Lack of affordable & accessible marina insurance threat to jobs, tourism & coastal communities

Marina Industries Association © Marina Industries Association

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 jeopardising 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."