The story of the year

Political and regulatory scrutiny, escalating climate threats and some corporate manoeuvring dominated in 2024

JANUARY

Insurers were counting the cost after a rough end to 2023 for many policyholders.

The clean-up was under way after Ex-Tropical Cyclone Jasper swept across parts of north Queensland in December, before Christmas and New Year floods hit the same state along with areas of NSW and Victoria. The Insurance Council of Australia’s first estimate on the combined claims cost was almost $750 million.

Meanwhile, the federal parliamentary inquiry into insurers’ responses to the record floods of 2022 scheduled its first round of public hearings, with insurers, consumer groups and regulators among the first in line to appear.

FEBRUARY

The cost-of-living crisis was thrown into sharp relief by new data from the Australian Bureau of Statistics showing that in 2023, home and motor insurance costs grew at their fastest pace since March 2001, surging 16.2%.

Insurance inflation far outpaced the 4.1% annual rise in the Consumer Price Index.

At the federal floods inquiry, MPs heard allegations that insurance staff talked about their own bonuses in front of devastated claimants at a forum designed to help 2022 flood victims. And the federal government announced a $97 million financial resolution scheme for Indigenous policyholders of failed funeral insurer Youpla Group.

MARCH

The Insurance Brokers Code Compliance Committee warned the industry to raise its game on the monitoring and reporting of breaches after its 2022 data showed about 45% of brokers reporting no breaches and 39% recording no complaints, prompting the committee to question the thoroughness of their self-assessments.

ASIC put insurers on notice over their claims handling after another summer of damaging weather. And in the US, the Baltimore bridge collapse shaped as one of the year’s most dramatic large loss events.

The National Insurance Brokers Association appointed Richard Klipin as CEO, replacing Phil Kewin. NIBA hailed Mr Klipin’s “extensive experience in professional associations and a strong history of relationships with the government and key regulators”. And Insurance News hosted its inaugural conference in Sydney, kicking off a year of INsight events and seminars.

APRIL

Insurers and brokers sounded the alarm as a drafting error in federal reforms meant intermediaries operating on a general advice model would not be exempted from a ban on conflicted remuneration.

The Albanese government moved quickly to fix its blunder.

In NSW, more than 11,500 claims related to April 3-8 severe storms were lodged, after heavy rain, wind and flash flooding hit Hawkesbury-Nepean and Illawarra.

US researchers made their strongest April forecast ahead of a “very active” Atlantic hurricane season, with more than 11 storms expected. And Lloyd’s CEO John Neal hailed the London market’s “remarkable journey” as its turnaround program delivered a £10.7 billion profit before tax, compared with a year-earlier £800 million loss.

MAY

UK business Ardonagh moved to buy Melbourne-based PSC Insurance Group for $2.26 billion. Ardonagh, led by CEO David Ross, said the deal marked a “significant milestone” in its global growth, and analysts hailed a “good price for the sellers”.

Meanwhile, NSW Fair Trading launched a review of strata management agency Netstrata after an ABC report highlighted alleged excessive fees charged by the Sydney business and its associated entities, leading to wider criticism of practices within the industry.

The Insurance Council of Australia warned more resilience and mitigation spending was required after the federal budget allocated just $138.7 million over four years for disaster support. And the Senate opened an inquiry into climate risk and its impact on insurance premiums, covering issues such as affordability and access to cover.

JUNE

Aldi announced it would begin selling car, home and landlord cover in Australia under a new distribution agreement with Honey.

The budget supermarket chain’s Australian group director Rodney Balech said consumers had been “calling for a trusted insurance provider that … doesn’t break the bank”.

He added: “Customers getting stung by increasing premiums simply because they didn’t shop around is a trope of traditional insurance.”

Federal Treasurer Jim Chalmers approved the sale of Suncorp’s banking business to ANZ, clearing one of the last remaining hurdles for the $4.9 billion deal.

The sale, announced in July 2022, had been contingent on conditions including approval from the Treasurer, competition clearance and Queensland legislative amendments.

In the intermediary world, AUB Group was taking a 40% stake in UK authorised representative network Momentum Broker Solutions.

And Allianz had to make a $50,000 community benefit payment, the first such financial sanction imposed on an insurer by the code governance committee. The breach related to the denial of a claim after February 2022 floods.

