Insurance Council of Australia

Media releases

Additional resilience funding welcome in Queensland budget

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Additional resilience funding welcome in Queensland budget

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News release

Tuesday, 21 June 2022

The Insurance Council of Australia (ICA) has welcomed the confirmation of $741 million in additional funding to better protect Queensland homes and communities from the impacts of extreme weather in the State Budget handed down today.

The Government’s commitment to additional funding, co-funded by the Federal Government, matches the amount called for by the Insurance Council in its Building a more resilient Australia report released in February.

The ICA welcomes the extension of the Queensland Government’s $13.1 million Resilience and Risk Reduction Fund to support disaster mitigation projects and build resilience to worsening extreme weather in the State.

The budget also includes a welcomed $170 million to build essential public infrastructure such as roads, bridges, causeways and culverts back to standard.

The ICA is pleased to see $900 million allocated to Queensland Fire and Emergency Services which will go a long way in supporting the vital work of the State’s first responders.

Quote attributable to ICA CEO Andrew Hall:

The ICA commends the Palaszczuk Government for this very significant increase in resilience funding, made in response to the devastating floods experienced in South-East Queensland in February and March this year.

Last year the ICA was critical of the Government’s Budget for its lack of funding in this area, but it’s clear that this has now been reversed.

Queensland is now leading the nation in terms of resilience and mitigation funding which is critical given the State’s exposure.

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Failure to reform Emergency Services Levy a missed opportunity

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Failure to reform Emergency Services Levy a missed opportunity

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News release

Tuesday, 21 June 2022

The Insurance Council of Australia (ICA) says the failure to reform the Emergency Services Levy (ESL) on insurance products in today’s New South Wales State Budget means home and car owners and small businesses will continue to pay the most expensive insurance premiums in the country.

Insurance customers in New South Wales will continue to pay a tax which has been or is being removed in every other state, and which adds 30 to 50 per cent to the cost of a premium.

No other mainland state taxes insurance customers with the cost of delivering emergency services, and Tasmania is currently in the process of removing its levy.

The Budget Papers show that insurance customers will pay more than $1 billion in ESL in 2022-23 to fund measures associated with the 2020 NSW Bushfire Inquiry and in response to the 2021 and 2022 floods.

Including council contributions, ESL payments over the forward estimates will be 10 per cent higher, or $520 million more, than forecast at last December’s mid-year review.

This increase has a direct impact on insurance affordability for policyholders all over the State.

The Government’s own 2020 Review of Federal Financial Relations chaired by former Telstra CEO David Thodey found that insurance taxes like the ESL "drive up premiums and discourage consumers from adequately insuring [with] serious human and social consequences.”

The ICA welcomes action in the Budget on renewables and climate change, as well as funding measures previously announced to meet the requirements of the 2020 Bushfire Inquiry.

While the Budget does not contain any previously unannounced funding to make communities more resilient to extreme weather risk, the ICA looks forward to the Government’s response to the O’Kane-Fuller independent flood inquiry due by the end of the month.

The ICA has previously called for $232 million to be jointly invested by the State and Federal Governments in measures to better protect New South Wales homes and communities from the impact of extreme weather, which is estimated to deliver a return on investment of $5.6 billion by 2050.

Quote attributable to ICA CEO Andrew Hall:

We support the NSW Government’s positioning as a driver for major reform to the State’s budget, but one of the most inefficient and punitive taxes being levied on insurance customers remains untouched.

New South Wales will soon be the only state to require those who insure to pay for the cost of delivering emergency services.

This is not only unfair, it also has terrible public policy outcomes that discourages adequate insurance coverage.

In a State that is recovering from the worst flood and bushfire events in modern history, and with extreme weather events only getting worse not better, we can’t afford not to include insurance levies and taxes in the Government’s reform agenda.

 

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ICA Board appoints new non-executive director

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ICA Board appoints new non-executive director

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News release

Thursday, 9 June 2022

The Board of the Insurance Council of Australia (ICA) today announced Sharon Ooi has been appointed as a Non-Executive Director of the ICA Board.

Ooi is Managing Director, Head of Australia and New Zealand, for Swiss Re, and a member of the Australian Financial Services Council (FSC) Life Board Committee.

She was previously the Head of Property & Casualty (P&C) Underwriting, Asia and Australia & New Zealand, Swiss Re, based in Singapore and is a director and Chair of Swiss Re Australia Ltd.

The appointment reflects the ICA’s commitment from the leaders of Australia’s general insurance sector to ensuring the industry is well-placed to respond to and drive the many strategic challenges and opportunities facing the sector.

