ACIL calls for Federal action to reduce premiums in Northern Australia

The Australian Consumers Insurance Lobby (ACIL) has made a submission to the Federal Government Pre-Budget Consultation to reinvest surplus funds from the Cyclone Reinsurance Pool into reducing insurance premiums and strengthening resilience in Northern Australia.

Residents of Northern Australia face some of the country’s highest insurance premiums, often 2-3 times higher than in lower-risk areas, with extreme cases reaching 8-10 times higher. These inflated costs burden cyclone-prone communities, leading to affordability issues and underinsurance challenges.

Although the Cyclone Reinsurance Pool was created to address these disparities, its growing reserves present an opportunity for further action. Strategic reinvestment of surplus funds could offer immediate premium relief to residents while supporting long-term resilience.

Tyrone Shandiman, Chairperson of ACIL, said, “The growth of reserves within the Cyclone Reinsurance Pool provides a critical opportunity for the Federal Government to reinvest in high-risk communities.

“When reserve levels reach sustainable thresholds, surplus funds should be directed toward reducing premiums and funding resilience initiatives. The end of the cyclone season on April 30th will be an opportune time for the government to reflect on whether its surplus position enables the launch of such a program.”

ACIL has urged the Federal Government to leverage the Cyclone Reinsurance Pool’s growing reserves and collaborate with the Australian Reinsurance Pool Corporation (ARPC) to implement premium reductions across Northern Australia. Additionally, it has recommended using surplus funds to support resilience initiatives such as roof strengthening, debris management, and securing outdoor structures, ensuring high-risk areas are better prepared for cyclone events.

The proposal aims to ease the financial burden on high-risk communities while building stronger, more resilient infrastructure in Northern Australia.

Shandiman added, “Reinvesting surplus funds, particularly as reserves grow, is essential to deliver both premium reductions and meaningful resilience improvements for Northern Australia.

“The Federal Government must use the conclusion of the cyclone season as a moment to evaluate its financial position and take decisive steps toward implementing this much-needed program.”

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