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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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Insurance Costs SKYROCKET as Foreign Corporations Profit

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How much has your insurance increased? For some, insurance costs have increased by as much as ten times. While many insurance companies operate under Australian brands, they are actually controlled by foreign multinational investment funds like BlackRock, Vanguard, State Street, and Goldman Sachs. These foreign entities influence our government to push climate change propaganda, which they then use as an excuse to drastically increase insurance premiums.

Only One Nation can be trusted to say no to the foreign corporate cartel, ensuring more affordable insurance for Australians.

Transcript

My question is to the Minister representing the Minister for Financial Services, Senator Gallagher. Minister, Australians opening insurance renewals have been falling off their chairs. Brendan O’Malley from the Courier Mail reported in September that a homeowner on Cheviot Street in Brisbane had their insurance bill increase from $3,000 to $32,000 a year—more than 10 times. Queensland’s Suncorp Bank profited $379 million last year, while Suncorp Bank’s insurance division made a whopping $1.2 billion profit, more than triple that of their banking business. Why is your government letting insurance companies rob Queenslanders? 

Senator GALLAGHER: I don’t accept the proposition that Senator Roberts has put as part of his question. But I do accept and understand that insurance affordability is a real issue for Australian households and businesses, and it is something that the government is concerned about. You see in the inflation data that one of the big drivers of inflation is the costs around insurance. There are a number of reasons insurance premiums have increased in the last 12 months—it’s due to a range of factors—but I think Senator McAllister was talking about this earlier in the week. There have been more frequent and more intense hazard events, price inflation is making it more expensive to repair damages, and there is the global distribution of risk by reinsurers, which are having to cover the costs of earthquakes in New Zealand and hurricanes in Florida—that all has an impact on costs here. The government has established an Insurance Affordability and Natural Hazards Risk Reduction Taskforce within PM C to address the impacts of climate change and inflationary pressures that are driving up the cost of insurance. We are looking at what further steps the government can take, working with industry and stakeholders through the taskforce, including some things the insurers always raise this with me: risk mitigation, land use planning and other near-term opportunities to address affordability. 

The PRESIDENT: Senator Roberts, first supplementary? 

That insurance bill that I talked about before went up because Brisbane City Council published new climate scaremongering flood maps. The street never had a problem with flooding yet was included in a new zone marked for a one-in-2,000-year climate change doomsday flood. Minister, why are you letting insurance companies use baseless climate change scaremongering as an excuse to gouge billions at the expense of Queenslanders? 

Senator GALLAGHER: As I said in my previous answer, there are a range of drivers impacting on the cost of insurance. Some of it is around local hazardous events that we’ve had, including floods, and including floods in Brisbane and other areas of Queensland. But there are other reasons, like price inflation and like the reinsurance market, which is being affected by those big, global natural disasters that we’ve been seeing. Some would say—and I would say—these are caused by climate change. I accept that you might not agree with that. In relation to land use planning, that has been subject to a number of inquiries and reviews post the flooding, particularly in areas like Brisbane. Land use planning zoning maps have changed to reflect some of the risk associated with that, and that would feed into premiums not just in Queensland but around the country. 

The PRESIDENT: Senator Roberts, second supplementary? 

Foreign insurance companies own these insurance companies in Australia. Foreign multinational, global wealth funds and corporates like BlackRock, Vanguard, State Street and Goldman Sachs are the largest and control shareholders. Insurance is expensive, and the money goes overseas. Minister, why aren’t you doing anything to stop these insurance companies gouging Queenslanders and sending the profits overseas to multinational, global investors? 

Senator GALLAGHER: Certainly, I’ve already alluded to the fact of global distribution of risk by reinsurers. You talk about them. The global reinsurers affect the price of insurance here, as they do in other countries around the world. But I do not accept that we are not taking any action. We have established this taskforce to look at what further steps we can take to build on existing work, including in areas like risk mitigation and land use planning, as well as other steps to deal with some of these affordability challenges. This is a challenge not just in Queensland but around the country. 

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The Australian Financial Complaints Authority Faces Scrutiny

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The Australian Financial Complaints Authority (AFCA), an independent industry-funded agency, handles complaints concerning financial losses due to actions by banks, insurance companies, or superannuation funds. While AFCA has a reputation for avoiding complaints rather than addressing them, their recent accomplishment of collecting $300 million for members of the public affected by financial misbehaviour is a good result.

My questioning of AFCA didn’t start smoothly, as CEO David Locke seemed unaware that the AFCA website explicitly asks that individuals with concerns about a code of practice to submit them via the form provided, as part of their role overseeing the Banking Code of Practice review body, the BCCC.

It took until around the 2 minutes 52 seconds mark to receive a response to what, I thought, was a straightforward opening question. Subsequently, I pursued questions regarding AFCA’s success rates. A significant portion of their response was taken on notice, so I look forward to receiving their answers.