Quotes attributable to ICA President Nick Hawkins: 

The Board is pleased Sharon has joined the Board of the Insurance Council.

The Board has a good mix of general and speciality insurers as well as our industry’s key reinsurers, providing a range of perspectives on the issues we face.

We look forward to drawing on Sharon’s broad knowledge of reinsurance and financial services as well as her regulatory experience in Singapore.

 

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ICA welcomes new Albanese ministry

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ICA welcomes new Albanese ministry

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News release

Wednesday, 1 June 2022

The Insurance Council of Australia (ICA) today welcomed the formation of the first Albanese ministry and said it looked forward to working with the Government’s new ministers on improving the resilience of homes and communities exposed to extreme weather risk.

While there have been some changes in the portfolio responsibilities relating to insurance, in the main the new ministers will provide continuity from Opposition, where the ICA and insurers worked constructively with shadow ministers on policies to improve community resilience and support insurance customers.

The Treasury and Finance portfolios remain largely unchanged from Opposition, and the ICA looks forward to working with Assistant Treasurer and Minister for Financial Services Stephen Jones on the implementation of the Northern Australian Reinsurance Pool, among other issues.

Insurers well understand the impacts of a changing climate, and so the return of the Climate Change portfolio and its position in Cabinet under the able stewardship of Chris Bowen is welcomed.

The ICA welcomes the continuation of Senator Murray Watt in the Emergency Management portfolio as the clean up from the February-March flood continues under the threat of continued extreme weather.

The ICA and insurers supported Labor’s $200 million Prevent, Repair, Rebuild package, announced by Senator Watt and Prime Minster Albanese in January to better protect Australian homes and communities from the impacts of storms, floods, bushfires and cyclones.  

The Government’s commitment matches that made by the Insurance Council in Building a more resilient Australia, our election platform report that outlined the pressing need to improve protections for Australians from extreme weather risk, and represents a significant step up in resilience funding.

The ICA is also focused on how insurance can protect Australian businesses from cyber-attacks and welcomes the appointment of Claire O’Neil as Minister for Cyber Security along with her Home Affairs responsibilities, and the elevation of the Cyber Security portfolio into the Cabinet.

Quote attributable to ICA CEO Andrew Hall:

There are no shortage of issues confronting ministers in portfolios that relate to insurance, and the ICA looks forward to continuing our work with those minsters we know well and those new to our areas of interest.

We are really pleased to see Senator Murray Watt retain Emergency Management and enter the Cabinet, which is testament to the hard work he has put into this difficult portfolio area.

I’d also like to thank Matt Thistlethwaite, who moves into other portfolio roles but who showed a very collaborative and open-minded approach to the insurance sector over the past three years as Shadow Assistant Minister for Financial Services and Superannuation.

 

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2022 flood cost continues to rise

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2022 flood cost continues to rise

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News release

Wednesday, 1 June 2022

The cost of the record-breaking flood that hit South-East Queensland and Northern New South Wales earlier this year continues to rise and is now Australia’s fourth costliest disaster, the Insurance Council of Australia (ICA) said today.

As of Tuesday 31 May, insured losses are estimated at $4.3 billion from 216,465 claims across both states.  

The cost is almost double that of the 2011 Brisbane flood, which saw $2.3 billion in insured losses. 

The extreme weather event has now surpassed the 1989 Newcastle Earthquake, which recorded $4.24 billion in insured losses and falls fourth behind the following (all normalised to 2017 values):  

  • Eastern Sydney Hailstorm (1999, $5.57 billion) 
  • Cyclone Tracey (1974, $5.04 billion) 
  • Cyclone Dinah (1967, $4.69 billion) 

The 28 per cent rise in estimated claims cost from last month’s figures is largely due to the progression in the claims assessment process and an increase in commercial claims, which are typically slower to come through and have a greater cost per claim. 

Insurers are working as fast as possible to support their customers, with more than 20 per cent of claims already closed and almost $1 billion paid to policyholders.  

Quote attributable to Andrew Hall, CEO, Insurance Council of Australia:  

The Insurance Council and insurers continue to work with communities affected by this record-breaking flood, now Australia’s fourth costliest disaster. 

Over the past two weeks we have been holding community forums in flood-impacted areas of New South Wales, and next month will spend two weeks holding forums in Queensland towns and in Brisbane.  

Keeping Australia insurable as extreme weather events worsen requires governments to invest in appropriate physical mitigation and adaptation strategies.  

Insurers and the Insurance Council look forward to working with the Albanese Government to implement its $200 million Prevent, Repair, Rebuild package, to better protect Australian homes and communities from the impacts of extreme weather.

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