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Insurance Profits Soar While Australians Struggle

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During Senate Estimates in October, I raised an issue that’s hurting Australians — insurance costs.

Health Insurance: Private hospitals across Australia are under extreme stress because of funding shortfalls from insurers, yet those same insurers are posting record profits — over $5 billion. Why are hospitals being starved while insurers rake in billions?

The ACCC Chair acknowledged the challenges but said they haven’t actively investigated this. She noted that private hospitals face rising costs and tough negotiations with a small number of insurers — a clear sign of limited competition.

Home and Car Insurance: On paper, there are 11 home insurers, many just brands under the same company. Suncorp owns AAMI and Apia; CGU and NRMA are both IAG. That means only eight real players. Car insurance is even worse — 12 brands, yet only six actual companies. When I asked the ACCC if this lack of competition worried them, they expressed their concern and said that they’re reviewing IAG’s proposed acquisition of RACWA because it could remove an important competitor.

Australians are furious about insurance premiums skyrocketing in areas that have never flooded, and never will, based on speculative climate change claims. Insurers argue that future flooding risk justifies massive hikes, even though extreme weather trends are flat. I asked if the ACCC has looked at how insurers justify these increases in a low-competition market. The answer? No.

All five publicly listed insurance companies share the same major shareholders — BlackRock, Vanguard, State Street and Norges Bank. These global asset managers hold significant stakes across insurers and banks. I asked if the ACCC considers the impact of these interlocked holdings. They said they’re aware of the investors yet will only act if they see evidence of coordinated conduct.

— Senate Estimates | October 2025

Transcript

CHAIR: Senator Roberts.  

Senator ROBERTS: Insurance is the second most painful item on the consumer’s shopping list after groceries. There’s a lot of pain. I’ll go to the hospital aspect and then to the competition aspect. Private hospitals across Australia are under extreme stress because of funding shortfalls from the health insurers. We’ve been told this by many. Why are private hospitals being starved out of existence when the health insurers have recently recorded record profits of more than $5 billion?  

Ms Cass-Gottlieb: There will be a number of factors there. They’re not questions, I believe, that we have actively looked at. Some relate to the level of competition among private hospitals, but they need to negotiate with a small number of private health insurers. That leads to difficulties for them in that bargaining situation. We’re also aware that the private hospital sector, from recent events, has been facing significantly increased costs at the same time as they are having to undertake complex negotiations in relation to coverage from private health insurers.  

Senator ROBERTS: What I’ll do is I’ll go to the lack of competition that you talked about with the insurance companies and come back to this and the hospitals. There are 11 companies in Australia offering home insurance. We’re going away from health to home. Of these, Suncorp, AAMI and Apia are the same entity and CGU and NRMA are the same entity, meaning there are only eight companies offering home insurance. Is that what you meant by limited competition in insurance?  

Ms Cass-Gottlieb: There I was particularly talking about health insurance. But you are right that, partly as a result of prior acquisitions, a number of the groups have multiple brands, but it’s actually one insurance company behind it.  

Senator ROBERTS: Similarly, there are 12 insurance companies doing car insurance. IAG owns CGU and NRMA and has underwriting ties to RACV. Separately, Suncorp, AAMI, Apia, Bingle and GIO are all the same entity. This means there are only six companies in the car insurance market hiding behind several different logos. So it’s the same. Are you worried about the lack of competition in the retail insurance market?  

Ms Cass-Gottlieb: We are certainly very focused on this. We currently are assessing, under the informal merger assessment regime, a proposed acquisition by IAG of the RACWA, which is the Western Australian Royal Automobile Club. We have put out for public response a statement of issues concerned about the removal of the Royal Automobile Club. Our preliminary view set out in that statement of issues is that they provide a very important competitive constraint.  

Senator ROBERTS: We know that, in the home insurance market, insurance companies are putting up premiums on homes and businesses in areas that are supposedly affected by flooding despite never having flooded. In fact it will never flood. The argument is that, owing to climate change, which we’re told is coming sometime in the future, your property is now likely to flood, so premiums are going up, and they’re going up exponentially. I wonder if you use flags like these. Suncorp is making so much money out of insurance that it sold its bank in order to grow its insurance business. That tells you how profitable it is. Have you looked at the basis on which insurance companies are increasing premiums in a low-competition environment using specious claims of global warming when extreme weather events have not changed? There’s been no trend. It’s just flat.  

Ms Cass-Gottlieb: We haven’t looked at that specific issue, no.  

Senator ROBERTS: The answer for people is not to change insurance companies—they can’t, because they’re all the same. They’ve got similar policies, similar conditions and the same shareholders. Specifically, all five publicly listed insurance companies in Australia have the same shareholders. I’m not trying to verbal you, but I think I asked you if you had heard of BlackRock, and you said no. Was it you?  

Ms Cass-Gottlieb: We have heard of BlackRock.  

