Tuesday, 23 April 2024

The Motor Vehicle Insurance and Repair Industry (MVIRI) Code Administration Committee (CAC) have met significant milestones as it continues its work to review the MVIRI Code of Conduct (Code) in response to the independent review conducted by Dr Michael Schaper.

The CAC has received legal advice regarding options for incorporation as a formal legal entity and is considering its next steps.

“Recommendation 9 of Dr Schaper’s review was that the CAC should adopt an association, company or other corporate structure. He identified that under its present informal structure, the Code may lack credibility among industry players and government bodies.” MVIRI CAC Chair, Stephen Jenkins said.

“The advice received by the CAC is a critical input to the CAC’s considerations on how it can enhance its independence and improve the overall governance of the Code.”

Mr Jenkins added, “The legal advice received is also of assistance in guiding instructions for the redrafting of the Code. The CAC is also currently in the process of obtaining proposals as to the drafting of the revised Code.”

“Once a revised draft of the Code is received, the CAC will engage and consult with the insurance and repair industry and other stakeholders.”

Reflecting on the CAC’s work in implementing the recommendations of the review of the Code, Mr Jenkins expressed cautious optimism on the progress made to date.

“As a committee, we have set ourselves a goal to receive a revised draft of the Code by the middle of 2024.”

“I would like to thank all committee members for their hard work, but more importantly to the industry for their patience to date.”

Background

In December 2022, the Motor Vehicle Insurance and Repair Industry (MVIRI) Code Administration Committee (CAC) announced Dr Michael Schaper was appointed to conduct an independent review of the MVIRI Code of Conduct (Code) and in May 2023, the CAC formally received Dr Schaper’s final report.

The report provided 15 recommendations in response to the review’s terms of reference which focused on:

1. The effectiveness of dispute resolution processes under the Code
2. Awareness and accessibility of the Code
3. Compliance with the Code
4. Governance of the Code and the CAC
5. Other issues pertinent to the effective governance and operation of the Code

A range of stakeholders were consulted in the review process, including government bodies, regulators such as Small Business Commissioners, members of the Code Administration Committee, as well as the insurance and repair industry.

Since its inception in 2006, the Code has undergone multiple reviews to ensure it remains fit-for-purpose, with the last review undertaken in 2017.

A copy of Dr Schaper’s report can be found on the Motor Vehicle Insurance and Repair Industry Code of Conduct website at www.abrcode.com.au/resource-centre as well as the MTAA website www.mtaa.com.au and the ICA website at www.insurancecouncil.com.au.

Wednesday, 10 April 2024

The Insurance Council of Australia (ICA) has today declared last weekend’s severe storm focused on New South Wales a Significant Event.

The storm caused heavy rainfall, damaging winds and flash flooding, most severely impacting the Hawkesbury-Nepean and Illawarra regions of New South Wales.

Insurers have received 11,527 claims to date, with most from damage to buildings and contents as a result of wind and heavy rain causing gutters to overflow and flash flooding to occur.

At this stage it is too early to estimate the insurance damage bill.

The ICA’s extreme management processes have been activated to escalate insurers’ response for customers impacted by the event from Wednesday 3 April 2024 to Monday 8 April.

Under a ‘Significant Event’ declaration:

• The ICA commences its claims data collection, analysis, and reporting processes in consultation with members.
• ICA representatives will continue to work with government and agencies to understand impacts on the community and ensure affected residents receive assistance.

If property or a vehicle have been impacted, customers are advised to contact their insurer as soon as possible to commence the claims process even if they do not know the full extent of damage.

Insurance customers are not required to keep destroyed property, including carpets and furnishings, and should instead take photos, note any identifying information, and keep materials samples.

New data also released today shows that losses from declared insurance catastrophes this summer have reached close to $1.6 billion, with the cost of the Christmas Storms now exceeding $1.1 billion.

• Ex-TC Jasper (CAT 232): $296 million incurred from nearly 10,000 claims.
• Christmas Storms (CAT 233): $1.1 billion incurred from nearly 95,000 claims.
• Valentines' Day storms (SE 241): $162 million incurred from nearly 25,000 claims.

Quote attributable to ICA CEO Andrew Hall:

The summer of 2023-24 saw a number of extreme weather events across the east coast, with two declared catastrophes including a cyclone and severe storms and flooding in Queensland.

As we move into autumn the impact of extreme weather continues with the storm that largely impacted New South Wales last Friday and Saturday.

Insurers are already on the ground in impacted areas assisting customers and responding to claims and will be at Recovery Centres in the Illawarra and Hawksbury-Nepean over the next three days.

Thursday, 14 March 2024

The Board of the Insurance Council of Australia (ICA) today announced incoming Lloyd’s General Representative in Australia Tracey Bryan has been appointed a non-executive director of the ICA Board.

Tracey will replace outgoing Lloyd’s representative Chris Mackinnon, who joined the ICA Board in 2017.

Tracey will hold the dual role of Lloyd’s General Representative in Australia and Lloyd’s Head of Regulatory Affairs & Compliance Asia Pacific from 1 April.

