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 Competition and Consumer Commission (ACCC) has recently opposed the proposed acquisition of RAC WA's insurance operations by Insurance Australia Group (IAG). This decision stems from concerns that the merger would significantly reduce competition within Western Australia's insurance sector, potentially leading to higher premiums and diminished service quality for consumers. - read more
BizCover, an online business insurance platform, has expanded its professional indemnity (PI) insurance offerings through a new distribution agreement with Zurich Australia. This partnership enables small and medium-sized enterprises (SMEs) with annual revenues under $7.5 million to access Zurich's PI insurance directly via the BizCover website, with coverage limits of up to $10 million. - read more
In a recent development, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) have jointly called upon insurers to enhance their artificial intelligence (AI) governance frameworks. This directive underscores the regulators' growing concern over the potential risks associated with the rapid adoption of AI technologies within the insurance sector. - read more
In the Australian beauty industry, professionals such as beauticians, hairdressers, and salon owners are facing significant challenges due to escalating insurance premiums. This trend is largely attributed to a lack of competition among insurers, leading to higher costs and limited options for coverage. - read more
As of May 1, 2026, Australian Football League (AFL) players will no longer have insurance coverage for brain injuries under their superannuation policies. This change comes after Zurich Insurance decided to exclude total and permanent disability (TPD) benefits for claims related to traumatic head injuries, concussions, chronic traumatic encephalopathy (CTE), post-concussion syndrome, or any neurological impairments linked to brain injury. - read more
In today’s digital landscape, Australian companies face an increasing threat from cyber criminals. The paramount importance of cybersecurity has never been more evident, with the surge of incidents exposing the vulnerabilities in organizations' digital defenses. As we usher into an era where data breaches and cyber attacks are commonplace, protecting digital assets becomes a crucial part of doing business. - read more
Cybersecurity refers to the measures and practices put in place to protect digital information and systems from attacks, unauthorized access, damage, and disruption. - read more
Data breaches have become a significant concern for businesses in today's digital landscape. Simply put, a data breach occurs when sensitive, protected, or confidential information is accessed, disclosed, or used without authorization. The implications of such breaches can be far-reaching, affecting not just financial health but also the reputation of businesses and the security of individuals involved. - read more
In the digital age, Australian small businesses find themselves navigating a world where online presence isn't just an advantage, it’s a necessity. With this increased online activity comes heightened vulnerability to cyber threats, making the protection of digital assets an urgent priority. - 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
Insurance Underwriter: An insurance company, a financial institution that sells insurance.
No comments yet. Be the first to share your thoughts.