Regional Development Australia (RDA) Tropical North Chief Executive Officer
By Sonja Johnson
Regional Development Australia (RDA) Tropical North Chief Executive Officer
A survey across 21 local government areas in Far North Queensland has found most respondents have faced increases in insurance premiums since the Cyclone Reinsurance Pool commenced in 2023.
Regional Development Australia (RDA) Tropical North conducted the survey over a two-week period in March with most of the 224 respondents living in Cairns and surrounding areas.
The results demonstrated that the Reinsurance Pool had failed to reign in rising insurance costs with minimal evidence of premium reductions.
“High excess levels are also a concern with many noting excesses above $2,500 and some exceeding $5,000,” according to the results.
“Residential insurers were the most impacted with 90 per cent of the 169 residential respondents reporting an increase in premiums since the introduction of the Reinsurance Pool and, of those, 40 per cent experienced an increase of 15 per cent or more.
“Insurance is becoming unaffordable for 88 per cent of residential respondents with 71 per cent stressed about rising costs and 48 per cent choosing to underinsure their property to manage costs, while some are reducing maintenance spending to cope.”
Despite 59 per cent being proactive in property protection, most saw no reduction in premiums.
Business responses were similar with 86 per cent of the 51 respondents facing increased premiums and almost half – 47 per cent of those – experiencing an increase of 15 per cent or more.
Concerns included excesses increasing by more than 50 per cent, the need to sacrifice spending on operations and 36 per cent opting to insure for public liability only.
A small Daintree business said they were paying more than $12,000 for business insurance which excluded cyclone cover and limited storm damage to $200,000.
Strata-titled owners had the greatest success in accessing lower premiums with 24 per cent noticing a decrease of more than 15 per cent.
However, 76 per cent reported an increase despite 68 per cent of body corporates being proactive with mitigation.
RDA Tropical North remains committed to advocating for improved insurance affordability as well as stronger measures to boost insurer participation and market competition.
A clear investigation needs to be made into the drivers of rising premiums since the advent of the Reinsurance Pool.
Public education, investigation of models globally and any other identified measures including removing income testing eligibility criteria for the Household Resilience Program grants should be implemented.
Regional Development Australia Tropical North Inc is an independent organisation driven by community leaders to broker regional development solutions that will create jobs and grow the Far North Queensland economy.
