Over the last few years, rising cost of living expenses has had an undeniable impact on many Queensland families. At RACQ, we are very aware of these pressures and we’re always looking for ways to support our over 1.7 million members.

This includes being open and transparent about the decisions we’re making about the price of premiums.

There is no denying the insurance industry is facing a perfect storm of challenges – the increasing severity and frequency of extreme weather events, on top of supply chain pressures has significantly increased the cost of doing business and is forcing us to make tough decisions when it comes to the price of premiums.

Why are premiums increasing now?

There are a couple of key drivers. The unfortunate reality is the price of insurance premiums are going up because the climate risks we all face around the world are increasing.

Natural disasters are becoming more frequent, destructive, and expensive.  

In the past year, the world witnessed monsoonal rain in Pakistan, Hurricane Ian in the US, severe drought in Africa and our own devastating floods which severely impacted south east Queensland and northern New South Wales.

And to exacerbate the issue, in Australia there has been limited investment in disaster mitigation over the years which would have helped to reduce the risk and bring down the cost of providing insurance. 

Global reinsurance companies - which provide insurance for insurers - assess, adjust and price for these risks, leading to insurers like RACQ paying more for their reinsurance.

We know more needs to be done to address the impacts of climate risk.

Voice for resilience

RACQ will continue to be a leading voice for greater investment in natural disaster mitigation and resilience initiatives. This includes joining the Federal Government’s Cyclone Reinsurance Pool prior to the commencement of the 2023 cyclone season.

At the same time, the insurance industry is experiencing record levels of annual inflation, more than 10%, which is impacting the cost of repair for both our home and motor claims. RACQ’s panel of builders describe the current cost of materials as ‘dramatic’, particularly here in Queensland where we have experienced significant price increases.

Adding to the issue, a shortage of qualified trades in both the automotive and building industries, and the increasing complexity of car repairs as vehicles become more sophisticated and technology enabled, means we will continue to see an impact on our claims costs.

What does this mean for you?

I want to assure all our members, that every pricing decision we make is with you in mind. As a member-based organisation, we’re doing everything possible to minimise premium increases for our members, while ensuring the Club continues to be financially strong to serve you.

We understand this is a challenging environment, and the last thing we want to do is put more pressure on our members. If you are concerned about your financial position and how an increase in your premium will impact you, please get in touch with us. There are some things we can do to help: 

• Increase your excess.
• Review your sum insured to make sure it would cover the cost of your assets, or the cost to rebuild your home.
• Shift your Comprehensive Car Insurance policy to market value from agreed value.
• Look at the optional benefits you have on your policy.

At the same time, we’re continuing to expand our member benefits platform with new partner discounts on the items we know are putting the biggest pressure on households. Our goal is to help our members save money every day – whether that’s at the grocery store, petrol station or paying for general household expenses.

Financial hardship support is also available to all RACQ members – and we urge anyone feeling overwhelmed or concerned to please reach out. We know this is a tough environment, and we’re committed to being there for all our members, as we have been for the past 117 years. 

Find out why RACQ is a different kind of insurer