Cyclone pool modelling to be released today, savings 'overhyped'
The previous federal government misled the public on the level of savings that will be achieved by the upcoming cyclone reinsurance pool, Financial Services Minister Stephen Jones will announce today.
Modelling set to be released this morning is expected to show that premium savings will not reach the previously flagged reductions of up to 46% for homeowners, 58% for strata properties and 34% for SMEs.
insuranceNEWS.com.au understands that revised savings will be “much lower”, and in some low risk areas premiums could even go up due to cross-subsidisation.
The pool launches tomorrow and the Labor Government is pressing on with the scheme, although no insurers have yet joined.
Large insurers have until December next year to have all eligible policies transferred into the pool, and small insurers have until December 31 2024.
Government sources say the modelling will show that the previous government’s claims “are not going to materialise. They were misleading, overhyped.”
Mr Jones is expected to make an announcement in Townsville at noon today.
The Australian Consumers Insurance Lobby (ACIL) says it is concerned by reports that the previous government’s promises “will not be met”.
It says that level of savings is still needed “to deal with the issue of affordability and availability of insurance in Northern Australia”.
“Irrespective of the actions of the past government, the new government has a role to play in getting the cyclone reinsurance pool right for policyholders,” it says.
“ACIL is passionate about a review of the cyclone reinsurance pool after 12 months. It is clear [it] will need updates to ensure it is fit for purpose for consumers.”
The previous government declined to release the modelling, saying it contained commercially sensitive details and had been discussed by cabinet.
More details in our Daily update this afternoon.