Welcome to Inside, the insurance-newed podcast hosted by me, Andrew Salkox. In this research of Inside, after some strong listener feedback on these introductions, we've decided to give out beagre vouchers to anyone who complains in the comments. That way, they can have their wine and cheese. That's jokes a bit cheesy, but I'll milk it for all its worth. Speaking of complaints, there's a lot of talk about Essex New Complaints dashboard. I used to work in a shoor recycling shop. It was sold ass-striing. But as the saying goes, I must and grumble. The Life Insurance Code Review has taken a big step forward, which reminds me of a famous old proverb. For man who complains he has no shoes, introduce him to a man who has no feet, and let him steal his shoes. And the Middle East uncertainty is dragging on with S&P's take on the effect to local insurers. But like the time I complained that I needed to get into shape, there's hope around the corner. I started by doing some lunges. That was a big step forward. Hello everyone. This week I'm joined by journalist and podcast debut, Harris Puzz Deravitch. Senior journalist Beniz Ham, deputy editor Wendy Pugh and editor-in-chief John Deeks. Welcome, Harris. Hello. What's up, Tobias? As usual, for that time I'll go easy on you. What happened when I debuted my comedy act at a haunted theatre? Kill everyone. I got booed off stage. What's better? Hello, Wendy. Morning, Andrew. North Korean penpal say when I asked him how he liked living there. I don't know. He said he couldn't complain. Hi, Beniz. Hi, Andrew. Beniz, are you a Justin Timblek fan? No. Okay, when you might not get this one, where is the best place to complain? At the lake. Close. A river in Crimea. Oh, okay. And hello, John. Hello. Is it true Miranda was complaining there were too many Bond Jovey songs on our office playlist? I don't really know when this is going, but no, that's not true. Well, I told her that we were in the process of removing them. We'll give it a shot, but unfortunately, we're only halfway there. Middle East uncertainty is dragon on Beniz and S&P this week detailed the likely impact on local insurers. Yes, according to S&P, the pain for Australian insurers is very likely to come from financial market turmoil and by that, the ratings agency is referring to investment market volatility. So and it's not difficult to see the link that insurers do have substantial investment portfolios income from these investments are big from equity or fixed income assets. They are pretty important to insurers. And with the wave markets have sea salt to every social media post, social media post, etc. From key players in the middle is conflict that have led to a lot of earnings volatility on the investment side of things. And S&P says that if geopolitical tensions escalate, it could heighten capital market and foreign exchange volatility leading to capital and earnings uncertainty. And the assessment is based on the scenario that the straight-up hormones closure were eased during April. And we've seen fresh developments on that front, the US as we record this. So the S&P has begun a naval blockade of the straights, so how that will play out when we don't know yet. S&P also repeated its earlier warning last month that higher energy costs would lead to higher input costs for insurers. They're looking at higher claims costs, what with prices of motor and building materials are going up. Well, the insurance counsellors flagged up a few issues too, Harris. Yeah, the insurance council said in the middle is conflict is already impacting the industry and is adding to the financial strain that households and businesses are facing. Insurers that have a report increase of up to 36% for building material costs and up to 50% for freight costs. They've also said they expensive for trades, people and on-site specialists are up as much as 30%. Council CEO Andrew Hall said the body is cleverer with its members to offer relief and is also working with the government in this manner. He's likened the ICA to a response to their project takes to natural catastrophe freeze. As part of our reporting insurance news spoke to KPMG partner Scott Goose. He said the council's comments indicated the industries likely to face ongoing challenges due to supply issues and logistical hurdles. He said these types of prices spike up quickly as we've seen a fuel cost and this has a knock on effect for nearly all industries. While insurers would be familiar with the supply chain issues from the pandemic, Mr. Goose was a direct comparison cannot be made given that we also saw an overall reduction in claims activities in this time due to lockdown measures. Rather, he said the impact of this conflict is still unknown, especially given it's volatility. I would also mean that prices will remain elevated for an extended period and that some products probably weren't returned to their pre-conflict cost. The life insurance code review has taken a big step forward in recent days too, Beniz. Yes, we're the closing stages of the review and some pretty significant takeaways from the