Broader Solutions Needed for Insurance Affordability, Says ACCC

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Gina Cass-Gottlieb, the Chair of ACCC, acknowledges the beneficial impact of the cyclone reinsurance pool, although it has been limited by external cost pressures, leading to only partial relief on insurance premiums which remain "significantly high" for many across Australia.

"We are hopeful that the pool provides a measure of protection for those particularly vulnerable to cyclones, yet it isn't a comprehensive solution for the wider insurance affordability issues," stated Cass-Gottlieb at the Gilbert + Tobin Financial Services Forum. She insists that, "As climate change accelerates, it reshapes not just our weather but our entire approach to managing risk."

The ACCC emphasizes the importance of Northern Australia Insurance Inquiry recommendations, suggesting these could overhaul consumer interaction with insurance markets, enhancing both accessibility and transparency. Cass-Gottlieb also notes corroborating findings from government and industry reports urging continued reforms.

Her vision involves a collaborative approach with all stakeholders, including the government and regulatory bodies, to equip communities, particularly those bearing the brunt of climate changes, with affordable insurance solutions.

The ACCC's Northern Australia inquiry, concluded in 2020, offered insights such as simplifying policy comparisons, addressing conflicts of interest, safeguarding consumer rights, and promoting risk mitigation strategies like better infrastructure.

The federal government has tasked the ACCC with ongoing data collection and monitoring concerning the cyclone pool's effectiveness in delivering savings to policyholders in target regions, evaluating its tangible benefits.

Cass-Gottlieb mentions that global reinsurance markets' current dynamics, alongside soaring costs of building materials and labor, compound the challenge. "Consumers frequently report that exorbitant insurance costs force difficult decisions—either inadequately insuring their property or choosing no insurance at all," she mentioned.

This article reinterprets an original piece noted in Insurance News Magazine, which underscores the pressing demands on the insurance industry amid growing criticisms and external pressures.

Published:Monday, 4th Nov 2024
Source: Paige Estritori

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