The last fortnight has been extremely difficult for the Australian insurance industry at large, with the life and general insurance categories alike taking a significant battering both at the stand and in the eyes of the general public. Sordid revelations around unethical practices exposed more than 300,000 misdeeds under the gaze of counsel assisting Rowena Orr QC.
Disgruntled customers and former employees emerged from the woodwork, making their way into the public eye to further highlight insurer shortcomings at a more personal level.
This was further compounded by ASIC’s Tuesday release of a report noting “…serious, unacceptable delays in the time taken to identify, report and correct significant breaches of the law among Australia’s most important financial institutions.”
ASIC itself has come under fire during proceedings, with Peter Kell stepping down just months into his extended term as deputy chairman.
Yet perhaps most concerning was the fact that the Insurance Council of Australia had recorded 31,000 breaches of the industry code since 2014, while sanctioning precisely none of the companies involved.
With the arrival of the interim report for the Royal Commission now only days away, the calls for reform within the insurance industry – and the financial services sector at large – demand to be taken seriously. General insurance is not currently classed as a financial service in Australia and is exempt from unfair contract laws – though given that the Labor and Liberal parties are pushing for reform, this may change in the near future.
Yet from a PR and financial perspective, the Royal Commission has already proven to be a disaster for the big financial players. Last Sunday, the Sydney Morning Herald reported that “more $12 billion has been wiped from the value of major listed financial companies this year,” linking the Royal Commission to the overall downturn in a market that had already experienced “weak” trading conditions.
The Australian reports that the interim report will arrive on Friday, September 28. The full report will likely arrive in January, 2019.