Brokers and insurers say a sweeping review of the industry sought by a consumer lobby group is unnecessary following a string of previous inquiries and reforms and the focus should be on reducing risks. 

The Australian Consumers Insurance Lobby (ACIL) has this week written to Assistant Treasurer Stephen Jones urging the commissioning of a report or inquiry into existing market failures and impacts from emerging problems, such as cyber threats. 

The report should encompass areas such as identifying market failures, examining current challenges, recommending measures to reduce the impact of failures, identifying emerging risks, and providing guidance for consumers, insurers, and the government on appropriate actions, ACIL says. 

National Insurance Brokers Association CEO Phil Kewin says challenges exist in the market but there is also more collaboration than in the past between industry, government, communities and other stakeholders and the industry has just emerged from a wave of reforms and reviews. 

“The are some areas of the market where it is extremely difficult but I really question whether another broad-ranging review is going to help,” he said. “I am not sure that would tell us anything we don’t already know. The key thing is taking what we already know and taking action on that.” 

The Insurance Council of Australia (ICA) also says it understands cost of living pressures are being felt by consumers, but the only sustainable way to counter the upward pressure on insurance costs is to reduce risks. 

State governments could also bring down the cost of cover by 10-30% immediately by removing taxes on cover, ICA says. 

“The answer isn’t another inquiry - there have been so many over the last 15 years and they all say the same thing - it’s doing the hard work of reducing risk and removing those imposts that only add to the cost of insurance,” a spokesperson told insuranceNEWS.com.au. 

ACIL Chairman Tyrone Shandiman says other recent reviews have looked at parts of the market or specific issues, but a broader approach is needed. 

“We are wanting a review that covers off the market as a whole and that looks at the emerging issues,” Mr Shandiman told insuranceNEWS.com.au. “Reviews so far have looked retrospectively at problems many years after they should have been dealt with.” 

ACIL says the issue of worsening affordability problems was highlighted by the establishment of the Cyclone Reinsurance Pool, but it doesn’t extend to other flooding or natural perils, such as bushfires. 

Mr Shandiman says there should also be clearer parameters set around what constitutes market failure, given unaffordable property premiums in parts of the country.