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What 2009 taught the insurance industry and consumers

  • by The Quotesonline Team

NIBA’s Chief Executive Noel Pettersen reflected on important events that took place in the insurance industry last year and makes suggestions for what’s to come.

In his web column posted 25 January 2010 and entitled Its Been a Helluva Ride … Pettersen reports:

“The impacts of the global economic crisis, bushfires and floods have had a ripple effect across Australian households and the business sector. Yet the dramatic events of the past year have also served to highlight the importance of proper insurance protection to the wider community.

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The role of brokers

Insurance brokers in Australia have been holding, if not increasing, their market share and it seems most have survived the financial crisis. Importantly, the public retained confidence in the Australian prudential regulatory system and in the financial viability of local insurers.

Further rationalisation of the insurance brokering industry has occurred during the past year. There are now about 700 registered insurance brokers in Australia. Certain industry commentators have predicted that over the next 10-15 years that number could be halved.

Some brokers have found it difficult to cover overheads and have the necessary mass to negotiate effectively with insurers. That’s why cluster and aggregator groups remain vital to the lifeblood of these brokers. NIBA’s role, of course, is all embracing – to bring the industry together and provide services that maintain, and indeed enhance, the professionalism of all its members, regardless of size or affiliation.

Insurance taxes

Weather-related events have had a significant effect on the Australian insurance industry in this past year, costing the community over $3 billion in insured losses. The Victorian bushfires also provided greater awareness of a number of issues that have troubled the industry: under-insurance or non-insurance of property, and also taxation.

It’s bizarre that in country Victoria the taxes and charges now exceed the basic insurance premium for businesses. This surely presents a disincentive to spend money on insurance and affordability may have been a major factor for many victims of the February bushfires who did not cover their properties.

Clearly, NIBA is awaiting the Commonwealth’s Review of Australian’s Future Tax System with much interest.

The year ahead

NIBA is continually developing its services to ensure that members have the tools to keep pace with change. The Board is considering modifications to the membership structure and is looking at ways to expand broker education and training to better meet needs in the future.

We look forward to the year ahead. As the economy shows signs of recovery and consumer confidence follows, it is nonetheless imperative that we all take time to reflect on an extraordinary time in our lives and continue to move forward as an industry united.”

Gillian Lilley

Freelance Business Writer

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