Insurance companies need details on $10bn reinsurance pool

Insurance companies and North Queensland residents are eagerly waiting for the final legislation for the $10bn reinsurance pool to see just how much they will save.

INSURANCE companies and North Queensland residents are eagerly waiting for the final legislation for the $10bn reinsurance pool to see just how much they will save.

Sure Insurance managing director Bradley Heath said the key thing for the industry was to know how the pool would change the premium at a risk level.

“We all need to know what the pool (will mean) for the cyclone component.”

Mr Heath said the earlier the insurance companies could begin working on premium calculations the better.

“If there is a change in our pricing systems we need to know well in advance,” he said. “Bear in mind most insurance companies send out their renewal notices … (in) early May, Middle of May. You really need a fair bit of time ... to get your changes in.”

Mr Heath said the company wanted the ability to continue to offer cheaper rates for customers, if the pool rate ended up higher than the company’s premiums.

He said the process of designing and implementing the pool was very detailed.

North Queensland insurance advocate Margaret Shaw said while she understood a model had been picked for the pool, no one knew what it was.

Ms Shaw, who lives in Idalia, said consumers would like to know which model had been chosen.

“We don’t know what it’s going to cover, there is no way we can say home and contents, strata and small business, strata is defined all over Northern Australia in totally different ways and so is small business,” she said. “There are some outstanding questions where that is concerned.”

Ms Shaw said there had not been a meeting with the consumer panel who was helping advise Treasury since August. “I’m hoping the model will be announced so at least the insurance companies have got a chance of renegotiating and still taking into account what it’s going … to offer them,” he said. “I’m hoping what is to be included and what is not to be included is defined.”

Labor Senator Nita Green said she was concerned there were not enough parliamentary sittings left to get legislation implemented in time.

“No details means we’re not able to understand if there will be a mandatory pool,” Ms Green said.

“We don’t understand whether the savings will be passed on. We don’t understand how much the savings will be.

“We don’t understand at the moment who will be involved in the pool, and who it will cover.”

The senator said it was time for the government, including Herbert MP Phillip Thompson, to “roll up their sleeves” and get on with the job.

Mr Thompson said it would take time to get the reinsurance pool right.

“We have consulted with hundreds of businesses, organisations and individuals across North Queensland and expect the draft legislation to be released publicly within weeks,” he said.

“I’d encourage the Senator to make practical representations that are outcomes focused rather than continually flying into Townsville seeking cheap headlines that benefit no one but herself.”

Labour hire woes in DVA leads to calls for overhaul

LABOR is calling for an overhaul of how the Department of Veterans Affairs is staffed after a damning report was released into its labour hire culture.

A Senate committee looking into the current capability of the Australian Public Service has found DVA’s reliance on labour hire is damaging public service capabilities.

The Senate committee found there were serious issues with unsustainable caseloads for staff, poor job security for large numbers of the workforce, a high staff turnover and a reduction in productivity.

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Community and Public Sector Union national secretary Melissa Donnelly told the Senate hearing: “The high workloads, combined with the lack of job security for labour hire staff, result in a revolving door, with high turnover, loss of corporate knowledge and lots of resources being deployed to train new, incoming labour hire staff.”

Shayne Neumann

Opposition spokesman for DVA Shayne Neumann and Senator Tim Ayres are calling for the government to invest in a permanent, well-trained public service workforce to help deliver the services veterans need.

“The report’s case study on DVA found that it has the largest proportion of labour hire contractors of any government department: 33.4 per cent of the total departmental workforce as of April 2021,” the two Labor politicians said in a statement.

“Evidence given to the committee found that DVA used 46 separate labour hire providers in 2019-20 at a cost of $82.1 million. At that stage, 41.6 per cent of the department’s workforce was labour hire, including over 50 per cent of frontline claims processing staff.”

The statement said replacing public servants with external labour hire contractors had a “disastrous” impact on services for veterans.

“The average processing time for initial liability claims is now 193 days – more than double the 90-day deadline outlined in the Military Rehabilitation and Compensation Act 2004. Research commissioned by the department shows that delays in processing compensation claims has a direct impact on the mental health of claimants,” they said.

“Additionally, the use of labour hire contractors to process some of the most vulnerable and complex cases has created concern that veterans are not receiving the quality of services that they need. This sensitive work requires a well-trained and stable workforce that is undermined by the use of short-term contract staff.”

War medals worn on Anzac Day by war veterans.

A DVA spokesman said the blended workforce allowed the department to respond quickly to changes in workload and engage specialists to deliver specific projects or initiatives.

“Our contracted staff work hard and are passionate about serving veterans and their families,” he said.

“All DVA staff are unwavering in their commitment to supporting the veteran community, and we reject any assertion that our contracted staff are somehow less capable or not as committed as our APS staff. This is simply not true.

“Many DVA staff have either served in the ADF themselves or are a family member of current or ex-service personnel.”

The spokesman said the 2021 budget had also provided an additional $98.5m over the next two years to support the department’s claims capacity. The funding would allow for an additional 446 public service positions, of which, 355 had been filled.

“As noted in the report, the number of claims DVA has received has more than tripled in recent years and contracted workers are a critical part of ensuring we can continue to meet the needs of the veteran community,” he said.

“Despite this, the median processing time for initial liability claims lodged under the Military Rehabilitation and Compensation Act 2004 has reduced from 214 days in 2020-21 to 200 days now.

“The department has implemented a range of initiatives to respond to the growth in demand, including allocating older and more complex claims to the most experienced delegates and providing increased training to build the capabilities of more delegates to assess complex claims more quickly.”

He said the additional funding would help with reducing the claims backlog. 

Originally published as Insurance companies need details on $10bn reinsurance pool