The insurance industry has embraced Justice Owen’s report even as others have criticised it. The reason: the royal commission report identifies exactly where the industry is hamstrung by restrictive legislation and destructive taxes.

Insurance Council of Australia (ICA) President Raymond Jones said implementation of the report’s suggestions would increase stability for the industry, provide more security for policyholders and reduce tax – and all that adds up to lower premiums.

Mr Jones said Justice Owen has written a “significant new chapter” into the history of general insurance in Australia. The report is the “most comprehensive” he’s seen, and now ICA is keen to work with the Government and regulators to assist in implementing Justice Owen’s recommendations.

ICA was particularly impressed with recommendations to have all insurance-like businesses authorised under the Insurance Act and following the prudential standards; the introduction of a support scheme to protect policyholders, and the abolition of stamp duty on general insurance products.

Don’t hold your breath, however. The state and territory governments won’t lose their taxation take on insurance premiums without a struggle, and the report has done little more than provide ammunition for the industry. The Federal Government is standing by to see exactly what the reaction is, but insurance taxation reform doesn’t yet appear to be any nearer the top of the agenda.

Mr Jones is also interested in the report’s suggestions to abolish the remaining fire service levies (NSW, Victoria and Tasmania) and to create a specialist general insurance team within APRA. In light of the current state of the Australian financial services market, Mr Jones says “any new external changes to the way the general insurance industry operates has to be beneficial, practical and workable”. In other words, don’t hit us with “flavour of the week” style changes.

National Insurance Brokers Association CEO Noel Pettersen has taken an equally positive line on much of the report’s longer-term consequences, saying the role and value of insurance is now better understood by ordinary Australians. “The royal commission report has highlighted a number of issues that impede the industry’s effectiveness in Australia,” Mr Pettersen said. “It would be good to think that governments around Australia would now consider the royal commission’s views on premium taxes and act on them. The tax take must be addressed.”

Australasian Institute of Chartered Loss Adjusters (AICLA) President Mark Godfrey says the report points out the need for greater concentration by insurers on claims reserving. “HIH showed just how vital professional claims reserving is,” he said in Hobart at the opening of AICLA’s national conference.