Published | 29 January 2026
RACT has urged the Tasmanian Government to commit to deeper collaboration on insurance affordability to avoid significant risks to the state’s finances.
Economic analysis released by the Insurance Council of Australia lays bare the budget impact of establishing a state-owned insurance company.
RACT Group CEO, Mark Mugnaioni said the analysis by Lateral Economics made for sobering reading and mirrored the RACT’s consistent concerns about the State Government’s proposed TasInsure model.
“The good news is that the Tasmanian Government doesn’t have to go it alone – as Tasmania’s largest and only locally owned insurance company, RACT stands ready to work with government to implement solutions that will address the problem of insurance affordability, without exposing the state to serious financial risk,” Mr Mugnaioni said.
“Deep collaboration with the insurance industry and affected households and businesses is the key to understanding this problem and addressing it in a sustainable way.”
Mr Mugnaioni said the evidence was clear that establishing a state-owned insurer without addressing the underlying causes of insurance price increases would be unsustainable and, ultimately, ineffective.
“The root causes behind insurance price rises are the increasing likelihood of natural disasters, the increasing costs of claims, including building materials and labour and government taxes policies.
“Failure to address these root causes would simply transfer financial risk to the state budget and all taxpayers.
RACT has made its own comprehensive submission to the State Government, which includes a suite of alternative policy measures designed to address insurance affordability as a true partnership.
“We look forward to presenting these proposals to government directly in the near future and will release our submission in full to help inform this important public discussion,” Mr Mugnaioni said.
“As we have long said, the Government has identified the right problem and should be applauded for putting insurance affordability firmly on the agenda.
“But it is in everyone’s interests that we develop a solution that supports long term insurance affordability, targets underlying costs and avoids serious unintended consequences, including exposing the Tasmanian budget to billions of dollars in liabilities in the event of a catastrophe.
“We welcome the appointment of industry expert, John Trowbridge, and look forward to engaging with him to progress this important work.”