Allianz said it was “committed to ensuring that our customers are supported and protected, especially in challenging times such as when making flood-related claims”.

JULY

Australian mid-year property catastrophe reinsurance renewals were flat with some price reductions. After relatively benign conditions and with global capacity increasing, the market had “achieved a balance in terms of supply and demand”, according to Gallagher Re.

Meanwhile, a Cladding Safety Victoria review of more than 800 buildings in the state found “substandard” documentation and “widespread misapplication” of regulations contributed to the use of non-compliant cladding materials in many apartment blocks.

In NSW, state insurer icare began talks with staff over structural changes, including job cuts, to save about $23 million a year. And the CrowdStrike outage shut down computers worldwide; the July 19 blip was sparked by a faulty operating system update.

AUGUST

The Australian Financial Complaints Authority said it was “disappointed the sector has not yet been able to achieve sustained improvement” after revealing the number of general insurance complaints reaching the dispute resolution authority grew 4% to a record 29,096 in the year to June.

In NSW, insurers welcomed the announcement of strict new safety standards on e-bikes and other e-mobility devices powered by lithium-ion batteries amid growing concern over fire risks. And AUB, PSC and Steadfast all announced profit gains for the previous financial year, as did major insurers IAG and QBE.

SEPTEMBER

The ABC’s Four Corners (pictured) aired a series of allegations of malpractice in the strata sector, forcing major insurance industry players to respond to a flood of criticism.

Steadfast challenged many of the ABC show’s assertions about its conduct, particularly that its brokers funnelled strata clients towards more expensive Steadfast-owned underwriters or premium funders. The broking giant also announced a review to flush out “inappropriate” behaviour.

Building services provider Johns Lyng Group said it was committed to transparency and integrity after it too featured in the show.

Following the ABC program, nine consumer groups wrote to Treasurer Jim Chalmers requesting that the Australian Competition and Consumer Commission or the Productivity Commission lead an inquiry into the sector, and the Australian College of Strata Lawyers called on each state and territory to introduce a properly resourced enforcement agency to be a “strata cop on the beat”.

The ACCC repeated its call to ban commissions, and NSW MPs began debating reforms that would tighten rules around commissions, increase disclosure obligations and raises penalties.

Meanwhile, a dispute authority ruling backing a consumer who complained about a 60% increase in home and contents premiums had some observers warning a “proverbial can of worms” had been opened.

Marsh’s Australian Mid-Year Insurance Market Update reported rates had stabilised and premium pools had grown “across most insurance classes”.

“Overall, the first half of 2024 saw a significant improvement in market competition and the return of insurer choice for buyers, which had not been generally seen since 2017,” it said.

And Suncorp, now a “pureplay insurer” following its bank sale, reported a rise in profit after several “challenging” years.

OCTOBER

The parliamentary floods inquiry issued its final report, making 86 recommendations aiming to address “poor claims and complaints handling”. The recommendations added to 101 made in a separate code of practice independent review report.

The inquiry committee said its findings pointed to the need for “systemic changes to the way insurers operate during natural disasters and a significant strengthening of regulatory powers and oversight”.

The Insurance Council of Australia said it would review the report, while consumer groups and counsellors called for the industry to accept the recommendations immediately.

In NSW, Fair Trading held meetings with consumer and industry groups to consult on a ban of strata insurance commissions following the ABC’s exposés on the sector.

Meanwhile, Ardonagh finally closed its takeover of PSC. And the Bureau of Meteorology predicted an average cyclone season but warned climate change will bring more powerful storms. The alert came as southeast US states counted the costs from the double punch of hurricanes Helene and Milton.

NOVEMBER

Taylor Fry’s latest Radar report revealed the general insurance industry made an after-tax profit of $3.9 billion in the nine months to June 30 – its strongest result in more than 10 years. But it warned climate change was “undoubtedly changing the risks insurers face and manage”.

Spain was the latest nation to see that threat made real, as it began the clean-up following deadly floods in Valencia and east-coast communities such as Catarroja. Meanwhile, Steadfast was eyeing further international growth after buying Lloyd’s broker HW Wood for £23.5 million ($46 million).

The Senate inquiry into climate impacts on premiums called for the competition commission to monitor pricing, to “ensure the disaster insurance gap does not continue to grow”, and IAG moved to buy 90% of the RACQ insurance underwriting business for $855 million.