The rapid improvement in pricing individual risks has reduced the extent to which insurance pools risk.
This removal of cross subsidies has the advantages of fairer pricing between consumers, better price signalling, and hopefully better risk mitigation by consumers and communities in response.
But this has also lead to conflict with groups that are more interested in risk pooling. An example is strata insurance for North QLD, where insurers are now pricing based on the risk, and property owners are complaining to politicians about the increased price.
However, the politicians don’t hear from the remainder of the country that no longer have to subsidise the North QLDers!
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