00:00Warren had an interesting case. He had a renewal with his insurer he'd been with for a few
00:06years. He'd had no claims. He'd had no severe weather events that impacted his property,
00:12but his premium went up by 109%. And so he sought an explanation from the insurer, which
00:19he was unhappy with. So he tried to take it to the financial ombudsman, but was unsuccessful.
00:25They said it was outside their rules, and he questions whether that is in fact correct,
00:30given that it has considered other similar cases. Let's have a listen to what Warren
00:35told me.
00:37We received a premium notice from Coles last year, and the premiums actually doubled. The
00:44premiums went up by 109%. There was no explanation given in the letter. We followed it with Coles,
00:50and they just told us there was generic conditions and changes in the market that had forced
00:55these increases. The insurance companies expect us to disclose a lot of information, but they
01:00don't seem to be prepared to disclose information about the changes to the premiums and what's
01:06caused those premium increases.
01:09Michael, what have consumer advocates said about the cases being knocked back?
01:13Yes, well, I've spoken to the Financial Rights Legal Centre, and former ACCC boss Alan Fells
01:20and they've reviewed Warren's case and two others that I discovered, and they're very
01:25concerned about these knockbacks that the ombudsman is making without duly considering
01:31the claims. They think they may be making mistakes in these cases, and so have called
01:37for the ombudsman to launch an urgent internal review, and I think this is quite important
01:43at the moment because insurance prices have been rising steeply. We know that they're
01:49up by about 14% in the last year, and that people are really concerned about it, and
01:55when there's not adequate justification from the customer perspective about why that increase
02:02is happening, they want to be able to do something about it, and they want to know whether the
02:07ombudsman is available to them or not.
02:10And how has the Australian Financial Complaints Authority responded?
02:15It says it will launch an internal review in response to our story, which is significant,
02:22but it also points out that it has very limited jurisdiction here, so it can only consider
02:28cases where premium has been incorrectly calculated, but consumer advocates point out that it's
02:35actually quite difficult for a customer to prove that because all the information resides
02:40with the insurer about that, and so unless that's provided to the customer in a sufficient
02:46way for them to challenge, the ombudsman really needs to get involved to have a look at what
02:51was calculated, the justification for it, and make a ruling on it, and in a recent case
02:56they did do that. They ordered Suncorp Insurance had to scrap a 60% increase in a home insurance
03:03premium rise case, and so consumer advocates are saying, well, there's an inconsistency
03:09here that they believe needs to be sorted out and sorted out quickly.
03:14And insurers are under pressure to tell customers more about premium prices. What's being called
03:19for, Michael?
03:20Yes, the ombudsman and consumer advocates say that a lot of problems would be sorted
03:25out if more information was provided to customers, and there's been a Senate inquiry that released
03:31its report this week which said that they should provide detailed breakdowns to customers
03:37about why premiums are going up, and they're also calling for the consumer watchdog the
03:44ACCC to be given price monitoring powers. Now, this is something the ACCC already does
03:51in the domestic aviation space, and it's really contributed to debate around airline ticket
03:59pricing and whether that's fair or not, and put a lot of scrutiny on those companies.
04:04So it is significant, I think, what's happening in this space. The Albanese government told
04:10me that they've had a taskforce inside Prime Minister and Cabinet looking specifically
04:16at insurance affordability issues, and that they'll have more to say about it. So I think
04:21there's a lot happening in this space, given the community concern about it and how much
04:25it's been driving inflation as well, and there will be changes to come, I think it's fair
04:30to say.
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