Cyclone reinsurance pool 'needs improvement'

Cyclone reinsurance pool ‘needs improvement’ | Insurance Business Australia

Catastrophe & Flood

Cyclone reinsurance pool ‘needs improvement’

Consumer lobby group takes aim at initiative

Catastrophe & Flood

By
Roxanne Libatique

The Australian Consumers Insurance Lobby (ACIL) has found that the Cyclone and Cyclone-Related Flood Reinsurance Pool “needs improvement”.

The findings come from ACIL’s first comprehensive evaluation report of the initiative, which found that the pool offers limited to no substantial savings for consumers.

ACIL called on policymakers to initiate necessary amendments before the 2025 review to avoid missing opportunities for timely improvements.

Additionally, the report highlighted that northern communities could be seen to shoulder the financial burden of cover for their southern counterparts. It also had an unfavourable assessment of insurers’ interactions with the pool.

Recommendations

ACIL’s report outlined recommendations to close the gaps, including reducing premiums linked to cyclone cover. It also called for expanding the eligibility framework for the pool to include marine insurance, which has been facing soaring premiums, high cyclone excesses, and gaps in coverage for cyclone events.

On September 11 and 12, ACIL met with Assistant Treasurer Stephen Jones and Joint Select Committee Members for Northern Australia, including, Hon Warren Entsch MP, Luke Gosling OAM MP, Senator Dean Smith, and Andrew Willcox MP.

“We are excited to share the results of our in-depth evaluation of the cyclone reinsurance pool. This report underscores our dedication to ensuring an insurance landscape that truly serves the interests of consumers.” Said ACIL Chairperson Tyrone Shandiman. “The discussions we had with the Assistant Treasurer and members of the Joint Select Committee for Northern Australia were receptive, and we expect they will yield tangible benefits for consumers.”