The Minister for Revenue and Assistant Treasurer, Senator the Hon Helen Coonan, and the Parliamentary Secretary to the Treasurer, the Hon Ross Cameron MP, today announced the release of the Australian Competition and Consumer Commission’s (ACCC) Second Public Liability and Professional Indemnity Insurance Monitoring Report.
This series of reports was commissioned by the Government as a result of a commitment made by the Australian Government to a Ministerial Meeting on Insurance Issues held on 30 May 2002.
The report was based on data received from insurers for the period ending 30 June 2003 and concluded that claims costs had begun to fall and liability lines of insurance had been restored to profitability.
“The report found increases in average public liability insurance premiums were slowing and that in the first six months of 2003 premiums had grown by just four per cent compared to an increase of 88 per cent between 1999 and 2002,” Senator Coonan said.
“This substantial stabilisation of premium prices has been largely due to the average size of settled claims decreasing by 10 per cent in the first six months of last year.
“The report highlights that claims costs continue to be the largest component reflected in the premium charged by insurers, and therefore have the greatest influence over the final price charged.
“Labor Senators currently blocking changes to the Trade Practices Act to underpin tort law reforms by the States and Territories should have a good look at the results already being achieved and seriously reconsider their ill-conceived opposition.
“Although we have always expected it would take some time for the benefits of the ambitious and far-reaching tort law reform to progress through to premium prices it is clear the impact is already being felt.”
Mr Cameron said that in the field of professional indemnity insurance, premiums had increased by five per cent in the first six months of 2003 — a much slower rate than experienced in 2002.
“I expect the reforms we are currently implementing to introduce professional standards legislation and proportionate liability for economic loss will have an even greater impact on professional indemnity insurance premiums in the future,” Mr Cameron said.
“The Australian Government has already introduced legislation into the Parliament to support State and Territory professional standards legislation and proportionate liability for economic loss.
“I would urge my State and Territory colleagues who are still to implement this type of legislation to do so quickly to ensure that professional indemnity insurance becomes affordable.”
Senator Coonan will chair a meeting of her State and Territory Ministerial counterparts on Friday 27 February in Hobart, where professional indemnity insurance, will be an important focus.
The Government has asked the ACCC to continue to update its report on a six monthly basis for the next year.
All Governments will be watching closely to ensure that the positive benefits of reform are passed on to consumers.
The report is available from the ACCC’s web-site at www.accc.gov.au.