Two independent reports to Government have shown further reductions in the premiums of Public Liability and Professional Indemnity cover following insurance reforms, Assistant Treasurer Mal Brough, announced today.
The results, released at the Insurance Council of Australia conference in Canberra today, show:
- Public Liability insurance premiums have, over the 12 months to December 2004, fallen between 4 and 4.8%*
- Professional Indemnity premiums have, over the same period, fallen between 0.3 and 4%*
The Australian Competition and Consumer Commission provided its price monitoring report to the Government on insurance premiums. Meanwhile, the Australian Prudential Regulation Authority provided its first National Claims and Policies Database to assist the insurance industry in appropriate pricing and premium setting. Both reports were commissioned by the Government, honouring its commitment to continue putting downward pressure on premiums.
"The Commonwealth, State and Territory Governments took hard decisions to halt a blow out in unaffordable and frivolous claims. This has resulted in real and tangible benefits to the community in the form of more affordable and accessible insurance cover," Mal Brough said today.
"The Commonwealth, State and Territory Governments worked together to secure a viable insurance industry and make public liability and professional indemnity insurance as affordable and accessible as possible.
"It's essential for economic stability that we have a secure and profitable insurance industry and that has been achieved. We had expected reduced premiums in the longer term; however these latest reports demonstrate that we are seeing reduced premiums now.
"This latest data contradicts the claim by some that premiums are not falling. Premiums are, in fact, reducing. We have seen a new industry code of practice, and greater stability within the industry.
"While I support the need for a profitable industry, Tort Law reform is not a one-sided process and the community expects further reductions over the longer term.
"To that end, the Government will continue monitoring to ensure that community continues to share the benefits of tort law reform through appropriate policies being available and reduced premiums."
The reports can be found separately at www.ncpd.apra.gov.au and www.accc.gov.au.
Note*: While the results both show reduced premiums, the reductions vary slightly between the reports due to different methodologies, purposes and monitoring period.