Cyclone Insurance Pool inquiry finds little cheer for homeowners

A public hearing into the long-awaited Northern Australia cyclone reinsurance pool has heard the scheme is unlikely to live up to the former federal government’s promises of cheaper policies for Far Northern homeowners unless fixed.

A public hearing into the long-awaited Northern Australia cyclone reinsurance pool has heard the scheme is unlikely to live up to the former federal government’s promises of cheaper policies for Far Northern homeowners unless fixed.

Even if the program was running as designed it would still only offer small savings for customers if any, the hearing was told.

Homeowners were promised premium discounts of up to 46 per cent, strata properties up to a 58 per cent and small and medium-sized business up to 34 per cent.

Responding to a question from MP Warren Enstch asking if premiums would be lower under the insurance pool compared to the private market, CEO of the National Insurance Brokers Association, Philip Kewan was careful in claiming any savings.

“The expectation is that if we get the pool right premiums should at least be stable,” Mr Kewan said.

“Reductions would be up to the insurers.

“The challenge is we have seen such a dramatic rise in the last few years that any small reduction in the last two years will still be more expensive than they were two years ago.”

Australian Consumers Insurance Lobby chairman Tyrone Shandiman agreed the scheme was never going to be perfect.

“I agree it was never going to be perfect and would always need refining over time to ensure benefits for homeowners,” Mr Shandiman said.

Recovery from Cyclone Yasi 2011. SES volunteer Stefan Buick from Canberra clears tree litter from a house at Tully Heads. Picture: Evan Morgan

“We still believe that the Cyclone Reinsurance Pool is still the best way to solve this issue.”

Senator Nita Green was scathing in her review of the program’s success and the promises made by the previous government.

Labor Senator Nita Green Picture: Supplied

“It is clear to me, after the evidence I have heard in the Joint Committee on the Northern Australia Reinsurance Pool today, that the former government was aware that this scheme would not perform the way they promised it would,” Senator Green said.

“They concealed the modelling from scrutiny, and they misled North Queenslanders.

“North Queenslanders need and deserve affordable insurance.

“And after what we have heard today, the least they deserve is an apology from the former LNP government.”

Originally published as Cyclone Insurance Pool inquiry finds little cheer for homeowners