Peter Costello

Media Releases

ACCC Public Liability and Professional Indemnity Third Monitoring Report

NO.068

ACCC PUBLIC LIABILITY AND PROFESSIONAL INDEMNITY THIRD MONITORING REPORT

The Treasurer today released the Australian Competition and Consumer Commission’s third public liability and professional indemnity insurance monitoring report. The report monitors costs and premiums of insurers up until 31 December 2003, which was the latest data available to the ACCC.

In July 2002 the Australian Government asked the ACCC to monitor costs and premiums in public liability and professional indemnity insurance on a six monthly basis over two years to assess the extent to which insurance companies are passing on to consumers the benefits of insurance reforms.

The report found that increases in public liability insurance premiums are slowing and that for the year ending 31 December 2003, average premiums had grown by 17 per cent, significantly lower than the increase of 44 per cent seen in 2002.

The report also found that the size of premium increases for professional indemnity insurance was lower in 2003 than in 2002. The rate of increase for professional indemnity insurance slowed in 2003 with the increase in premiums being 15 per cent. This compares to the increase of 29 per cent in 2002.

As a result of the Federal Government’s insurance reforms, insurers expect public liability premium increases in 2004 to be constrained to 4 per cent. Furthermore, some insurers commented that the savings in 2004 premiums were conservative and that reforms may have a larger impact in the medium term.

The next report released by the ACCC will examine the actual outcomes for costs and premiums for the first half of 2004 when data becomes available.

CANBERRA
12 August 2004

Contact: Amanda Kennedy
02 6277 7340

10 Aug 2004

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