The Australian Reinsurance Pool Corporation has released the modelling data used to design the Northern Australia Reinsurance Pool, revealing the impact the scheme is likely to have on premiums across the region.
The report indicates up to 24 per cent of residential home policyholders in Queensland with minimal cyclone risk will see premium increases, and in some cases, this premium increase could be greater than 20 per cent.
The model estimates that just five individual small businesses across the whole of Northern Australia are expected to receive the highest premium reductions.
The Northern Australia Reinsurance Pool was designed to give large insurers until 31 December 2023 to have all cyclone-risk reinsurance contracts in the Pool, while small insurers have until 31 December 2024, meaning policyholders in Northern Australia should expect to see an impact on premiums once insurers move their reinsurance contracts into the Pool.
Andrew Hall, CEO of ICA, said: “We welcome the Assistant Treasurer’s move today to bring full transparency to the modelling which sits behind the Reinsurance Pool scheme.
“Insurers have been concerned that consumer expectations around premium decreases were never going to be met through this scheme, so today’s release has provided transparency for the first time.”
“Ultimately this data highlights that driving sustainable relief to people’s premiums will require long-term co-ordinated investment across a range of measures from all levels of government.”
“We endorse the Assistant Treasurer’s comments that Government should be working with vulnerable communities to reduce the risks of extreme weather, through direct action at the household level and in community infrastructure.”
“Ultimately a more resilient built environment and smarter land planning decisions will be the key to insurance affordability and availability in Northern Australia.”