Inquiry into Australia’s General Insurance Industry

Insurance Council of Australia (ICA) CEO, Rob Whelan gave evidance and provided an opening statement to the House of Representatives Economic Committee Inquiry into Australia’s General Insurance Industry.

Whelan said, “The Insurance Council’s members are rising to the challenges of natural disasters and the initial impact of COVID-19. They are helping customers affected by the pandemic through a wide range of assistance packages, including discounts, rebates and refunds.”

National Insurance Brokers Association (NIBA) CEO, Dallas Booth said, “The opening statement shows the major challenges facing the insurance industry as a result of the summer fires, hail and storms. This emphasises the important role insurance plays in protecting people, businesses and the broader community in times of major loss.”

Whelan believes that the insurers are being flexible and adaptive in these challenging times, “Insurance is a necessity. It underpins the economy. We need to ensure the industry remains prudentially strong and retains the capacity to take on risk in the community.”

He stressed that this is especially important as Australia recovers from the immense economic and social pain caused by the pandemic and natural disasters.

Whelan added, “This (2019-20) was the worst natural disaster season on record, and insurers are fulfilling their promise. They have made – and continue to make – strong progress in helping thousands of families and small businesses.They are paying claims, rebuilding and repairing properties.”

Since September, customers have lodged $4.6 billion in insurance claims for damage caused by natural disasters, on top of the normal level of claims that insurers might reasonably expect. Most of the 242,000 claims are for damage or destruction of family homes, cars and belongings. Thousands of small businesses were also affected.

More than $2.26 billion in claims have come in from the series of tragic bushfires that predominantly affected New South Wales, Victoria, South Australia and Queensland.

Whelan said that the insurance industry is being disrupted by the COVID-19 pandemic in similar ways to most other businesses, “Even during a pandemic, customers lodge claims and need our support, but it is far from business as usual.”

He added that the insurance industry’s customer focus has never been more apparent than in these times of crisis and the industry’s Code of Practice also has a strong focus on financial hardship.