The Australian Consumers Insurance Lobby (ACIL) has told a federal parliamentary committee that insurers have used external factors as cover to avoid accountability for Australia’s insurance affordability and availability crisis.
The organisation is calling on lawmakers to compel the sector to take a greater role in resolving it. The appearance was made before the Parliamentary Joint Committee on Corporations and Financial Services, which opened an inquiry in November 2025 into how insurance products serve small businesses and not-for-profit and community organisations.
The committee identified rising costs and shrinking availability as central concerns, noting that sectors including construction, tourism, and live music had experienced constrained access to coverage. The inquiry has drawn submissions from both consumer and industry representatives who identified overlapping areas of market failure – a signal of how broadly the structural problems before the committee extend.
ACIL spokesperson Tyrone Shandiman told the committee that the industry had a pattern of pointing to government taxes, planning regulations, climate risk, litigation, and reinsurance costs whenever questions of affordability arose, while leaving its own conduct unexamined. “While those factors play a role, what is consistently missing from the conversation is any discussion of the insurance industry’s own responsibility,” Shandiman said.
Shandiman told the committee the problem had accumulated over time rather than emerging suddenly. “Australia’s insurance affordability crisis did not appear overnight. It is the result of an industry that has become increasingly short-sighted and increasingly focused on protecting profits rather than ensuring Australians can access the protection they need,” he said. ACIL put to the committee that insurance operates as an essential service, given that households and businesses have little practical choice but to obtain coverage. On that basis, the organisation argued the industry carries obligations that extend beyond commercial returns. “Insurers have been granted a social licence to operate. They provide an essential service that underpins home ownership, business activity, and economic participation. Unfortunately, many of the industry’s leaders have lost sight of that responsibility,” Shandiman said.
ACIL identified failures across professional indemnity, public liability, cyber insurance, and coverage in regional and disaster-prone areas. The organisation told the committee that the consequences reached beyond individual policyholders – businesses had closed, professions had become unviable, and communities had lost access to services where coverage was no longer obtainable at any price. ACIL also disputed the notion that the industry lacked the financial means to address the problem. “The insurance industry collects more than $70 billion in premiums each year and generates billions of dollars in profit. The problem is not a lack of resources. The problem is a lack of willingness,” Shandiman said. The $70 billion figure is ACIL’s own claim and has not been independently verified in the sources available for this article.
ACIL drew on the Cyclone Reinsurance Pool to argue that policymakers should scrutinise industry claims about the likely effects of proposed reforms. The pool was introduced despite sustained opposition from insurers, who had argued it would not deliver on its stated aims. Premium reductions and wider coverage availability in cyclone-exposed regions followed its establishment, which ACIL put to the committee as evidence that the industry’s warnings had proved unfounded. “The industry fought that reform every step of the way. The evidence now shows they were wrong,” Shandiman said. ACIL closed its address to the committee with a direct call for legislative action. “Australians deserve an insurance industry that is prepared to be part of the solution, not one that simply explains why nothing can be done,” Shandiman said.
The National Insurance Brokers Association (NIBA) appeared before the same committee in May 2026, representing the broking profession. NIBA and ACIL approached the inquiry from different positions – one representing brokers, the other consumers. Both organisations nonetheless identified the same product lines as areas where market failures had emerged. NIBA CEO Richard Klipin told the committee that small businesses were operating in an increasingly complex risk environment and that access to professional advice had become correspondingly more critical. “Australian small businesses and not-for-profits today operate in an environment of rising complexity – cyber threats, intensifying natural catastrophes, evolving global political risks, and escalating regulatory obligations. Access to professional insurance and risk advice in this environment is essential,” Klipin said.
NIBA put forward 12 recommendations to the committee across three areas. The first targets a consumer protection gap in the Corporations Act: small businesses purchasing commercial lines – including public liability, professional indemnity, cyber, and business interruption insurance – are not classified as retail clients, leaving them with materially weaker protections than individuals buying personal products such as motor or home cover. NIBA recommended a review of the section 761G(5) prescribed product list and a regulatory impact review specific to general insurance broking.
The second area calls for reform at the state and territory level. NIBA recommended national harmonisation of workers’ compensation arrangements, arguing that inconsistency across jurisdictions added cost and complexity for businesses operating across state lines. It also called for the abolition of insurance-based emergency services levies and consistent stamp duty treatment across all states and territories. The third area addresses sector-specific challenges. NIBA recommended the development of sustainable market solutions for high-risk not-for-profit activities, action on public liability cost drivers, broader cyber awareness and education programs, reform of government procurement practices, and expanded resilience grants for small and medium enterprises. The inquiry, chaired by Senator Deborah O’Neill, remains ongoing. What the committee ultimately decides to recommend will determine whether the gap between what ACIL is demanding of the industry and what regulators are prepared to compel narrows – or widens further.