interim report that was released last Friday. So all in Peter Kell, the former regulator who's leading the review, he made 72 recommendations on mental health claims handling premium disclosure, practices, sales practices and code sanctions for our mostly general insurance audience. The report's mental health section may be very relevant. We do know that mental health is very topical for the industry at the moment. We've seen the new South Wales workers come, reforms, nearly falling apart because of mental health related proposals. And with the life code review, our life insurance are proposed doing a way with blanket exclusions, specific to mental health conditions in standard form contracts. So the industry's preferred position is for a reinstatement of commitment to the disability discrimination act in state. The act has got exemptions that allow an insurer to refuse cover to a person with disability or offer different premiums in terms if there is reasonable actual data to back the decision. So like workers come skiing to cross the country, life insurers say they've seen a huge charming mental health claims. They're at a tipping point. That's how the Council of Australian Life Insurance described the current situation. And the peak body says that Australians are turning to life insurers to claim when they're permanently unable to work. And this has actually, and the peak body actually raised the implications on other parts of the safety net. If the new South Wales workers come skiing, we'll reduce its mental health protections. So the code reviews a final report is due by June 30th. We're knowing a few months time the final proposed changes. Reminders were up to on the general insurers and brokers code reviews, Wendy. Well on the broker code, the independent reviewer has delivered 14 recommendations to the neighbour, which has released its response. And neighbours just finished further consultations with members around that. So it's putting something together based on all that and will release a draft revised code for public consultation. Then it's a matter of finalising it and setting out a time frame for putting it into effect. The review of the general insurers code is a bigger exercise and it's a long process. So the ICA received 101 recommendations from its independent review and there's also taking to account recommendations from parliamentary inquiries. And last May it said it would do an extent of the bary right rather than just making amendments. So we're still waiting to see the outcome from that. And ICA has also said they were submitted to ASIC for approval. So that adds an extra step to the process. So early on they were talking about doing that by the middle of this year. And I'm not sure of the current status of that. But ICA CEO Andrew Hall, you know, at our conference highlighted how important this code review process is in strengthening relationships between insurers and customers. Well, and after alling about a repeat fraudster, got people talking Harris, run us through the details. Yeah, so the customer heard about history of fraud for several claims for losses that he said occurred while he was in a family holiday in Pakistan. He had so compensated for various electronics that he says were damaged during the trip. As always, two luggage bags that he claimed were either lost or stolen by his airline. Harris and Shira NIB travel services discovered that he had already returned some of these items. And one case, he only obtained an invoice for an item without actually purchasing the product. There was also this be a medications that he said were for his daughter's tonsilitis. But most of them were actually found to be unrelated to her illness. He also said they had to rearrange his flights because of his daughter's health condition, but record showed that he had spent 12 days nearby and was well beyond the period as she was clear to fly. Then Shira noted that he had a long history of filing travel and home claims, including two prior claims that had been deemed fraudulent by AFCA. He also literally threatened to sue an ICB's investigator if they did not provide a favorable report to him. AFCA stated that the insurers allegations were warranted and that there were significant inconsistencies and contradictions in the man's claims. There was also a common link then about why the customer wasn't charged with deception. There could be several reasons for this while insurance fraud is a crime and that includes instances where he can exaggerate or be dishonest regarding your losses. Such cases don't typically escalate towards investigations and this one was the total loss that he was claiming for was about $25,000. And she was a usually cancelled policy if the claim is found fraudulent and this goes into the record and that makes it hard for them in the future to be able to get insurance. It's also somewhat raised to question about giving them a previous history. How was he able to get insurance again? But it's probably a question for the insurer. But we've had a couple of other travel insurance rulings recently, John.