Senator ROBERTS: Maybe I misunderstood. That’s why I checked; I don’t want to verbal you. The most notable common shareholders across all five entities based on top 10 holdings are BlackRock, a global asset manager which owns five to eight per cent of insurance companies. With State Street, it’s the same deal. They’re a global adviser with six to 16 per cent. That’s even more. Vanguard Group is the same type of entity, with five to six per cent. Norges Bank Investment Management has only two per cent, but they have a combined controlling interest, and these funds apparently are interlocked. Are you aware of these significant holdings that basically control our insurance companies?  

Ms Cass-Gottlieb: What you are describing in terms of global funds managers and global funds does not surprise me in relation to who would look to invest in insurance companies. As to your comment that they’re interlocked, a number of those will be operated and will be advised and managed independently. It’s possible what you’re referring to is that they have either financing or shareholding agreements relating to the particular investment. Those elements are not ones that we would be aware of.  

CHAIR: Senator Roberts, do you have many more questions?  

Senator ROBERTS: I can put some on notice.  

CHAIR: That would be great.  

Senator ROBERTS: I just have a couple more questions. Are you aware that the banks are similar to the insurance companies—Westpac, NAB, ANZ, Commonwealth? Basically we’ve got one bank, it seems, owned by the same controlling shareholders, the same entities that I just mentioned. We have four banks that hide behind four logos, but they have similar policies, similar conditions, similar products and similar strategies. They’re effectively controlled by BlackRock, Vanguard et cetera.  

Ms Cass-Gottlieb: In relation to the four banks, I’m also aware that there are both individual Australian shareholders and Australian super fund investors in them as well.  

Senator ROBERTS: Is there any consideration given to investigating BlackRock’s behaviour, for example, or State Street’s, Vanguard’s or Norges’s and their connections with each other?  

Ms Cass-Gottlieb: Where there are situations where the ACCC sees both common shareholdings and interlocking directorships, we take that into account if we see conduct that we think indicates concerted action, but we would need to see conduct that we considered indicated concerted action between the relevant companies.  

Senator ROBERTS: I’ll put five questions on notice.

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Should we let bad banks keeps abusing virtual AGMs? Australian Securities and Investments Commission at Senate Estimates

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Annual General Meetings of large companies have almost always been held physically. This changed with COVID when the use of Virtual AGMs was authorised. Virtual AGMs were necessary when the country was plagued by lockdowns, but now as restrictions ease big companies such as banks are desperately trying to hold on to them.

Virtual AGMs allow the big banks to shut down investor questions and avoid scrutiny on important topics like the huge salary bonuses of top executives. AGMs that used to take an entire day because of questions from investors are now being sailed through in just a couple of hours.

I believe in the free market and to have that we must have confidence in the stock market. Physical attendance at AGMs for those investors that want it is a fundamental part of maintaining that confidence in the stock market and the companies in it.

Transcript

[Senator Roberts] And thank you all for attending today. The corporation’s coronavirus economic response determination number three, 2020, provided the basis for virtual AGMs. ASIC have replaced that determination, which expired this week with order 21-056 MR, which takes a no action position on virtual AGMs. Does this mean that corporations can run a virtual AGM with no restrictions coming from ASIC?

[Commissioner Melina] Senator, hopefully I can help you with that. In relation to this, there is a bill that parliament is considering about a full-time permanent change to the law to allow virtual AGMs, but that bill is still in committee and being considered.

[Senator Roberts] That was the rule of the Senate to extend it.

[Commissioner Melina] Yes, exactly, exactly. So in light of the fact that the pandemic, whilst we’ve operated very effectively nationally in the pandemic, but there is still some uncertainties about the pandemic for companies whose balance dates, for example, after December 31, this year, they have five months to have their AGM. In light of that fact, we think that it is reasonable given that there are still some restrictions of movements for companies to temporarily, until we hear, and it is temporary, but until we hear how parliament intends to pursue that matter, have an opportunity to, if they need to hold a virtual AGM to comply with various restrictions, wherever they may be located. Now, it is only a no action position. We don’t have the power to amend the law in this area or make any more permanent situation. But we are intending to give guidance to companies about what’s important. If they do need to take advantage of having a virtual AGM to ensure really the safety of their shareholders, their employees, and their staff. We are working to ensure that we give enough guidance about what’s necessary, so that people have an opportunity to ask questions of the chairs.

[Senator Roberts] So you’re saying this is temporary.

[Commissioner Melina] Temporary, absolutely.

[Senator Roberts] When will it expire?

[Commissioner Melina] We intend to revisit it once we, one, if the pandemic conditions change dramatically and two, once we hear more how the Senate and the parliament are considering this particular issue.

[Senator Roberts] So why couldn’t you’ve extended it until September 30th?

[Commissioner Melina]Well, we weren’t feeling comfortable about doing that because we were, my understanding and please correct me because I’m not so familiar with parliamentary time-tabling but my understanding was it’s possible that this bill could be determined before then. I understand the committee that is considering it is due to report at the end of June. So we did want to take our lead from the decisions of parliament. We’re not interested at all in-

[Senator Roberts] So the intent is temporary, but there’s no deadline.

[Commissioner Melina] And we could announce in a month or two, you know, it’s no longer applicable, but we want to give companies the opportunity to plan. These events do require a bit of logistics.

