Addressing the local general insurance industry at an Insurance Council of Australia (ICA) event recently, ICA chief executive Rob Whelan warned that the "raft of regulatory change" sweeping through the financial services sector will be game changing and general insurance will inevitably be impacted.
At the same event, ICA president Richard Enthoven also urged the industry to learn lessons from past mistakes while remaining mindful of the significant contribution insurance makes to its customers and the broader community.
The general insurance industry in Australia has faced tough times in the last 12 months after being found wanting by the Hayne Royal Commission and mounting claims from a number of major natural disasters.
ICA, the representative body of the general insurance industry in Australia, comprises both insurers and reinsurers. Its members represent approximately 95% of total premium income written by private sector general insurers.
Projecting a positive outlook for the industry, Mr Enthoven said that the general insurance industry will be more resilient as it will better understand and serve the needs of customers after implementing the recommendations of the royal commission.
However, Mr Whelan acknowledged that “implementing the many recommendations of the Hayne report is and will be challenging. Particularly so because in some respects the recommendations are less than clear in their intent.”
At the same time, he also lauded the industry for its response to the recent Townsville flooding as assessors and claims staff were deployed as soon as access was available while emergency payments were made quickly after that and repairs commenced.
In regards to the Townsville flooding, Mr Whelan said that about 30% claims have been finalised despite immense logistical challenges with more than $300m already being paid in repairs, rebuilds, emergency accommodation and other services as total estimated insurance losses stand at A$1.132bn ($0.79bn).
Future plans
In his keynote speech during the ICA annual dinner, Mr Enthoven also outlined three major objective he has set for the ICA during his tenure as president which are:
- To usher in an enhanced general insurance code of practice
- To improve the gender diversity of the ICA board
- To have the industry take a proactive leadership position on the issue of climate change
Describing the code of practice as the industry’s statement and commitment to continuous improvement for its customers, Mr Whelan mentioned that a draft code was presented to the ICA board for its consideration last week and ICA is currently awaiting industry feedback.
Meanwhile, Mr Enthoven remains convinced that the next version of the code will set the benchmark for industry self-regulation and allow general (re)insurers to address some of Australia’s most vexing social challenges including domestic violence and financial hardship.
Mr Enthoven also announced the launch of ICA’s new climate change website as well as its new mobile app ‘MyHazards’ which will serve to reduce the information asymmetry between insurers and our customers about risks to their property.