The National Insurance Brokers Association (NIBA) has welcomed an agreement between the Federal Government and insurers to investigate the feasibility of a cyclone reinsurance pool.

As insuranceNEWS.com.au has reported, insurers committed to “work with Government and Treasury” to explore whether a government-funded pool could help address premium affordability issues in northern Queensland, following a meeting with Assistant Treasurer Michael Sukkar.

NIBA was not invited to last Friday’s meeting, but earlier this year spoke in favour of exploring whether “some form of government intervention” should be part of the solution.

“It is certainly something that should be seriously explored, and we welcome that there is engagement between the Government and insurers,” CEO Dallas Booth told insuranceNEWS.com.au today.

However Mr Booth stressed that NIBA backs the Insurance Council of Australia position that investment in mitigation and resilience is the most important way to sustainably reduce premiums.

“We totally support the idea that the number one thing has to be proper management of the built environment,” he said.

“The built environment has to be able to cope with Australian weather.

“But we have an existing issue in north Queensland where there is a high cost of exposure and not a huge population to spread it across.

“That’s where you run into problems with affordability.”