Review outcomes and rising premiums have set up a “defining time” for the industry, which must ensure it has a seat at the table as governments consider reforms, Suncorp CEO Steve Johnston told the Insurance Council of Australia annual conference. 

Mr Johnston, who will become ICA chair in January, says the parliamentary floods inquiry report, due to be released tomorrow, code of practice review outcomes and issues around affordability and inflation levels present challenges. 

“I think everyone in the room knows that the next three months are going to be a very, very defining time for the insurance industry,” he said.  

Mr Johnston said insurers must continue to focus on their role in the community and have a seat at the table as reforms move through political processes. ICA, under its current leadership, has shifted its approach compared with the past, he told the conference in Brisbane yesterday. 

“I think historically, the industry has sort of sat away from table, and belligerently in some cases,” he said. “We’ve got to engage constructively.” 

Repricing of insurance risk globally, rising sophistication of risk assessments, and past housing and land use decisions have left some people more exposed to steep premium increases, leading to problems that are also political, he said. 

“We have to lean into that discussion, not just sit back and say, ‘We’re not part of the solution.’ ” 

Mr Johnston said many of the parliamentary floods inquiry recommendations are likely to be already in train, and the 2022 catastrophes and the ICA-commissioned Deloitte report highlighted a need to improve processes, judgment and communication. 

ICA CEO Andrew Hall said the floods inquiry had been a “healthy exercise” for the industry, and came as the code of practice review panel was conducting its work, releasing an interim report last month.  

“Hopefully, in coming weeks, we’ll have a broader view over all of these recommendations, and we can start working through each and every one of them,” he said. “We do have an ICA board meeting in December, where I expect that we’ll work through at a more granular level ... the action plan the industry will be following.” 

Floods inquiry chairman Daniel Mulino told the conference the evidence presented covered issues relating not just to the record-breaking Queensland and northern NSW floods in early 2022, but also catastrophes later that year. 

“Being able to scale up quickly, being able to deal with vulnerable people, that is core business,” he said. “I do think there is a reasonable expectation on the industry to be able to scale up when an event of a 30,000 or 40,000 claim magnitude occurs.”  

The rising impacts on the most-at-risk people from more granular insurer data, fewer available flood opt-out options and poor land-use planning and housing decisions were among issues raised, he said. 

“If one is going to think about that whole set of issues, one has to then wrap it up with community mitigation, with household mitigation, and with a range of policies to deal with not increasing the stock of houses at risk,” he said. 

“I think we need to think as an industry, as a society or government, about whether government intervention might be becoming a timely issue for us to look at, but if we were to go down that path, I think we would have to look at a range of other mechanisms in parallel. It has to be a multi-pronged approach.”