Cyclone reinsurance pool Several insurance industry leaders are looking forward to the finalisation of its implementation details after the passing of the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022.
One of those who welcomed the legislation is Karen Hardy, managing director of parametric insurance pioneer Redicova, who emphasized the role that Australian Reinsurance Pool Corporation (ARPC) will play in administering the pool.
“Our industry is eager to learn what savings it will bring to policy holders. Hardy said the ARPC would have to put their skates on if they wanted to keep their commitment.
I hope that more affordable insurance will allow us to take a proactive approach to risk management,” she said.
Affordability in insurance will allow us to manage our risk exposure based on our needs rather than budgets.
The cost of insurance in northern Australia has risen dramatically over the past decade, which has forced many of us to reduce our coverage.
The savings under the pool should enable us all to extend our insurance arrangements to include cover we were unable to afford at current prices.”
RACQ CEO David Carter expressed similar sentiments.
We should support any initiative that allows insurers to pass savings from reinsurance on to policyholders.
RACQ is still working through a number of matters before it can join the pool and understand what it can offer to its members,”
Carter said. «The main issue is pricing. I can’t estimate the savings until I have seen the pool’s proposed pricing rates.”
Prior to July 1, the implementation date determined by Parliament, operational details, such as how insurers will recover costs, how premiums will be monitored, and how insurers will interact with the ARCP, must be decided.
According to the Strata Community Association (SCA), the reinsurance pool is a crucial first step toward fixing issues affecting the strata sector. Kristi Kinast, SCA president, says the
legislation, while beneficial to strata owners and managers, continues to highlight the gaps in the Strata Title Pilot Resilience Program.
According to Andrew Hall, CEO of the Insurance Council of Australia (ICA), the reinsurance pool fails to address a number of issues.
While we appreciate the additional funding in last night’s Budget for those affected by this year’s floods, there are dozens of other communities in Australia that remain vulnerable to perils like cyclones and require similar assistance to improve their resilience,” said Hall.
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