30 September 2005
Record Insurance Industry Profits At The Expense Of Injured Australians
|The insurance industry is making record profits at the expense of ordinary Australians, particularly those deprived of their rights by changes to compensation laws, the Law Council said today.|
Law Council President-elect Tim Bugg said, "Recent figures suggest that injured Australians are finding it increasingly difficult to obtain adequate compensation, while insurance companies continue to make enormous profits."
Mr Bugg referred to today's announcement by the Australian Institute of Health and Welfare that spending on health increased by $6.1 billion during 2003/04. Over the same period, insurance premiums fell by just four per cent, after increasing by 150 per cent since 1999.
"Injured Australians are still requiring healthcare, but insurance companies are covering less and less of the cost. These figures suggest strongly that taxpayers are now footing the bill," Mr Bugg said.
KPMG's General Insurance Industry Survey 2005 revealed that insurers made a record after-tax profit of $3.252 billion during the past 12 months, a 27 per cent increase on last year's profit.
The study also showed that in the years since changes to tort law were introduced, the share price of the Australian insurance industry has grown by over 70 per cent – one of the world's largest financial sector increases.
"The KPMG survey reveals the scandal underlying the tort law changes in Australia. Tort 'reforms' have simply shifted the burden of supporting people who have been injured, through no fault of their own, from the insurance industry to Medicare and the Australian taxpayer," Mr Bugg said.
"What we are seeing now demonstrates that the tort law changes have gone too far. It is time to start reversing the changes in tort law, which are continuing to hurt injured Australians and costing the Australian taxpayer millions of dollars," Mr Bugg concluded.
|Media Contact: Elenore Eriksson,
Director Public Affairs - 02 6246 3716/0419 269 855
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