Lack of Affordable & Accessible Marina Insurance threat to Jobs, Tourism & Regional Coastal Communities
The Marina Industries Association (MIA) the peak body representing the interests of club, recreational, and commercial marinas, boatyards, and industry suppliers in Australia and the Asia-Pacific Regions, is raising the alarm on the pressing issue of insurance affordability and access for marinas in Northern Australia.
25% of Australia’s 300 marinas are located in the northern half of the country. Notably, Queensland boasts over 65 marinas, which tend to be the largest in the nation, each averaging storage for over 300 boats and providing essential commercial tenancy for thousands of marine and tourism businesses, including marine trades, hospitality, and tourism operators.
The Cyclone Reinsurance Pool, established by the former LNP government, was slated to include marine insurance from 1 July 2023. However, the current Labor Government’s decision not to follow through with this inclusion will have detrimental consequences for coastal communities in northern Australia.
Marinas play a vital role in fostering regional economic activity, generating employment opportunities, and offering the essential land-water interface for accessing the region’s most popular tourism attractions. They provide the essential support and infrastructure marine trades and businesses require to operate. Without accessible and affordable insurance options, marinas are struggling to maintain viable operations, manage costs, and reinvest in facility upgrades, posing significant consequences for marine and tourism industries, and regional economies.
Marinas are finding it difficult and, in some cases, impossible to secure cyclone cover for their on-water infrastructure. Some have only been able to secure partial coverage, some struggled to find cover at all. Furthermore, over the past five-seven years, many marinas in northern Australia report triple-digit premium increases with some over 300%. Most have cyclone excesses of half a million dollars and are further burdened by impractical policy conditions and endorsements.
The consequences of these insurance challenges are profound. The sustainability of marinas has knock on effects to marine and tourism businesses, which are the backbone of many regional coastal communities in northern Australia. These surging costs are passed on to related marine and tourism operators, leading to inflationary spirals, and jeopardizing their business sustainability and Australia as an affordable tourism destination. Employment opportunities will be negatively impacted as a result.
Suzanne Davies, MIA CEO explained, “High excesses and a level of self-insurance means marina businesses are burdened with setting aside funds as unproductive security to cover potential cyclone events, diverting resources that could otherwise be reinvested into business development.” There is further concern that potential investors may be deterred due to the escalating insurance costs or an inability to secure insurance.
In light of these challenges, the Marina Industries Association urgently calls for the federal government to consider how it can provide relief to marinas in Northern Australia to ensure the sustainability of marine and tourism sectors and support regional economies and communities. The MIA President Andrew Chapman commented, “We specifically ask the Government to include marine insurance in the Cyclone Reinsurance Pool immediately. Alternatively, if the intention is to wait for the 2025 review as stated, the industry urges the government to subsidise insurance premiums for Northern Australia until the review is completed. Such subsidies would offer immediate relief to marinas, enabling them to foster sustainable, resilient businesses and continue supporting thriving maritime and tourism industries.”
For more information visit www.marinas.net.au
Coral Sea Marina Resort, together with the wider maritime industry in Northern Australia and the Australian Consumer Insurance Lobby, is calling for urgent Government intervention to address the soaring insurance premiums for marine operators.
The former LNP Government’s commitment to include Marine Insurance in the Cyclone Reinsurance Pool, announced during its launch on 1 July 2023, was met with anticipation and hope by marine operators across northern Australia. This inclusion was seen as a beacon of relief from the mounting insurance expenses that have been plaguing the industry in recent years.
Regrettably, the decision by the current Labour Government not to include Marine Insurance in the Cyclone Reinsurance Pool has dealt a significant setback to the maritime industry. It has created an atmosphere of uncertainty for marina operators who were relying on this support to protect their businesses from ever-increasing insurance premiums.
Marina facilities drive economic growth, support employment and support a network of local small ancillary businesses that service the marina guests, tenants and operators. Some marinas in the north of the country have reported a 300% increase in the cost of their premiums, with higher excesses and premiums resulting in rising berthing rates across the state. For marine tourism operators as well, the burden of operating their on-water tourism businesses in northern Australia continues to grow as insurance premiums rise exponentially each year with overinflated excesses imposed on cyclone-related claims.
