Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I'm going to read a quote:

Australia is a country of fires, floods, cyclones and other extreme weather events. Recent natural catastrophes have revealed a number of gaps in consumer protection when it comes to general insurance. The mass lodgement of business, home and contents insurance claims in the wake of multiple natural disasters that have hit Australia in recent years showed up these consumer protection gaps in stark detail.

Claimants had nowhere to turn and no means of redress when they were unable to have their insurance claims resolved in a timely manner. Victims of extreme weather events all over Australia faced unacceptable delays in the assessment of their claims; misunderstandings about the scope and extent of their polices; a lack of information or communication from insurers; discrepancies or inaccuracies in damage assessments or third-party expert reports; and token efforts at dispute resolution. Those who tried to assert their rights in the labyrinth of the claims process found themselves on the wrong side of a power imbalance.

Those words do not come from the Flood failure to future fairness report so ably chaired by the member for Fraser, Dr Daniel Mulino, in the House of Representatives Standing Committee on Economics. Those words come from a report on the now-defunct House of Representatives Standing Committee on Social Policy and Legal Affairs chaired by the member for Moreton, 12 years ago, arising out of the natural disasters in North Queensland and across the country—particularly in South-East Queensland. He chaired that committee and I was on the committee. Those words from 12 years ago could have been included in the report done by the House of Representatives committee on economics. Not enough has changed.

As Dr Daniel Mulino, the member for Fraser, said in his media release when tabling this report: 'Too many cases were badly mishandled. Inconsistent decision-making meant neighbours received different outcomes after the same event. Long delays caused emotional, mental health and financial strain. More than two years on, many people still can't get into their homes. Initial offers were too low, which was especially problematic for cash settlements.'

The member for Fraser and the member for Moreton were saying almost the same words, 12 years apart, in two separate parliamentary committees. The insurance industry in this country should get a handle of itself and have a good hard look at itself. The Insurance Council of Australia, in their submission to this inquiry, blamed the consumers for living close to areas where there could be natural disasters, quoting former governor Lachlan Macquarie about the fact that these people had themselves to blame. That was the attitude of the Insurance Council of Australia initially when this inquiry was held.

Fortunately, the insurance companies moved, and statements of contrition and regret continued to operate during the submissions and public hearings of this inquiry. It doesn't matter where this inquiry moved to, whether in New South Wales, South-East Queensland, Cairns or Townsville—which I recall vividly—the insurance industry failed monumentally in addressing the natural disasters that took place and have not learned enough in the 12 years between these two parliamentary reports. Whether it's a government, community or insurance company response to floods and natural disasters, the response needs to be swift, direct and generous. That's what the Australian public expects.

This is a comprehensive report. The member Fraser did a brilliant job in relation to this report. I thank the secretariat for what they've done and the members of the committee who worked in a very bipartisan way—indeed, a tripartisan way, because there was one Independent member on the committee.

In 2022, floods devastated communities across Australia, in New South Wales, Victoria, Tasmania and my home state of Queensland. More than 300,000 claims were lodged—more than any other natural disaster in Australia's history—but the insurance industry kept on saying this was unprecedented. They're actually in the business of insurance and have been in Australia since colonial times. So don't give us that. It is a bit like complaining if you're playing football saying, 'I'm worried about getting tackled, being penalised or losing a game.' If you're going to play the game, if you're going to be in the business of insurance, you've got to do better. You've got to look after your consumers better. Policyholders need to be treated better. Pooling mechanisms need to be strengthened. Preparation needs to be done better. Cash payments were too low. The idea was to get the money out and then not have anything more to do with it.

People were treated poorly. We heard a number of cases during the inquiry of insurers denying claims, then denying the internal dispute resolution process, and then the case went to the Australian Financial Complaints Authority and the insurers lost at that AFCA level. Their success rate at AFCA level was less than 20 per cent. If you're a football coach and you lose more than 80 per cent of the time, you're going to lose your job. The insurance industry was losing more than 80 per cent of the time in the internal procedure, which was being manifested into the external procedure. If you're losing at AFCA level more than 80 per cent of the time, there's a problem internally with your dispute resolution process. They didn't prepare well enough in any way at all. They kept on admitting that during the course of the process.

There are a number of recommendations—about 86 recommendations—and they need to be adopted. There are recommendations in terms of the general industry code of practice. It needs to be strengthened as a matter of priority. It needs to be registered with ASIC's approval. Further, the code needs to be contractually enforceable in relation to the insurer's responsibility. In addition to that, there should be guidance given by insurers to consumers at emergency hubs. Too often, insurance companies didn't bother turning up to these community hubs when there was a natural disaster. Too often, they didn't answer the phone. Too often, they didn't get back to their policyholders. Too often, the so-called meaningful timelines were just ignored by insurance companies. The supercilious and arrogant way the insurance companies dealt with so many of their customers and claimants was there for all to see in submission after submission and hearing after hearing.

We've got to do better at a federal and state government level, too. Deloitte Access Economics, after the 2011 floods, did a report that I remember that said if we spent about $250 million dollars on insurance, on preparation, on resilience and flood mitigation, we could save the taxpayer about $12.5 billion. We know that in 2014 the Productivity Commission found that 97 per cent of natural disaster funding from the Australian, state, territory and local governments go after the natural disasters. Only three per cent is invested in mitigation and resilience. We've committed $200 million in our Disaster Ready Fund, and we should be committing that or more. It was oversubscribed on the two occasions that people made applications for that funding. I got some in my electorate, and I'm deeply grateful. There's some that I wished I got as well, in terms of community hubs at Mount Crosby, for a start, and the Karana Downs area. There's an opportunity in the DRF process to substantially reduce the risks of flooding for communities exposed to high levels of risk, and I can see the benefit of flood mitigation in the roads up in Toogoolawah, in my electorate, in the Somerset and also at Ipswich showgrounds.

The Resilient Homes Program that was so successful in South-East Queensland needs to be rolled out nationally. It's one of the recommendations of this inquiry. We can do more. That program was a one-off for South-East Queensland. New South Wales had a similar one. We need to do this on a regular basis at a whole-of-government level. That's something that should be there—an available pool to retrofit, improve and raise homes to make sure that homes are more resilient. Whether it's in Ipswich, in my electorate—in Trumper Street, East Ipswich—or indeed in Goodna, in Ipswich, we've seen the benefit of the Resilient Homes Program. There are many recommendations here. I'm urging the government to pick them up and the insurance companies to do better.

Debate adjourned.