Queensland councils explore a community insurance mutual as home premiums surge in the south-west

A regional response to soaring home insurance costs

In parts of south-west Queensland, the cost of home and contents insurance has become a defining household expense—one that some residents say now rivals, or even exceeds, their regular income. In the inland town of St George, where community life centres on the Balonne River, a mix of drought history and flood exposure has helped shape both the local landscape and the insurance market residents must navigate.

Against that backdrop, six local councils have begun exploring an unusual option: becoming insurers themselves. The proposal, still in its early stages, is to create a “community protection mutual” that would allow residents and businesses to seek cover outside the major insurance market. Supporters argue it could provide a fairer, more affordable model. Critics and experts caution that mutuals face structural challenges, particularly when the insured community shares the same concentrated risks.

When a quote becomes “a wage”

St George resident Adam Osborne described receiving home and contents insurance quotes that were far beyond what he believed a typical household could manage. According to Mr Osborne, the quotes ranged from $23,000 a year at the low end to more than $60,000 annually at the high end.

He said the jump was stark when it came time to renew. In 2022, he paid $7,000. More recently, after using a broker, he secured a policy costing $14,000 to cover his home and contents. Even that figure represents a substantial increase over a short period. The most expensive quote, he said, came with a monthly repayment larger than his pay cheque.

Mr Osborne’s experience sits within a broader pattern described by local leaders: premium increases that can exceed 100 per cent year-on-year, and in some cases climb far higher. In the St George area, residents have reported annual increases approaching 500 per cent.

Why the Balonne River matters—socially and financially

The Balonne River is central to life in St George. Residents gather along its banks for family picnics and fishing competitions, and the river feeds dams that support the region’s agricultural activity. A sign near the water captures the extremes that define the area: “A land of drought and flooding rain.”

Those extremes are not just part of the local identity; they are a core driver of insurance risk. The Balonne is prone to flooding, and south-west Queensland is widely described as vulnerable to both drought and flood. For insurers, flood exposure is a key factor in pricing. For residents, it can translate into premiums that feel disconnected from household budgets and local economic realities.

Six councils consider a “community protection mutual”

While premium pressures have been reported across Australia, a group of councils in south-west Queensland has decided to investigate a more direct intervention. The Southwest Regional Organisation of Councils (SWROC) comprises the Balonne, Murweh, Paroo, Bulloo, Maranoa, and Quilpie shires.

Balonne Mayor and SWROC chair Samantha O’Toole said the group is working on a model she described as a “community protection mutual.” The intention is to create an insurance mutual that could serve residents and businesses, potentially allowing them to bypass major insurers.

Cr O’Toole framed the mutual concept as a model designed around member equity rather than profit. “The idea with mutuals is not to make money but to provide equity across the membership group so that they have affordable and reasonable insurance,” she said.

SWROC has engaged risk analyst and international insurance broker JLT to prepare a proposal, with a feasibility study expected within weeks. A key issue, Cr O’Toole said, is participation: “We need the majority of the community to participate if the mutual is going to be viable.”

Talks with the insurance industry—and a sense of stalemate

The councils’ move comes after years of tension over how premiums are set and whether local risk-reduction investments are being adequately recognised. Cr O’Toole said SWROC has held multiple meetings with the Insurance Council of Australia (ICA), but she characterised the discussions as unproductive. “It’s a bit like banging your head against the wall,” she said.

The ICA, for its part, said it is working with the Queensland Reconstruction Authority and local councils to “develop practical solutions” to reduce insurance costs in south-west Queensland. The ICA also pointed to broader cost pressures, saying premiums are under strain due to a 40 per cent increase in construction costs since 2020.

That construction-cost factor matters because rebuilding and repair expenses influence the size of claims insurers may need to pay after a disaster. When those costs rise, the price of covering the same property can rise as well.

Evidence to a Senate inquiry: premium jumps of 400 per cent and more

SWROC made a submission to the 2024 Senate inquiry into the impact of climate risk on insurance. In that submission, the group provided evidence that some premiums had increased by more than 400 per cent.

One example cited involved a Thargomindah resident whose premium reportedly rose from less than $4,000 to almost $20,000 in a year. For households and small businesses, such increases can force hard choices: whether to reduce cover, accept higher excesses, or go without insurance altogether.

Cr O’Toole said she understood that premiums were rising across the country, but argued the south-west was experiencing increases that were difficult to justify. She alleged there had been “a bit of price gouging in the market,” and said: “There’s no justification for a 100 per cent year-on-year increase in insurance premiums in the south-west.”

Climate risk and the case for rethinking insurance

Internationally recognised insurance expert Professor Paula Jarzabkowski said the industry needs to be “reinvented” as climate change and extreme weather increase risk. In her view, the challenge is not temporary. “There is no bright future where the market will go back to what it was without significant intervention, financially subsidising people, and physically changing the risk profile,” she said.

