The Insurance Council says the ACCC report on pricing released late September contains “a number of flaws that inflated profit projections”.

According to actuaries Trowbridge Deloitte, there were not excessive profits in the insurance sector. But the ACCC ignored four major factors, including general expenses, used unrealistic minimum capital requirements, and failed to consider changes to reserves and the effect of tax.

ICA Executive Director Alan Mason expressed concern that the report would cause decision-makers and readers of the report to make incorrect assumptions and take inappropriate decisions.

ICA Executive Manager Corporate Affairs Rod Frail said that while the report has been used by some “legal lobbyists” as a reason for not going down the reform track, there was no indication or formal reference made to the findings in last Wednesday’s ministerial meeting.

While the ACCC said it is aware of the ICA’s concerns, Mr Frail said there has been no formal response as yet.