Insurers Agree to Investigate Reinsurance Pool

Long-held opposition to a reinsurance pool has been overturned

There may be some good news on the horizon for thousands of North Queenslanders who have seen their residential insurance premiums go through the roof over the last five years.

Insurers have agreed with Federal Government and Treasury to investigate the feasibility of a reinsurance pool in an unexpected turn of events that strata leaders say brings insurance affordability and availability one step closer for struggling strata communities in far north Queensland.

SCA (Qld), which has been supportive of a reinsurance pool in its submissions to the Australian Competition and Consumer Commission, says at a time when insurance affordability and availability is reaching crisis point, industry consensus to investigate a reinsurance pool is pleasing.

SCA (Qld) President James Nickless says, “The Insurance Council of Australia and the insurance industry at large has our full support in examining measures that will decrease premiums and encourage insurers to re-enter the market.

“We hope Government, Treasury and the insurance industry will embrace and implement a cyclone reinsurance pool to provide protection to the thousands of Queenslanders who live in far north Queensland.”

“Despite concerns held by some insurers, we are delighted to see that rival insurers in far north Queensland have agreed to cooperate in preliminary work by Government and Treasury to explore a cyclone reinsurance pool.”

In its submissions to the ACCC, SCA (Qld) has reported that insurance affordability and availability in far north Queensland is leaving strata communities exposed, with some members reporting that they are underinsured or worse, uninsured.

Mr Nickless says, “Any measure that will serve to increase the availability of affordable and comprehensive insurance coverage is welcome relief to strata communities who have been between a rock and a hard place for too long.

“These communities are required by law to insure common property, body corporate assets and any multi-unit building for full replacement value. Given this requirement, bodies corporate have been unable to demand a better deal.

“We’re confident a government-backed cyclone reinsurance pool will alleviate these issues in the region and we’re recommending the terrorism fund be changed to a cyclone reinsurance pool.

“We hope Government, Treasury and the insurance industry will embrace and implement a cyclone reinsurance pool to provide protection to the thousands of Queenslanders who live in far north Queensland.”

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