July 18, 2022
KAP Federal Member for Kennedy, Bob Katter, has applauded the Reinsurance Pool as a huge win with insurance premiums predicted to drop by 27 to 30 per cent in the coming months in high-risk cyclone-prone areas.
Hard fought legislation providing a Government-backed cyclone reinsurance pool was passed in the very last minutes before Parliament closed prior to the election. The Pool is now at the roll-out stage.
Mr Katter said, "The Albanese Government has honoured this common-sense legislation to provide accessible and affordable insurance cover for all people living and working in cyclone affected areas."
At a briefing by the Australian Reinsurance Pool Corporation (ARPC) today, Mr Katter was told that the Government-backed Reinsurance Pool will be cost neutral to the Government whilst providing significant savings to consumers in cyclone prone areas.
Data is still being collated by the ARPC, but initial figures predict a 19 per cent on average saving for home insurance in Northern Australia, with a 27 per cent saving in high-risk areas between Townsville and Cairns and a 30 per cent savings in Cairns.
It is anticipated that as more insurers enter the Northern Australian insurance market, even greater savings could be delivered.
The ARPC will finalise premiums by 1 October this year, allowing for insurers to fully transition to the Reinsurance Pool over 18 months.
However, Mr Katter concedes the battle is still not yet won.
“We have achieved brilliant results here, but the fight is far from over. It is vital that insurance premiums in North Queensland are similar to those offered in the rest of Australia.
“While there’s a significant predicted reduction in premiums, there is a risk that we won't get economic development and investors in Northern Australia until we have premiums that are competitive with those down south.
“It also doesn’t provide the protection for post-48 hour flooding, a critical issue in areas such as Ingham, or the degree of protection for the on-farm agriculture sector that we had hoped.
“We’ve been paying over $4,000 for insurance per house, whereas in the rest of the country they pay $1,500 per house. The oppressive rate of strata title insurance meant we couldn’t get bank finance to build new apartment blocks in North Queensland.
“A 27% to 30% saving is appreciated but we deserve and should demand for accessible and affordable insurance that is on par with the rest of the country.”
KAP Member for Hinchinbrook, Nick Dametto, said he was sceptical of the ACCC’s ability to be effective on bringing costs down for all consumers.
“Costs need to be as close as possible to the rest of Australia. The ACCC which is going to be brought in to review the Pool annually has been described as being a ‘toothless tiger’ in the past, so we will be doing what we can to ensure these reviews fix the problems highlighted and provide a fair deal for all North Queenslanders.”
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