Business and consumer confidence in the performance and financial stability of insurers has improved significantly over the past 12 months, according to a new national consumer and business survey commissioned by the Insurance Council of Australia (ICA).

The survey conducted by Quantum Market Research found perceptions of the industry improved over the previous year, probably helped by insurers’ response to disasters such as the Canberra bushfires and Melbourne’s December storm.

Renewed certainty in insurers’ ability to cover claims was also noted, with 77% of consumers and 72% of small business respondents confident that insurers have sufficient financial strength, up 10% from last year. And 87% of businesses and 85% of consumers say it is important for insurers to make a profit.

An ICA report on the survey acknowledges there is still room to improve the industry’s image.

In 2003 people’s understanding of policies improved, as well as their knowledge of insurance issues. Greater coverage of insurance issues, particularly after disasters such as the Canberra bushfires, is also seen to have contributed to a slight drop in confidence (from 71% to 68%) that they have sufficient insurance cover.

Respondents nominated activities by lawyers and generous payments by the courts as the major causes of increased public liability premiums.