A leading consumer advocate has ranked the insurance industry as worse than the banks in its dealings with consumer groups, citing a “take it or leave it, arrogant attitude”.

Speaking at the Insurance Council of Australia’s (ICA) 2011 regulatory update, Consumer Action Law Centre co-CEO Catriona Lowe said that over the past year the insurance industry’s engagement with both consumers and their representatives had been “more combative” than it needs to be.

She says consumer groups are “natural allies” with insurers.

“We actually want consumers to have your products; we think more consumers need insurance, particularly vulnerable and disadvantaged consumers.”

But Ms Lowe says that despite this consumer groups have “more constructive dialogue, more often” with the banks.

“We manage to have a very useful and constructive dialogue with the banking industry.”

She says the attitude of insurers contributes to consumer antipathy about insurance products and discourages advocates who “otherwise might want to encourage and inform consumers about the benefits of taking out insurance”.

However, Ms Lowe commended ICA under CEO Rob Whelan for establishing the National Consumer Reference Group (NCRG), whose members include the Consumers Federation of Australia, the Australian Financial Counselling and Credit Reform Association and Legal Aid.

An ICA spokesman told insuranceNEWS.com.au the purpose of the NCRG “is to have open and ongoing dialogue with consumers”.

Ms Lowe says consumer advocates are “somewhat heartened” by recent developments and expressed hope that in future insurers and consumer groups can “work together in a new and more constructive way”.