On Monday afternoon, Insurance Council of Australia (ICA) President Richard Enthoven delivered a State of the Industry Report to delegates of the 2019 NIBA Convention.
Upon reflecting on the state of the industry, Enthoven, who is also the Chief Executive Officer of The Hollard Insurance Company, said he saw a well-regulated, well capitalised, innovative, and competitive industry.
“I see teams of people striving to exercise their social licence responsibly and learn the lessons of the Royal Commission.
“I also see an industry that earns an adequate, although by no means exciting, return on the capital deployed,” he added.
In his address, Enthoven acknowledged that the industry faces an array of challenges and uncertainty, including changing community standards and community expectations, a 24.4 per cent gender pay gap, changing regulatory expectations, changing weather patterns, a slowing economy, the explosion of big data and the fourth industrial revolution.
“It is a lot to deal with and it means that executives and Boards have their hands full and are currently grappling best to prioritise all these work streams.”
In his address, the ICA President said a revised General Insurance Code of Practice (or new Code), will go a long way to addressing community expectations and demonstrating the efficacy of self-regulation.
“It will include important new provisions focussing on mental health and a requirement for insurers to implement a domestic violence policy.”
And, for the first time, the new Code will include a community benefit payable by members of up to $100,000 as a sanction for significant breaches.
The new code will become mandatory following ICA Board approval and a 12-month transition period, which is likely to commence 1 January 2020.
Enthoven went on to discuss the challenges of an economy stuck in first gear, and climate change, which renders past data an unreliable tool for predicting future losses.
In closing, Enthoven urged brokers to recognise the opportunity to meet (if not exceed) their customers’ changing expectations and make a significant and enduring difference in the community.
“Appreciate what an honour and unique privilege we share as a result of our career in insurance.”
Enthoven was then joined on stage by NIBA President Eric Harris, who acknowledged that brokers were having to work a lot harder to achieve outcomes for their clients.
“I think every one of us is feeling the pinch on our businesses, and that busy word is absolutely the word I hear from the people in my own organisation and the brokers I speak to on a weekly basis.”