INSURANCE INTERMEDIARIES have been faced with a truth behind the massive amount of regulations that have been imposed on the general insurance industry because of government lack of understanding of the industry’s place in society and the economy.
Andrew Beer, Director of Retail Distribution CGU, addressing delegates at the AFMA IAAA conference on the Gold Coast on the changing landscape of the insurance industry in 2012 said: “Governments don’t really understand what it is we do.
“It is important that the industry finds solutions for our clients. Some of those solutions will come at a price. We have to make our products sustainable and no one wants to go through the pain and chaos of 2001 when HIH collapsed.
“2011 saw nearly $5 billion in insurable claims. It was the worst year on record for reinsurers and we have to determine if this was a one off event or is it the new norm.”
Pricing would continue to increase as insurers and reinsurers sought to deliver underwriting outcomes.
“It will be a tough 12 months. it won’t get easier. We need to get closer to our clients if we are to retain and grow our businesses.”
Mark Tiernan from Macquarie encouraged delegates to consider using EBITDA instead of top line revenue as the appropriate valuation for the business.
Source: Insurance News Australia