The insurance industry is under scrutiny as never before, thanks to the HIH collapse. Now rising personal lines premiums are to be the target of a new ACCC inquiry. Financial Services and Regulation Minister Joe Hockey ordered the consumer watchdog into action late last week after a spate of media reports on premium rises being experienced by NRMA and RACV customers.

The rises – which are considerably less than commercial premium rises in most classes – seem to average about 10% in NSW and 7.5% in Victoria. Other states appear to be experiencing lower personal lines increases. All the rises are generally in line with predictions made earlier this year, but nevertheless the public reaction has been negative enough to push NRMA Insurance into action. The No 1 insurer has set up a telephone hotline to record customers’ complaints. 

As reported last week, the industry is confident that any ACCC inquiry will find the rises are justified.

Mr Hockey said consumers “deserve an explanation”. But he also agreed that statements by some state governments about rising personal lines premiums have been misleading, and added: “In some cases state taxes represent up to 40% of an average insurance premium, and the extra levies in NSW and Victoria will further increase premiums.”