18 August 2015 Insurance

Australian Government mulls cyclone pool

The Australian Government is considering the potential of a cyclone reinsurance pool or a mutual cyclone insurer as it seeks to reduce home, contents and strata insurance for cyclone-prone areas in Northern Australia.

According to the Northern Australia Insurance Premiums Taskforce interim report, which was published yesterday (August 17. 2015), the task force is exploring the feasibility of a number of options.

“These options are to be evaluated having regard to: the potential reduction in consumer premiums; the likely cost and risk associated with using the Commonwealth balance sheet to lower the cost of insurance to consumers; the potential effect on the operation of the insurance and reinsurance markets, particularly the likely effects on competition; and how the role of the Government can be gradually reduced over time.,” said the interim report.

The task force is headed by Mike Callaghan AM, a former executive director in the Australian Treasury.

It is supported by a reference panel which includes: Joan Fitzpatrick, chair of the Australian Reinsurance Pool Corporation Board, Rob Whelan, executive director and chief executive officer (CEO) of Insurance Council of Australia and Dallas Booth, CEO of the National Insurance Brokers Association.

A final report by the Taskforce will be presented to the Government in November this year.

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