First Report on the Cyclone Reinsurance Pool

REPORT - March 2023

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Full Report (PDF)

Contents

Members

Recommendations

Chapter 1 - Introduction

Conduct of the inquiry
Acknowledgements
Previous inquiries

Chapter 2 - Problem and current situation

The problems caused by high insurance premiums in Northern Australia
Historical data on cyclones and projections for future cyclone activity
Key information about the pool
Relevant legislation
Monitoring and regulation of general insurers

Chapter 3 - Issues raised about the operation and implementation of the pool

Reasons why insurers have not yet joined the pool
Anticipated impact on premium costs
Proposals to increase savings for consumers
Budget neutrality
Length of 48-hour period of coverage after downgrading of a cyclone
Incentives for insurers to provide coverage in the Northern Australia market
Marine insurance
Impact of climate change on the operation of the pool
Differences across states and territories
Concerns raised about the role of the ACCC
Other issues raised

Chapter 4 - Committee view and steps forward

Reasons why insurers have not joined the pool
Community expectations
Budget neutrality
Length of 48-hour damage period
Thin markets and benefits for insurers to join the pool
Marine insurance
Mitigation and other initiatives
Stamp duty and GST
The ACCC’s role
Business property policy—sum insured
Additional issues raised during the inquiry
Climate change
Final comments

Additional comments from Senator Allman-Payne

Appendix 1 - Submissions

Appendix 2 - Public hearings and witnesses

Appendix 3 - Additional information

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