The Strata Community Association (SCA) has joined the insurance industry in welcoming the final design of the Federal Government's reinsurance pool for cyclones and related flood damage in northern Australia, to be presented to Parliament soon.
The Northern Australia Cyclone Reinsurance Pool aims to improve insurance accessibility and affordability for residents and small businesses in cyclone-prone areas in the country. Beginning July 1, 2022, the pool will be administered by the Australian Reinsurance Pool Corporation (APRC).
The strata sector in Queensland and northern Australia has long called for a reinsurance pool, and several changes announced in the final design of the pool link directly to SCA advocacy efforts. For example, the association called for the threshold to qualify for the scheme to be changed from the originally quoted 80 per cent of residents down to 50 per cent in mixed use buildings. It also called for a review in 12 months to allow for further advocacy.
“This announcement by the Federal Government is extremely welcome. Maximising the benefits of the Northern Australia Reinsurance Pool to strata is incredibly important, and a potential 58% saving as announced will be a game-changer,” said SCA (Queensland) President Kristi Kinast.
However, Kinast noted that other policy levels must be pulled to ensure the reinsurance pool's long-term viability in northern Australia.
“The Strata Title Pilot Resilience Program has been announced, but no detail has really been given,” she said. “Any funding which helps make strata communities in the north more resilient is critical to getting equity with insurance costs. We urge the Federal Government to get moving on this program as quickly as possible.”
SCA (National) president Chris Duggan said there is still much work to be done, particularly at the state government level once the reinsurance pool passes the Federal Parliament.
“We are asking the State Government to examine rebating or abolishing stamp duty on strata insurance premiums and increase mitigation funding in the north. Every single thing they can do to help strata communities will have a big impact,” Duggan added.
SCA's comments reflect the views of the insurance industry, with the Insurance Council of Australia (ICA) advising the Federal Government to invest in stronger homes and infrastructure to make communities more resilient to extreme weather.
“We must also improve resilience standards in building codes, remove state insurance stamp duties and levies, and make better land planning decisions that factor in worsening extreme weather and its impacts,” ICA CEO Andrew Hall said in a recent statement.