Lobby groups call for "urgent" action on skyrocketing marine insurance premiums

Lobby groups call for “urgent” action on skyrocketing marine insurance premiums | Insurance Business Australia

Marine

Lobby groups call for “urgent” action on skyrocketing marine insurance premiums

Northern Australian tourism to be potentially hampered by rising costs

The Australian Consumers Insurance Lobby Inc (ACIL) is highlighting the need for urgent action, warning that Northern Australian tourism could be impacted by skyrocketing marine insurance premiums. This echoes the calls of the Marine Industries Association for the Federal Government to intervene and protect the marine industry and the region’s tourism sector.

In July, the Federal Government decided to exclude marine insurance from the Cyclone Reinsurance Pool, resulting in a doubling of premiums during their recent renewal cycles. This was a move promised by the former LNP government.

ACIL notes this would raise prices for tourism activities and services. Consequently, this could make Northern Australia less attractive to potential tourists.

“Marine tourism serves as a cornerstone of Northern Australia’s economy, supporting a range of activities,” said Tyrone Shandiman, chairperson at ACIL. “However, the relentless rise in costs

threatens the tourism industry’s viability.”

Suzanne Davies, MIA CEO, described the marine industry and local tourism as “indispensable to the economic well-being of regional communities in Northern Australia,” noting the businesses in the region are family-run and boost local employment.

“The marine industry plays a pivotal role in driving tourism across Northern Australia, providing a range of unique experiences and opportunities that attract visitors from around the world,” said Davies. “These businesses bring people to the regions which support other businesses, such as restaurants and hotels. Mounting insurance premiums, excesses and conditions are reaching unsustainable levels.”

In addition, the lobby groups note the ongoing uncertainty and financial stress could discourage investors from considering Northern Australia as a destination for marine tourism business. The rising costs could eventually lead to job losses, potentially weakening the local businesses and livelihoods of the residents.

“Escalating expenses associated with marine insurance present a significant and imminent threat to both the vitality of the tourism industry and the well-being of the communities that rely on the marine sector’s support. Marinas are integral to the broader marine and tourism industries, and foster significant employment opportunities,” said Andrew Chapman, president at MIA.

Among the proposed solutions by ACIL are the urgent inclusion of marine insurance in the Cyclone Insurance Pool and providing subsidies for Northern Australia’s marine businesses should the federal government choose to wait for the 2025 review.