RACQ is committed to supporting our members and their communities
We’ve long been concerned about the affordability of insurance premiums in the North Queensland region – a region we’ve been insuring for more than 50 years.
With an increase in severe weather events, we’re seeing larger damage bills and rising reinsurance and rebuilding costs, but even more so, we’re seeing the devastating toll this damage has on our members and their communities.
On May 4, 2021, the Federal Government announced a $10 billion fund in the form of a cyclone reinsurance pool, designed to help drive down insurance premiums in hard-hit regions from Rockhampton to the Cape.
As this reinsurance pool evolves, we want to keep you - our members - engaged and informed by providing regular, honest, and timely updates.
On behalf of our members and the Queensland community, RACQ has tendered a submission to the Federal Treasury on the design of the Federal Government’s northern Australia reinsurance pool. We will continue to provide regular communication on our role in the design of this pool as we work closely with the Government.
RACQ CEO David Carter said while this reinsurance pool is good news for locals, it must be well-designed and part of a broader package to offset the price pressures in the disaster-prone region. Reinsurance is vital for insurers, allowing us to sustainably function as a business and support our members now and into the future.
We are proposing a reinsurance pool designed to increase the affordability and accessibility of insurance in high-risk areas, and one that is future-proofed against the increasing impacts of severe weather events. Based on our modelling, a well-designed pool could result in up to a 20 percent discount for homes in medium and high-risk cyclone areas, roughly two-thirds of homes on the east coast, from Mackay to the Cape.
Our submission will advocate for the best solution for our members with a promise to return any savings from the pool to our members through reduced premiums.
Key submission points:
- Mandatory national reinsurance pool (all insurers are required to participate);
- Includes cyclone related flooding and storm surge;
- Implemented after a suitable transition period (at least one year);
- Priced at the individual property level based on the risk profile of the property and this information be shared with insurers;
- Cover landlords (investment properties for both stand-alone dwellings and strata dwellings);
- Operate on a continuous basis (i.e. no exit date) given the non-site specific nature of the peril;
- Be flexible on the amount of risk retained by insurers to enable the pool to operate efficiently alongside the insurer’s reinsurance market program and to ensure that smaller insurers are not disadvantaged.
You can review RACQ's full submission here.
Reinsurance pool timeline
- 18 June 2021 – RACQ submitted to the Federal Treasury the Club’s suggestions on the design of the reinsurance pool
- July 2021 – November 2021 (estimated) – Treasury to review submissions and draft a plan for the reinsurance pool. This will be followed by a public consultation period. RACQ looks forward to sharing the draft document with members to review when available.
- November 2021 – February 2022 (estimated) – Announcement of the final design of the Reinsurance Pool
- 1 July 2022 – Reinsurance pool start date.
How we can support you now
At RACQ, we’re always looking for ways to support our members.
In 2016, we introduced our Household Cyclone Resilience program, which provides up to a 20 per cent discount on the cyclone portion of your insurance premium for those who undertake certain measures to safeguard their homes from cyclone damage. Since the introduction of this program, over 4,000 members have benefited from this discount with savings of more than $1 million.
To see how you can reduce your premiums sooner, check your eligibility today.