Transcript

Senator ROBERTS: Your website invites consumers to lodge a complaint regarding the operation of a code of practice. How many such complaints have you received on the Banking Code of Practice?

Mr Locke: We receive complaints where a consumer has a contract with the bank and they have suffered financial loss. Then they can bring a complaint through to AFCA. So the matter is really if, for example, the bank has failed to comply with its legal obligations or they’ve suffered loss through some misconduct or inappropriate action on the part of the bank. We have to determine what’s fair, and, in looking at that, we have to have regard to the banking code. That’s how the banking code comes into effect. We had 56,000 complaints about banks and other credit lenders last year. In terms of a freestanding complaint about the banking code, though, that would normally go through to the Banking Code Compliance Committee, which is a separate body, and their role is to enforce the banking code. The banking code is relevant to us in our jurisdiction and we do look at it, but, if it’s just about a financial firm breaching the banking code obligations on its own, then that would be a matter that would go through to the Banking Code Compliance Committee.

Senator ROBERTS: So you would only field the complaint if it was a breach of the banking code?

Dr Smith: We can take complaints about breaches of the banking code if the consumer can show that there has been a financial loss suffered as a result of that breach or indeed that they have suffered non-financial loss as a result of that particular breach. For example, a breach of the provision under the banking code related to guarantees and whether or not the guarantor was fully informed of their rights before they entered into that guarantee might be a matter that we would take as a complaint.

Senator ROBERTS: So, if someone was just concerned about a potential change or a possible change in the banking code, which is coming up, they would not be lodging a complaint with you?

Dr Smith: The conduct needs to have occurred. But, in terms of future issues, there has obviously been a recent review of that code and no doubt that person could also voice those concerns to the Banking Code Compliance Committee.

Senator ROBERTS: Have you had any communication with the Australian Banking Association regarding their review of the banking code?

Mr Locke: Yes. We were consulted in a fashion by the Australian Banking Association in the course of their review. They commissioned an independent review of the banking code, which was carried out, and then they undertook an informal consultation process with a number of bodies, including us. Following that, they approached the Australian Securities and Investments Commission for approval to change the banking code. This is a code that has been approved by ASIC, so any changes need to be approved by ASIC. ASIC decided to undertake its own consultation, and we participated in that and made a submission to it as well. So we’ve engaged with the ABA and we’ve engaged with ASIC with regard to the ABA’s review.

Senator ROBERTS: On notice, could I get a copy of your comments to the ABA and ASIC, please.

Mr Locke: Certainly. We’ll take that on notice. We have made a public submission, and it’s available on our website, but we can certainly send the link through to your office.

Senator ROBERTS: From the data on your website, for the year 2023, the number of complaints resolved in favour of the complainant was only 31 per cent, with 69 per cent in favour of the bank or financial institution. However, only five per cent of complaints reached the decision stage. Some were rectified early on and some were refused process. Of the complaints over banking disputes—just banking—how many complaints were received, how many were resolved in favour of the complainant and how many were withdrawn for 2023?

Mr Locke: I can provide all those details on notice, Senator.

Senator ROBERTS: That’s fine.

Mr Locke: What I can tell you is the way our process works. A consumer will have gone through an independent dispute resolution process with the bank and then come through to AFCA. AFCA sends it back to the bank for them to have one last opportunity to resolve the matter before we otherwise start working on it. What we’re finding is that about 65 per cent of the time the banks resolve the matter at that point.

Senator ROBERTS: Once you step in?

Mr Locke: Yes. Obviously we would prefer for that to have been done and for people not to have to come to AFCA, but we’re finding that 65 per cent of the time there. What we then find is that we are able to resolve the majority of cases through our case-working process—through mediation, through recommendations and through negotiation. Only about five per cent of matters actually go through to decision. What you will see is that the matters that resolve when we go back to the bank or the matters that resolve through our processes—that is a situation where the consumer is effectively happy with the agreement that they’ve reached with the bank. So you would expect that the small number that go through to determinations are probably the ones where it’s more contentious, more of a binary decision. You would expect that, where the consumer had a better claim, the banks would have resolved the cases earlier in the process. But I can set all of that out on notice so you’ve got that.

Senator ROBERTS: Could you also break down the information into value groups so that I can see the success rate at progressively higher amounts of claim. My feedback is that AFCA are great at getting back $1,000 but not so good at getting back $100,000. The banks’ clutches are maybe a bit stronger.

Mr Locke: I’ll certainly provide you with whatever we have in terms of the breakdown. Last year our work secured $304 million in compensation and refunds for consumers and small-business owners, but we can give you the amounts that relate to that. I don’t think it is the case that it’s just lower value amounts that have been settling. We do settle a number of matters where the settlement is in the hundreds of thousands of dollars. We’ll provide you with some information on that.

Senator ROBERTS: I’m hearing settlements are a fraction of the claim but the complainant accepts something rather than nothing. On notice, of all complaints settled on behalf of the complainant, what was the value of claim verses the settlement accepted or awarded?

