NIBA Welcomes Findings of the Impact of Climate Risk on Insurance Premiums and Availability Report
NIBA welcomes the findings of the Senate Committee’s Impact of Climate Risk on Insurance Premiums and Availability report
NIBA welcomes the findings of the Senate Committee’s Impact of Climate Risk on Insurance Premiums and Availability report, noting its analysis and recommendations aimed at addressing the challenges around insurance affordability.
As the professional association for the insurance broking profession, NIBA is committed to ensuring that insurance remains affordable and accessible for all Australians.
The report lists 8 recommendations that revolve around policy, industry transparency, and resilience-building efforts. The recommendations include:
Establishing a National Disaster Risk Database: A public, centralised risk map is proposed to aid insurers, brokers, and communities in understanding and managing exposure to natural disasters.
Increase in Transparency of Premium Pricing: Requiring insurers to provide policyholders with sufficient breakdown and explanation of premium costs, particularly adjustments made due to resilience measures.
The Australian Competition and Consumer Commission to Monitor Premium Pricing: Empower the ACCC to monitor premiums and publish quarterly reporting on premium trends, aimed at ensuring market fairness.
Abolition of Insurance Taxes: Recommending the removal of levies that exacerbate affordability issues, particularly for high-risk areas.
Expanded Reinsurance Pool: Extending the Cyclone Reinsurance Pool to include all natural disasters, coupled with incentivising insurer investments in mitigation.
Increased Disaster Mitigation Funding: The report proposes increasing the current Disaster Ready Fund to $400 million per year for resilience projects.
Land Use and Development Reform: Advocating for restrictions on development in high-risk areas to prevent future losses.
Polluter-Pays Model: The report suggests implementing levies on coal and gas companies to fund disaster mitigation and offset insurance cost escalations.
This report, as well as the previously released ‘Flood Failure to Future Fairness’ report, include important recommendations for the industry and fostering resilience to ensure that Australian families, businesses and communities continue to thrive.
NIBA looks forward to working closely with the government, industry and other key stakeholders around the relevant recommendations.