Australian Consumers Insurance Lobby Inc (ACIL) are concerned about reports from Assistant Treasurer Stephen Jones MP suggesting promises of premium savings associated with the Cyclone Reinsurance Pool made by the previous Government will not be met.
The new Federal Labor Government will shortly release modelling used to design the previous government’s Cyclone Reinsurance Pool and they believe savings promised are unachievable.
ACIL response to Modelling
ACIL are disappointed to hear this news and we believe:
savings advised by the previous government of up to 46% (including savings for strata properties up to a 58% and SMEs up to a 34%) are still needed to deal with the issue of affordability and availability of insurance in Northern Australia.
If immediate fixes cannot be applied, the implementation of the Cyclone Reinsurance Pool should continue if it generates a positive outcome for consumers.
a cyclone reinsurance pool is an appropriate mechanism to address affordability of insurance in Northern Australia.
the modelling of the Cyclone Reinsurance Pool must continue to be refined to ensure that the Cyclone Reinsurance Pool meets its purpose.
The legislated 3-year review of the reinsurance pool is not sufficient. A review of the reinsurance pool after 12 months must take place. This was agreed by the former Assistant Treasurer under their ministerial discretion and we will be seeking similar assurances from the new Assistant Treasurer Stephen Jones MP.
the new government must work with the ARPC and all stakeholders to address the affordability crisis for insurance.
“We did have some reservations about whether the modelling associated the reinsurance pool stacked up when we were advised by Treasury the final reinsurance program would not be released to insurers until after the federal election in late May. The timing seemed somewhat unusual given feedback provided by insurers suggested this did not provide insurers enough time to implement the Cyclone Reinsurance Pool to consumers at the “household level’ on the 1 July rollout. Irrespective of the actions of the past government, the new government has a role to play in getting the Cyclone Reinsurance Pool right for policy holders. ACIL are passionate about a review of the Cyclone Reinsurance Pool after 12 months. We wrote to Anthony Albanese in April seeking commitment of a 12 month review, although this was not responded to we are following this up with the new government. It is clear the Cyclone Reinsurance Program will need updates to ensure it is fit for purpose for consumers”