High Insurance Prices Do Not Necessarily Lead to Market Failures: Productivity Commission

Published on October 1, 2024

The Productivity Commission (PC) said high insurance premiums do not indicate market failures. This comes amid concerns about the surge in home insurance unaffordability from consumer groups. During a recent Senate inquiry hearing, Tyrone Shandiman, the chairman of the Australian Consumers Insurance Lobby, said there was a market failure in the home insurance sector. He cited the example of a pensioner in Townsville, Queensland, who was charged $16,000 (US$11,000) for home insurance. “That is just one example. But then you go to flood areas where you’ve got consumers paying $20,000. How is that not market failure?” Shandiman questioned. “We’ve got data which shows consumers are paying 10 or 20 times as much for their insurance.”...

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