Ditching insurance: The unintended outcome of the royal commission
Mistrust in the insurance sector driven by the Hayne royal commission could result in increasing levels of underinsurance, an insurance leader has warned.
Suncorp CEO Insurance Gary Dransfield, who appeared before last year’s hearings to face allegations of poor claims service, admits the industry has made mistakes.
Writing in an online article today, he highlights the importance of regaining trust – not just for the industry’s sake but also to ensure the continued protection of consumers.
“We know there are times when the industry doesn’t always get it right, and last year’s royal commission was a stark reminder that we can and should always do things better, and must learn from our mistakes,” Mr Dransfield says.
“This has, naturally, tarnished trust in insurance.
“One of the unintended consequences of the public losing trust in insurance is that more Australians may be left unprotected when they need it most.
“The Victorian Government already estimates one in two don’t have insurance, or don’t have enough to cover the costs of replacing home and household possessions that are damaged by fire, storm, flood and other emergencies.”
Mr Dransfield says insurers don’t take lightly the responsibility they have to support people who are suffering following natural catastrophes.
However, “despite the best intentions” claimants can be left confused and angry, especially if they need to deal with a new person every time they call their insurer.
“Suncorp now gives customers who have suffered medium and large-scale building losses a dedicated client manager to case-manage their claims,” Mr Dransfield said.
“More than anything, we must be there for the most vulnerable members of our community, by having skilled staff, trained to listen to the signs, hear a customer’s concerns and able to provide a solution that suits their needs.”
Mr Dransfield says winning back trust will not be easy.
“The challenge we collectively face is how we, and our policymakers, deliver on the need for reforms that better reflect community expectations, while also maintaining the integrity of an insurance system that delivers significant economic and social benefits each year.
He says the industry will take “a major step forward” later this year when a new code of practice comes into effect.
“The challenge will be for all insurers to live up to the spirit, and not just the letter, of the new code. At this pivotal point for our industry, we must rebuild trust, demonstrate our value and always deliver on the promise.
“Because if we don’t, we not only risk losing our licence to operate but will let our customers and communities down.”