Ungodly insurance rise force Diocese to risk buildings
DIVINE intervention will be needed to save hundreds of holy properties when the next major disaster strikes the region, as the Anglican Diocese of North Queensland reveals they can no longer afford to insure their buildings.
Bishop Keith Joseph said the diocese had expected their insurance premiums to double after the catastrophic Townsville floods, but in October they were informed the price had quintupled.
"It was a bit of a shock," Bishop Joseph said.
"We were looking at premiums going up from $500,000, including our schools, to $2.65 million."
Without the schools, their insurance premium would be $900,000.
Bishop Joseph revealed the diocese's dilemma at an insurance forum in front of Assistant Treasurer Michael Sukkar and North Queensland MPs Phillip Thompson, George Christensen and Warren Entsch.
It was one of many forums that have been held by politicians in recent years, as North Queensland grapples with unaffordable insurance coverage due to premiums that have soared 130 per cent in the last decade.
There have been ongoing calls for governments to act urgently, particularly on a suite of recommendations by the Australian Competition and Consumer Commission as part of their ongoing inquiry into insurance in Northern Australia.
Bishop Joseph said the diocese has about 250 properties worth a total of $125 million, ranging from Townsville's Saint James Cathedral to small churches in the bush, adjoining houses, church halls, churches in the Torres Strait, a couple of businesses in indigenous communities, schools, and a main office building.
The diocese's footprint stretches from Sarina, south of Mackay, up to the Papua New Guinea border and west to Mount Isa.
"We have spent the last three weeks asking insurers, checking with brokers, going back to our own insurers, we have been looking everywhere for affordable insurance and it's just not to be had," Bishop Joseph said.
The diocese will now have no choice but to take on the risk themselves and self-insure a large majority of their properties, knowing a major event could force many buildings to shut forever.
Parishes have been asked to increase their contributions normally paid to insurers by 50 per cent this year, and 100 per cent next year. This will go into a pool that the diocese will use to fix up damaged buildings when needed.
"This is extraordinarily risky but we just haven't got $900,000 a year to spend on insurance and that's money that's lost every year," Bishop Joseph said.
"We're not taking this decision lightly. We know that it's incredibly risky and that if we have a major event we are going to be faced with closing a lot of buildings.
"It's often said in a small town the last thing to close is the pub and the church, and we're approaching that with a lot of insurance premiums that we can't afford to maintain on a lot of country churches."
Bishop Joseph said that in the event of a major disaster, it was likely the diocese would have enough to demolish or make safe a damaged building, but restoration would be too costly.
"The cost of replacing (Saint James Cathedral in Townsville) will be in the tens of millions and without insurance that's absolutely beyond us," he said.
Leichardt MP Warren Entsch said the diocese's situation was a clear sign of insurance market failure.
"It's time that we stopped doing reviews, we stopped doing inquiries … it's time now to start taking some serious action because it's only going to get worse," Mr Entsch said.
Mr Sukkar said he understood "time is of the essence" and committed to acting on the recommendations of the ACCC's next interim report, which is due by the end of November.
"I will be receiving an interim report by the end of this year and I will be intending to act upon that interim report. Now I think is decision making time," he said.
"I'm very happy to commit that before the final report is released, that we will make some decisions on what needs to be done and what form of action that is, is yet to be determined.
"There's a whole range of options open to me as Minister and one of the messages that I'll be taking back to the insurance company CEOs and senior executives today is that we'll be as light touch or as heavy handed as we have to be."
One of the ACCC's 28 recommendations so far includes allowing Australia's corporate regulator ASIC to step in, which includes forcing insurers to report which brands they underwrite and where they are writing new business.
Mr Sukkar said this was an "important recommendation" but signalled the Federal Government could be "potentially more interventionist" than that.