The homegrown insurers of Australia aren’t looking for special treatment – just equitable treatment on a level playing field, according to Promina Group CEO Michael Wilkins.

Speaking at a meeting of the Trans Tasman Business Circle in Sydney, Mr Wilkins said Promina’s corporate strategy of “specialisation and focus” means the insurer is aiming for market segments that may be under-serviced.

“What it also does, however, is enable us to see the activities of DOFIs [direct offshore foreign insurers] and DMFs [discretionary mutual funds] very clearly.”

“In 2004, the Potts Review concluded that while overall they comprise only approximately 2.5% of the Australian market, they have a significant capacity in specialised lines. We believe it is closer to 7.5% of the premium pool,” he said.

Mr Wilkins says it is a concern that DOFIs do not offer the degree of regulatory protection authorised insurers provide.

“It is clear that after HIH neither the Australian business community nor the public are willing to tolerate the failure of another insurer. And should a DOFI or DMF fail, these communities will not distinguish between their status as an offshore provider and the highly regulated sector which operates in Australia.”

In the public eye this would simply be seen as another insurance failure, and the general industry’s reputation would be tarnished by circumstances beyond its control.

“To retain the integrity of our regulatory system, and hence the trust of the consumer – which is something that has been very hard earned – we believe that DOFIs should also be subject to regulation by ASIC [the Australian Securities and Investments Commission] and the Australian financial services licensing requirements, as well as the general insurance industry code of practice.”