NEWS

Queensland Budget Fails North Queensland Residents on Insurance Cost of Living, Favours SEQ

Queensland Treasurer Cameron Dick delivered the state budget yesterday, offering cost-of-living savings for Queenslanders. However, it glaringly failed to address the insurance cost crisis in North Queensland, opting instead for cheaper public transport fares to benefit Southeast Queensland.

Queensland, Australia's most uninsurable and unaffordable state, is predicted to have 6.5% of homes effectively uninsurable by 2030, according to a Climate Council report, “Uninsurable Nation: Australia’s Most Climate-Vulnerable Places" (click here). In comparison, New South Wales, the next most uninsurable state, is expected to have 3.5% of homes effectively uninsurable by 2030. This disparity demands immediate action from the Queensland government to ensure economic prosperity for all residents.

“North Queensland residents and those grappling with extreme affordability issues should be outraged by the Queensland government's inaction and lack of attention to this critical issue. The government's failure to address insurance affordability has cemented Queensland's status as the most uninsurable and unaffordable state in Australia.” ACIL Chair Tyrone Shandiman said.

Residents in North Queensland pay at least twice the premium of those in other parts of Australia, and consequently, twice the stamp duty, as revealed in the ACCC Northern Australia Insurance Inquiry of 2020. Despite the implementation of the Cyclone Reinsurance Pool, it has failed to deliver the necessary savings to North Queensland residents (more info, click here).

As a result, North Queensland residents pay significantly higher insurance stamp duty than other parts of Queensland. With the budget’s focus on reducing public transport fares, it is evident that additional revenues from insurance duties from northern residents are subsidising transport services predominantly utilised in high-density Southeast cities. While the increase in the announced threshold for stamp duty relief for first home buyers is a welcome step, what is the point if those buyers cannot afford to insure their new homes?

Margaret Shaw, a Queensland resident who began advocating for fairer, more affordable insurance for North Queensland in 2011, said, “The sudden rise of 324% in insurance premium for our property led to our premium becoming an astonishing three to five times greater than those for similar properties in other parts of Australia. Regrettably, this also translated to a three to five time increase in stamp duty expenses. It's disheartening to witness the unfairness of consumers in Northern Australia, who are already grappling with cost-of-living pressures related to insurance costs, being compelled to contribute so much more stamp duty than their counterparts in other regions of the country for properties of similar value.”

ACIL has met with representatives from both Labor and LNP earlier this year, advocating for stamp duty reform. ACIL calls for the abolition of stamp duty as the first preference or increased spending on mitigation and resilience to reduce insurance premiums. We urge the LNP to address this critical issue in their budget reply. More information on ACIL’s concerns and recommendations can be found in the attached flyer.

ACIL Advocates for Industry Action to Address Empathy Gap After Flood Inquiry

The management of insurance claims with empathy has come under the spotlight during the Inquiry into insurers’ responses to the 2022 major floods claims. Both parliamentary committee members and consumers have voiced significant frustration over the perceived lack of empathy shown by insurers during the claims process. In response to these criticisms, ACIL recommended to the Australian and New Zealand Institute of Insurance and Finance (“ANZIIF”) the development of a course focused on empathetic claims management.

In response, the ANZIIF has launched a new Empathetic Claims Management short course. This initiative aims to address the gaps identified during the Canberra Inquiry. Katrina Shanks, CEO of ANZIIF, expressed her hopes for the course, stating, "We are hoping this course is well received by the insurance sector as we endeavour to understanding current concerns and issues in the sector and provide relevant and timely professional development to the sector to ensure we are all working together to obtain good consumer outcomes."

Empathy in claims management is also a focal point in the recent review of the General Insurance Code of Practice. In its submission, ACIL highlighted that "recognising and addressing consumers' emotional and situational needs not only enhances their experience but also reduces conflicts." Proposing an empathy standard for the Code, ACIL advocates for insurance interactions to be conducted with heightened understanding and care, emphasising that empathy is crucial during crises, such as property loss or accidents, as it profoundly affects consumer satisfaction and trust. An empathetic approach can transform potentially adversarial situations into supportive experiences, thereby fostering trust and reducing disputes.

ACIL recommended the inclusion of empathy standards and the introduction of mandatory empathy training for insurance professionals in the Code.

ACIL Chairperson, Tyrone Shandiman, who is also the Managing Director of Strata Insurance Solutions, remarked on the critical role of empathy in the claims management process, especially in highly traumatic scenarios or where consumers face financial hardships and vulnerability. “In my own business at Strata Insurance Solutions, we frequently encounter clients involved in highly traumatic events requiring empathetic handling. Just last month, we managed a particularly distressing claim involving a fatality, which necessitated working closely with the insurer to expedite property repairs," Shandiman shared. He stressed the importance of adequate training for claims staff to handle such sensitive situations effectively.

Sue Shandiman, the claims manager at Strata Insurance Solutions and mother to ACIL Chairperson Tyrone Shandiman, recently completed ANZIIF's one-hour Empathetic Claims Management course. Reflecting on her experience, Sue noted the practicality of the course, stating, "The training provided practical learning outcomes that are immediately applicable in scenarios that demand empathy. It's a vital resource for claims managers striving to improve their handling of sensitive situations."

For those interested in enhancing their claims management skills with a focus on empathy, the course is available via this link: https://anziif.com/professional-development/short-courses/ecm24

Rising Consumer Discontent Spurs ACIL Call for Stringent Insurance Code Reforms

In response to mounting frustrations and evidence of systemic failings, the Australian Consumers Insurance Lobby Inc. (ACIL) is calling for significant reforms to the General Insurance Code of Conduct. Recent trends have shown a marked increase in disputes between consumers and insurers, particularly highlighted during the hard market conditions and exacerbated by the 2022 flood events. These issues underscore a pressing need for comprehensive changes to the existing framework.

The current Code of Conduct, ACIL argues, is riddled with loopholes that insurers have exploited, failing to provide adequate protection for consumers during critical times. This exploitation was vividly demonstrated in the aftermath of the 2022 floods, where consumer grievances and the ineffectiveness of the Code were laid bare. The evidence, collected from a wide range of consumer experiences and presented during the flood inquiry, paints a damning picture of the current regulatory measures.

ACIL has formulated a robust set of 52 recommendations aimed at addressing these shortcomings. These recommendations are designed to tighten regulatory oversight, enhance transparency, and bolster consumer protections, ensuring that the Code not only meets but exceeds the expectations of Australian insurance policyholders.

ACIL Chair, Tyrone Shandiman, stated, "The current state of the Code is unacceptable and does not fulfill its purpose to protect consumers effectively. If significant enhancements are not integrated into the revised Code, ACIL will take further actions to ensure that the necessary protections are firmly established."

This call for change underscores ACIL’s commitment to advocating for a fairer and more accountable insurance industry. We urge all stakeholders within the industry to support these vital changes to ensure the Code truly serves the best interests of consumers.