ACCC released its first insurance monitoring report

According to the ACCC’s first insurance monitoring report, Insurance affordability remains a significant issue in northern Australia and other high cyclone-risk areas. The report discovers that policyholders in those areas face much higher premiums on average and have surged much faster than the rest of the country over the past decade.

The ACCC has been tasked with observing the effects of the government’s new cyclone and cyclone-related flood damage reinsurance pool, which the Australian Reinsurance Pool Corporation runs. This first report observes the current state of the market and sets a baseline of prices and costs before insurers join the pool. The pool started its function in July 2022 and is envisioned to increase the affordability and accessibility of insurance for householders, strata properties, and small businesses in cyclone-prone areas by decreasing the cost of reinsurance. The report discovers that in 2021-22:

• The average premium for residential combined building and contents insurance in northern Australia was about AU$2,370, more than AU$1,000 above the average across the rest of Australia
• The average premium for strata insurance in northern Australia was about AU$5,740, almost double that of the rest of Australia, which is about AU$2,940
• The average premium for small business building and contents insurance in northern Australia was about AU$3,160, almost double that of the rest of Australia, which is about AU$1,610.

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