[Senator Roberts] Were you happy with the outcome of the trial of virtual AGMs?

[Commissioner Melina] Generally, there were some instances where we received complaints about how those, on some occasions, how questions were dealt with, but generally we were reasonably happy, and we’re able to go back and talk to chairs and companies about the particular issues.

[Commissioner] Senator, I just wanted to emphasise what Commissioner Melena just said, that the dialogue, the ongoing dialogue, which we had with the director community and the corporate community was very constructive so that we saw improvements taking place, as this was operationalized by companies in that initial no-action period.

[Senator Roberts] Okay my experience and the feedback we’ve got is quite the opposite. Companies are using virtual AGMs to disenfranchise activist shareholders. And these tactics include sending activist shareholders a wrong entry code. So they can’t access the virtual meeting room. Accepting questions on notice and then not reading them out, not calling on shareholders who they know will ask difficult questions and switching off shareholders, who were asking difficult questions. So this is why virtual AGMs went to an inquiry. So you’re basically invalidating the process.

[Commissioner Melina] Well, Senator we would be very happy to take those points on board and review them ‘cos that sort of feedback is very helpful.

[Commissioner] Yeah, we are interested in following up that sort of feedback.

[Senator Roberts] It does become a great way to manipulate annual general meetings and shareholders. American shareholder organisations are stating just that. So I understand the benefit for small companies to have virtual only AGMs, if shareholders agree before every AGM. But are you really saying that 100% virtual is acceptable for large companies like the banks and Crown Casino, who featured strongly in complaints to my office? And in addition, it seems like some of these companies want to shut down the problems, but that only defers it, because they eventually pop up, and then it becomes more embarrassing.

[Commissioner] Senator the points that you’re raising, we will certainly take on board, but just to confirm and this is explicit in your question. This is a temporary relief, we’re waiting on parliament. And certainly we will take those points on board but it strikes me that these are issues for Parliament’s consideration.

[Senator Roberts] Okay, thank you. Going to Banking Code of Practise. The enforceable code provisions, particularly, how close are we to seeing which provisions of the Banking Code of Practise will be enforceable?

[Commissioner Hughes] Morning Senator. Sean Hughes-

[Senator Roberts] Good morning.

[Commissioner Hughes] Commissioner at ASIC. Thank you for your question. The current version of the code, which we approved in January, which came into effect on the 1st of March does not contain any enforceable provisions. The changes that were approved by us in January are essentially minor in nature. We are however waiting to see the outcomes from the ABO’s triennial review of the code, which commences in June, that will also include a consideration of the small business threshold definition with the reviewer recommending an increase of that definitional threshold from $3 million to $5 million. At that point in time, I’d suggest Senator that we would revisit to the issue of enforceability in relation to any provisions of the code.

[Senator Roberts] So what date after June?

[Commissioner Hughes] So they’re commencing the triennial review in June.

[Senator Roberts] So at the moment, ASIC doesn’t have any provisions it wants to see as enforceable?

[Commissioner Hughes] The position in relation to enforceable code provisions, Senator is that the relevant body in this case, the ABA needs to apply to ASIC to say whether any provisions should be made enforceable. No such provisions were nominated to us and having considered it, we didn’t believe that any needed to be made enforceable at this point in time. As I say the changes that we approved in January were relatively minor and technical in nature. We would prefer to revisit the question of enforceability post the triennial review in June.

[Senator Roberts] So basically at the moment ASIC is waiting for the banks to tell them what to do.

[Commissioner Hughes] That’s not the case at all Senator. We have not identified any enforceable provisions in relation to the minor and technical changes to the code made in January.

[Chair] Senator Roberts, two more questions.

[Senator Roberts] Yes, exactly that, two. Going to unconscionable conduct. My question relates to this week’s judgement of the full bench of the Federal Court in the Kybolt Case which saw a substantial change in the definition of unconscionable conduct. Unconscionable conduct is contained in section 12CB of the ASIC Act. Will ASIC assist Corporate Australia to meet the lower standard of proof this offence now carries by way of a regulatory document or note or report?

[Commissioner Hughes] Senator I’ll take that question as well. We are aware of and have followed the decision of the High Court in relation to that proceeding that was commenced by the ACCC. And we’re revisiting the extent to which that may have an impact in enforcement actions that we are running. But as you rightly point out, Senator, that’s a very fresh judgement from the High Court. And I can’t make predictions as to what we will do in relation to future litigation matters at this stage.

[Senator Roberts] Will you be assisting Corporate Australia though to understand this component?

We will certainly continue to inform and educate Corporate Australia as to the impact of that decision. As I know, the ACCC will do, and we will be discussing with colleagues across the law enforcement agencies the benefits and the implications of that judgement .

[Senator Roberts] Last question. Well, it’s not a question, actually it’s a statement. May I compliment ASIC for its enforcement history on unconscionable conduct cases against the major banks. And I look forward to this judgement making your job even easier.

[Commissioner] Thank you, Senator.

[Commissioner] Thank you, Senator.

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