RACQ Insurance joins Cyclone Reinsurance Pool
One of Queensland’s leading insurers, RACQ Insurance, has joined the Federal Government’s Cyclone Reinsurance Pool (‘the pool’) ahead of the 2023-24 cyclone season.
The announcement comes as Queenslanders continue to face the devastating impacts of extreme weather and many are also dealing with significant premium price increases from across the whole insurance industry.
Chief Executive Insurance Trent Sayers said while RACQ supported the introduction of a pool, the design and implementation of the current model means it will only deliver marginal benefits to members living in the north.
“Unfortunately, home insurance premiums will remain high despite RACQ passing on all the benefits gained from the pool to our members,” Mr Sayers said.
“This is a disappointing outcome, and with a review scheduled for 2025, RACQ will continue to recommend changes to the pool’s design that will achieve maximum benefits for homeowners.
“Any benefits the pool will provide will be more than offset by the affordability challenges facing the insurance industry, such as growing climate risk and inflation including significant increases in labour and building material costs.”
Mr Sayers said there were three important things members should know about the pool:
- The pool charges insurers for providing cyclone cover. It does not provide free cyclone cover to insurers.
- The pool only provides partial cyclone cover. For example, the pool will not cover insurers two days after the cyclone becomes an ex-tropical cyclone – this is when many weather systems cause most damage and results in insurers having to purchase reinsurance to cover the gap.
- The pool has been costly to implement - ongoing regulatory requests for information and system changes, which inevitably must be passed on.
Mr Sayers said RACQ shares the Federal Government’s ambition to keep insurance affordable and has long advocated for greater investments in natural disaster mitigation and resilience initiatives.
“The pool is just one measure - more needs to be done to better protect Queenslanders such as the removal of stamp duty, increasing disaster mitigation infrastructure, home upgrades and stronger land planning and building rules,” he said.
“Last month we commended the Federal Government for allocating $84 million of its $200 million Disaster Ready Fund to Queensland and for its commitment to building a long-awaited flood levee in Bundaberg.
“RACQ will continue to engage all levels of government on this important issue, while advocating on behalf of our members for initiatives and changes that will improve our resilience against the growing threat of climate change.”
For more information visit www.racq.com.au/help-contact/be-prepared/storms-and-cyclones/cyclone-reinsurance
Related topics
-
The information in this article has been prepared for general information purposes only and is not intended as legal advice or specific advice to any particular person. Any advice contained in the document is general advice, not intended as legal advice or professional advice and does not take into account any person’s particular circumstances. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives and needs.
Insurance products (excluding Travel Insurance) are issued by RACQ Insurance Limited ABN 50 009 704 152 (RACQ). Conditions, limits and exclusions apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the PDS and any applicable Supplementary PDS before making a purchase decision on this product. You can also access our Target Market Determinations on this website.
Banking and loan products issued by Members Banking Group Limited ABN 83 087 651 054 AFSL/Australian credit licence 241195 trading as RACQ Bank. Terms, conditions, fees, charges and lending policies apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the disclosure documents for your selected product or service, including the Financial Services Guide and the Terms and Conditions, and consider if appropriate for you before deciding.
Except for RACQ Bank, any RACQ entity referred to on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). That entity’s obligations do not represent deposits or other liabilities of RACQ Bank. RACQ Bank does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.
RACQ Operations Pty Ltd (ABN 80 009 663 414 AR 000234978) and Members Travel Group Pty Ltd (ABN 45 144 538 803 AR 000432492) are acting as an Authorised Representative of the issuer of the insurance, Tokio Marine & Nichido Fire Insurance Co., Ltd. (ABN 80 000 438 291 AFSL 246 548). Any advice set out above is general in nature only, and does not take into account your objectives, financial situation or needs. Before purchasing any travel products, please consider the RACQ Travel Insurance Product Disclosure Statement (PDS) and the Target Market Determinations (TMDs) that apply to these products. Whilst the PDS outlines the Terms and Conditions of these products, the TMDs outline the intended class of customers that comprise the target market for these travel products. This will allow you to consider which products best suit your objectives, financial situation and needs and consider the products appropriateness to your personal circumstances. TMDs also outline matters involving the distribution and the review of these products. The PDS, Supplementary PDS and TMDs for each travel product can be found here.