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Abbott brands insurance rates ‘unacceptable’

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Insurance Business | 09 Nov 2012, 12:00 AM Agree 0
Opposition leader Tony Abbott has thrown his weight behind a growing local petition against rising property insurance rates in central and northern Queensland.
  • Bruno | 10 Nov 2012, 12:56 PM Agree 0
    Claims made by the insurance industry amount to nothing more than lies and the government is assisting them in getting away with it. They need to be held to account and Julia Gillard and her bunch don't have the know-how or the guts to do it.
  • Andrew | 12 Nov 2012, 11:32 AM Agree 0
    Like anything that is 'market appraised' premiums are only driven by competition. As there is no competition - the premiums can be as high as they like. Its about time the Government realise that our industry is a business operation - not a charity or donation slush fund. No wonder our industry doesn't get taken seriously in the SME market when the government talks as though they can "strong-arm" insurers into rate reductions......
  • Karen | 12 Nov 2012, 12:43 PM Agree 0
    Bruno has chosen to ignore a few simple facts that void his comment:

    1. REINSURANCE - global appetite for risks within the Asia Pacific Rim are at an all time low.

    2. INSURANCE COMPANIES are not government run agencies. Most of which are multinationals who would gladly withdraw from our shores.

    3. STRATA - is historically a non-performing risk. Lots of little claims that increase operating costs. Particularly excessive premium increases indicate a poor claims history.

    4. ACCOUNTABILITY - stops with you Bruno. The government cannot do a thing about insurance costs in FNQ, they do not have the resources.

    5. GUTS and KNOW HOW - Stop whining and start your own insurance company - it's really easy - any politician, citizen or Harry can do it...apparently!

    6. LIES - What lies would they be Bruno?

    *The fact that insurance costs have risen in the Asia Pacific Rim due to - cyclone, tsunamis, earthquakes, fires and storms; or

    *The fact that we're lucky to get insurance from any source; or

    *The fact that Strata insurance has always been too cheap; or

    *The fact that we are living in a global market/community that is currenlty experiencing significant change?

    *The fact that most politicians/citizens that are currently complaining about premium increases: have little or no knowledge of how the system works and are not looking at the big picture.

    *The fact that Societies greed and indebtedness guarantees that we have lost the choice to self insure as our forfathers once did.

  • David | 12 Nov 2012, 01:05 PM Agree 0
    Im sure yet another petition in FNQ will be well received by Insurers. Given there are only 2 options up there now for Strata Business, im sure CGU & Vero would happily withdraw from that market and concentrate on other areas. Be happy you even have insurers up there willing to insure you at the moment!
  • Phil McGuire | 12 Nov 2012, 01:15 PM Agree 0
    Another emotive issue that, with some, hits a raw nerve.
    Political comments like this need a strong advocacy response from the Insurance Council and NIBA expousing the reasons why there is a very definite line between insurers being charitable and running a profitable business. It would also be good to hear them talk up the great positives of our industry. There has not been enough of this. Without insurers, no government would have an economy. It would have ground to a halt a long time ago!
  • Cranky Again | 12 Nov 2012, 01:19 PM Agree 0
    That's a rather rash statement, Bruno, old chap. Do you have any evidence of insurers telling fibs or are you just stirring the pot?
  • Tim Allan | 12 Nov 2012, 01:22 PM Agree 0
    $3.5bn paid claims for Qld floods and Yasi alone. Perhaps you could write a cheque Bruno!
  • Tony | 12 Nov 2012, 02:03 PM Agree 0
    Bruno, chillax bro, you sound like Alan Jones.
  • Keith L | 13 Nov 2012, 10:19 AM Agree 0
    Anyone even loosely associated with the insurance industry will pick the uneducated comments of Bruno and headline grabbing politician. Insurance is basically sharing the risk by pooling premiums so if you as an individual are unlucky enough to suffer a loss, you will be compensated from the collective pool. As Karen and Andrew correctly point out, insurance is a business and if they don't make a profit they fold just as HIH did some time ago.
    Insurers reduce their own risk by extending the collective pool by passing on some of the received premium to global re-insurers so if a regional disaster strikes the cost is spread further. All very nice and philosophically delightful but reality dictates that higher risks have to pay a higher premium. I'm sure Bruno would not be very happy about cross subsidising premiums for an area which had to be frequently rebuilt because of (say) high bush fire incidence. The expectation is that if you choose to live in a risky situation then you pay a higher premium than someone who resides in a lower risk situation or environment. Insurers silly enough to fully cross subsidise across their whole book of business would quickly loose all their lower and standard risk business but attract premium from all the risky areas. Consequently there would be no pool of money from which to pay any claims. If it is a matter of national importance to attract people to particular high insurance risk areas perhaps Governments could provide a regionally based re-insurance guarantee for that area but I'm sure the Bruno's of this world would find certain inequities in that situation too.
  • Bruno | 13 Nov 2012, 04:23 PM Agree 0
    Spot on, Keith. Insurance is sharing risk by pooling premiums. But across time as well as geography and sheer numbers. Reciting your costs about a very narrow window of time (to include two events that occur once a century or less) is not exactly telling the whole truth. And to say insurance companies outlaid $130 for every $100 in premiums (including claims, operating costs and commissions) suggests a 30% shortfall of breaking even. If premiums increased 30% it would be roughly break even. If premiums increased 130%, it would mean large profit. Increasing 500% is nothing less than scandal. Unfortunatley, 500% is not where it has stopped in practice. Not even 1000%. Perhaps Karen would like to explain to a pensioner why half her income must, by law, be spent on insurance.
  • Bruno | 13 Nov 2012, 05:21 PM Agree 0
    Oh, and also tell the pensioner that she's "lucky to get insurance from any source"
  • Robert Cooper | 14 Nov 2012, 11:43 AM Agree 0
    Jumping on the bandwagon of insurer bashing just because it is popular with the masses explains why Abbott's popularity has slumped to an time low. Remember it was the conservatives that brought in the FSRA and added 10% to premiums and our fees. They are also happy to allow weather related events to increase but not strengthen building codes. Conservative Coalitions are no friend of the Insurance Industry at all.
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