Labor promises to work with all parties to find solution

Challenged on what was being done to improve insurance affordability for northern Australians, Assistant treasurer Stephen Jones reaffirmed his government commitment to working with insurers and local communities on the issue.

“There are several global factors contributing to high insurance costs – global inflation, supply chain issues, and costs to rebuild – we know these pressures can be especially acute for northern Australians,” Mr Jones said.

“The Albanese government is working hard to make communities more climate resilient and reduce the risk of natural hazards so that people are safer and insurance is more affordable.

“We have seen some positive early signs that the Pool is working as intended and we will continue to monitor its effectiveness to produce the best outcomes for northern Australians.”

The federal government was investing $1bn over five years in disaster resilience through the Disaster Ready Fund, and established the Hazards Insurance Partnership, a collaboration between government and insurers to understand where to invest to reduce risk.

By December 2023, all major insurers had joined the Reinsurance Pool for Cyclone and Flood Related Damage and about 95 per cent of home insurance policies were covered.

The former Coalition government claimed the pool would save northern Australians up of up to 34 per cent for small business, 46 per cent for homeowners, 58 per cent for strata from the Cyclone Reinsurance Pool, but revised modelling has determined it would only save 10 per cent for small business, 13 per cent for homes and 37 per cent for strata.

It was understood that the true impact of the Reinsurance Pool in reducing premiums could not be known until some time after the end-of-2024 deadline for the remainder of insurers to join the pool.

Herbert MP Phillip Thompson (pictured, right) said he had many constituents tell him they had managed to find savings on quoted premiums for their homes in the hundreds to thousands of dollars by shopping around.

“However, this is not always the case, and tweaks need to be made to ensure the savings are experienced by as many people as possible,” Mr Thompson said.