Hello to everyone gathered in Sydney for the Insurance Council of Australia’s annual forum.
Unfortunately I can’t be there in person today. But I am pleased that so many of you could be.
This is a forum where, year after year, you share your ideas, your vision and your expertise. And that is important, because this is an industry that is vital to our economy and our community.
So in my short time now, I want to share a few thoughts on what the Government sees as the priorities for this industry in the year ahead.
And the first is meeting community expectations.
We all know that insurance can be a reluctant purchase for some Australians. Too often we underestimate our exposure to risk — until, sadly, it is too late.
It is critical that every Australian understand such risks, and the products and services that are available for times of need.
We believe that informed consumers are confident consumers, and confidence in our financial system is crucial in terms of both stability and growth.
Financial literacy is therefore a critically important component of our fast-evolving financial landscape.
Helping Australians to improve their understanding of financial products and services to make informed decisions for their future is important.
The insurance industry, together with government, must play a leading role in this respect.
And the excellent research that is being showcased by the ICA later today can show us how to do this better.
Insurers are more than underwriters. You are advocates and educators — and, as I said, full of ideas.
What’s more, this work can be taken even further.
With new technology emerging every day, I believe you are more than capable of embracing the new opportunities to improve financial literacy that exist.
And that willingness to embrace change should also extend to building Australia’s resilience.
Natural disasters are — and will forever be — a challenge for Australia. And this means the industry must continue to encourage homeowners to mitigate risks, and reward them for doing so.
This, I should say, was flagged in the final report to the Northern Australia Insurance Premiums Taskforce.
It identified a number of measures to promote mitigation. I won’t go into these now, but clearly it is a complex area — one that requires homeowners and insurers to both take action.
However, as I said, reward will be critical if we are to build resilience. So when mitigation work is done by homeowners, this should be welcomed. And it should take the form of lower premiums.
Now, let me finish by talking about the about the opportunities that exist for more innovative products.
We live in an ever-changing society. Australians are living and working for longer — and the insurance industry must stand ready to meet the ever-changing needs of those Australians.
Of course, new needs offer new markets. But evolving societal expectations mean that old practices may need to be re-assessed.
For example, blanket mental health exclusions for products like travel insurance may need to be re-visited.
So, too, exclusions or premium step-ups that may appear rather arbitrary to older Australians, whose ability and desire to travel continues to increase.
Another emerging area is big data — and the benefits are likely to be significant.
Big data can potentially provide for innovative ways to encourage behavioural shifts that mitigate risk — and improve societal outcomes in the process.
That said, it will also pose some challenges. For instance, highlighting poor driving techniques to policyholders based on telematics data may not necessarily win customer loyalty!
But these are, nonetheless, big and exciting developments. And that is why I’m pleased to see that many of these issues are being discussed today.
So thank you to the Insurance Council of Australia for this opportunity, and I wish you all the best for this forum, and for the year ahead.