Australian Insurance - Property & Casualty: NSW ESL reform is finally coming… better late than never

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Australian Insurance - Property & Casualty: NSW ESL reform is finally coming… better late than never

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Australian Insurance - Property & Casualty

NSW ESL reform is finally coming… better

late than never

Government Regulations

Emergency Services Levy reform is finally here 10 July 2026

NSW Treasury has proposed to replace the Emergency Services Levy (ESL) which is Equity

currently funded through insurance premiums, with a property-based levy. This would be Australia

consistent with how levies are already collected in most other states. This would be a Insurance - Property & Casualty

more equitable way of raising levies based on land value, that should better-reflect Freya Kong >>

owners’ capacity to pay. Collection of levies as a % of insurance premiums has often Research Analyst

exacerbated affordability issues: lower income households are often situated in higher Merrill+61 2 9226Lynch5840(Australia)

hazard areas where housing might be more affordable, but due to elevated peril risks are freya.kong@bofa.com

often subject to higher premiums (and therefore higher levies). The reform has broad Stephanie Deeb >>

Research Analyst

industry support, and we view it as a positive step of government support for the sector Merrill Lynch (Australia)

and addressing under-insurance. See: Australian Insurance - P&C: Margins to be made on stephanierebecca.deeb@bofa.com

climate change (18 Nov 24). We have a Buy rating on IAG; U/P on QBE & SUN. Mitchell Hawker >>

Lower premiums = more demand, higher volumes Merrillmitchell.hawker@bofa.comLynch (Australia)

NSW is the last mainland Australian state still funding emergency services through an

insurance-based levy, with three-quarters of funding borne by households and

businesses through insurance premiums.