In this section of Insurance Focus we provide a quick summary on news and recently released reports affecting the insurance industry.
Insurance Council of Australia Report: 2007 Year in Review
The Insurance Council of Australia (ICA) has released its retrospective of the year that was 2007. The report provides a useful summary of the major issues and opportunities of 2007 for the insurance industry and of the industry's broader economic performance. Of particular interest is the ICA's work in relation to response and coordination in relation to catastrophic events and climate change over the year.
The report is available from the ICA's website at www.insurancecouncil.com.au
Lloyd's Annual Report 2007 & Lloyd's Review 2008
The Lloyd's 2007 Annual Report titled 'Eyes on the future' makes for an interesting read. The sections titled 'Looking Ahead' provide a good overview of the economic environment and the challenges ahead for the insurance industry in general.
In addition, the Lloyd's 2008 Review provides a closer look at Lloyd's operations, performance and strategy for 2008 and beyond.
Both are available from the Lloyd's website at www.lloyds.com
Click here to view the 2007 Annual Report.
Click here to view the 2008 Review.
Lloyd's 360 Report - Coastal comunities and climate change: maintaining future insurability
On the subject of Lloyd's, the insurer has recently released an insightful report on climate change, rising sea levels and the risk to coastal communities. This report looks at how insurability in these regions can be maintained in the future. In its press release, Lloyd's claims 'without adaptation, insurance losses from coastal flooding for high-risk properties could double by 2030'. However, the report suggests effective adaptation measures could reduce future losses to below present-day levels with losses for high-risk properties reduced by as much as 70%.
Click here to view the report.APRA's general insurance statistics for 2007 released
In early August, APRA released its Half Yearly General Insurance Bulletin which is compiled from audited annual returns from APRA-regulated general insurance companies for their financial years ending in the period 1 January 2007 to 31 December 2007. The Bulletin reports that the industry has had a relatively good year in relation to its performance and position despite the volatility of the global financial markets and impacts from some major natural events. Insurers reported gross premium revenue of $30.2 billion, an increase of $1.3 billion on the previous year. A copy of the report is available from APRA's website at www.apra.gov.au
Australian Institute of Health and Welfare (AIHW): Medical Indemnity Claims report
This the second of AIHW's reports containing data from the Medical Indemnity National Collection (MINC) on public and private sector medical indemnity claims. The report, summarises medical indemnity claims in Australia from 2005–06 and produces a number of interesting findings. Findings include 67% of medical indemnity claims settled for under $100,000, 43% reportedly settled for under $10,000, and claims in excess of $500,000 constituted less than 3% of all finalised medical indemnity claims in the public and private sectors. The most common incident type or allegation leading to a new claim was 'procedure' (33.9%), followed by 'diagnosis' (21.4%) and 'treatment' (11.2%).
Click here to view a copy of the report on AIHW's website at www.aihw.gov.au
ACCC denies standard flood definition
On 3 September 2008, the ACCC issued a decision denying authorisation to a proposal by the Insurance Council of Australia for a common definition of 'inland flood'. As reported in July's edition of Insurance Focus, the ACCC had acknowledged there has been unsatisfactory levels of consumer confusion on insurance cover for flood and as such had issued a decision proposing to grant conditional authorisation for a proposed common definition. However, the ACCC has concluded the definition proposed by the ICA is unlikely to lessen consumer confusion. In its press release, the ACCC said the proposed definition had raised 'too many uncertainties' and that it was particularly concerned 'that the ICA definition of flood introduced a range of new concepts the legal implications of which are not clearly understood'. But ACCC has not ruled out considering a revised common definition down the track and has encouraged the ICA to work with consumer groups and other interested stakeholders to develop an improved and easier to understand, common definition.
The ICA has responded by stating that the definition they had provided to the ACCC was developed after extensive consultations over a long period of time with consumer groups. They have also stated no further work will be undertaken on the standard definition at this time.
Click here to review the ACCC's full press release on the decision at www.accc.gov.au
DLA Piper - changes to regulation of conected Travel Insurance
Our DLA Piper colleagues in the UK have issued a useful publication on changes to travel insurance regulation in that jurisdiction. From 1 January 2009, the Financial Services Authority (FSA) will regulate travel insurance sold alongside a holiday or other related travel (connected travel insurance, or 'CTI') in the UK. Since 15 January 2005, stand-alone travel insurance has been regulated by the FSA, but following a review in 2006, the UK government announced its intention to extend the FSA's scope to include connected travel insurance. Connected travel insurance covers risks linked to travel booked with the agent.
Click here to view the report.Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.
This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.