From the Publisher
It’s sad to see an institution as well regarded as Catholic Church Insurance (CCI) close its doors, particularly when it’s an effective and efficient player in its market niche. Our cover article this month asks the question: what killed CCI?
Who killed it is obvious enough. This venerable insurer has had to close because its owner, the Catholic Church, declined to pony up additional capital to enable its insurer to continue operating.
CCI has been burdened for years by claims against priests who committed horrific sexual abuses of children. Nevertheless the insurer has stayed mostly in the black. But the bishops who control the church in Australia appear to have decided the peak number of victims’ claims has already passed and they no longer need to recapitalise CCI.
The insurer says it has sufficient assets to meet its commitments “as they currently stand”, which leaves a question hanging in the air like incense at a funeral: if CCI, which is registered as a charity, doesn’t continue paying for the awful physical and psychological damage caused by a significant percentage of the church’s priestly workforce, then who? And how?
Our article in this edition of Insurance News, researched and written by Wendy Pugh, also points out that CCI has been a handy source of money by returning surpluses to its shareholders.
This edition also examines the present state of the Australian insurance market. Premiums have been rising for more than five years, and now that they’ve reached somewhere around the “technical” level, capacity is gradually returning. That’s the good news; the bad news for customers is that premiums aren’t expected to go down again.
Today insurers are adamant that today’s high premiums are the new normal.
Will insurers take the competition bait and start tweaking premiums to attract new customers and retain the ones they already have? That’s probably going to happen in personal lines, but in commercial lines it’s a far more complex story.