Mr Locke: I don’t think we would have that information, but I can certainly let you have the information that we have available.

Mr Untersteiner: The challenge with that is: if something is settled between the parties before it goes to determination, there’s no obligation for them to disclose to us what the settlement was, so we typically won’t have visibility. We have some visibility, and, on notice, we can share with you what we do have, but it will be a small cut of the overall data.

Mr Locke: There are three cohorts that I talked about. The first cohort, when we go back to the financial firm, is given an opportunity to resolve. We don’t normally know what the resolution of that matter is. We just know the consumer’s happy and doesn’t want us to do anything further. That is what we call IDR data, internal dispute resolution data. The firms have, since January, had to report that through to ASIC, so ASIC would have some of that data. The data that we will have are those cases that don’t resolve and that are then resolved through our caseworking process or the matters that go through to decision, which you have mentioned. With regard to that, I can certainly provide that.

Senator ROBERTS: Thank you very much, if you could do that. When AFCA were set up, you were allowed to go back to 2012 to take on older cases. On notice, of all banking cases referred to you for the period 2012 to 2018 for an amount over $200,000, how many were resolved in favour of the complainant, and what was awarded as opposed to what was claimed?

Mr Locke: I will take that on notice. I think, in total in that look-back jurisdiction, if I recall right we had just under 1,500 cases. A majority of those did relate to banking and credit matters. We will certainly take that on notice and provide you with what information we can.

Senator ROBERTS: Thank you. Finally, for that group of claims, are there any claims still outstanding from 2012 to 2018?

Mr Locke: No. They’ve all been dealt with.

Senator ROBERTS: Great. Thank you. The next question is about your administration. Are you still closing your office at 2 pm on Wednesdays so the staff can go home in the name of productivity?

Mr Locke: We don’t close the office, but we do give staff—it’s effectively a bit like compressed hours—three hours to spend on wellbeing or to use for their time. This was an initiative we trialled during COVID, when we were seeing a lot of burnout and stress amongst our people. We discussed it with our people. We didn’t change any of our productivity measures, so the same amount of work had to be completed within the five-day week as was completed with this three-hour period. What we actually found was that productivity increased, and we’ve found that’s continued to be the case. We actually have higher levels of productivity now than at any time in the operation of the organisation, by caseworker. We found giving people that small amount of flexibility has actually made sound business sense. The initial intent behind it was about wellbeing, particularly when we were seeing a lot of and stress and challenges during lockdowns. Of course the majority of our staff are Melbourne, and they had prolonged lockdowns at that time. But what we’ve actually seen is that productivity has increased and continued to increase. So that is something that we do, but we don’t close the phones. It is an optional thing. Many staff work during that period but use it just for quiet time without interruption, but some staff use it to pick up the kids or to look after older relatives or to arrange appointments. As I said, the same amount of work has to be done during the working week.

Mr Untersteiner: I’ll just add that we did measure and we saw our attrition rates drop, we saw absenteeism drop, we saw productivity go up, we saw cost per complaint go down and we’ve seen employee engagement go up. Just from a general business initiative and a cost perspective, it’s been cost positive.

Chair: I need to share the call, Senator Roberts. Do you have another question?

Senator ROBERTS: I can put two on notice, but I’ve got one final question. Are financial institutions afraid of AFCA, or do they see you as another pesky bureaucracy that needs to be surmounted or brushed aside?

Mr Locke: Well, I hope—

Senator ROBERTS: I know you said 65 per cent of complaints are resolved.

Mr Locke: I can’t speak on behalf of—there are 44,000 members. About three-quarters of those are people who have ACRs, and the remainder are different firms with Australian financial services licences. I don’t think there’s any unified view with regard to that. What I hope, Senator, is that financial firms recognise that we play an important role. We do our utmost to act independently and fairly to determine intractable matters that otherwise people would presumably be coming to their elected representatives for or going to the media about. We seek to give people closure on matters, whether that goes in their favour or not. We act in accordance with the rules, and we apply our fairness jurisdiction in accordance with the way that we articulate there. I don’t seek for anybody to be afraid of us. I hope that industry see us as playing a constructive and useful role and recognise our legitimacy, but I hope that they also recognise that we will call matters as we see them and we will treat all parties fairly and independently. That’s our role as an alternative to the court system.

Senator ROBERTS: Could you take on notice if there’s any sign, evidence or statistic that reflects that the financial institutions respect what you’re doing.

Mr Locke: I’ll take that on notice.

Senator ROBERTS: It’s a difficult one.

Mr Locke: It’s a difficult one for us to answer really.

Senator ROBERTS: It is; I accept that.

Mr Locke: We hope that parliamentarians, financial firms and people who act on behalf of consumers, whether that’s law firms or consumer bodies, respect the role that we play and believe that we do that to our utmost ability.

Senator ROBERTS: Thank you

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