Professor Jarzabkowski also pointed to mutualisation and solidarity as concepts that governments and communities may need to consider more seriously. “Mutualisation and solidarity are things we are going to have to consider as local councils, as states, as a nation, so that we will have to hedge each other against risk,” she said.

At the same time, she cautioned that a local mutual is not a simple fix. While she described SWROC’s plan as a great initiative, she flagged a major limitation: diversification.

The diversification problem: why local mutuals can struggle

One reason large insurers can manage pricing is that they spread risk across multiple portfolios and geographies. Flood risk in one region may be balanced by other types of risk elsewhere, such as fire risk in different locations, or by a mix of urban and regional exposures. This diversification helps reduce the impact of a single event on the overall pool.

Professor Jarzabkowski said local governments would struggle to replicate that breadth. A mutual operating in a concentrated region may be exposed to the same type of hazard affecting many members at once—particularly flood.

“They’re not going to be able to push the price down because they’re facing the same type of risk and the same level of risk,” she said. “On its own, it’s not the answer to the problem we face.”

That does not mean a mutual cannot help. But it suggests the design would need to confront the reality that a shared-risk community may also face shared losses, and therefore may still require significant premiums, robust reserves, or other mechanisms to remain viable.

Access to cover is also shrinking in some cases

For some residents, the challenge is not only the price of insurance but whether they can get cover at all. In St George, some residents have been told insurers will no longer cover the area.

Resident Jan Dimond said her premium rose four-fold over five years, prompting her to shop around. When she sought quotes from other companies, she said she was told they could not insure her home because the area had been classified as a flood zone.

When households cannot obtain cover, the consequences extend beyond the annual premium. Insurance is often tied to mortgage requirements and can shape property values and the ability to buy or sell. Even for those without a mortgage, going uninsured can leave families exposed to financial shocks after extreme weather.

Levees, flood studies, and the dispute over risk reduction

The question of how flood mitigation infrastructure should affect premiums has been a long-running point of contention. Towns including St George, Charleville, and Roma have flood levees intended to prevent swollen waterways from spilling into town.

In St George, a levee was built in 2014 after major flooding in prior years, including three consecutive years of flooding. Local leaders argue that such investments should translate into lower premiums, or at least prevent sharp increases.

Cr O’Toole said councils felt “a lot of frustration” that reduced flood risk was not being reflected in pricing. The ICA responded that risk reduction measures such as levees are taken into account when insurers price premiums. It added that insurers rely on comprehensive risk data and are supporting councils to conduct up-to-date flood studies and implement appropriate risk reduction measures.

The ICA also said there is a working group between insurers and the Queensland Reconstruction Authority to “identify climate mitigation activities and targeted investment that will strengthen flood resilience and put downward pressure on premiums.” At the same time, it noted that premium pricing is ultimately a matter for individual insurers.

What a mutual could change—and what it might not

The concept SWROC is exploring aims to address two problems described by residents and councils: affordability and availability. If a mutual can bring more predictable pricing or offer cover where commercial insurers are withdrawing, it could provide a form of community stability.

However, the mutual would still need to price risk, pay claims, and remain solvent. That means it would need a sufficiently large membership base, clear rules for coverage, and enough capital or reserves to withstand bad years. Cr O’Toole’s emphasis on broad participation reflects that reality: a small pool may be too fragile, while a larger one may be better able to share costs among members.

Professor Jarzabkowski’s warning about limited diversification underscores another challenge: if many members are exposed to the same flood event, claims could surge simultaneously. Any feasibility study will need to consider how the mutual would manage such scenarios and whether it would require additional structures to spread or manage that risk.

Residents watch closely as councils seek options

For residents like Mr Osborne, the councils’ proposal represents a rare sign of momentum in a debate that has often felt stuck between rising risk, rising costs, and limited alternatives.

He said he appreciated what the councils were trying to do and hoped the mutual, if established, could lower his premiums. “We’re people in the bush just doing our best, and it’s just another hurdle for us,” he said.

In the coming weeks, the feasibility work commissioned by SWROC is expected to provide a clearer picture of whether a community insurance mutual can operate sustainably in the region—and whether it can deliver the affordability and access that residents say is slipping further out of reach.

Key points at a glance

• Residents in south-west Queensland have reported home insurance premium increases above 100 per cent, with some citing rises close to 500 per cent.
• St George resident Adam Osborne said he received quotes ranging from $23,000 to more than $60,000 a year; he later secured $14,000 cover via a broker, up from $7,000 in 2022.
• Six councils in the Southwest Regional Organisation of Councils are investigating a “community protection mutual” and have engaged JLT to prepare a proposal and feasibility study.
• The Insurance Council of Australia said premiums are under pressure, including due to a 40 per cent increase in construction costs since 2020, and that it is working with government and councils on solutions.
• Experts say mutuals may help but face challenges in regions with concentrated risk and limited diversification.
• Some residents report difficulty obtaining cover at all due to flood-zone classifications, adding urgency to the search for alternatives.