The marine industry in northern Australia is raising the alarm over the dire consequences that skyrocketing insurance premiums are inflicting upon the region's vital tourism sector.
Last month, ACIL reported on alarming premium hikes within the marine industry, with some marinas witnessing a doubling of premiums during their recent renewal cycles. These exorbitant costs, combined with high excesses of up to $500,000, are burdening marinas and forcing them to allocate considerable resources in their budget to accommodate potential excess payments.
“Marine tourism serves as a cornerstone of Northern Australia's economy, supporting a range of activities, such as snorkelling, scuba diving, boat tours, whale watching, and fishing charters. However, the relentless rise in costs threatens the tourism industry's viability. The increase in operating expenses for marine businesses results in higher prices for tourism activities and services, making Northern Australia less attractive to potential tourists and impacting tourism numbers.” ACIL Chairperson Tyrone Shandiman said.
The implications of inaction extend far beyond those who bear the burden of premium payments. The escalating costs are trickling down to tourism businesses that depend on marinas and boat operators, putting an additional strain communities in northern Australia. The ongoing uncertainty and financial stress inflicted by high insurance prices discourages potential investors from considering Northern Australia as a destination for marine-tourism business
Concerns in the Marine Industry is growing following the Federal Government's decision to exclude Marine Insurance from the Cyclone Reinsurance Pool, a move promised by the former LNP government and effective from 1 July 2023. The Australian Consumers Insurance Lobby Inc (ACIL) and Marina Industries Association are jointly sounding the alarm, highlighting the urgent need for action.
In light of this urgent situation, the marine industry advocates for the following actions to mitigate the looming crisis:
Urgent Inclusion in the Cyclone Reinsurance Pool: We call on the Federal Government to take immediate action by including Marine Insurance in the Cyclone Reinsurance Pool. This step is crucial in providing the necessary relief to marine businesses in Northern Australia, curbing the upward trajectory of insurance costs and safeguarding their financial well-being.
Subsidising Premiums for Northern Australia Marine Businesses: Alternatively, should the Federal Government choose to await the 2025 review, we urge them to consider subsidizing insurance premiums for marine businesses in Northern Australia until the review's completion.
The marine industry in Northern Australia is at a crossroads, and the time to act is now. Failing to address the pressing issue of insurance affordability could have far-reaching consequences for the region's economy, employment, and tourism sector. The Federal Government must prioritize the well-being of Northern Australia's marine industry and take swift action to ensure its continued growth and success.