As ex-Tropical Cyclone Alfred causes major flooding in northern NSW and southern Queensland, a crucial issue arises: rising insurance premiums. These increases aren’t solely the result of extreme weather events; outdated regulations also play a significant role.
Australia’s insurance sector is divided into general, life, and health insurance, each requiring separate licenses to operate. This division leads to inefficiencies, subsequently driving up costs for consumers.
The industry is currently facing a crisis, with insurance costs surging by 11 percent in the past year. Health insurance premiums are also set to rise, specifically by 3.7 percent starting in April. According to the Australian Prudential Regulation Authority (APRA), insurers are struggling in this environment. This, in turn, means higher premiums and ultimately fewer options for Australians.
Jesse Krncevic, formerly a policy advisor at APRA, and also a former Head of Government Relations at the Australian Securities and Investment Commission, has stated the need for reform within the industry.
