Insurance Premiums Increase by up to 10-fold for Victoria’s Alpine Businesses

A supplied image obtained on Wednesday, July 26, 2017 of the Mount Hotham ski resort's range of slopes for skiing. AAP Image/Tourism North East

Businesses in the Victoria’s Alpine region—along the state’s mountain ranges in the North East—have seen insurance premiums surge by almost 1000 percent just as businesses begin to recover financially post pandemic.

The increase has been due to the Black Summer bushfires, which in 2019-2020 saw more than 1.5 million hectares of land burned in Victoria alone. Approximately 187,000 hectares in the alpine region were burnt during that time, according to state government statistics.

Insurance companies are reported to be scared of the risks despite alpine businesses being equipped with snow guns to tackle any potential fires,” Mount Hotham Chamber of Commerce president Steve Belli told the Australian Broadcasting Corporation (ABC).

“[The east coast has] the all disasters area of Australia. It’s getting to the point now where some places are uninsurable,” Belli said.

Belli added that as businesses seek to recover revenue lost during the pandemic, they said the costs of insurance was a “big issue.”

“I know of one lodge that started off at about $13,000 in 2018–19 and then moved up to $122,000 in 2022,” Belli said.

“Some of these guys owe the resort management board $880,000 of service charges for only four days work. With insurance on top of that, it becomes a pretty difficult exercise.”

While some businesses have not seen such a steep rise in insurance costs as some others, Paddy Hoy from Hoy Ski Hire told the ABC that his business insurance had risen exponentially.

“It’s pretty obvious to me that we have market failure. We have very few players in the national or international [insurance] market that will participate so there’s no competition,” Hoy said.

There are also concerns that investments into resorts could cease if businesses are not insured.

“The push is to develop the resorts and get them up to world-class standard. We can’t see any of that if we don’t have insurance,” Belli said. ”In the absence of insurance these places will just go into gridlock and they will not continue to operate.”

Further, a lack of accomodation for workers and a general shortage of staff have caused some business to close this ski season, Belli added.

Both Mt Hotham Resort Management, and Network Insurance Group have been approached for comment.

The state government has acknowledged the impacts of the 2019/20 bushfires and the pandemic to Victoria’s alpine region, announcing that from October 2022, Alpine Resorts Victoria will be responsible for managing Falls Creek, Mt Hotham, Mt Buller, Mt Stirling, Lake Mountain and Mt Baw Baw alpine resorts.

“The government’s objective is to create economic resilience and ensure the long-term sustainable future of Victoria’s alpine resorts sector, recognising its importance to the state’s visitor economy,” Victoria’s Department of Environment, Land, Water and Planning said in a statement.

Meanwhile, many businesses in the alpine region are looking forward to welcoming visitors this weekend with a number of ski resorts opening earlier than expected.

Mt Hotham Skiing Company general manager Nathan Butterworth told the ABC that he was pleased to see large amounts of snow forecasted over the coming week.

“We’ve watched the resort transition from green to white,” Butterworth said. “I’m thrilled to be able to bring the season opening forward and welcome guests back to what is a very special part of Victoria.”

During winter, the alpine region contributes nearly $1.1 billion to the Victorian economy, attracting one million visitors and sustaining nearly ten thousand jobs.

The ski season officially starts this long weekend.