The Insurance Council of Australia (ICA) is seeking industry feedback on an independent review that detailed solutions to address commercial insurance availability and affordability issues, particularly for small and medium-sized enterprises (SMEs).
In February, the ICA commissioned former insurance executive and regulator John Trowbridge to conduct an independent review of these issues, which have been challenging sectors for some time, and to recommend solutions.
The independent review found affordability and availability issues for SMEs – revolving around public liability, professional indemnity, directors and officers, and business interruption cover. While there is no one-size-fits-all solution to the issues, the review argues that the industry can address the gaps if insurers, small businesses, and the government collaborate effectively.
ICA chief executive officer Andrew Hall said insurers' costs soar as risk increases. As a result, premiums may rise, impacting the availability and affordability of some types of insurance.
“While some small businesses are facing challenges in accessing the insurance they need to operate, in many of these categories, insurers are under pressure to provide a profitable product, so solutions are often difficult to determine,” Hall said.
This week, the ICA and the Council of Small Business Australia held a roundtable on insurance availability and affordability issues for small businesses, which included a presentation from Trowbridge.
Trowbridge identified 16 options that fall into three broad categories:
“The Trowbridge review shows that insurers are serious about engaging with these issues for the benefit of individual commercial policyholders and the economy as a whole,” Hall said.
The ICA will conduct a one-month stakeholder consultation, with the ICA Board preparing a final response to the paper.
