RACQ acknowledges the important role of the ACCC in ensuring consumers receive the full benefits of the pool. However, we are unsurprised by the report finding insurance affordability remains a problem in northern Australia and there are a variety of challenges insurers need to overcome before they can join the pool.
 
RACQ's Head of Government Relations and Policy Vanessa Fabre said it is well known insurance premiums are higher in northern Australia due to the higher risk of natural disasters.

"We also know the Cyclone Reinsurance Pool - in its current form - will not achieve the stated policy objectives of fixing insurance affordability in the north," Ms Fabre said.
 
"On behalf of our 300,000 members who live in north Queensland, RACQ is committed to working with the Federal Government to help make the pool the best it can be.

"This report is another reminder that policy responses need to be well considered, designed and implemented promptly given premiums continue to rise due to inflation and increasing levels of risk."
 
Last month, representatives from RACQ appeared at the Joint Select Committee on Northern Australia Inquiry public hearing to share views on the pool's design and operation and how it could be improved. They recommended four key changes:

1. Reconsider the budget-neutral principle and investigate opportunities for Government subsidisation of the pool, or direct subsidisation to homeowners.
2. Expand the pool to cover all types of floods as flooding is emerging as a more frequent, high risk, and significantly costly peril for Queensland and Australia.
3. Replace the “48-hour claims period” with a 7-day provision, in line with commonly accepted definitions in current reinsurance contracts with the global market, and
4. Expand the pool to cover motor insurance because the exclusion of motor will add uncertainty, complexity and cost to the system.
 
Ms Fabre urged the Government to consider changes to the pool's design sooner rather than later.

"If the Government is committed to this pool, then RACQ urges it to make the required changes so that it can deliver meaningful insurance premium relief for the people of northern Australia," she said.