One of Queensland’s leading insurers, RACQ Insurance, has joined the Federal Government’s Cyclone Reinsurance Pool prior to the 2023-24 cyclone season. This announcement comes after insurer Suncorp Group announced last week that it has joined the pool as well.
Queenslanders have continued to face the devastating impacts of extreme weather. A lot of who are also dealing with significant premium price increases from across the whole insurance industry.
Chief Executive Insurance Trent Sayers affirmed RACQ supported the introduction of a pool.
Sayers continued, “Unfortunately, home insurance premiums will remain high despite RACQ passing on all the benefits gained from the pool to our members. This is a disappointing outcome, and with a review scheduled for 2025, RACQ will continue to recommend changes to the pool’s design that will achieve maximum benefits for homeowners.
“Any benefits the pool will provide will be more than offset by the affordability challenges facing the insurance industry, such as growing climate risk and inflation including significant increases in labour and building material costs.”
Key information about the pool is that it charges insurers for providing cyclone cover, although it does not provide free cyclone cover to insurers, only partial cover. For example, the pool will not cover insurers two days after the cyclone becomes an ex-tropical cyclone which is when many weather systems cause the most damage and results in insurers having to purchase reinsurance to cover the gap.
So far the pool has been costly to implement due to ongoing regulatory requests for information and system changes.
RACQ shares the Federal Government’s ambition to keep insurance affordable with a history of advocating for greater investments in natural disaster mitigation and resilience initiatives.
Sayers concluded, “The pool is just one measure – more needs to be done to better protect Queenslanders such as the removal of stamp duty, increasing disaster mitigation infrastructure, home upgrades and stronger land planning and building rules. Last month we commended the Federal Government for allocating $84 million of its $200 million Disaster Ready Fund to Queensland and for its commitment to building a long-awaited flood levee in Bundaberg.
“RACQ will continue to engage all levels of government on this important issue, while advocating on behalf of our members for initiatives and changes that will improve our resilience against the growing threat of climate change.”
