Catholic Church Insurance to shut after shareholders opt against financial rescue

Church insurer fails to secure another financial lifeline amid large numbers of historic sex abuse and other claims.

The Australian revealed in 2021 that dioceses and religious orders across Australia had moved to shore up CCI, which recorded a $192m loss in 2020-21 and lost nearly $250m the previous financial year.

The Catholic insurer will wind down after failing to receive another financial lifeline amid large numbers of historic sex abuse and other claims.

Catholic Church Insurance shareholders and staff were told on Monday afternoon that the body would begin winding down after the decision was made by shareholders not to prop it up.

CCI remains solvent and will be able to pay existing claims – including for abuse-related matters – but will close for new business.

The church leadership has stressed that abuse claims will be covered and not affected by the shutdown, which will occur over time. The board described the move as heading into voluntary “run-off’’.

Its demise will create turbulence for Catholic dioceses across Australia but officials have been eager to stress that it is still able to fund existing claims.

The church’s insurance shareholders had been considering whether to provide another capital injection to CCI after previously providing $170m to help cover sex abuse claims.

The CCI board said it had been unable to secure sufficient capital to enable its business to continue operations and abide by regulatory requirements.

It said CCI remained an Australian Prudential Regulatory Authority-authorised insurer and would manage claims from existing policyholders using reserves.

“It will not issue any new or renewal policies for all insurance business,’’ it said in a statement.

“Some policyholders have contracts that are due to expire in coming weeks. CCI is offering them a short-term renewal up to 30 June to allow affected policyholders time to source alternate insurance arrangements.’’

CCI chair Joan Fitzpatrick said the insurer had sufficient capital.

“The CCI board and management deeply regret that it has been necessary to make this decision and would like to assure all staff, policyholders and suppliers that it has sufficient assets to meet its commitments as they currently stand,” she said.

Its shareholders include the ­Australian dioceses and the move will affect hundreds of entities.

Steps have been under way for weeks to reassure victims of abuse that compensation will be covered, with claims under the redress scheme already met outside CCI’s operating framework.

The Australian revealed in 2021 that dioceses and religious orders across Australia had moved to shore up CCI, which recorded a $192m loss in 2020-21 and lost nearly $250m the previous financial year.

At the time, 18 CCI shareholders had injected capital into the company to strengthen its ability to compensate victims for abuse carried out by priests, religious officials and lay ­people.

Sex abuse remains the dominant issue for the church insurer, but there have also been payouts for climate-related issues affecting customers.

Catholic Bishops Conference president Timothy Costelloe and Catholic Religious Australia president Peter Jones both back support for victims of abuse.

“We restate our commitment to responding with justice and compassion to victims and survivors of abuse in Catholic settings – as we have sought to do for many years,’’ they said.

“The bishops and leaders of ­religious institutes, who reiterate today our apology for the abuse that has occurred in the church, will continue to work towards justice and healing for the crimes and sins that took place, where that is possible, including through the payment of compensation.

“The CCI run-off also means that church entities that have been insured with CCI will need to find new insurers. We are supporting Catholic ministries currently insured with CCI to ensure continuity of general insurance cover, and we are confident that will be achieved.’’