News

ACIL Pushes for Fair Premiums: Northern Australia Shouldn't Subsidise the South

The Australian Consumers Insurance Lobby Inc. (ACIL) has made a significant submission to the Australian Reinsurance Pool Corporation (ARPC) for the 2024 Cyclone Reinsurance Pool (the Pool) premium rates review. This submission underscores the urgent need to address the disparity in insurance premiums between Northern and Southern Australia, advocating for a fairer and more equitable system.

Key Points of the Submission:

Equitable Contributions: ACIL highlights the necessity for all regions, including those south of Port Macquarie, to contribute to the Cyclone Reinsurance Pool. Historical data from the University of Newcastle reveals that regions in New South Wales have experienced cyclone events are not currently contributing to the Pool, demonstrating that the risk is not confined to the north.
Fair Modelling: The current modelling for the Pool does not adequately consider the potential for future cyclone events in southern regions, leading to an unjust premium burden on Northern Australia residents. ACIL contends that private reinsurers would factor in cyclone risks for areas south of Port Macquarie, and the Pool should do the same
Transparency in Rate Setting: To foster greater transparency, ACIL advocates for the disclosure of reinsurance costs on policy premium notices. This would enable consumers to understand the impact of the Pool on their premiums and hold insurers accountable for passing on savings.
Proactive Mitigation Measures: ACIL supports pre-cyclone season roof inspections for strata buildings, which can significantly reduce claims and improve the Pool’s effectiveness. Discounts should be provided for buildings that comply with established inspection criteria.

"Tyrone Shandiman, Chairperson of ACIL, stated, 'It is imperative that the Cyclone Reinsurance Pool operates on principles of fairness and equity. Residents in Northern Australia should not bear a disproportionate burden while southern regions contribute nothing. Our submission calls for a more balanced approach that ensures all Australians share the risk and benefits of cyclone insurance.'"

ACIL’s submission to ARPC aims to bridge the divide between Northern and Southern Australia, promoting fairer premiums and a more just reinsurance system. By addressing these key issues, we can ensure that all Australians are protected and treated equitably in the face of increasing climate challenges.

ACIL's Submission to the Select Committee on the Impact of Climate Risk on Insurance Premiums and Availability

We are pleased to share that the Australian Consumers Insurance Lobby Inc (ACIL) has officially submitted our detailed review and recommendations to the Select Committee on the Impact of Climate Risk on Insurance Premiums and Availability. This submission underscores our commitment to advocating for fair and affordable insurance for all Australians, especially in the face of escalating climate risks.

Our submission includes actionable recommendations focused on safeguarding consumer interests and ensuring that insurance remains accessible and affordable.

To view the full submission, please click the below:

Joint Call for Action: Addressing Insurance Affordability in Queensland

The Australian Consumers Insurance Lobby Inc, Financial Rights Legal Centre (which operates the national Insurance Law Service), Queensland Consumers Federation, Consumers Federation of Australia, Unit Owners Association of Queensland and Owners Corporation Network are united in calling on the Queensland Government to show leadership in addressing the escalating crisis of insurance affordability.

In the face of compelling evidence that Queensland is currently the most unaffordable and uninsurable state in Australia, these organisations believe it is imperative for the government to implement meaningful reforms. This joint call to action highlights the urgent need for measures that will alleviate financial pressures on households and businesses, promote fairness, and enhance financial resilience across the state.

Key Issues:

Queensland residents and businesses, particularly those in high-risk areas, are facing exorbitant insurance costs.
The current system disproportionately burdens those who can least afford it, exacerbating challenges related to insurance affordability, availability, and financial resilience.

Proposed Solutions:

Removal of Stamp Duty on Insurance: Eliminating or reducing stamp duty on insurance premiums can provide immediate financial relief to consumers and businesses, reducing the overall cost of insurance.
Investment in Resilience and Mitigation Measures: Allocating funds towards resilience and mitigation initiatives can help reduce the risk of damage from natural disasters, leading to lower insurance premiums in high-risk areas.

Statements

Australian Consumers Insurance Lobby Inc: “Some residents in North Queensland are paying up to ten times more for their insurance, disproportionately increasing their stamp duty payments, yet recent budget measures have failed to address this critical issue.” – Tyrone Shandiman, Chairperson.

Financial Rights Legal Centre, which operates the national Insurance Law Service “Insurance unaffordability is becoming widespread across Australia. By its very nature, this issue disproportionately impacts people on lower incomes who tend to occupy a greater proportion of housing in more disaster-prone areas. Queenslanders face unique affordability challenges, so we urge the government to take decisive action to help address these issues before even more people lose the ability to protect themselves from risk.” – Karen Cox CEO.

Consumers Federation of Australia: “Insurance affordability has emerged as a critical concern for consumers across Australia, with Queensland facing its own unique challenges. We fully support the Queensland government in taking action to improve the affordability and availability of insurance.” – Gerard Brody, Chairperson.

Unit Owners Association of Queensland (UOAQ) "The exorbitant cost of insurance is affecting the quality of life for unit owners across Queensland. We need decisive action to protect our homes and our financial wellbeing." — Bob Boundy, Secretary/Treasurer.

Owners Corporation Network (OCN) "High insurance costs are a major concern for property owners. We urge the government to consider reforms that will make insurance more affordable and accessible for everyone." —Karen Stiles, Executive Director.

Relevant Documents: