The Joint Select Committee on Northern Australia has published its final report on the operation and implementation of the cyclone reinsurance pool – and urges the federal government to continue supporting the scheme.

The pool, set up by the Morrison government in 2022 to tackle soaring premiums in the north, is backed by a $10 billion government guarantee. It covers cyclone damage and cyclone-related flooding for home, strata and some small business insureds up to 48 hours after a cyclone ends.

The inquiry, which began shortly after the pool started operating, heard evidence from insurers, regulators and consumer groups.

Its final report makes eight recommendations but does not form a view on key issues such as whether the 48-hour period should be extended or whether the pool should cover all flooding.

Instead it suggests a scheduled review of the pool, due to take place later this year, consider these matters.

“It is clear that the pool is having a positive, if limited so far, impact on the cost of premiums,” the report says. “The committee calls on the Australian government to provide continued support for the pool.”

It says the pool is needed to address “market failure”, given the impact on premiums from mitigation measures “may take years to eventualise”.

The committee “strongly recommends” that the government supports “an ongoing, national resilience program on a permanent basis”.

It says the government should consider measures to improve the resilience of high-risk homes, including tax offsets and subsidies, and publishes modelling on the benefits of including marine in the pool. It also says the Australian Competition and Consumer Commission should investigate the impact of “current taxation methods” on premium pricing.

The Insurance Council of Australia has welcomed the report and its focus on broader affordability measures.

“ICA has long advocated for a holistic approach to improving insurance affordability and accessibility in northern Australia,” it said.

“We’re pleased to see the report acknowledge critical areas we have been advocating for, for some time: particularly the increased focus on mitigation and resilience programs, which is key to addressing the underlying risk driving insurance premiums, and state tax reform.

“While we support the cyclone reinsurance pool’s intent to improve affordability and availability for cyclone-prone communities, we continue to advocate for targeted risk reduction as the most effective long-term solution to ease pressure on insurance costs.”

The committee’s final report can be read here.