The Australian Reinsurance Pool Corporation welcomes the Final Report of the Northern Australia Insurance Premiums Taskforce released by the Minister for Small Business and Assistant Treasurer, the Hon Kelly O’Dwyer MP on 04 March.
The Taskforce was established to explore the feasibility of options to reduce insurance premiums in northern Australia, where cyclone risk has caused affordability concerns.
Dr Christopher Wallace, ARPC CEO, said ARPC’s submission to the Taskforce was consistent with the Taskforce’s conclusion that mitigation measures are the key to long term, sustainable reductions in premiums.
“The ARPC’s Taskforce submission did not advocate for or against a Government-backed reinsurance pool for natural catastrophes. Our submission emphasised that losses to government would be expected to occur frequently, that a pool would not be self-funding for several years and finally that a proportion of any scheme needed to be allocated to community risk mitigation initiatives.
“However, our submission did note that a viable pool already existed for terrorism catastrophe and that should the Government resolve to establish a pool, ARPC had the skills and systems to implement this. ARPC would work with insurers and reinsurers to structure a pool to be as efficient and effective as possible, and our existing infrastructure would make implementation relatively straightforward.
“ARPC exists to address market failure where there is insufficient or unaffordable insurance or reinsurance capacity – in particular, for terrorism catastrophe. We stand ready to work with Government and the insurance industry to extend our capability to other types of catastrophes if we are required to do so,” Dr Wallace said.
The Federal Government’s detailed response to the Taskforce report is expected by 30 June 2016.
For media inquiries, please contact ARPC CEO Dr Chris Wallace on (02) 8223-6777.
Click here to see the Final Taskforce Report.
Click here to read the Minister’s speech to the Insurance Council of Australia’s Annual Forum – at which the Taskforce Report was publicly released.
Click here to see ARPC’s submission/response to the Interim Report of the Taskforce.