Andrew Gee (Calare, Independent) Share this | Hansard source

by leave—I rise to make remarks in relation to this issue and this report on behalf of constituents in the electorate of Calare in central western New South Wales.

The storms and floods that hit central western New South Wales in November 2022 were catastrophic and devastating for our region and its residents. Two lives were tragically lost in Eugowra, which was the scene of the largest helicopter rescue in Australia's history. Across the communities of our region, including Eugowra, Molong, Cudal, Canowindra, Manildra and Wellington, infrastructure, homes and businesses were destroyed. The stress, fear and anxiety amongst our local residents from not only having survived the ordeal of their lives but also facing an uncertain future were palpable.

When disaster struck, our residents naturally turned to their insurers for help, and issues arose almost immediately. For example, NRMA had been the insurer of choice for many local residents in Eugowra, yet in the immediate aftermath of the disaster, many residents reported problems in being able to talk to claims personnel. It took the company 10 long days after the disaster to arrive at the Eugowra showground with their mobile claims unit to assist homeless residents. This was a source of anger amongst residents, which grew stronger as the response to the disaster unfolded. As the exhausting days of recovery wore on, problems with insurers just grew and grew.

I held public meetings in our electorate of Calare where residents were able to tell and share their stories. It was empowering. Residents noted striking similarities in the way in which insurers were treating their policyholders. These included policyholders not having key provisions in their insurance contracts explained to them, claims processing being unnecessarily dragged out, substandard and inconsistent expert reports, shoddy treatment by contractors and insurance company representatives, claims being unnecessarily knocked back, and policyholders being offered, and accepting, lowball cash settlements because they were too exhausted to fight anymore.

It was clear that the rebuilding and recovery process was being made much harder and the tragedy much worse by the cold-hearted and shocking response of insurers to policyholders. There were so many issues being raised about insurers that local residents and I began calling for a parliamentary inquiry. To its credit, the government called for an inquiry. The Assistant Treasurer and I announced the inquiry in Eugowra in July 2023. This committee then took evidence in Eugowra, Molong and all over eastern Australia and, for the first time, a real spotlight has been put on the industry. What it has revealed is unconscionable and systemic industry failures that exist at every step of the insurance process.

The evidence taken by this inquiry amounts to a damning indictment of the insurance industry. While some in the industry may be ashamed of it, I suspect many are not. Eugowra is a long way from the boardrooms of capital cities. While not every insurance company did the wrong thing, the living hell that a number of these large insurers have put policyholders through should not be sugar-coated. Words should not be varnished when describing it. The narrative put forward to this inquiry by the Insurance Council of Australia and a number of insurers was, in effect, that the floods of 2022 were unprecedented. This and other excuses, such as poor planning decisions since the time of Governor Macquarie and European settlement, COVID, labour shortages and the war in Ukraine, all resulted in some customers having poor experiences. Examples of this attitude and these excuses are littered throughout the written submissions and oral testimonies of insurance industry and company representatives.

But, as we know, major natural disasters are not new to Australia or insurance companies. There is simply no excuse for what a number of these corporations did to their policyholders, and the Australian public should not let these insurers get away with this arrogant spin. When insurance company representatives came to give evidence before this inquiry, there appeared to be a complete lack of insight on the part of some of them as to the pain and suffering they had inflicted upon their own customers, notwithstanding that an army of public relations consultants had no doubt prepared many insurance company representatives for their appearances before our inquiry. In some cases, getting apologies and acknowledgements for the hell they had put their customers through was like pulling teeth.

As I've said, some insurers did do the right thing. Some did genuinely try and assist residents in our area, but the fact remains that the industry giants clearly don't like the spotlight being put on industry practices or the healthy profits that they continue to enjoy. This profitability has come at a high cost to many of their fellow Australians. The reality is that the Australian insurance industry has had a good thing going for a very long time. It has donated to both sides of politics. It's a strategy that has served it well. In the midst of healthy profits, it's been left to largely self-regulate.

Insurance companies don't just answer to shareholders; they also answer to the nation. They don't just have insurance contracts with our residents and businesses; they also operate with a social licence. The Australian public needs to be vigilant and not be afraid to revoke these licences to operate when egregious behaviour comes to light. This inquiry has exposed plenty of that.

As I've said, profits have been made by these corporations at the expense of customers all around our country. The committee heard evidence from policyholders about their treatment by insurers that was deeply disturbing and disgusting. This callous treatment was truly shocking. The debilitating effects this has had on traumatised policyholders is tragic, and it must be stopped.

The report makes recommendations across a range of issues plaguing the industry. I believe that they can make an important contribution towards fixing the massive power imbalance that currently exists between insurance companies and their customers. I just don't think they go far enough. These insurers need to be held to account. More recommendations are needed, and I was disappointed that more weren't included in the main report and given the consideration I believe they were due. That's why I filed additional comments and a dissenting report to supplement the main report. It contains a further 38 recommendations that can make a real difference to insurance policyholders such as forcing experts and claim assessors to sign up to a code of conduct; funding building expert reports for policyholders when complaints reach the Australian Financial Complaints Authority; forcing all insurers to sign up to the General Insurance Code of Practice; properly funding community legal organisations to help disaster-hit residents; and stopping the uncontrolled strip-outs of policyholders' homes after natural disasters, which has been described as legalised looting.

All of these recommendations are the first steps to fixing a broken industry. The government and insurers now need to step up and implement the recommendations. Policyholders shouldn't be made to wait for long-overdue reforms. The government now needs to act on the recommendations and ensure that any necessary legislation can be passed during this term of government. The insurance industry also needs to get cracking because the eyes of the nation are upon it.

I wish to thank the very hardworking chair and the secretariat staff for their hard work and diligence throughout the course of this inquiry. The committee has worked in a productive and collegiate way. I wish to also thank all who gave evidence to this inquiry. For many, having to relive the trauma they suffered has been very difficult. It is my hope that by telling their stories, collectively, they can be a catalyst for long-overdue change and reform to this industry.

I extend a heartfelt thank you to the countless unsung heroes around our nation who risked their own lives to save others during these devastating disasters. I also thank those who've worked with such care and compassion to help so many to rebuild their lives and recover from such tragic loss, including those who've attempted to help policyholders get through the deeply traumatic process of dealing with insurers.

In that respect, in our area, I make mention of the team from Legal Aid who were there from the first hours of this disaster. There were also many others including lawyers like Kirsty Evans from Cheney Suthers lawyers in Orange who gave up so much time to make submissions to this committee and help our devastated residents right throughout our region. Their work continues to this day.

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