Everyone else has been relatively benign towards the insurance industry during the great public liability debate, and Allan Fels’ ACCC resisted the temptation to do a number on the industry in its pre-Canberra summit report.

It said several factors impacted on the rates for professional indemnity and public liability insurance, including general wage inflation; low premiums in recent years; continuing increases in the cost of claims; increased reinsurance costs; and very low returns.

Nothing new there. But Professor Fels did make the point quite sharply that “until recently a number of insurance companies have been chasing market share rather than managing risk in a sensible fashion”.

“The ACCC is not advocating price controls on general insurance but believes companies should not try to justify price rises by using external factors rather than admitting past management mistakes,” he said. A good point, and one which the global insurance industry, which behaves in exactly the same way, should heed.

The report said that underwriting losses have exceeded $1 billion for the past three financial years, and recommended the industry “take steps to assist consumers in their assessments of insurance premiums on offer. This includes giving clearer information about increased charges for insurance policies and improving enquiry and complaints-handling systems.” Brokers and highly praised industry dispute resolution facilities weren’t mentioned.

The Federal Government has asked the ACCC to update its report by June and provide an analysis of the competitiveness of public liability and professional indemnity insurance. ASIC and APRA could help by providing some advice to ACCC on the finer points of insurance practice.