The Queensland Government uses a ‘self-insurance pool’ but does not take out re-insurance to protect against the financial or infrastructure costs of a catastrophe. Most of the other states do take out re-insurance.
The cost of catastrophes even to bodies like whole state governments can only be expected to grow steadily with climate change increasing the rate and severity of major climate events.
The reason the QLD Government doesn’t reinsure is because it costs so much. The point is that catastrophes cost huge amounts.
Continually absorbing the cost one way or another is the challenge we are facing and we must be prepared for the possibility that neither the government or an insurance company will always be able to pick up the pieces.