She joined Lloyd’s in 2010 and has over 20 years’ experience in the insurance industry having managed claims and dispute resolution teams, conduct risk, compliance, and legislative development.

Holding a Bachelor of Laws and Bachelor of Arts from Monash University, Tracey commenced her legal career working as principal solicitor for a Community Legal Centre, before moving into insurance in 2001, holding various managerial roles at AAMI Insurance.

Tracey also serves as a Director on the Board of Lloyd’s subsidiaries in Australia, Japan, Dubai and Lloyd’s Branch Executive Committee in India. Tracey was also a member of the past two ICA Code Review Committees.

Quote attributable to ICA President Nick Hawkins

I welcome Tracey to the ICA Board as we bid farewell to Chris and wish him luck on his new role as Lloyd’s Regional Director for Asia Pacific, Middle East and Africa.

Chris has contributed a wealth of experience and provided insights on the global insurance market and reinsurance solutions for a wide variety of risks.

We look forward to working with Tracey and to continue our valued relationship with Lloyd’s.

Wednesday, 13 March 2024

With Easter holidays approaching, the Insurance Council of Australia (ICA) is urging Australians planning overseas trips to purchase travel insurance, as new data shows a concerning number of holidaymakers are considering travelling without the crucial safety net.

A survey commissioned by the ICA and the Department of Foreign Affairs and Trade’s Smartraveller shows that 41 per cent of Australians would consider travelling overseas without travel insurance.

The survey also revealed that one in six (16 per cent) did not have travel insurance on their most recent overseas trip.

The most common reasons cited for not having travel insurance were:

• Perceived safety: 24 per cent believed their destination was safe enough.
• Unsure if it was needed: 27 per cent didn’t think it was necessary.
• Short trip: four per cent felt their trip was too short to warrant insurance.

The survey also found 44 per cent of travellers used Smartraveller for pre-trip information, but 10 per cent would still travel to destinations against government advice.

Key takeaways for travellers:

• Purchase travel insurance before your trip.
• Read the policy terms and conditions carefully.
• Use Smartraveller (smartraveller.gov.au) for the latest travel advice and information.

Quote attributable to ICA CEO Andrew Hall:

School holidays will be here before we know it, so now is the time to ensure you have the proper insurance coverage if you’re planning an overseas trip.

We hear of too many stories of families facing financial hardship due to medical emergencies or accidents overseas, simply because they didn’t have travel insurance.

Travel insurance is as vital as your passport. We encourage everyone planning a trip to purchase travel insurance well in advance and to carefully read the terms and conditions.

The full survey can be found here.

Wednesday, 13 April 2022

As hundreds of thousands of Australians head away for the Easter break, the Insurance Council of Australia (ICA) is warning short-term holiday rental hosts not to place their most valuable asset at risk.

The attraction of earning extra income from short-term holiday rental is financially appealing, but for the uninsured it could lead to disaster.

Almost 500,000 Australian hosts have listed their property on short-term holiday rental platforms since 2016 and Easter and Christmas are particularly popular times to list.

However, hosts who offer their properties on short-term holiday rental platforms are most likely not protected for any damage caused by their short-term tenants under their home and contents insurance.

Most insurers regard short-term holiday rental as a commercial use of a property or a business activity.

A home building or contents claim incurred while a property is being rented by short-term tenants may be declined, leaving the host financially liable and potentially vulnerable to financial loss.

Some insurers have responded to the increasing popularity of short-term holiday rentals by offering specialty policies for hosts who self-manage their property.

Cover like this can be tailored to the number of nights the property is rented and the daily cost can be as little as the price of a take-away coffee.

It can cover paying guest-related accidental or malicious damage, theft or attempted theft, personal liability if a guest is injured, identity theft, and strata property damage.

Short-term landlord insurance policies are also available to cover a professionally managed property.

Hosts considering short-term holiday renting should:

• Check their building and contents insurance policy details prior to advertising on short-stay holiday rental platforms. If the policy doesn’t cover short-term rental look for a specialty policy at findaninsurer.com.au that protects both home and contents while paying guests are staying.
• Not rely solely on the rental platform’s host protection insurance as there may be gaps in the cover offered.
• Be aware that home insurance includes public liability coverage, however, the commercial activity of short-term holiday stays may invalidate this cover for some claims.
• Reduce the risk of theft by removing valuables during the short-term stay.
• Check strata rules, tenancy agreements and local council laws because these may prohibit short-stay holiday rental.
• Ensure their property is safe and secure.

Quote attributable to Andrew Hall, CEO ICA:

Short-term renting is a legitimate and attractive activity that turns many homeowners into short-term landlords, but it’s vital that they do this properly and have insurance cover for the unexpected.

The Insurance Council is aware of frightening stories of hosts returning after short-term paying guests have departed to find their house stripped of possessions or significantly damaged.

Short-term rental landlords wouldn’t leave home without locking their property – this Easter they mustn’t leave home without the right insurance cover.