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

A river town facing a new kind of pressure

In St George, a country town in Queensland’s south-west, the Balonne River is both a gathering point and a source of livelihood. Community life is shaped by the waterway: picnics and fishing competitions take place along its banks, and the river feeds dams that support the region’s agricultural industry. The landscape is often described in terms of extremes—drought and flooding rain—an identity captured by a sign near the river.

That same reality is increasingly reflected in household budgets through insurance. In a region vulnerable to drought and flood, residents say annual home insurance premiums have surged sharply, with some reporting increases of close to 500 per cent. The price rises are not only a financial strain; for some, they raise questions about whether insurance remains accessible at all.

“Effectively a wage”: one resident’s quotes

St George resident Adam Osborne said the quotes he received for home and contents insurance were staggering. According to Mr Osborne, the cheapest quote he was given was around $23,000 a year, while another exceeded $60,000 annually. He described one quote as effectively “a wage,” noting that the monthly repayment on the most expensive option was more than his pay cheque.

Mr Osborne said that when it came time to renew, the cost “went through the roof.” He paid $7,000 in 2022. More recently, after using a broker, he secured insurance for $14,000 to cover his home and contents. Even at that level, the premium represents a major expense for a household in regional Australia.

His story is not presented as an outlier. Local leaders say they have compiled many accounts of premiums rising by more than 100 per cent, and they point to examples of increases above 400 per cent for some policyholders.

Six councils consider becoming insurers themselves

Against this backdrop, six Queensland councils have decided to explore a different approach: creating an insurance mutual that would be owned by members and designed to serve the community rather than generate profits. The councils are part of the Southwest Regional Organisation of Councils (SWROC), which includes the Balonne, Murweh, Paroo, Bulloo, Maranoa, and Quilpie shires.

Balonne Mayor and SWROC chair Samantha O’Toole said the group is working on what she described as a “community protection mutual.” The aim is to provide a pathway for residents and businesses to bypass major insurers entirely.

“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,” Cr O’Toole said.

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

Why councils say the current discussions aren’t working

Cr O’Toole said SWROC has held multiple meetings with the Insurance Council of Australia (ICA), but she believes those discussions have not produced meaningful progress. “It’s a bit like banging your head against the wall,” she said.

The ICA, in a statement, said it was working with the Queensland Reconstruction Authority and local councils to “develop practical solutions” to reduce insurance costs in south-west Queensland. The ICA spokesperson also said premiums were under pressure due to a 40 per cent increase in construction costs since 2020.

While the councils are pursuing their mutual proposal, the broader environment remains complex: premium pricing is ultimately determined by individual insurers, and the cost of rebuilding after disasters is a key factor in the overall insurance equation.

Evidence to a Senate inquiry: steep increases in a short time

SWROC has already taken its concerns to the national level. The group made a submission to the 2024 Senate inquiry into the impact of climate risk on insurance. In that submission, SWROC provided evidence that insurance premiums for some had risen by more than 400 per cent.

One example cited was a resident in Thargomindah whose premium reportedly rose from less than $4,000 to almost $20,000 in a year. The councils argue that such increases are difficult for households and small businesses to absorb, particularly in regional communities where incomes may not rise at the same pace.

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

A mutual model: what it is meant to do

Mutuals are often framed as a community-oriented alternative to conventional insurance. In SWROC’s description, the proposed mutual would focus on equity across members and seek to offer more affordable, reasonable cover for residents and businesses.

It is still early in the process. The councils are awaiting a feasibility study, and the viability of the mutual would depend on factors including participation levels and the ability to manage risk in a region with known exposure to flooding and other severe weather.

For residents facing large premiums—or those struggling to find coverage at all—the prospect of a locally designed option is appealing. Mr Osborne said he appreciated what the councils were trying to do and expressed hope that a mutual could lower his premiums. “We’re people in the bush just doing our best, and it’s just another hurdle for us,” he said.

Expert view: the industry needs reinvention, but mutuals have limits

Internationally recognised insurance expert Professor Paula Jarzabkowski said the insurance industry needed to be “reinvented” as climate change and extreme weather drive up risk. She said “mutualisation and solidarity” are concepts that governments and communities may increasingly need to consider.