Yeah, we've had a few and they've all been going the way of Tia Chura possibly one of the most interesting was the case for the man who booked a resort through a fake online travel agent. Apparently this website was very convincing but when the tourists arrived overseas the agents started asking for more money and when the man contacted the resort he was told no booking or payment had been made. The funds couldn't be recovered and a claim went in with the travel in Chura but there was an exclusion around errors and emissions in booking arrangements and so the claim was denied and in this dispute Africa backed the insurer. It's quite sympathetic towards the tourists it said that the agent appeared genuine and there was no reasonable way to foresee this scam but it said that it still fell within the booking error exclusion so yeah tough luck really for this tourist unfortunately just a little plea to Africa here it'd be nice if they could add a few more specific details to these determination documents so you know if we knew where the man was going on holiday or how much money he'd lost just those little details it would make a better story and it would also actually probably make it less likely that others would fall for this scam the more details that we were able to put in about it. An impassioned plea from John there or a complaint. We spoke a bit about Essex new complaints dashboard the other week pennies but you've now had a much closer look what did you find? Yes we had a look at the data for the 2024 financial year and the internal dispute resolution in four shows that general insurance entities received about 2.086 million complaints across domestic extended warranty, professional indemnity and small business of farming insurance products so 81.6% of these complaints they were closed within a day and 99.3% were closed within 30 days by outcomes about 333,000 plus cases. These were closed with monetary payments of more than $1,75 million. Other remedies include service-based solutions, apologies and changing their original decision. Premiums are a big issue they accounted for 42% of the complaints and by product comprehensive motorlads with 1.14 million disputes. We also took a look at the five biggest insurers and SunCorp had the most complaints 1.03 million just for comparison say I.E.G. had about 2,000 1,000 complaints. It's worth pointing out that Essex has stressed a few times that a high volume of complaints do not necessarily indicate poor performance by a company. Volumes between firms they will vary due to a range of factors including the firm's market share and product offerings. So a firm with a positive compliance culture and robust processes may record and report higher volumes than a comparable firm. And we are SunCorp about the numbers. So SunCorp say they welcome Essex ongoing focus and agree that robust complaints management is an important protection for its customers. And SunCorp has put in substantial work since 2021 to manage the inter-managing the internal resolution dispute cases. Yep. Well, is this useful information for consumers Wendy? Well, I think it's good that the information is available and if it keeps scrutiny on the way that complaints are being handled, I mean that ultimately is probably helpful for consumers. But as Benise says, you can't really directly compare the complaint counts and come up with conclusions. And this site, it's not really great when it comes to searching by brand rather than a company. So a lot of consumers are looking at the brand that they purchase in from rather than the company behind it. So I can't really imagine consumers looking at this and finding it helpful in deciding which policy to purchase. But I think overall it's very good that that information is out there and it's provided a lot of background on the way the gen what's generating complaints and how quickly they're being closed. And I guess if it increases transparency and support improved complaint handling, then that's beneficial. Well, as the saying goes, just because nobody complains, it doesn't mean all of power issues are perfect. Finally, John, the April May issue of Insurance News magazine is about to drop. What's in store for readers this edition? Yeah, we've got to stubbed out cigarette on the front page as we turn our attention to the tobacco wars and the impact on insurance. We've written about this topic quite a lot online, but I think it's the first time we've given it the magazine treatment. readers will know that the illegal tobacco trade has led to a spate of firebombs across the country and this has caused an insurance retreat as underwriters take these risks into account. Not just for the tobacco canist themselves, but for anyone nearby or in the same building. As our story says though, it's not all bad news at the moment because just about every state and territory is having a crackdown on a list of tobacco and as a result capacity is slowly but surely coming back to the sector. Also in this edition, we report on a very successful insurance news conference and summarise our inform report that was compiled with Finiti. So this report analyses market trends with bang up to date, lined by line statistics from Finiti and a series of insightful features and interviews that have been done by Finiti and the insurance news team. Meanwhile, we speak to Hollard CEO Paul Faye and he outlines the top five insurance ambitions. Our journalist take a close look at the New South Wales Productivity and Equality Commission's report on strata remuneration. We have a chat to rural brokers about challenges facing their clients and Ann Bess Rob Curtis explains a new underwriting agency assessment service. So you'll find all this and much more in insurance news magazine, which you should be able to get your hands on very soon. Well, that brings us the end of this week's insight podcast by insurance news. Thank you once again to our panel Wendy Pugh, Harris Busterovich, Benise Han and John Deeks. Enjoy your week. Thank you all for listening. If you have any questions or comments, please email us at
[email protected]. We value your input. You can read all these stories and many others at your leisure at insurancenews.com.au. You can subscribe to the insight podcast on iTunes, Spotify, Google and all your favourite podcasts platforms now. We're forward to catching up again next week.
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