The collective impact of the Hayne Royal Commission, the summer bushfires and the ongoing COVID-19 pandemic has been well and truly felt throughout the general insurance space. In this practice update podcast, Win-Li Toh (Convenor) and Estelle Pearson, of the Institute’s General Insurance Practice Committee (GIPC), revisit these challenges and how they have shaped the future direction of the GIPC and the profession as a whole.
Listen to the podcast below:
As Convenor of the GIPC, Win-Li stepped into the role as COVID-19 was being named a global pandemic, all while the Royal Commission’s recommendations were due to be implemented.
“Well, to insurers’ relief, the government announced in May that it will defer implementation of most of the commitments for at least six months because of COVID-19. So, shifting most of insurers’ obligations from around early mid to later in 2021. This is except for the treatment of vulnerable customers, of course, and the hardship provisions of the general insurance code of practice. These were fast tracked because of COVID-19,” Win-Li explains.
In late 2019 came the unprecedented summer bushfires, which chiefly raged along the east coast of Australia, followed by storms and hailstorms throughout south-east Australia in January 2020.
“I think overall general insurers paid about $5 billion in losses across all of those events which occurred over about a three-month period of time,” Estelle says.
These natural disasters have resulted in two inquiries, the New South Wales Bushfire Inquiry, and the Royal Commission into Natural Disaster Arrangements, with the Institute’s Climate Change Working Group presenting at the latter.
“Many of the recommendations of the NSW Bushfire Inquiry were around resources and equipment and hazard reduction and emergency response. But there were also some recommendations that I know would really resonate with Actuaries around using data and technology to better understand and mitigate risk, and also in building better resilience through better land planning and management,” Estelle explains.
The potential impact of the COVID-19 pandemic on the general insurance space was softened by the introduction of pandemic exclusions following the SARS outbreak, as pandemic events aren’t insurable, Estelle explains in the podcast.
“But in terms of financial impacts so far, the adverse impact seems to me, to be longer term and on the top line rather than the bottom line. Obviously there have been COVID-related claims under landlords’ policies and trade credit, some event cancellation although not a lot here in Australia, and of course travel.”
For the remainder of 2020 and into 2021, the GIPC will focus on a number of key areas, each led by a different member of the committee. These areas, which are further elaborated in the podcast, include ‘Data Driven Decisions’ led by Chris Dolman, ‘Emerging Man-made Risks and Opportunities’ led by Tim Clark, ‘Climate and Weather’ led by Yifan Fu, ‘Policy and Standards’ led by Susan Ley, ‘Emerging Insurance Regulations’ led by Mat Ayoub, ‘Personal Injury and Health’, led by Arie van den Berg, Research and Innovation led by David Koob, and Education led by Melissa Yan.
The GIPC are also in the process of appointing members to lead ‘CPD and Seminars’ and an editor for Actuaries Digital.
CPD: Actuaries Institute Members can claim two CPD points for every podcast listened to.