The Australian Consumers Insurance Lobby (ACIL) says changes to cyclone pool pricing modelling should be made before a scheduled review, to deliver improved savings to regions paying the highest premiums.

Pool legislation is due to be reviewed next year but ACIL Chairman Tyrone Shandiman says changes could be made earlier to improve its operation at the direction of Assistant Treasurer Stephen Jones. 

“We have not asked for an early review. What I would really like to see is some substantial changes, particularly to the modelling before the actual review of the pool takes place,” he told a recent parliamentary committee hearing. 

ACIL says premium collection should involve more cross-subsidisation between low and high-risk areas, and that regions as far south as Sydney could be contributing. 

The parliamentary Joint Select Committee on Northern Australia resumed its inquiry into the government-backed scheme with a hearing in Brisbane this month, as the current risk season concludes and after Cyclone Jasper in December delivered the pool’s first major test.  

Issues raised at the hearing have included whether the pool’s role in covering flooding should be expanded, or whether there should be a separate scheme. 

“What we are saying is get this right for cyclone and then explore the issue of flood at a later date,” Mr Shandiman said. “But right now we don’t think the pool on the cyclone issue is working in its best capacity and it just needs some tweaking to the modelling.” 

Strata developments have seen some significant reductions under the pool, but buildings with a sum insured over $20 million are still struggling to get cover and premiums remain well above national average levels, he told the committee. 

ACIL released a report last year which supported changes including an extension to the pool’s cover period to seven days after a cyclone is downgraded, from the current 48 hours, with more areas contributing, and it also wants marine included.  

Insurers appearing before the committee gave diverging views on whether the 48-hour limit should be extended and the degree to which it should cover flood.