Tasmania reshapes TasInsure plan, shifting from state-owned insurer to oversight authority

A flagship election pledge changes course

The Tasmanian government has confirmed it will not proceed with its election commitment to establish a state-owned insurance company that would sell home, contents and small business policies in competition with private insurers. Instead, the government says TasInsure will be created as a not-for-profit statutory authority designed to “oversee and support the insurance ecosystem”, with a primary focus on lowering the cost of insurance.

The shift marks a significant change from the model promoted during the 2025 state election, when TasInsure was presented as a direct provider of “affordable insurance” for households, small businesses, community groups and events, and for regional needs. At the time, the policy was described by the Liberals as their key election pledge, and the premier argued the insurance market had “failed Tasmanians”.

Under the new approach, TasInsure will not be established as an insurer selling policies to consumers. The government says the new body will instead work with insurers, brokers, reinsurers and other parts of the system to address gaps in availability and affordability, while developing advisory, transparency and comparison functions intended to promote competition.

What was promised during the campaign

During the election campaign, the government’s plan for TasInsure was framed as cost-of-living relief and a response to rising premiums. The Liberals repeatedly stated the policy would save families $250 a year and reduce small business insurance costs by 20 per cent.

Public-facing material also reflected a direct-to-consumer insurer model. The TasInsure website previously said the new company “will offer affordable, reliable insurance products for families, small businesses, and Tasmanian communities”. Draft legislation for the state-owned company also referenced the provision of “general insurance”.

Branding for TasInsure was visible during the campaign, including signage placed on an office. That branding was later removed several months after the election.

The government’s new model: a statutory authority

In announcing the revised direction, the government said TasInsure will be established through legislation as a not-for-profit statutory authority. Rather than underwriting and selling policies itself, TasInsure is intended to operate as a coordinating body across the insurance market, with a focus on affordability and availability.

The government’s statement describes TasInsure as partnering with insurers, brokers, reinsurers and other participants to address “gaps in availability and affordability”. It also says the government is finalising TasInsure’s initial market interventions to support “hard-to-insure activities and risks”.

Alongside these interventions, TasInsure is expected to develop advisory services, transparency measures and comparison functions. The government has framed these as tools to promote competition and help address cost pressures.

Premier says commitments are being “bettered”

Premier Jeremy Rockliff argued the change should not be seen as a broken promise. Speaking at a press conference, he said he believed the government could “better our commitments” through the new path.

However, the decision does mean the original plan to create a state-owned insurer competing for customers will not proceed. The revised model shifts TasInsure away from selling policies and toward influencing how the broader market operates, including through targeted interventions and information services.

Implementation plan outlines phased rollout to 2028

The government has released an implementation plan for TasInsure, describing a three-phase approach. The plan says early action will deliver “practical benefits for Tasmanians from the outset”, while later phases will introduce “more complex market-facing initiatives”.

According to the plan, TasInsure will begin in the coming year with advisory services for community groups and assistance for hard-to-insure activities to obtain insurance, under a structure that is yet to be determined. The plan indicates the third phase is expected to be complete in 2028.

The plan also records that concerns were raised about the state-owned insurer model. These included potential risk to the budget, the state’s ability to respond to a disaster, and possible impacts on the private market.

Expert review questions the case for a state-owned insurer

The government engaged industry expert John Trowbridge to develop a framework for TasInsure. His February report to government, released alongside the new plan, was dismissive of Tasmania starting a state-owned insurance company.

Instead, the report made recommendations aimed at upgrading the “competitiveness, affordability and availability” of insurance. Several of those recommendations are consistent with the government’s new direction for TasInsure as a market-supporting authority rather than a retail insurer.

Key recommendations: reinsurance pool and designated risk pool

One major recommendation was for a “TasInsure-operated reinsurance pool” that all insurers would use to reinsure Tasmanian weather events. The report describes the purpose of the pool as protecting Tasmanian property owners from losses arising from major weather events—principally bushfires and floods—while also insulating them from contributing to the funding of weather events in other parts of Australia.

The report cautioned that such a pool would need to be “designed with great care”.

Another recommendation was a “designated risk pool” to support operators in sectors described as hard to insure, including:

• tourism
• outdoor recreation
• live entertainment
• hospitality
• community associations

In addition, Mr Trowbridge recommended insurance advisory services and comparison services—functions that align with the government’s stated intention to build advisory, transparency and comparison tools.

