MTAA Calls on Insurers to Return What They Didn't Earn
Medical Technology Association of Australia (MTAA) has called on the Government to force insurers to return profits gained during the COVID-19 pandemic to their members.
MTAA CEO, Ian Burgess, said that while the COVID-19 pandemic has caused financial stress for many Australians, the data released today by the Australian Prudential Regulatory Authority (APRA) has revealed that COVID has been a boon for big corporate insurers.
The quarterly report from the APRA shows the big insurers’ profits continued to soar in the year to 30 June 2021.
Between June 2020 and June 2021 insurers’ net investment income rose a staggering 313.2% ($146.2 million to $603.9 million) and their net profits are up 93.7% ($754.0 million to $1.5 billion).
According to APRA, these gains are likely due to a number of factors, including growth in premiums and lower than anticipated claims.
“There is no doubt that insurers profited from the pauses put on elective surgery in 2020 to the tune of $1.4 billion in deferred claims which they are still hoarding,” Mr Burgess said.
“MTAA does not believe that insurers should profit from this difficult but necessary decision, which delayed access to needed surgery for thousands of their members.
“Over the past four years insurers will have benefitted from an estimated $1.2 billion in savings due to device price reductions delivered by the medical technology community as part of MTAA’s 2017 Agreement with the Federal Government.
“Unfortunately, there is no evidence that insurers have honoured their commitment to pass these savings onto their members.
“MTAA welcomes the clear statement from APRA that insurers should not gain financially from COVID-19. But based on past experience we fear this COVID windfall will disappear into the corporate coffers of insurers and never be returned to members.
“That’s why we’re calling on the Government to explore all legislative and regulatory options to ensure the COVID windfall insurers’ have pocketed are returned to members and not used to increase management bonuses and shareholder profits.”
