A new proposal from the Australian Consumers Insurance Lobby (ACIL) calls for insurers to take financial responsibility as consumers struggle with rising insurance costs, particularly in areas prone to natural disasters.

To address these challenges, the organisation is advocating for a $250 million annual fund, directly financed by the insurance industry, to improve affordability and access to coverage.

The proposal comes in response to the Insurance Council of Australia’s (ICA) recent push for an $30 billion government-funded Flood Defence Fund. While the ICA’s plan seeks public investment to mitigate disaster risks, ACIL argues that insurers must also contribute financially.

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ACIL chairperson Tyrone Shandiman said that insurers cannot continue to rely on government funding while reporting strong financial performance.

"Insurers should return some of their record profits to policyholders instead of prioritising shareholder returns,” he said.

According to Shandiman, sharing $250 million annually among ICA members would be a relatively small financial commitment but could provide substantial relief for consumers struggling with affordability.

The proposed Insurance Affordability & Availability Program would support initiatives such as mitigation projects in high-risk areas, premium relief for vulnerable consumers, and research into long-term affordability solutions.

ACIL’s proposal raises broader questions about the balance of responsibility between the insurance industry and the government in addressing affordability issues.

The group argues that while public funding is important, the industry must also take active steps to address these concerns through direct financial contributions.

“It is time for insurers to show they are part of the solution rather than merely calling for government action,” Shandiman said.

Should insurers take greater financial responsibility for addressing rising premiums, or should the government continue to lead these efforts? Share your thoughts in the comments.