Brought to you by:
Berkshire Hathaway Specialty Insurance
Berkshire Hathaway Specialty Insurance

Forcing the issue: ACCC calls for compulsory comparator

Facebook Twitter LinkedIn Google

The Australian Competition and Consumer Commission (ACCC) says insurers should be forced to participate in a home insurance comparison website to push down premium prices in the north.

In an update published today as part of the regulator’s ongoing Northern Australia Insurance Inquiry, the ACCC finalises 13 previously draft recommendations.

These are added to 15 that had already been confirmed – including the proposed banning of brokers’ general insurance commissions – making 28 in total.

The ACCC says the recommendations will “boost price transparency and consumer choice”, but insurance industry groups strongly disagree.

National Insurance Brokers Association CEO Dallas Booth told insuranceNEWS.com.au that until underlying issues of availability and affordability are tackled nothing else will have significant impact.

“An aggregator site is no use if there are only two or three companies on it, because they are the only ones who want to offer cover in that area,” he said.

“It is not the solution and more understanding is needed. [The ACCC] is not getting to the point.

“There are so many times that brokers [in north Queensland] tell us they struggle to even get two quotes. An aggregator site does not help that process.”

The compulsory national home insurance comparison site is one of the ACCC’s key recommendations.

“It should require the participation of all insurers active in relevant markets, allow consumers to compare policies by features, and make it quick and easy for consumers to act on the results,” the report says.

ACCC Deputy Chair Delia Rickard says while commercial comparison sites are available they don’t include all providers “and Australia’s four biggest insurers do not participate in these websites at all”.

Another recommendation says consumers should have the right to choose between an insurer-managed repair or cash settlement when their homes are damaged. This should be legislated through changes to the Insurance Contracts Act.

The ACCC also wants insurers to “disclose premium impacts of optional inclusions or exclusions” and suggests renewal notices go out at least 28 days before a policy expires to encourage shopping around.

It also proposes that strata managers should be paid only by body corporates, and not accept payment from brokers or insurers when they arrange strata cover.

As well as the recommendations, the report outlines five focus areas for ongoing consultation, the first of which is “measures to improve affordability and availability”.

Views are being sought on mitigation, reinsurance pools, mutuals and direct government subsidies, and submissions must be made by September 6.

The second focus area relates to case studies, which will see specific areas, including Townsville, analysed in detail.

The other focus areas are: examination of insurers’ premium adjustments; barriers to insurers expanding into northern Australia; and understanding non-insurance.

Click here to see the full report and list of recommendations.