The Insurance Council of Australia the ICA today welcomed the passage legislation that will allow the establishment of a Reinsurance Pool in case of cyclones and cyclone related floods for small businesses, homes, strata companies and other property.
The Australian Reinsurance Pool Corporation (ARPC), must now release its pricing schedule in order to allow the sector to price reinsurance costs and give policyholders visibility on expected premium cuts.
The insurance sector has worked constructively with the Federal Government since the Pool was announced in the lead-up to last year’s Budget and will continue to engage with the ARPC, Treasury and the ACCC in the lead-up to implementation, planned from 1 July this year. The Reinsurance Pool is only one of the levers that can be used to affect premium prices in cyclone-affected regions.
Governments must invest more in infrastructure at the local level and household-level programs to achieve sustained premium reductions for people who are exposed to extreme weather events, such as cyclones. That’s why last month the ICA released Building a More Resilient Australia, which set out an investment pipeline of $2 billion over five years jointly funded by the Federal and state governments to better protect communities and households from cyclone, flood, and bushfire risk.
ICA CEO, Andrew Hall, said, “Insurers welcome the passage of the reinsurance pool legislation, which is an important next step on a very complex issue. 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. We look forward to the ARPC releasing that information as soon as possible”.
“However, a Reinsurance Pool is just one piece of the puzzle. The recent and ongoing floods have shown the urgent need for investment in measures to better protect homes and communities”.