State Insurance policy increases

State Insurance announced today on their web site that premiums for home insurance will be increasing by approximately 15%. The explanation given by State's CEO Jacki Johnson is:

Our reinsurance costs are increasing
Insurers take out their own cover against major events – called reinsurance. This ensures we have the funds available to cover the high cost of a major catastrophe. Over the last 18 months a series of global events, including the Christchurch earthquakes, has meant reinsurers incurred massive costs and have been forced to increase the premiums companies like State pay them.

Our financial strength helps ensure we’re here when you need us
Fortunately you are insured with State, which is part of the Insurance Australia Group (IAG). This gives us access to a large pool of capital and reinsurance funds, reflected in our strong Standard and Poor’s credit rating of AA-and ‘Very Strong’ claim paying status. It is crucial we maintain this solid foundation so you have reassurance that State will be able to pay out on your claims.

My team has worked hard to provide the best balance between keeping premiums affordable and maintaining our business strength. That way, as we have been for over 100 years, we’ll always be here when you need us.

There is no indication when the increases will occur.

This, and other policy related news can be found on State's web site here.

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