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Feledy explained the company's difficult position as it aims to balance commercial viability with customer loyalty. He emphasized that Allianz is seeking a way forward that will not compromise the support provided to existing policyholders, while recognizing that continuing to offer flood coverage options independently was becoming untenable.
He pointed out the potential problem that, should Allianz remain a solo provider for selective flood coverage, it might expose itself to negative selection, attracting a disproportionate share of high-risk policies. Feledy hinted at a possible industry-wide impact, where fewer and fewer people would have access to reasonably priced insurance.
The House of Representatives Standing Committee on Economics probes how insurers have dealt with catastrophic flood events, emphasizing the necessity for continued coverage availability across other non-flood related areas like fire and theft. MP Kevin Hogan from the flood-stricken Lismore region stressed the importance of maintaining such diverse coverage for residents.
During the inquiry, it was revealed that significant discrepancies in premium costs existed between coverages including and excluding flood protection. Independent representative Andrew Gee brought forth a constituent case wherein the difference amounted to a staggering $20,000 annually.
Moreover, questions were raised about the independence and reliability of hydrologists’ reports, which are essential in claims assessment but might lack the declaration of independence standard in legal expert reports. Feledy defended these reports, clarifying their role and the experts' external status to the company.
Allianz and RACQ both committed to refining their claims handling processes. Allianz is moving from a task-based to a case management approach, aiming for a more personalized service. RACQ's Group CEO David Carter underlined their prioritization of empathetic engagement and the provision of specific updates and assistance for clients affected by adverse weather conditions.
Carter concluded by emphasizing the insurers' recognition that more must be done to appropriately support customers in distress. As resilience to natural disasters seems increasingly vital, insurers are reevaluating their strategies for a sustainable, empathetic approach to claims handling.
Published:Tuesday, 13th Feb 2024
Source: Paige Estritori
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