Marina Operators and owners of other fixed marine structures in Northern Australia are no closer to a solution on the affordability crisis face in what appears to be a decision by the Federal Government to not include Marine Insurance in the Cyclone Reinsurance Pool (pool)
The previous LNP government had set 1st July 2023 as the date that Marine Insurance would be included in the pool, however ACIL understand no preparations are being made to include marine insurance in the Cyclone Reinsurance Pool.
“This represents yet another disappointment for consumers associated with the cyclone reinsurance pool. First delays with the rollout, then news that savings would not be as promised and now operators of fixed marine infrastructure will not be covered” ACIL Chairperson Tyrone Shandiman said.
ACIL hold the view there is a need for the Cyclone Reinsurance Pool for the marine Industry – the need may not necessarily extend to all aspects of marine insurance, however fixed marine infrastructure is an area that needs further attention from the Federal Government.
Fixed infrastructure such as Marinas, Pontoons & Jetties are vital infrastructure for communities in Northern Australia where boating is a very important part of the economy and community. The Federal Government must take action to include fixed marine infrastructure into the Cyclone Reinsurance Pool.
The cost of insurance for Marinas & other fixed marine infrastructure has skyrocketed in recent years and some Marina operators are resorting to self-insuring, co-insuring (taking out partial cover) or taking out polices with excessively high excesses to reduce their costs.
The owners of the fixed infrastructure are also having to pass on the cost of insurance to those that use their facilities including businesses that utilise this vital infrastructure and this has a flow on impact to businesses and economies that use this infrastructure.
ACIL believe Federal Government intervention is required by including cover for fixed marine infrastructure into the pool. The average sum insured value of marinas based on our research is between $10,000,000 to $25,000,000, so the current $5,000,000 cap for commercial property under the pool would not be sufficient for this infrastructure.
We have sourced data (see table below) from four marinas over the last 6 years in Northern Australia and the key issues that marinas have faced are:
The compounding effect of 15% increases over a 6 year period results in a 130% increase over this period.
All four marinas with a $500,000 Excess.
Some marinas not being able to source or afford 100% cover and partially insuring their marina.
ACIL have written to Assistant Treasurer Stephen Jones MP and are in discussions with other Labor senators and interested parties to discuss the need for Marine Insurance to be included in the cyclone reinsurance pool.