The Northern Australia Insurance Premiums Taskforce has released its final report which calls mitigation the “only way to reduce premiums on a sustainable basis.”
The report, released on Friday, backed mitigation as the best way forward when compared with a mutual or reinsurance pool.
“Mitigation to reduce the risk of damage from cyclones is the only way to reduce premiums on a sustainable basis,” the report notes.
“It was widely considered by stakeholders that encouraging mitigation should be part of any Government response to the rise in insurance premiums.
“A concern is that policy measures that work only to reduce premiums may dampen incentives for mitigation. Further, without action on mitigation, the benefits of any measures taken by the Government to lower premiums would be reversed upon Government exit.”
Minister for small business and assistant treasurer, Kelly O’Dwyer, spoke on the release of the report at the Insurance Council of Australia (ICA) Annual Forum and said that the mutual or reinsurance pool options remained too costly for taxpayers and encouraging mitigation was “essential.”
“The Taskforce looked very closely at the scope for Government intervention in this market, as well as the risk to the Government balance sheet,” O’Dwyer said.
“Using extensive modelling to assess the probability of these weather events, the Taskforce predicts that Government support for a mutual or a reinsurance pool could be very costly for the taxpayer.
“The Taskforce found that either of these options would involve substantial cost and risk to the Government and the taxpayers. To read more click here.
The Developing Northern Australia Conference Above the Line – unleashing the north’s potential will be held on 20-22 June 2016 at Darwin Convention Centre.
The Conference continues the dialogue started in 2015 following the release of the Australian Government’s White Paper on Developing Northern Australia. To register your attendance at the conference CLICK HERE.
Speaking opportunities are available to interested parties wishing to address delegates at the Developing Northern Australia Conference. To apply to speak at the conference CLICK HERE.