“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,” Professor Jarzabkowski said.

However, she also cautioned that a local mutual fund can face structural challenges. One of the key issues she raised was diversification. Insurers can keep prices lower by spreading risk across multiple portfolios—such as flood and fire—and across different geographies. A local government-led mutual, operating in a region where many members share similar hazards, may struggle to achieve the same spread of risk.

“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, adding that on its own, a mutual is “not the answer to the problem we face.”

Professor Jarzabkowski also warned against expectations that the market will simply return to previous conditions without major intervention. She said there was “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.”

When the issue isn’t only price, but availability

In St George, residents say the challenge goes beyond premium increases. Some report being told they can no longer be covered at all. That shift—from expensive insurance to no insurance—can have serious implications for households trying to protect their assets and for communities seeking stability.

Resident Jan Dimond said that after her premium increased four-fold over five years, she began shopping around. But when she sought quotes from other companies, she said she was told they could not insure her home because the area had been “blanketed as a flood zone.”

Her experience reflects a fear expressed by many in high-risk areas: that the market may not merely price risk higher, but may withdraw from certain locations altogether. For communities, that can affect more than individual households—it can influence confidence, investment decisions, and the sense of long-term security.

Flood levees and the dispute over how risk reduction is recognised

Another point of tension concerns flood mitigation infrastructure and how it is reflected in premiums. Towns including St George, Charleville, and Roma have flood levees designed to prevent swollen waterways from spilling into town.

In St George, the levee was built in 2014 after major flooding in prior years, including three consecutive years of flooding. Local leaders argue that such investments should reduce risk and, in turn, be recognised through lower insurance premiums.

Cr O’Toole said councils had “a lot of frustration” that the reduced flood risk was not being reflected by lower premiums.

The ICA responded that risk reduction measures such as levees are taken into account when pricing premiums. “Any risk reduction measures that have been implemented, such as levees, are taken into account when pricing premiums,” an ICA spokesperson said.

The spokesperson added that insurers rely on comprehensive risk data to price premiums accurately, and said insurers are supporting local 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 happens next for the council-led proposal

SWROC’s next step is to assess the feasibility of its proposed mutual, based on the work being developed with JLT. The councils have framed the mutual as a way to give residents and businesses an alternative at a time when many feel priced out or excluded.

Yet the proposal sits within a broader debate about climate risk, construction costs, mitigation infrastructure, and the limits of current insurance models. Even supporters acknowledge that a mutual would need substantial community participation, and experts caution that localised risk pools can face difficulties if most members are exposed to the same hazards.

For residents like Mr Osborne, the motivation is straightforward: the premiums being quoted are difficult to reconcile with everyday life, and the search for a workable solution has become urgent. The councils’ initiative is, at minimum, an attempt to shift the conversation from frustration to a structured alternative—one that will now be tested by the practical realities of risk, cost, and collective buy-in.

Key points at a glance

• Residents in parts of south-west Queensland report home insurance premium increases that can exceed 100 per cent, with some citing rises of close to 500 per cent.
• St George resident Adam Osborne said he received quotes ranging from about $23,000 to more than $60,000 a year; he later secured cover for $14,000 after using a broker, compared with $7,000 in 2022.
• Six councils in the Southwest Regional Organisation of Councils are exploring a “community protection mutual” intended to provide more affordable, reasonable insurance for members.
• SWROC has engaged JLT to develop a proposal, with a feasibility study expected within weeks; the councils say broad participation would be required for viability.
• The Insurance Council of Australia says it is working with the Queensland Reconstruction Authority and councils on practical solutions, and notes construction costs have risen 40 per cent since 2020.
• Professor Paula Jarzabkowski says the industry needs reinvention and that mutualisation may be part of the discussion, but warns local mutuals can struggle with diversification of risk.
• Some residents say the issue is also access, reporting they have been told they cannot be insured due to flood zoning.
• Councils argue flood levees should be better reflected in premiums; the ICA says risk reduction measures are taken into account and that insurers rely on comprehensive risk data.