Australia has passed legislation to enable the establishment of a reinsurance pool for cyclone and cyclone-related flood for homes, strata corporations and small businesses, in a move welcomed by the Insurance Council of Australia (ICA).
The ICA says it is now incumbent upon the Australian Reinsurance Pool Corporation (ARPC) to release its pricing schedule to give the sector time to price in reinsurance costs and provide visibility to policyholders on expected premium reductions.
It added that the insurance sector will continued to engage with the ARPC, Treasury and the ACCC in the lead-up to implementation, which is planned from 1 July this year.
However, the ICA also stressed that sustainable premium reductions will require further government action, such as investments in local infrastructure and household-level programs.
“Insurers welcome the passage of the reinsurance pool legislation, which is an important next step on a very complex issue,” said ICA CEO Andrew Hall.
“The Pool is scheduled to commence in just three months, so it’s vitally important that insurers and their customers are able to understand how and to what extent this will impact on premiums.”
“However, a Reinsurance Pool is just one piece of the puzzle,” Hall continued. “The recent and ongoing floods have shown the urgent need for investment in measures to better protect homes and communities.”
“While we welcomed the increased funding in last night’s Budget for those communities impacted by this year’s floods, there are dozens of other communities in Australia that remain exposed to perils like cyclones and require similar assistance to uplift their mitigation.”
“In the lead up the election in coming weeks it is incumbent upon the Government to not only assist with recovery, but announce further investments to better protect communities from the impacts of extreme weather.”
