Insurance relief delayed

AS insurance premiums continue to skyrocket in Northern Australia, policy holders are being warned any benefits flowing from a governmentbacked reinsurance pool will be delayed.

The scheme, backed by a $10bn government guarantee, is due to commence on July 1.

But the Northern Australia Insurance Lobby says insurers are telling them they are not ready.

“It really comes down to the fact that they weren’t given enough time by the (former) government,” Northern Australian Insurance Lobby spokesman Tyrone Shandiman said.

The former LNP government announced plans to establish the pool in May last year, promising reductions in premiums of up to 58 per cent for strata property owners. But legislation to establish the pool did not pass through parliament until March this year.

Mr Shandiman said insurers needed at least three months and probably longer to buy the pool’s reinsurance and then include it in their policies to pass on any savings.

Large insurers have been given until the end of next year to have the reinsurance in place, while smaller insurers have until the end of 2024.

Mr Shandiman said any benefits from the pool could be wiped out by premium increases occurring now of as much as 50 per cent.

But he wants the new Labor government and the government’s Australian Reinsurance Pool Corporation, tasked with setting the pool up, to implement it.

“We don’t know what the full outcome (of premium reductions) will be, but it’s better to do something than nothing,” Mr Shandiman said.

The pool has been designed to provide cover for residential, strata and small business property insurance in Northern Australia for cyclone and related flood damage with varying restrictions on insured values.

Townsville Lot Owners Group spokesman Andrew Turnour said while a few smaller strata properties had seen some premium reductions in recent times, increases of as much as 100 per cent were occurring.

“Ten to 15 per cent is the average increase we are seeing this year,” Mr Turnour said.

Mr Turnour said property insurance continued to be a “huge mess”, which was hampering the North’s economy.

He also wanted to know what arrangements the Australian Competition and Consumer Commission had to monitor the market after being announced with extra funding.

“The economy of North Queensland is struggling under this insurance mess. It’s a sad scar on the economy and it’s holding us back,” Mr Turnour said.

When asked for comment, the Australian Reinsurance Pool Corporation referred questions to Treasury, while new Assistant Treasurer Stephen Jones, who will be the responsible minister, did not respond to media inquiries.