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Workers’ Union attacks insurance industry

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Insurance Business | 03 Oct 2012, 12:03 AM Agree 0
In a vicious attack on the ethics of the insurance industry, the Australian Workers' Union has criticised the removal of the fire levy as it suggests insurers will just pocket the additional revenues.
  • Regional Broker | 03 Oct 2012, 11:05 AM Agree 0
    A union boss attacking an industry on the ethical use of money. I would imagine the irony of that would be lost on Paul Howes.
  • Luke Chrzanowski | 03 Oct 2012, 11:10 AM Agree 0
    It's amazing that anyone with a pen/computer & a job title can get a column published. No matter how uneducated their views may be...
  • Cranky Again | 03 Oct 2012, 11:31 AM Agree 0
    Uninformed, ignorant, misleading and downright stupid. Paul Howes' should put his brain into gear before setting his mouth in motion. As everyone (i.e. EVERYONE) who is involved in the general insurance industry knows, fire levies in NSW and Victoria are separately identified from the premium component on all invoices. Based on the experience in other states that have transferred fire levies to property rates (such as Queensland) his wild assumptions are without foundation. If his comments sound like the ravings of gormless dolt, they probably are.
  • Robert Cooper | 03 Oct 2012, 01:01 PM Agree 0
    What you expect from one of the faceless men who dumped a popular PM because he was not a Union Man. Has Paul Howes not heard of competition, no because he does not believe in competition. It is the competitive rivalry of insurers that will see the premiums come down. He makes it sound like insurers are going to add the equivalent amount to the base premium. It would not be smart for any insurer to do that and lose market share as a result.
    At least we are encouraging more people to insure by lowering the price.
  • The Elephant In The Room | 03 Oct 2012, 02:11 PM Agree 0
    @Cranky Again: never let the facts get in the way of a good story. The fire levy in NSW is not a levy on policy holders, but rather on insurers. There is no legislative or regulatory requirement that policy prices are jacked up to cover the levy, nor any requirement that if the levy is abolished, premiums will drop. I am yet to see a single public commitment, let alone anything binding from anyone, that if the levy on the insurance industry is removed, premiums will drop. Indeed, surely the profit-maximising obligations of any listed company will ensure that companies will have to try to pocket as much as possible of their savings on the levy, while maintaining premiums as high as the market will bear?

    [Insurance Business Editor Comment]

    "I am yet to see a single public commitment, let alone anything binding from anyone, that if the levy on the insurance industry is removed, premiums will drop."

    There is a commitment from QBE to its brokers in the story you have commented on that premiums will drop. But never let the facts get in the way of a good story, hey?
  • Dean McCauley | 03 Oct 2012, 02:15 PM Agree 0
    Here's a link to the actual story if anyone is interested?
    http://www.dailytelegraph.com.au/news/opinion/why-i-think-barrys-pants-are-on-fire/story-e6frezz0-1226484010526
    100% agree with all 4 comments so far. It never ceases to amaze me how politicians (you could say that Paul is a quasi politician) never seem to let the facts get in the way of their agenda.
  • The Elephant In The Room | 03 Oct 2012, 04:23 PM Agree 0
    @editor: nice one, but are you seriously suggesting that policy holders will pay less on their premiums plus the new tax than they do now on the supposedly inflated premiums? If not, then the guts of the criticisms being levelled at the insurance industry remain correct: households pay more, insurers pay less.

    The campaign by the Insurance Industry Council, now supported by the Government, implies that the new regime will cost households less, but I swear I'll eat my hat if I get the half price premiums that would be needed to actually end up saving me money by the time I've paid the new tax.

    We'll all have to wait and see, but on past form its hard to escape the conclusion that the insurance industry will take what they can, and the devil take the rest of us.

    [Insurance Business Editor Comment]

    "The guts of the criticisms being levelled at the insurance industry", is the suggestion that the insurers won't cut their premiums (certainly that was your central accusation in your previous post). That's demonstrably not going to be the case and they will.
  • The Elephant In The Room | 05 Oct 2012, 10:08 AM Agree 0
    @editor: you argue premiums will drop, I'm not convinced - time will tell.

    But the bigger question is whether the public benefits from these changes, or simply the insurance industry. I take it, given your silence on the question, that you concede that it is unlikely I'll end up better off under the new scheme?

    For me to benefit, insurers would have to be dropping their premiums by more than the cost of the tax, not simply making a nominal face saving adjustment and pocketing the rest ...

    [Insurance Business Editor]

    Some interesting points by Allan Manning today too...

    http://www.insurancebusinessonline.com.au/article/workers-unions-insurance-criticisms-torn-apart-144317.aspx
  • Ian Fry | 06 Oct 2012, 08:55 AM Agree 0
    It amazes me that so many people can't count. Many states (Qld, SA, etc) abolished FSL years ago. Have a look at the premiums there...
    Instead we pay a Land based Emergency Services levy spread across ALL landholders, not penalising those who choose to insure.
    How much is that? $35 per year for most people.
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