Non-Insurance
The Insurance Council
commissioned the study The Non-insured: Who, Why and Trends
into non-insurance by Dr Richard Tooth and Dr George Barker of
the Centre for Law and Economics at the Australian National
University to add to the body of knowledge on non-insurance in the
Australian community.
Principally, this research finds that non-insurance
remains a significant issue in our community. The attached report
uses both the Australian Bureau of Statistics Household Expenditure
Survey and the Roy Morgan Single Source Survey to comprehensively
profile the non-insured and considers the impact of government
policies on non insurance.
Report Findings:
-
Affordability is a significant constraint on insurance
and that State taxes impact on insurance affordability and in turn,
non-insurance.
-
Home type and tenure are critical drivers of
non-insurance for both buildings and contents cover although demand
for contents insurance appears to be more price sensitive than
building insurance.
-
Non-insurance is lower for those with a mortgage than
those without, although non-insurance escalates the longer the age
of the homeowner's mortgage.
-
Disconcertingly, that those individuals with fewer
savings (and hence those more vulnerable to loss) are also more
likely to be non insured.
-
Non-insurance is more prevalent at the early stages of
life (ie singles, the young etc).
-
Non-insurance is more prevalent in urban centres and in
particular, specific urban localities in our major
capitals.
The report also provides a review of the impact of State taxes
on non-insurance and concludes that States with high levels of
insurance taxes also face greater rates of non-insurance.
The Non-Insured: Who, Why and Trends report represents
a major contribution to better understanding non-insurance in
Australia. The Insurance Council is keen to ensure that debates on
insurance are conducted within an evidence based framework and in
this regard, the Who, Why and Trends report adds to the
body of evidence on this important economic and social
challenge
Key Issues:
According to the Australian Bureau of Statistics, about 1.8
million Australian households have no house and contents
insurance - that is 23 per cent of all Australian
homes.
Non-insurance has an important flow on effect to Governments in
that if individuals in the community can be encouraged to put in
place measures to mitigate risk, then the incidence of Governments
being called upon to provide ex-gratia assistance to individuals
and businesses affected by disasters will be minimised.
The Insurance Council is keen to collaborate with government on
this important issue in the Australian community in an effort to
promote the community's take up of insurance to enable risk
mitigation and protection.
Download
the The Non-insured: Who, Why and Trends report
Industry in Focus - Analysis of the demand for contents
insurance
This Industry In Focus paper builds on the Non-insured Report
and examines in more detail the extent to which household
characteristics (such as tenure type, dwelling structure and family
structure) and socioeconomic factors (such as age and household
disposable income) can shape the decision to purchase contents
insurance.
Download
Industry in Focus - Analysis of the demand for contents
insurance
Insurance Council Contact
Alex Sanchez, General Manager Economics &
Taxation
asanchez@insurancecouncil.com.au