Media Release

INSURERS are failing to pass onto community groups the windfall gains brought by public liability insurance legislative reforms, a survey of Victorian groups has found.

The survey conducted by www.ourcommunity.com.au found that 92 per cent of the community groups had not experienced any drop in insurance premium prices over the past two years. In fact 62 per cent of respondents to the survey said their insurance premiums had risen while 30 per cent reported they had not changed.

Almost a quarter (23 per cent) said premiums had risen by more than 20 per cent.

Only eight per cent of respondents reported a fall in the cost of their public liability insurance premiums - a finding which is at odds with claims by insurers and the ACCC that premiums had dropped by an average 15-17 per cent.

The survey also found that more than 94 per cent of the 275 groups in the survey had not had a claim against them in the past five years, mirroring a similar result in an Our Community survey of over 1000 groups in 2002.

Other findings included:

• Only 8 per cent of the groups did not have any insurance - which was down from 17 per cent at the height of the public liability crisis in 2002.
• One in 10 groups said they had been forced to curtail or cancel some form of activities or events as a result of not being able to obtain or afford insurance.
• A further 12 per cent of respondents have amalgamated or joined with other groups due to problems associated with insurance in the past four years.
• 93 per cent of the groups who responded to the survey had been in operation for more than five years with 84 per cent in existence for more than 10 years.
• 30 per cent of groups survived on less than $5000 a year with a further 29 per cent having income of between $5000-25,000.

The survey unearthed one group running a country show in existence since 1886 which saw their quote for insurance costs rise from $467 to over $1100 this year. They are currently uninsured.

Dr Rhonda Galbally AO, the CEO of ourcommunity.com.au, a resource centre for Australia's 700,000 community groups, said it was high time the insurance industry shared the windfall gains they had won through legislative reforms.

Dr Galbally said the Victorian Government had led the way in dealing with the public liability insurance crisis and providing risk management information and support for community groups across the State. The Government was instrumental in developing the Community Group Insurance scheme, run by the Municipal Association of Victoria and Jardine Lloyd Thompson, which had provided coverage for hundreds of festivals, events and community groups that were unable to access affordable cover from other insurers.

"The Victorian Government - indeed all Governments - provided the legislative reforms. The insurance industry has been quick to reap the rewards but as this survey shows, they have been slower in passing on the full benefits to community groups," Dr Galbally said.

"The Government has acted and now it is time for the insurance industry to deliver lower premiums that truly reflect the low level of risk posed by community groups."

Dr Galbally said the survey showed that the price monitoring by the Australian Competition and Consumer Commission needed to be changed so that the results distinguished between the community and business sectors.

"When community groups are paying up to half their annual income in public liability insurance they get pretty annoyed listening to the insurance industry telling them that everything is fine," she said.

"The insurers are enjoying booming share prices and record profits. It's time community groups stopped paying so much for their public liability insurance."