For many small businesses, insurance premiums have overtaken other common cost pressures such as energy, wages, and fuel. In Business Chamber Queensland's latest pre-budget survey, reducing insurance costs ranked as the number one priority for businesses.
More than 85.7% of respondents said lower insurance costs would have a positive impact on their business and the broader economy.
Premiums have risen sharply over recent years. While inflation peaked in 2022, insurance costs continued to climb well after other prices began to stabilise. Nationally, insurance prices rose by around 6% in 2022, 16% in 2023, almost 11% in 2024, and a further 3% in 2025. These increases followed major flood events, higher rebuilding costs, and global insurance market pressures.
For small businesses operating on narrow margins, these increases can be existential.
The affordability challenge is most acute in disaster-prone regions. In Far North Queensland, North Queensland, and Central Queensland, 89.2% of businesses report insurance costs as a major concern. Many face premiums well above $5,000 per year, more than double the average cost for businesses located south of the Tropic of Capricorn.
While initiatives like the cyclone reinsurance pool have begun to reduce average premiums in parts of North Queensland, underinsurance is widespread. Some businesses are forced to reduce coverage, accept higher excesses, or exit insurance altogether, leaving them exposed to disaster.
Looking ahead, the submission encourages consideration of alternative approaches, including:
- Parametric or index-based insurance, triggered by weather or flood thresholds rather than loss assessments.
- Expanding public reinsurance to cover additional catastrophic risks, such as non-cyclone flooding.
- Better land-use planning to reduce exposure to high-risk areas.
With disaster recovery costs projected to at least double over the next 40 years, shifting focus from recovery to mitigation is both an economic and fiscal necessity.
The submission calls for a coordinated response involving governments, insurers, reinsurers, and industry bodies. Priorities include improving competition, rewarding risk reduction, supporting cyber resilience, and considering how and if insurance products reflect the current geopolitical, climate, and technological conditions.
For small businesses, insurance should be a safety net, not a breaking point.
We are not leaving our advocacy there. Business Chamber Queensland will continue working with our partners and government to support more sustainable insurance for Queensland business.
