Insurers are returning to profit, but getting back into the black is a double-edged sword, says Insurance Council of Australia (ICA) Executive Director Alan Mason. He believes rising premiums present the industry “with one of our biggest PR challenges”.

Speaking at ICA’s WA state conference in Perth last week, he said plaintiff lawyers and other groups will use insurers’ profits “as a reason for either not proceeding with further reforms in areas like liability, or as an argument for immediately reducing premiums…”

Mr Mason says the focus by Australian insurers on making underwriting profits “has not been as strong in my experience since the demise of industry tariffs nearly 30 years ago”.

“Some in business circles are saying it is only a matter of time before the cycle changes and a price war brings prices down again. However, many in our industry are of the view that this is not a cyclical change but a structural change.”