“The Insurance Council’s members are rising to the challenges of natural disasters and the initial impact of COVID-19.”
This was the conclusion made by Insurance Council of Australia (ICA) chief executive Rob Whelan in his opening statement at Tuesday’s hearing, held via teleconference, as part of the House of Representatives Economic Committee inquiry into the country’s general insurance industry.
In his 10-page statement, Whelan noted how the industry itself is being disrupted by the pandemic in terms of how insurance businesses currently operate but that they are being flexible and adaptive and remain on hand to provide urgent services to policyholders who continue to lodge claims at this time.
“They are focussing on helping customers through these difficult times and are working within the confines of consumer law and the Corporations Act,” asserted the CEO, referring to insurers which remain operational mostly from home. “They have each developed various packages and support measures to reduce the stress experienced by many small to medium enterprises and household customers and provide immediate relief.
“These include deferred premiums, refunds, rebates, and a relaxation of claim requirements. For example, the four largest insurers have announced SME assistance packages that are focussed on premium relief and continuity of cover.”
Whelan stressed that providers are “pressing ahead” despite challenges including having to handle claims while centralised call centres are closed and seeing limitations in activities such as assessments and building works due to social distancing.
“I think you will agree the industry’s customer focus has never been more apparent than in these times of crisis,” he said.
The ICA official also provided data relating to natural disasters, including the more than $2.26 billion in claims resulting from the series of bushfires that predominantly hit New South Wales, Victoria, South Australia, and Queensland. In addition, a submission has been made to the natural disasters royal commission.
Whelan declared: “We hope it will provide insights into disaster preparation and management, the role of insurance, and the impact that state taxation is having on levels of insurance in bushfire communities.”
As for Commissioner Kenneth Hayne’s recommendations, the ICA chief expressed backing for the recommendation’s aims and noted that the commissioner did not find systemic issues with the general insurance industry.
“The industry has been working collaboratively with Government to strengthen community trust and confidence in the industry sector,” noted Whelan, “and ensure consumers are treated with dignity and respect.
“The Insurance Council is also focussed on seeking the right outcomes from the implementation of the Royal Commission recommendations. The changes must deliver genuine and measurable benefits to customers.”
Citing COVID-19 and “the worst natural disaster season on record,” Whelan said the industry wrote to the Treasurer to seek a delay to the timeframes for implementation of the legislation to July 2022. It is in the ICA’s view that insurers’ resources, in this time of massive disruption, should be focussed on helping clients and making sure claims are handled efficiently and fairly.
To conclude, the CEO asserted: “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.
“This is especially important as Australia recovers from the immense economic and social pain caused by the pandemic and natural disasters.”