With 525 wet berths and two vibrant marina villages, Coral Sea Marina is the largest marina of its kind in central Queensland. The marina is home to 50+ marine tourism operators, 80+ commercial vessels, and 140+ bareboat charter vessels. It provides an entry statement to the bustling tourist town of Airlie Beach and provides a 5 Gold Anchor Platinum marina facility from which its marine tourism operators conduct their businesses. Without inclusion in the Cyclone Reinsurance Pool, Marine Insurance premiums will inevitably continue to rise and the economic impact on regional tourism areas such as the Whitsundays will be significant.
In the first instance, the maritime industry of Northern Australia is asking for the Federal Government to reconsider adding Marine Insurance to the Cyclone Reinsurance Pool. If the Federal Government intends to wait until 2025 for a review of the Cyclone Reinsurance Pool, Coral Sea Marina is lobbying the Government for subsidised premiums for marina owners to be considered as an interim measure.
Supporting the entire marine industry against the weight of high insurance premiums would offer immediate financial relief to marinas in northern Australia enabling them to thrive and support the numerous businesses that operate from them.
For more information visit coralsearesort.com
Marina Insurance Crisis: Northern Australia Marinas Encounter up to 300% Increase in Property Insurance
Australian Consumers Insurance Lobby Inc (ACIL), a leading advocate for consumer insurance rights, is raising alarm over the deepening insurance crisis faced by marinas in Northern Australia. It follows a forum held by ACIL in partnership with the Marina Industries Association for Marina owners in Northern Australia on 19th July 2023.
At the forum, ACIL heard alarming stories from marina operators in Northern Australia, highlighting the dire circumstances they are facing. One marina operator shared their experience of a staggering 330% increase in property insurance premiums over a span of just seven years. Similarly, another marina witnessed its property insurance costs more than doubling in the past year alone. These skyrocketing premium increases are placing an immense strain on the financial viability of marinas and posing a significant threat to their long-term sustainability.
The forum also shed light on the fact that the rising costs of insurance are compounded by the lack of adequate cover for cyclone-related damages with some marinas being partially insured. Many marinas in Northern Australia face excessive excesses of up to $500,000 to $1,000,000, imposed either by insurers or out of necessity to reduce already high premiums. Such burdensome excesses further strain marinas’ financial resources, leaving them vulnerable in the face of potential cyclone-related risks.
“The consequences of this marina insurance crisis extend far beyond the marina owners themselves. Boat operators, both private and commercial, are feeling the impact of skyrocketing insurance costs. The combination of high insurance premiums, lack of adequate cyclone cover, and increased marina berthing fees has led many boat operators to consider relocating to more affordable options in southern waters. The varying costs of insurance are causing social disparity between the northern and southern parts of Australia.” ACIL Chairperson, Tyrone Shandiman said.
ACIL has engaged in extensive consultations with marinas and boat operators, seeking to address the pressing issues surrounding insurance affordability and coverage. The disparity between premiums and cover is causing significant social and economic disparity between Northern and Southern Australia.
ACIL in partnership with the Marina Industries Association and various marinas in the region is actively engaging with the Federal Government and Australian Reinsurance Pool Corporation.
“We are calling for immediate action by including marine insurance in the Cyclone Reinsurance Pool. Such inclusion would provide much-needed relief to marinas in Northern Australia, mitigating the escalating insurance costs and ensuring their financial stability. Alternatively, ACIL urges the government to consider subsidising premiums for Northern Australia marinas until the 2025 ARPC review of the Cyclone Reinsurance Pool, providing immediate relief and supporting the growth and viability of these vital community assets.” Mr Shandiman Said.
About ACIL:
ACIL is a leading consumer advocacy group dedicated to protecting the rights and interests of insurance consumers across Australia. ACIL actively engages with industry stakeholders, policymakers, and government representatives to address market failures, promote fairness, and improve insurance practices for the benefit of all Australians.
For more information visit www.acilobby.org.au.
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