How the new TasInsure is intended to work

The revised TasInsure model is framed as a way to influence affordability and availability without the government becoming a direct insurer. In practice, the government’s description suggests TasInsure would sit between consumers, community groups, industry and government policy, identifying gaps and coordinating responses.

Based on the implementation plan and the government’s statements, TasInsure’s work program is expected to include:

• early advisory services, particularly for community groups
• support mechanisms for “hard-to-insure” activities and risks, with the structure still to be determined
• development of transparency and comparison functions to promote competition
• later-phase initiatives that are more complex and market-facing, with the full rollout planned through to 2028

While the government has emphasised affordability, it has not described TasInsure as a provider of consumer policies under the new model. That is a departure from the earlier framing of TasInsure as a state-owned insurer offering home, contents and small business insurance products.

Industry response: a “positive step” from a major local insurer

Some in the insurance sector welcomed the new plan. RACT chief executive Mark Mugnaioni described the implementation plan as “a positive step towards improving insurance affordability”.

The earlier TasInsure proposal would have positioned the state as a direct competitor to RACT, which is described as Tasmania’s major state-based insurance agency. Under the revised approach, TasInsure would not compete in the same way, instead focusing on system-level interventions and support functions.

Both RACT and the national body representing insurers had criticised the original TasInsure policy, arguing it was the wrong solution to rising insurance costs. The government’s move to a statutory authority model was described as welcomed by insurance companies.

Concerns raised about the original state-owned company model

The implementation plan notes that concerns were raised about proceeding with a state-owned insurer. Among the issues identified were:

• Risk to the budget, reflecting the financial exposure that can come with underwriting and claims costs
• Disaster response capacity, including the ability of the state to respond to a major event
• Impact on the private market, suggesting potential disruption to existing insurers and market dynamics

Separate analysis ordered by the industry, conducted by LateralEconomics, concluded the original proposal would be “costly and risky for the state government”, and would lose up to $13 million annually.

Political reaction: Labor and Greens criticise the change

Opposition parties framed the decision as a broken promise and questioned whether TasInsure will deliver savings. Labor’s shadow treasurer, Dean Winter, said the premier knew “the day he announced TasInsure that he could never deliver it”. He also criticised the earlier claims about modelling and reiterated the election messaging that Tasmanians would save $250 on insurance.

Mr Winter argued the policy had been sold as cost-of-living relief but had now been “watered down into another bureaucracy”, saying there were “no savings, no cheaper policy, and no explanation of how Tasmanians will be better off”.

In a statement, the Greens said the Liberals’ flagship election policy had been exposed as a “cruel hoax”. The party argued that with the original plan “debunked and dismissed by their own review”, the government had been forced to change its approach completely. The Greens said they would “take our time” to go through the new TasInsure policy.

What remains unresolved

While the government has released an implementation plan and committed to establishing TasInsure through legislation, key details are still to be settled. The government has said it is finalising TasInsure’s initial market interventions to support hard-to-insure activities and risks, but the structure for providing that assistance is not yet determined.

The phased approach also means that some of the more complex initiatives are scheduled for later years, with the plan indicating completion of the third phase in 2028. How quickly Tasmanians experience measurable changes will depend on what is delivered in the early phases, including advisory services and any initial interventions aimed at hard-to-insure risks.

A shift from direct competition to market coordination

The government’s revised TasInsure plan represents a clear pivot. The earlier concept was a state-owned insurer that would compete for customers and offer policies across key segments such as home, contents and small business insurance. The new model is positioned as a statutory authority that works with the existing market—insurers, brokers and reinsurers—to address gaps, improve transparency, and develop tools that may encourage competition.

Supporters of the revised approach have pointed to affordability objectives and the potential benefits of targeted mechanisms such as reinsurance and designated risk pools. Critics have argued the change abandons the promise of direct savings through a government-backed insurer and replaces it with another layer of administration.

With legislation still to come and a multi-year rollout planned, the practical impact of TasInsure will be judged on whether the authority’s early interventions and longer-term market initiatives translate into improved availability and affordability for the households, small businesses and community organisations that were central to the original election pitch.