The Insurance Council of Australia was established on July 1 1975, succeeding the Fire Accident and Marine Underwriters Association, which traced its origins back to 1867. 

At Thursday night’s annual dinner at Sydney Town Hall, it celebrated its 50th anniversary and everything that has been achieved over that time.

But it is looking forward too. Speaking to insuranceNEWS.com.au today, chairman Steve Johnston outlined a bright future for the group and the industry it represents.

“ICA has really come into its own in the past five years,” the Suncorp Group CEO said. “What you’re seeing now is ICA taking on a far more relevant and proactive role than it might have done 10 or 15 years ago, when it was making a contribution but certainly not to the same level that it is today.”

He says insurance was once considered “a little bit ho-hum” and “not really in the spotlight”, but reinsurance and pricing resets have pushed issues such as affordability and claims management “into mainstream political discourse”. 

Mr Johnston gives great credit for ICA’s progress to CEO Andrew Hall, who took over in September 2020.

“I've known Andrew for 10 or 15 years, and I think he’s a very strong communicator,” he said.

“He’s a very softly spoken, sensible, articulate individual. As an industry, and a board of directors around that table, we were looking for someone who could start to put the industry’s position more forcefully, but do it in a respectful way.

“We didn’t want to end up at loggerheads with governments or regulators. We wanted someone who could articulate the views of the industry very effectively, and he’s done that very well.”

It has not been plain sailing though, with the record 2022 floods and subsequent parliamentary inquiry prompting a tough period of industry introspection.

“For those of us who appeared before the parliament, it was an experience that we will not forget too quickly,” Mr Johnston said. “But having said that, you’ve sometimes got to have those experiences to understand areas where you need to fundamentally do better.”

A key issue for the new federal government and financial services minister will be keeping track of such reviews, to ensure “as an industry we deliver what was promised”.

But Mr Johnston says the government also needs to make rapid progress on issues such as disaster resilience and tax reform.

“I’ve been on the record for a long time, that for every dollar we spend mopping up, we need to spend the same dollar building resilience.  

“It’s a long-term investment in our future. But it just doesn’t seem to get the attention politically that building a highway might do.

“Ultimately, we are going to have to confront tax reform on insurance, because it makes no sense whatsoever that governments collect big slabs of home insurance premium.

“If we want to encourage people to take out home insurance, then we’ve got to lighten the burden of the tax impost.

“It’s tough, because it requires national reform, and it can't be done by any particular jurisdiction on its own, but I think inevitably that debate will have to happen in the next five to 10 years.”

The nation also needs to “stare into” the issue of managed retreat.

“We do have to confront that there are communities that were settled for good reasons 50 or 100 years ago but in today’s environment, with the weather the way it is, climate change happening, they just are not viable any more. We are going to have to start thinking about something like managed retreat, acknowledging that consumers don’t want to move in many instances.”

Mr Johnston says in the short term, helping high-risk homeowners deal with insurance affordability issues should be a focus, but he’s “not a big fan of subsidies” because they “distort risk mitigation”. He says there may be a role for government, but insurers also need to pitch in to ensure customers do not fall out of cover.

“The industry has got to do a lot better in designing products that meet the needs of individual consumers. We’ve relied on the pooling concept forever, and that’s going to break down in the next five years. 

“Insurers need to be more dynamic, they need to have better technology, they need to be more personalised, and they need to be developing products that meet the broad requirements for Australian consumers, not just a subset of them.”

Despite recent issues with affordability and increased scrutiny, Mr Johnston sees a bright future, with the industry and its peak body still thriving in another 50 years.

“I’d like ICA to really be able to articulate very clearly to consumers the value of insurance, because I think it’s an underappreciated product. I think that’s a key thing, making sure consumers understand what insurance is and what it does and how it effectively underpins credit and society in general. 

“Insurance companies will need to change, the industry will need to change, but I don’t see a future where the government brings all of this onto its own balance sheet any time soon, and if that were to happen, it’ll be because the industry has let itself down.

“Insurance has been around for a long time. [In another 50 years] it will be different, but it will be no less important than it is today.”