NSW Budget Prioritizes Resilience, Aimed at Insurance Affordability
NSW Budget Prioritizes Resilience, Aimed at Insurance Affordability
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
The latest NSW budget signals a significant boost for improving insurance outcomes by heavily investing in resilience building and working towards emergency services levy reforms.
Unveiling the 2024-25 budget, the Minns government has announced a substantial allocation of $5.7 billion over the next four years focused on disaster response and natural calamities, with Australian government contributions included.
Among the key initiatives, $525 million is set aside for the Resilient Homes Program in the Northern Rivers and Central West, promoting voluntary home buybacks and flood-proofing just to name a few enhancements. Meanwhile, the Resilient Lands Program will receive $87.4 million aimed at creating new housing and land opportunities in Northern Rivers.
"The focus on resilience is truly commendable," stated Andrew Hall, CEO of the Insurance Council of Australia. "By proactively addressing the need to safeguard properties and human lives from the increasing menace of severe weather, the government is paving the path for improved insurance scenarios."
An equally notable aspect of the budget is the government's renewed commitment to replacing the current insurance-based emergency services levy (ESL) with a property levy mechanism.
According to the budget documents, growing needs for emergency services spurred by climate change and frequent natural disasters are driving the push for change. The documents mention, "Transitioning from the ESL to a broader-based property levy would alleviate the pressure on insurance premiums and distribute the cost more equitably among all property owners."
Insurers have long been advocating for such reforms. Mr. Hall praised the move, remarking, "Eliminating the ESL will definitely reduce insurance costs for customers in NSW. The existing system has long penalized policyholders especially those living in flood-prone areas, already burdened by hefty insurance premiums."
IAG, another major player in the insurance arena, also lauded the budget. Nick Hawkins, CEO and MD, commented, "Measures like voluntary home buybacks, planned relocations, house raising, and retrofits are critical. These steps will not only enhance safety but also secure long-term protection for residents in high-risk zones."
The budget papers project a significant growth in ESL-related revenue, estimating an uptick of $205.6 million by 2027-28 when compared to the previous half-year review of 2023-24. This increase highlights the provisioning of additional resources to elevate emergency services for the NSW community.
For the fiscal year 2024-25, the government anticipates collecting around $1.32 billion in ESL revenue, with projections for the subsequent years being $1.27 billion in 2025-26, $1.22 billion in 2026-27, and $1.24 billion in 2027-28.
However, insurance duty revenues have observed a slight decline, revised downward by $7 million for 2023-24 and by $34 million over the next four years up to 2027-28, a situation attributed to fluctuations in year-to-date collections.
From Insurance News Magazine: How Government Disaster Payouts Could Drive the Search for a "Better Way" on Climate Adaptation.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have jointly called on life insurers to take decisive action to address mounting sustainability pressures in the Total and Permanent Disability (TPD) insurance market. This appeal follows a high-level industry roundtable discussion involving senior executives from 19 insurers and reinsurers, as well as representatives from Treasury and the Council of Australian Life Insurers (CALI). - read more
Recent data from the Australian Prudential Regulation Authority (APRA) reveals a significant concentration of disputes in the life insurance sector, with Total and Permanent Disability (TPD) and disability income insurance (DII) claims accounting for 88% of all disputes. This trend underscores the pressing need for both insurers and policyholders to closely examine the factors contributing to these disputes and seek solutions to enhance the claims process. - read more
Recent findings from the Life Insurance Code Compliance Committee (Life CCC) have revealed a concerning 67% increase in violations related to the timely payment of income protection benefits during the 2024-25 financial year. This surge has raised alarms about the industry's adherence to its own standards and the impact on policyholders. - read more
In a recent joint CEO roundtable, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) highlighted the pressing need for life insurers to take decisive action to address sustainability challenges in the Total and Permanent Disability (TPD) insurance market. - read more
Recent findings from the Life Insurance Code Compliance Committee (Life CCC) have revealed a 67% increase in violations related to timely income protection payments. This surge raises significant concerns about insurer compliance and the impact on customers who rely on these benefits during challenging times. - read more
Remote work has seen a significant rise in Australia, especially following the COVID-19 pandemic. More businesses are embracing flexibility, allowing employees to work from home or other remote locations. - read more
In an age where digital presence intertwines with daily operations, the threat landscape in Australia has magnified, exposing businesses to an evolving array of cyber threats. From sophisticated phishing attempts to ransomware attacks, the risk of digital insecurity looms large. Australia, with its growing technological adoption, finds itself facing an upsurge in cyber threat incidents year over year. - read more
Cyber risk management involves identifying, assessing, and prioritizing potential risks to an organization's digital assets and implementing measures to mitigate these threats. - read more
In today's digital age, cyber security has become a critical aspect for small businesses in Australia. As more operations move online, the potential for cyber threats increases. Small businesses are particularly vulnerable, making it essential to understand and address these risks proactively. - read more
As the digital economy flourishes, Australian businesses are enjoying the fruits of their own cyber-infrastructure but are also becoming increasingly susceptible to cyber threats. The era of the internet has ushered in a wave of new opportunities, yet it also demands vigilance in the face of growing cyber risks. With cyberattacks becoming more sophisticated and frequent, the imperative for robust cyber security measures has never been more pronounced. - read more
Knowledgebase
Proximate Cause: The primary cause of loss in an insurance claim, which sets in motion a chain of events leading to the damage or injury.
No comments yet. Be the first to share your thoughts.