Thursday, January 18, 2024
Mackay and Whitsunday Life
The economic development bodies of North Queensland – Advance Cairns, Greater Whitsunday Alliance (GW3) and Townsville Enterprise - have joined forces to seek a better outcome for the region amid questions around the effectiveness of the Cyclone Reinsurance Pool.
This follows the recent devastating flooding which impacted the Far North in the wake of ex-Tropical Cyclone Jasper last month. The collective call from these three organisations is for a review into the terms of the Cyclone Reinsurance Pool, specifically the claims period for cyclone and related flood damage arising during a cyclone event, from the time a cyclone begins until 48-hours after the declared end of a cyclone.
Ex-TC Jasper was the first event to test this framework and the pool has been left wanting, as extensive flooding occurred outside of the 48-hour claims period. It is imperative that the Cyclone Reinsurance Pool is fit-for-purpose and meets the challenges it set out to address, which is to provide more affordable and commercially viable insurance for North Queenslanders.
Insurance availability and affordability remains a critical concern across North Queensland.
A significant number of households and businesses are underinsured or worse, are without insurance, given the spiralling costs of insurance premiums.
Advance Cairns, Greater Whitsunday Alliance and Townsville Enterprise are calling on the Government to conduct a review with a specific focus on the following:
1. Extension of the 48-hour period: Propose an extension of the post-cyclone period of coverage from 48-hours to 168-hours (seven days) in line with global reinsurance standards.
2. Inclusion of Flooding in Reinsurance Pool: Advocate for the expansion of the reinsurance pool to cover flooding, a crucial component in comprehensive coverage.
3. Insurance Incentives: Propose targeted insurance incentives to alleviate the cost-of-living pressures for residents and businesses which would reward policyholders for risk mitigation measures.
4. Enhanced Data Transparency: Reinforce the transparency of data requests to the ACCC for consumers to foster trust and understanding.
5. Long-Term Resilience Mitigation Action Plans: Develop and implement long-term resilience mitigation action plans, including: a. Investment in mitigation infrastructure in collaboration with local councils. b. Grants for property owners to enhance the safety of their dwellings. c. Strengthening building codes and improving disaster management planning. d. Removal of unfair taxes and charges from insurance policies by governments.
6. Build greater understanding of the role of the reinsurance pool.
The economic development bodies welcomed recent comments by the Federal Government opening the door to bringing forward the review of the Cyclone Reinsurance Pool from 2025 to this year. They strongly support any interventions aimed at resolving the issues highlighted with the Pool in its current form.
Advance Cairns Chief Executive Officer Jacinta Reddan said, "There is a lot of confusion about the impact of the reinsurance pool, particularly in the wake of ex-Tropical Cyclone Jasper. It is so important we can allay fears for those who have suffered damage and are making claims against their insurance policy.
“Ex-Tropical Cyclone Jasper was the first test of the reinsurance pool which has certainly highlighted shortcomings around timing. However, it is important that we also give the pool time to function – and it is important we work together to develop a framework that can ultimately be applied nationwide as we face increasing extreme weather events across Australia.”
Greater Whitsunday Alliance Chief Executive Officer Kylie Porter said that the future of North Queensland’s economy is bright and prosperous, whether it be tourism, biomanufacturing, green energy or critical minerals. However, she pointed out that the sky-rocketing costs of insurance premiums for both businesses and residents has the potential to hold back our regions and significantly limit ongoing investment and workforce attraction.
“Now is the time to review the effectiveness of the Cyclone Reinsurance Pool design and implement changes that can support the future direction and prosperity of North Queensland.”
Townsville Enterprise Chief Executive Officer Claudia Brumme-Smith said their concern from the beginning has always been that a 48-hour rule would not be sensible to address the unpredictability of weather events, including impacts from flooding.
“We have continued to urge the Government and subsequent insurers to consider the effects of a cyclone past the 48-hour window and having now seen the impacts of this firsthand on our North Queensland community, we urgently need action to address this market failure.
“The reinsurance pool needs to be fit for purpose for North Queensland, and right now – it is not.
“The minimal impact on insurance premiums, and failure to deliver the intended reduction in overall insurance costs means North Queensland are again left wanting, and now is the time for Government to enact positive change.”
GW3 CEO Kylie Porter. Photo credit: Coffee and Hops Photography