The insurance industry needs to ensure its value and social contribution is better understood by government and the community, according to Suncorp CEO Patrick Snowball.

He says the amount paid out in claims by the industry each year is not dissimilar to the Federal Government’s economic stimulus package.

“During the global financial crisis the Federal Government launched a package of economic stimulus measures including $16.2 billion over three years to build new schools and facilities throughout Australia,” he told the annual NIBA Convention on the Gold Coast yesterday.

“It also included more than $12 billion in special payments to assist households and support economic growth.

“During the same period, the gross incurred claims reported by the general insurance industry were more than $23 billion.

“Our industry was injecting back into communities broadly the same amount of money as the major Government stimulus packages.”

Mr Snowball says when it comes to protecting the Australian economy, the insurance industry has a significant role to play, but is facing two challenges.

“First, we need to ensure its value and ongoing economic and social contribution is understood,” he said.

“Developing and communicating a coherent narrative about our industry is even more important now given the new structure of the Federal Government.”

The second issue is ensuring products and services are delivered at very high standards – a responsibility Mr Snowball says is one for the major insurers.

He says there are four areas insurers will have to focus on if they are to succeed in a crowded market.

“These are corporate reputation and product brands, technology, pricing and claims management,” he said. “A related challenge is to provide product choice without eroding profitability.”

Mr Snowball says there will be some hardening in pricing for personal lines premiums due to recent major weather events, while in other areas price rises will be moderate due to growing competition.

“The focus will be on pricing flexibility to achieve market share and segmentation objectives,” he said.

“This means the most successful businesses will be those with the scope to achieve operating scale and synergy benefits across key functions.”