December 2003 - Two years of enormous industry change
This is the final president's page I will write for AILA News. My term ended in November, and I am relinquishing the post to my successor.
Over the past two years, it has been my pleasure and privilege to serve as AILA's president. That time has seen almost unprecedented upheaval in the insurance industry, both in Australia and worldwide. When I first took up the post, the September 11 terror attacks were at the forefront of world affairs. While many commentators at the time predicted the attacks would "change the world", who could have foreseen just how much it has changed?
From a relatively sedate and "soft" insurance market at the beginning of 2001, we have witnessed major corporate collapses, the number of insurers writing certain lines of business contracting, and rates hardening across the insurance and reinsurance markets. In Australia, we have also seen the emergence of the so-called "public liability crisis", although many lines other than public liability were affected.
For the industry, the "crisis" saw several legislative measures passed, designed to assist in keeping the cost of public liability insurance affordable. As a result, we now operate in a vastly different environment to that which existed in 2001. The way business is written has changed and claims are processed in a very different (and hopefully quicker) manner than was the case previously.
Lately, talk of a "crisis" has spread to the health care industry with doctors threatening not to elect to practise rather than pay hefty increases in their medical indemnity insurance.
It is no coincidence that both the public liability and medical indemnity markets have seen the collapse of major players over the past two years. The relationship between stability and affordable rates cannot be ignored. Indeed, further legislative changes in that area have already occurred, and more are in the pipeline. Those changes are designed to bring a long-term solution. In the future, it will be interesting to see if the redirection of individuals' rights will in fact lead to a greater benefit to the wider community.
While the challenges faced by the industry during my presidency have been great, it is heartening to see that the industry has reacted positively and decisively to them.
I wish my successor as president well. I am sure the role will present its own unique challenges in the months and years ahead but, if my time is anything to go by, the rewards will be far greater.