The Australian Consumers Insurance Lobby Inc. (ACIL) urges the Federal Government to take immediate and decisive action in response to the recent findings of the Australian Competition and Consumer Commission (ACCC) regarding the Cyclone and Cyclone-Related Flood Reinsurance Pool. The ACCC's report (click here) reveals that insurance premiums in Northern Australia remain unacceptably high despite the establishment of the pool in 2021 by the former Morrison government.
As insurers finalise their transition into the pool by the end of 2023, ACIL stresses that the full impact of the pool is still pending. However, the current data suggests that the intended reduction in premiums is not materialising as hoped. This stagnation calls for the Federal Government to intervene proactively, rather than waiting for the scheduled 2025 review.
ACIL’s own report (click here), titled “Under the Lens: ACIL’s first evaluation of the Cyclone and Cyclone-Related Flood Reinsurance Pool” (September 2023), echoes these concerns. While acknowledging some instances of reduced premiums, particularly in the strata sector, the overall lack of significant savings for consumers remains a pressing issue.
During a recent meeting with Assistant Treasurer Stephen Jones, ACIL presented five key recommendations. These include the integration of mitigation measures and the implementation of greater cross-subsidisation, aimed at achieving tangible reductions in premiums. Assistant Treasurer Jones, recently returned from a trip to Europe where he engaged with global reinsurers, supporting the notion that mitigation measures are essential in addressing the market failure in insurance.
ACIL Chairperson Tyrone Shandiman emphasises the urgency of the situation: "Stephen Jones highlighted concerns about the lack of savings for consumers in a media release in June 2022. The latest report by ACCC reiterates the need for federal government action. What more evidence is needed? It's no longer acceptable to attribute the pool's shortcomings to the previous government. There are specific measures the current government can take to reduce premiums. The time for action is now."
ACIL stands committed to advocating for the rights and interests of consumers in Northern Australia and will continue to monitor the situation closely, pressing for the necessary reforms to ensure affordable insurance for all.
About ACIL: ACIL (formerly the Northern Australia Insurance Lobby Inc) is a leading consumer advocacy group dedicated to protecting the rights and interests of insurance consumers across Australia. ACIL actively engages with industry stakeholders, policymakers, and government representatives to address market failures, promote fairness, and improve insurance practices for the benefit of all Australians.