Newsmakers

INSURERS FACE FLOOD INQUIRY

Insurers have appeared before the Federal Government’s inquiry into the response to 2022 floods, facing tough questions from the parliamentary committee inquiry.

Insurance Council of Australia Chief Executive Andrew Hall apologised in his opening statement to customers whose claims were not handled to expected standards during the catastrophe.

“Not all systems or processes of insurers passed the test of 2022, and this had very real impacts – impacts that we heard about through the testimony of the legal and financial advice groups last week,” he said.

The inquiry had previously heard examples of consumers feeling “coerced and gaslit” and of poor performance by insurers.

Independent MP Andrew Gee pressed Mr Hall to acknowledge that examples highlighted were “embarrassing and shameful” for the industry.

“We’re not proud of it, and those stories don’t bring great glory to our industry,” Mr Hall said. “We are constantly striving to do better.”

Chris Mackinnon

LLOYD’S LEADER STEPS UP

Lloyd’s Regional Head of Australia and New Zealand Chris Mackinnon, pictured, has been promoted as Regional Director for the Asia-Pacific, Middle East and Africa markets.

He takes over from Iain Ferguson on April 1, and will move from Sydney to Singapore, Lloyd’s says.

The appointment is part of a planned succession, after Lloyd’s announced last year that Mr Mackinnon would deputise for Mr Ferguson, who will remain in his other role as Lloyd’s Japan President until December 31.

Mr Mackinnon joined Lloyd’s in February 2015 as general representative for Australia and New Zealand.

Under his watch, Lloyd’s has grown its Australia business from about $2 billion of premium written to more than $4.6 billion last year. The number of coverholders has increased from 90 to more than 160.

“The [insurance] cycle continues to be driven by two human emotions, fear and greed. Depending on what moment we’re living through, that’s what determines which emotion is overshadowing the other.”

Berkley President and CEO Rob Berkley’s take on the US insurance market.

KEWIN RESIGNS FROM NIBA

The National Insurance Brokers Association (NIBA) says CEO Phil Kewin has resigned from the role and will leave the organisation in April.

Mr Kewin joined NIBA in 2021 and after a transition period took over the CEO role from Dallas Booth in November that year. Previously he was CEO of the Association of Financial Advisers.

“Phil’s impact on NIBA over the past few years cannot be understated,” President Gary Okely said.

“Under Phil’s leadership, NIBA successfully responded to the Quality of Advice Review, implemented a new, industry-leading Code of Practice, revitalised engagement with members across Australia, and launched the Insure Your Future initiative.”

NIBA has already initiated an executive search for a new CEO and says it will keep members informed as the process continues.

Mr Kewin says he plans to move to London to be with his partner, who already lives in the UK capital, and will look for his next role there.

ICA PUSHES FOR BUY-BACK FUND

The Federal Government should provide $250 million a year to pay for buy-back and home-raising projects, the Insurance Council of Australia (ICA) says.

In a pre-budget submission, ICA says state and territory governments should match the funds to provide a $500 million commitment to move upwards of 750 families out of flood danger zones each year.

Governments have already provided $1.6 billion in jointly funded projects to buy back at-risk properties, with about 1300 homes purchased across Queensland and NSW. But ICA says further support is needed.

The proposed fund would act separately from the $200 million-a-year Disaster Ready Fund, which ICA says should be extended to a 10-year rolling program.

It also calls for long-overdue tort reform to help address public liability affordability issues, and floats the idea of government involvement in reinsuring catastrophic cyber risk.

AFCA COMPLAINTS SOAR

Australian Financial Complaints Authority CEO and Chief Ombudsman David Locke says complaints are rising at an “unsustainable rate”, with insurance among the most common areas of dispute.

He says the body received 102,790 complaints last calendar year, a 22% increase on 2022, which resulted in $304 million in compensation, up more than 37%.

Home building insurance was the fourth most complained about product, despite an 8% drop from 2022 numbers to 8073 complaints recorded.

Issues related to delays in claim handling, payout amounts and claim denials all recorded notable increases, with the latter up 50%. Delays in claim handling were the second most common issue.

Mr Locke says a downward trend is needed and has called on financial companies to address complaints “quickly and efficiently in-house”.

Reflecting on the authority’s first five years, Mr Locke says companies have agreed to pay more than $1.2 billion due to successful complaints since its establishment in 2017.

He says the insurance industry has shown positive signs in acknowledging it “could have done better” with claim delays after the 2022 flood disaster, but says more work is needed.

“With climate change making such events more likely, it’s important that insurers can promptly help people whose lives have been devastated,” Mr Locke said.

CHU