The Tasmanian government has initiated a public consultation on the establishment of TasInsure, a proposed state-owned general insurer designed to address concerns over insurance affordability and access in Tasmania, despite concerns among the insurance industry. Premier Jeremy Rockliff (pictured) announced the release of a discussion paper and draft legislation, inviting stakeholders and the community to provide input on the framework and objectives of the new entity.
Rockliff said TasInsure is intended to be “affordable, locally owned, and built for Tasmanians.” He noted that residents have experienced increased premiums and fewer insurance options, particularly after major disasters on the mainland. “In the past few years, insurance premiums have skyrocketed,” Rockliff said, adding that the government is seeking expert advice on the model and governance of the insurer.
Read next: TasInsure or targeted mutual schemes?
According to government estimates, TasInsure may reduce annual insurance costs for households by up to $250 and lower expenses for small businesses. The insurer is planned to operate on a not-for-profit model, with an emphasis on providing coverage for local businesses, including those in the hospitality and production sectors.
The consultation period for the discussion paper and draft bill is open until Jan. 9, 2026.
Industry groups have raised concerns about the financial implications of the TasInsure proposal. The Insurance Council of Australia (ICA) warned that the initiative “would put significant financial risk on to the public balance sheet while failing to do anything about the underlying causes of insurance pricing.” The ICA referenced international examples where similar government-run insurers have resulted in increased liabilities for taxpayers.
Tom Allwright, principal partner at McLardy McShane Insurance Advisors in Tasmania, suggested that government support for targeted mutual schemes could be a more effective approach for sectors facing insurance challenges. “One of the most practical solutions would be for the government to actively support the development of targeted mutual schemes for hard to place risks, particularly for industries and community groups where traditional markets are not servicing,” Allwright said.
Allwright also called for greater investment in risk mitigation for small businesses and farms. “Better risk management support helps lower claims exposure, improving insurer appetite and ultimately reducing premiums at the source,” he said. He described the TasInsure proposal as “a politically popular announcement, not a properly costed proposal,” and questioned the long-term viability of government-run insurance models, noting that such entities have sometimes required taxpayer intervention or restructuring.
The National Insurance Brokers Association (NIBA) also urged caution, stating that “any intervention in insurance pricing or the underwriting process” should be carefully considered. NIBA pointed out the risks associated with a concentrated insurance market in Tasmania, where a single severe event could have a significant impact on the risk pool’s stability.
Both NIBA and ICA acknowledged the seriousness of insurance affordability and availability, calling for collaborative efforts between government and industry.
Industry representatives have identified insurance taxes as a key contributor to high premiums. ICA general manager of public affairs Mathew Jones said: “Insurance taxes are not an insignificant cost to policyholders, representing on average 20% for Tasmanians in their insurance premium pricing.” He noted that various reviews have found stamp duty to be an inefficient and inequitable tax.
NIBA CEO Richard Klipin advocated for a shift to a property-based funding model for emergency services, suggesting this would spread the cost more evenly across property owners. Klipin also emphasised the importance of addressing underlying risk through investment in public infrastructure and household mitigation measures. “The most effective and enduring way to improve insurance affordability is to reduce the underlying risk that properties face,” he said.
RACT acknowledged the government’s decision to seek consultation and collaboration. CEO Mark Mugnaioni said: “As Tasmania’s only local and largest provider of general insurance, we are encouraged by this opportunity to work collaboratively with the Tasmanian government on these matters.”
Mugnaioni stressed that there is no simple solution to insurance affordability and that the issue requires joint efforts. He pointed to RACT’s ongoing investments in research and partnerships to help reduce risk exposure and enhance community preparedness for natural disasters. “Investment in individual and community preparedness for the realities of a changing climate is critical to address the issue of insurance accessibility,” he said.
The Tasmanian government is accepting feedback on the TasInsure proposal until early January 2026. Industry groups, brokers, and community stakeholders are expected to continue discussions on approaches to address insurance affordability and accessibility in the state.
