Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gottlieb, speaking at the Gilbert + Tobin Financial Services Forum, highlighted the urgent need for reforms to improve affordability and consumer protections in Australia’s insurance industry.
With climate change driving more frequent and severe weather events, and economic pressures weighing heavily on households, Cass-Gottlieb (pictured above) underscored the ACCC’s commitment to fostering a competitive insurance market that can withstand these complex challenges.
In her address, Cass-Gottlieb said the ACCC is focused on advancing regulatory strategies to help keep insurance accessible, especially for Australians in regions most exposed to climate risks. Additionally, the regulator is prioritising affordability and transparency as it engages with industry and government stakeholders to manage the evolving landscape of insurance availability.
Cass-Gottlieb discussed the government’s cyclone reinsurance pool, an initiative intended to curb high insurance premiums in cyclone-prone areas.
This pool, which seeks to lower costs for insurers and, ultimately, consumers, has started delivering modest premium reductions in certain high-risk regions.
“We have seen that the pool has led to some savings for insurers writing policies in higher cyclone risk regions of Australia. We’ve also seen insurers making changes to pass these savings on to consumers,” Cass-Gottlieb said.
However, Cass-Gottlieb acknowledged that these gains are limited, as global reinsurance costs have risen sharply due to the intensifying impact of climate events worldwide. Additionally, surging costs for construction materials and labour have further complicated efforts to reduce premiums.
“These pressures are making it harder for consumers to see the full benefits of the pool in passed-on savings,” she said.
Cass-Gottlieb indicated that while the pool offers a pathway to premium relief, it is not a comprehensive solution.
For many in Northern Australia and other vulnerable regions, insurance has become difficult to afford, leaving some homeowners and small businesses with tough choices on coverage. These affordability challenges, Cass-Gottlieb said, point to the need for further market adjustments and policy interventions to ensure long-term accessibility.
The ACCC has advocated for reforms to improve transparency and competition in the insurance sector, building on findings from its Northern Australia Insurance Inquiry.
Cass-Gottlieb noted that the inquiry’s recommendations, which include clearer pricing disclosures and incentives for insurers to operate in high-risk areas, are intended to drive competition and provide consumers with better information about their options.
The ACCC is working with government bodies to explore policies that could bring more insurers into markets where coverage options are currently limited.
According to Cass-Gottlieb, the inquiry underscored that competitive pressure in the market could play a significant role in making premiums more manageable.
As insurers face rising costs from reinsurers – particularly in high-risk locations – the ACCC is examining additional ways to foster market resilience and increase the number of insurers willing to cover these areas.
The ACCC is also supporting regulatory steps to improve product transparency, making it easier for consumers to compare policies, understand coverage limits, and select plans that align with their specific needs.
A key driver behind rising insurance premiums is the hardening global reinsurance market, Cass-Gottlieb said.
With reinsurers facing mounting losses from climate-driven disasters, costs have escalated, placing additional pressure on Australian insurers and, in turn, consumers. The ACCC has been monitoring these dynamics, which could affect insurance affordability, particularly in disaster-prone areas.
The cyclone reinsurance pool was developed in part to buffer some of these cost impacts, but Cass-Gottlieb indicated that other mechanisms might be necessary to effectively moderate premiums.
She highlighted the ACCC’s efforts to encourage insurers to pass on savings from the reinsurance pool to customers, though rising input costs have made the full impact of these savings inconsistent.
Cass-Gottlieb also emphasised the ACCC’s initiatives to boost consumer protections within the insurance market.
Through measures to increase transparency and ease of comparison, the ACCC aims to equip consumers with clearer information on policy terms, exclusions, and costs. This effort aligns with the ACCC’s broader consumer protection strategy, which promotes market practices that enable individuals and businesses to make informed insurance choices.
In addition, the regulator is exploring ways to expand consumer data rights within insurance to support informed decision-making. Under these rights, consumers could access and share their data with different providers, potentially allowing for more tailored insurance products that better meet individual needs.
