Insurers make push
Better building standards the key for lowering premiums
Better building standards rather than cheaper reinsurance will be the biggest lever to pull for lowering sky-high insurance premiums, the industry’s peak body says.
The Insurance Council of Australia CEO Andrew Hall said the improved standards may add “a little bit of cost” to home but could offset “devastating costs” later.
“What we see — particularly with the recent flood events down the east coast of Australia — is that homes are destroyed, lives are destroyed and people’s small businesses are wrecked,” Mr Hall said.
Mr Hall visited the Cyclone Testing Station at James Cook University’s Douglas campus on Monday and met with stakeholders including Townsville City Council and local MPS.
He said it was important the work being done at the Cyclone Testing Station was translated into improved building codes nationally and that governments funded the retrofitting of homes as well as introduced stronger standards for new homes.
The ICA supported the Albanese government’s commitment to annual funding of $200m for a Disaster Ready Fund.
“That money should be spent particularly at a household level on strengthening roofs, on making sure they are flood proof (and) raising up services above the maximum flood levels,” Mr Hall said.
“As the (Labor) government said recently, most of the answers lie outside the insurance system. They lie in building standards, they lie in planning standards (and) making sure people are building homes to the right standard in the right location away from harm.” The former federal LNP government has been criticised for mis
leading people on the benefits a new $10bn governmentbacked reinsurance pool could deliver.
Mr Hall said they were concerned community expectations were “perhaps running ahead of where it will be”.
“Generally, there will be modest savings for most people but across the board (the reinsurance pool is) not going to be the thing that really shifts the dial,” Mr Hall said.
He said there was concern a 48-hour rule, limiting the pool’s flood cover after a cyclone has passed, introduced “some complexity”.
“We are talking to the federal government, making sure there’s a thorough review of this pool and that any changes that need to be made are done quickly,” Mr Hall said. The pool has provided reinsurance cover for insurers for cyclone and cyclonerelated flooding damage. It started from July 1 although insurers have up to another two and a half years before it becomes mandatory.
THAT MONEY SHOULD BE SPENT PARTICULARLY AT A HOUSEHOLD LEVEL ON STRENGTHENING ROOFS ANDREW HALL