Brisbane Flood Map Shake-Up Sparks Call for Federal Reinsurance Action

The Australian Consumers Insurance Lobby (ACIL) is calling on Assistant Treasurer Daniel Mulino to include flood cover in the government’s reinsurance pool as part of this year’s review of the cyclone reinsurance pool.

The call follows Brisbane City Council’s announcement that from 19th September 2025, an additional 10,129 properties will be added to the city’s flood risk overlay, with more than 2,000 others moved into higher flood-risk categories. In total, 17,246 properties will be affected, with premiums already spiking in some areas by as much as tenfold.

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ACIL Chairperson Tyrone Shandiman said it is essential that flood risk is addressed through a comprehensive, long-term strategy on insurance affordability.

“The Insurance Council of Australia has previously proposed a $30.15 billion Flood Defence Fund to build resilience. While resilience is important, it is equally important that all solutions are considered — particularly if it can be demonstrated that those solutions improve insurance affordability and deliver better value for taxpayers. Expanding the reinsurance pool to include flood cover is one option that deserves serious consideration,” Mr Shandiman said.

The cyclone reinsurance pool was introduced to reduce premiums in cyclone-prone areas, but ACIL says the same logic must be applied to flood risk.

“The government recognises the challenges with flood insurance, and the upcoming review is an opportunity to take action rather than leave Australians stuck with the status quo.  For some households, flood premiums can exceed $20,000 a year — completely out of reach for many Australians. When insurance is unaffordable, people are forced to go without or take out inadequate cover and that leaves taxpayers carrying the financial burden when disasters strike. The government cannot allow this to continue — it must act,” Mr Shandiman said.

“The review is a chance to show leadership by delivering solutions that provide lasting affordability. Expanding the reinsurance pool to flood should be on the table,” Mr Shandiman said.

Cyclone Reinsurance Pool: Early Gains, But the Gap Remains Too Wide

The Australian Consumers Insurance Lobby (ACIL) has welcomed the latest findings from the ACCC’s Insurance Monitoring – Fourth Report, which show the Cyclone Reinsurance Pool is starting to reduce the gap in insurance premiums between Northern and Southern Australia. However, ACIL warns that the job is far from done and calls for continued reform to address unaffordable premiums in cyclone-prone regions.

The report highlights early success:

• Home insurance policyholders in the highest risk bands (rating band U & W) are seeing premium reductions above 20%.

• Small and medium-sized businesses (SMEs) in high-risk zones (rating band V & W) are benefiting from reductions of up to 40%.

• On average, homes in medium to high cyclone risk areas received an 11% premium reduction, while homes with nil cyclone risk experienced a 7% increase.

These figures confirm the pool is beginning to rebalance pricing. However, the average premium per $100,000 sum insured in medium to high risk areas still remains more than double that of nil-risk areas — dropping from $701 to $627, compared to an increase from $279 to $299 in nil-risk areas.

“There is now clear evidence the cyclone reinsurance pool is working,” said Tyrone Shandiman, Chairperson of ACIL. “The gap is beginning to narrow — but more must be done to deliver fair and affordable premiums for Australians in disaster-prone regions. We cannot accept the current gap — over 100% — as the new normal.” “What’s missing from the reporting is insight into the most impacted, highest-priced consumers — those who remain unable to afford insurance. We must continue refining the pool to ensure the benefits reach those who need them most.”

A formal review of the Cyclone Reinsurance Pool is scheduled for July 2025, and ACIL will soon make contact with Assistant Treasurer Daniel Mulino seeking clarification on when the review will commence and how it will be conducted.

ACIL is urging that the review focus on four critical areas:

1. Mitigation and Resilience Measures:  Private mitigation efforts paid for by policyholders are not delivering insurance savings. ACIL believes the government should step in with funded or subsidised mitigation programs, and has called on the Queensland Government to invest $100 million of stamp duty revenue into  private cyclone risk reduction in North Queensland.

2. Review of Rates and Regional Equity: Major claims events such as Cyclone Alfred in South East Queensland raise concerns that higher-paying Northern residents may be subsidising other regions. The review must assess if the rates are equitable, particularly in light of the Interdecadal Pacific Oscillation (IPO) — a climate cycle which may shift cyclone risk further south.

3. Expansion of Eligibility: The pool should be expanded to cover currently excluded property types including commercial buildings over $5 million, fixed marine infrastructure, farms, and aged care facilities.

4. Expansion of Perils Covered: Given the progress made on cyclone risk, the government should consider expanding the model nationally to cover other high-cost, risk-priced perils such as flood, bushfire, storm surge, and earthquake.

   
   

“We applaud the progress — but we cannot rest,” Mr Shandiman said. “We need bold action to close the affordability gap, support our most vulnerable communities, and ensure that every Australian has access to fair and affordable insurance.”

ACIL Urges Queensland Treasurer to End the 'Tax on a Tax' and Double Investment in Resilience

The Australian Consumers Insurance Lobby (ACIL) has called on Queensland Treasurer David Janetzki to double the state’s investment in disaster resilience by redirecting stamp duty collected on the GST component of insurance premiums—revenue widely criticised as an unfair “tax on a tax.”

In a letter sent, ACIL noted that Queensland is projected to collect over $10 billion in insurance stamp duty over the next five years. Of that, approximately $912 million will come from taxing the GSTon each and every general insurance policy in Queensland —an approach that disproportionately burdens households and small businesses already facing unaffordable premiums, particularly in North Queensland.

“Queensland is the most unaffordable state in Australia for insurance, and the Government is taxing people not just on their premiums, but also on the GST applied to those premiums,” said ACIL Chairperson Tyrone Shandiman. “Redirecting that revenue to fund risk reduction would send a powerful signal that the Government is serious about cost-of-living relief and disaster resilience.”

ACIL welcomed the existing $450 million Queensland Resilience and Risk Reduction Program but pointed out that it represents less than 5% of forecast insurance stamp duty revenue. In contrast, using just the tax-on-GST portion could more than double the current investment.

Targeted Funding for North Queensland

As part of the proposal, ACIL has again urged the Government to commit $100 million per annum specifically for cyclone resilience measures in North Queensland, where the insurance burden is most extreme. The funding could support roof strengthening, roof maintenance, debris management, and securing outdoor structures in high-risk areas.

The organisation also recommended that any such state investment be contingent on securing an agreement with the Australian Reinsurance Pool Corporation (ARPC) and Federal Treasury to reduce Cyclone Reinsurance Pool premiums in regions where risk is materially reduced.

“It’s not just about spending more—it’s about ensuring that mitigation translates into real premium relief,” Mr Shandiman said.

ACIL has requested a meeting with Treasurer Janetzki to discuss how Queensland can better align its resilience funding with the communities that are paying the most—and getting the least relief.

“This is a chance to reform how we use stamp duty and invest where it matters most. The current system penalises those who can least afford it. That must change,” Mr Shandiman said.