ICA urges review of Tasmania’s plan for state-owned insurer

The ICA said the plan would shift disaster recovery costs.

The Insurance Council of Australia (ICA) has warned that the Tasmanian Liberals’ proposal to establish a state-owned insurer would expose taxpayers to significant financial risk without addressing the real drivers of rising premiums.

The ICA said the plan would shift disaster recovery costs—currently supported by $40b in private reinsurance—onto the public, citing global examples like the US National Flood Insurance Program, which carries over $20b in unfunded debt.

With 98% of Tasmania bushfire-prone, the ICA stressed the importance of maintaining a strong private insurance market. 

It estimated that a repeat of the 1967 Black Tuesday fires today would cost $2.69b (AU$4.1b) in insured losses, currently borne by private insurers.

The ICA urged the government to scrap stamp duty and the Fire Services Levy, which collected over $98.57m (AU$150m) from Tasmanians in 2024 to 2025, and to invest in risk reduction to improve long-term affordability.

($1.00 = AU$1.52)