One standard for insurance industry, another for government and the media.

Sick of being yelled at unfairly

Immediately after the Brisbane floods, most politicians and much of the media were attacking the insurance industry for being too slow, for not having a standard definition for flood, and since then we have seen a lot of press on the affordability of insurance.

Back at the time of the floods, I know how frustrated I was when our industry was faced with more natural disaster losses than I had seen in my 40+ years of doing claims.

These were not all just in Brisbane but were from north of Cairns to Victoria and from Perth to Christchurch and involved hundreds of thousands of home and business owners. Notwithstanding, the fantastic efforts of all the claims officers in insurance companies, brokers and underwriting agencies, the efforts of loss adjusters and claims preparers who worked 7 days a week, up to 20 hours a day, paying out over $10 million dollars a day. The majority of feedback was so negative that it became extremely demotivating. It was totally unjustified and only made to get a politician a few minutes on TV showing how tough he or she was and/or to win the ratings war for the media organisation.

I try and have a very positive attitude to life but I was really depressed by all the bad press and I know that particularly those new to the industry were extremely disheartened by it all and we lost some good people as a result.

Now, nearly 18 months later, where do we sit? Well, here it is:

  1. The Federal Budget did not provide any real  funding for flood mitigation which would be of great economic benefit longterm for our country. The same businesses and homes that flooded will do so again.
  2. The Federal Government has decided to take a $400 million dividend out of the unused Terrorism levy rather than nearly double the claims reserve which would have reduced the cost of reinsurance and would have allowed a reduction in the levy, which currently sits at 12% of the base premium for businesses in the major capital cities, 4% in any community where the population is greater than 100,000 and 2% for everyone else. With premiums rising due to the increased cost of reinsurance and the need to rebuild the catastrophe reserve, the levy is attracting more revenue than ever and a reduction in it would have benefited Australian business and lowered the rate of under-insurance and non-insurance.
  3. The Federal Government has not even approved the standard definition of “flood”, which they have had before them since last year! If our industry worked at their pace, we would not have finished the assessment of the losses in a single suburb rather than the vast majority of the claims.

I also have what many describe as an overly heighted sense of fairness and equity.

I appreciate that the Government has other issues besides a common definition for flood to contend with, but as I understand it, it has all been agreed and just needs sign-off. If the minister(s) concerned and the government need time to do their job properly then I ask them to ease up a bit on the insurance industry, allow us to do our job properly, to kindly show us the courtesy of publically acknowledging the great efforts of the industry over the past few years and not to crucify the industry before we have a chance to make a mistake. My deep concern is the number of loss adjusters and claims officers that are suffering from deep depression at the moment due to the very heavy workload for so time and no positive reinforcement let alone a thank you well done. I wonder how many will front up again should such a massive series of events happen again.

As for the media, well I think they start to have a good look in their own back yard with all the issues arising from the scandals in the UK right down to the heligate affair during the Sunshine Coast storms. The worst examples of unreasonable attacks on the industry were 60 Minutes, the Today show and Choice Magazine’s Shonky Award. I have not watched 60 Minutes or the Today show since preferring to watch and listen to the ABC. What keeps going through my head is that if they get it so wrong with an industry that I know so well, how can I rely on them to report accurately on an story or industry I do not know as much about? The simple answer is I can’t and therefore won’t and don’t.

If politicians and journalists want to destroy their own professional reputation, that is fine but it is not reasonable to attack our industry which has, in the vast majority of cases, done the very best for those that insure and the economy as a whole. The media have a duty to report the facts, the truth, not sensational rubbish. How many, based on all the bad press have now elected to self-insure believing it was better to carry the risk themselves rather than to transfer the risk from themselves and their families to an insurer? Even if it is only a few, it is a huge disservice.

I ask all governments to work with the insurance industry to remove all the hidden taxes on general insurance, work with the industry to mitigate the risk of flood, bush fire, tidal surge etc, to be reasonable on the level of regulation and compliance, it only adds to the cost of insurance and finally to move things such as the standard definition of flood through in a timely fashion so that we can implement the change for the good of the insuring public.

6 responses to “One standard for insurance industry, another for government and the media.”

  1. Vicki says:

    Wise, wise words, I must say.

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