Cyclone reinsurance pool pricing must be released as soon as possible to give the industry time to factor in costs and to provide visibility to policyholders on premium reductions, the Insurance Council of Australia (ICA) said today following the passage of the legislation through the Senate.

The legislation passed late yesterday in what was expected to be the last Senate sitting day before the Government announces the federal election, paving the way for the pool to start from July 1.

“The pool is scheduled to commence in just three months, so it’s vitally important that insurers and their customers are able to understand how and to what extent this will impact on premiums,” ICA CEO Andrew Hall said.

The Federal Government says more than 880,000 residential, strata and small business property insurance policies in northern Australia are expected to be covered for the risk of cyclone and related flood damage through the pool.

The Government came under pressure in the Senate yesterday over its refusal to release modelling to back up assertions that homeowners with the most acute cost pressures are expected to see premium discounts of up to 46%, while savings could reach 58% for strata properties and 34% for SMEs.

“Although the government have been using the language that those savings would apply to people with the most acute cost pressures, they still won't detail or define how many people would fit in this category, so we have no idea how many people they're claiming would benefit from these savings,” Queensland Labor Senator Anthony Chisholm said.

Strata Community Association (SCA) Queensland President Kristi Kinast says passage of the bill prior to the election is important, but more action is needed to address the affordability issue, including the abolition of state government taxes on premiums.

“We are so pleased to see this pass and give certainty to our sector. Savings of up to 58% for the most at risk schemes is massive,” Ms Kinast said.

“The reinsurance pool will make a big difference to strata owners and managers; however, it is only the first step in solving this ongoing strata insurance crisis.”

ICA says a reinsurance pool is “just one piece of the puzzle” and ongoing floods have shown the urgent need for investment in measures to better protect homes and communities, in addition to funding provided in Tuesday’s Budget for the areas affected by the current disaster.

“There are dozens of other communities in Australia that remain exposed to perils like cyclones and require similar assistance to uplift their mitigation,” Mr Hall said.

“In the lead up the election in coming weeks it is incumbent upon the Government to not only assist with recovery, but announce further investments to better protect communities from the impacts of extreme weather.”