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Suncorp warns that insurance reforms could mean higher costs

Business

Suncorp has paid out $227 million to bushfire affected communities and warned that proposed reforms could end up costing the public.

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Michael Miller, who leads the claims team for Suncorp’s Australian insurance business, told a federal parliamentary inquiry that by June 30 the company had finalised 88 per cent of consumer property claims, 71 per cent of commercial property claims, and 86 per cent of motor claims from the bushfires.

“This includes paying more than $227 million into recovering local economies,” Miller said.

It has also previously announced the COVID-19 pandemic would cost it $133 million.

“Suncorp learns and improves from each disaster, honing our response plans to improve the speed and quality of the rebuild and recovery process for our customers.

“Our submission to the Committee highlights several areas of opportunity to improve response and recovery for future bushfire events.

“Establishing standing arrangements for removal of debris between governments and insurers will help avoid significant post-event delays that cause heartache for homeowners.

“Our home insurance policies provide an additional allowance for debris removal costs, so for these bushfires, Suncorp decided to proceed with removal of debris for our customers, independent of government programs. These works have occurred faster than those undertaken by government contractors, and we have already completed debris removal works for our customers.

“Streamlining Bushfire Attack Level reviews and planning approvals is another area of opportunity. Delays in these processes impact important conversations with our customers, slowing the progress of their claims.”

“Suncorp supports reforms that will deliver better outcomes for our customers, including making claims handling a financial service. However, we are concerned that as proposed, the claims handling reform may place onerous regulatory requirements on smaller providers, excluding them from insurance work.

“This would not be a good outcome for those suppliers, their communities, or for our customers.

“The resilience of communities to natural disasters can be improved through planning, construction and building codes that place greater importance on reducing disaster impacts.

“Taxes on insurance policies affect insurance affordability. Risk-based pricing means those who live in areas with higher risk of natural disasters pay more for their insurance, as well as more in tax.

“Suncorp believes that the combination of reform to insurance taxes and greater investment in resilience measures will result in a stronger economy, safer communities, and will ultimately reduce cost of living pressures through lower insurance premiums.

Earlier this year, Suncorp announced it had exceeded its six-month natural hazard allowance by more than $100 million as a result of the catastrophic bushfires.

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