The past five years have been busy ones for the insurance companies – HIH, rates and regulatory reform are just a few of the issues they’ve had to deal with – but now they’re starting to look ahead.

Insurance Council of Australia (ICA) President Michael Hawker gave a good indication of the industry’s new political and community muscle in his speech at Thursday’s Canberra conference. He says the long-term health of the industry depends on four conditions which will require governments to keep right on reforming.

ICA wants to see development in four areas: the affordability of insurance, including the issues of tax and regulation costs; managing societal risks, including flood and climate change; personal injury management and compensation; and a regulatory environment that enables profitability. 

Mr Hawker says the industry is exhibiting a strong performance at present, but it must now develop blueprints for proactive policy formation to provide a strong insurance infrastructure in the community over the medium to long term.

“The industry is in good shape, well capitalised and profitable,” he said. “Its customer relationship is at an all-time high, as evidenced by the lowest level of disputes [over claims] in years.”

Profitability has been used by the insurers to provide broader coverage and improve affordability for public liability and other classes of insurance, Mr Hawker says.

Cost reductions following industry consolidation, disciplined underwriting, dry weather, strong investment markets, sound economic growth and the capping of significant losses through tort reform have all contributed to the current strong performance.

“It is critical for the long-term health of the industry and for the protection of the community that we make sure we continue to price risk appropriately,” he said. “But it is also critical that we continue comprehensive dialogue with governments to ensure we can continue to provide a strong insurance infrastructure for the community.”