Top five Australian insurer QBE is standing firm: it says its ill-fated appeal against a case brought on by a breast cancer patient who was refused travel insurance because of her illness could increase consumers’ costs and drive insurers away from the travel insurance market.

As reported by Sunrise Exchange News two weeks ago, Adelaide-based Denise Bassanelli successfully sued QBE for discrimination after it refused to cover her travel for a trip to Japan – which she had won in a radio station competition – in 2002. She found another insurer willing to take the risk, but decided to lodge a complaint with the Human Rights and Equal Opportunity Commission. The commission dismissed her complaint but she went to the Federal Magistrates’ Court last September and won. She was awarded $5000 for her distress throughout the ordeal.

QBE took the case back to court earlier this year saying the magistrate had erred, but the Federal Court found in Ms Bassanelli’s favour.

National legal firm Allens Arthur Robinson says the decision highlights the difficulty insurers face in demonstrating the “other relevant factors” exemption in Section 46 of the Disability Discrimination Act. 

In a report, it says the decision “causes concern for insurers offering standard cover, as it suggests that those insurers should investigate the individual circumstances of a prospective insureds and, where reasonable, offer cover based on that individual’s situation”.

“This will be of particular concern for insurers offering less expensive types of cover, as individual investigations will no doubt be significantly more expensive to the insurer than using generic information.”

Speaking to Sunrise Exchange News yesterday, QBE Australia MD Raymond Jones repeated his vow that the insurer will go as far as considering dropping travel insurance.

“This case has the ability to be very detrimental to the Australian travel insurance market,” he said. “It could get to the stage that when anyone applies for travel insurance they will have to seek full doctors’ reports disclosing their health status, which could be very expensive.”

Mr Jones says although QBE is “very committed” to the travel insurance division, it won’t continue providing the cover if it can’t “adequately underwrite risks and bring value to stakeholders”.

He says QBE is still assessing its options, and has until next Wednesday to make a decision as to whether it will appeal the judgement.