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Economics References Committee
Australia's general insurance industry

ROLFE, Mr John, Private capacity

Committee met at 09:27

CHAIR ( Senator Ketter ): I declare open this public hearing of the Senate Economics References Committee. The committee is hearing evidence on its inquiry into Australia's general insurance industry. The Senate referred this inquiry to the committee on 22 November 2016 for report by 22 June 2017. I welcome you all here today. The committee has received 22 submissions so far, which are available on the committee's website. This is a public hearing and a Hansard transcript of proceedings is being made. I remind all witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to the committee and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee.

The committee prefers all evidence to be given in public but, under the Senate's resolutions, witnesses have the right to request to be heard in private session. It is important that witnesses give the committee notice if they intend to ask to give evidence in camera. If a witness objects to answering a question the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may of course also be made at any other time. On behalf of the committee, I would like to thank all those who have made submissions and sent representatives here today for their cooperation in this inquiry.

I welcome Mr John Rolfe. Thank you for appearing before us today. I invite you to make a brief opening statement, should you wish to do so, and then we will open it up for questions.

Mr Rolfe : Thank you. I must preface my remarks by making it clear that they do not represent the views of my employer, News Corp Australia. They are my own opinions, formed through my work as a journalist unafraid to start a fight when I see a stitch-up—and general insurance is the biggest stitch-up since the Great Hall tapestry. Your constituents are not getting a fair go on the $16 billion of home and car insurance they pay each year, because these markets are about as transparent as the Yarra. And it is not just me who says that; it is the view of the original—and some would say the best—consumer cop, Allan Fels. It is also what Choice says. In its submission it says that 'home and car insurance remain two of the biggest cost-of-living concerns for Australian consumers' and that it is a problem exacerbated by the lack of publicly available comparison data.

I believe the problem the committee should look to solve is this: how do we make it easier for people to find good value general insurance? Among the big four insurers—IAG, Suncorp, QBE and Alliance—there is not one that allows their policies to be sized up on any private sector comparison site. This quartet, which controls 64 per cent of the car insurance market and 80 per cent of home insurance, is dead against being compared against each other or any of the smaller players. What's more, they do not put last year's premium on the renewal notice—so they have not even been willing to be compared against themselves. Their message is clear: just pay us what we want and stop asking questions.

So what would I do if I were in your position? I would recommend the establishment of an independent comprehensive comparison website run or overseen by the Commonwealth. The template for such a site is, introduced by the coalition in 2007 when Tony Abbott was health minister. It has the potential to help your constituents find better value home and car cover. It could save them, collectively, hundreds of thousands of hours a year. It takes nearly 100 times longer to search for car insurance than for health cover. I know this because I did both—one after the other—for a video that News Corp Australia has published today. It took one hour and 22 minutes to go from car insurer to car insurer re-entering almost exactly the same information over and over. It took 52 seconds on—and, in truth, I went slow as I was doing it.

Private was the first place that I and 1.2 million Australians went last year to re-evaluate our health insurance. It cost a princely $1.4 million to set up and $145,000 a year to run. That is less than a third of what the government committed last year to upgrading Campbelltown Oval in Christopher Pyne's seat of Sturt. There is no reason to think that a general insurance site would be any more expensive than In fact, the most elaborate public sector comparison site in the world, Norway's Finansportalen, cost $2.2 million to set up. That is less than 10c per Australian—a rounding error in the federal budget. And the North Queensland insurance comparison service Senator Arthur Sinodinos commissioned cost $3.1 million for 3½ years.

Insurers will tell you that comparison websites make things worse, not better, because they are all about price. I asked Professor Fels about this claim yesterday. He said: 'It is obvious that a customer who is interested enough to go to a website to compare prices will be a motivated, perceptive person who will also look at relevant premium and quality differences.' And when you look at the service that I am saying should be the template for reform, you can see that it is not all about price.'s results are ranked by rating—that is, the quality of the cover, not the price. It encourages people to look at the best cover, not the cheapest.

Some submissions, such as IAG's, argue that has not reduced premium increases and therefore has been a waste of money. The first thing to say about that is that there is no way of knowing whether it has or has not reduce premiums, so it is a hollow claim. Second, it fundamentally misrepresents the role of it is not there to force down prices; its purpose is to make it easier to begin the process of identifying value. Using the site, you can evaluate the actual product features, coverage, limits, exclusions and, yes, cost of policies side by side, based on your needs, and then get a standard information sheet with even more information on each of the policies you are interested in.

Some insurers' submissions suggest a comprehensive comparison website for home and car insurance will lead some players to exit the market. Alliance says this. But if this were true why hasn't it happened in health insurance as a result of Insurers also say what they do is too complicated to be compared. This simply beggars belief. Having just done a shop of all the major brands, I can tell you that their online quoting engines are almost identical; they ask nearly all the same questions. It is not too hard; they just do not want it to happen.

So there is a clear problem and a doable solution. What is needed is action. The government has been hoping insurers and private sector comparison sites would choose the lesser of evils and solve this situation themselves. But, as the story News Corp Australia published today reveals, the comparison sites are keen but the insurers are not. So it is not going to happen organically.

Finally, I would like to highlight some things I have read in the submissions. Consumer Action, on page 3 of its submission, says that 'a government comparator site could positively influence product design'. It bases this comment on the Swedish consumer affairs agency's website, which gives each insurers' policies a rating out of 5 as well as a score on a quality index. Consumer Action recommends simplifying general insurance into 'gold', 'silver' and 'bronze'. QBE, on page 1 of its submission, says that 'independent comparison services can potentially improve consumer engagement and access to information'. It says that public sector comparison service have the advantage of being 'objective'—and in saying that it cites the World Bank.

Some of the submissions talk about the negative effect of comparison websites on the UK market. There is no government run comparison website in Britain. APRA says value should be the key decision-making criterion for consumers—and I strongly agree with that. And I recommend Choice's set of recommendations at page 4 of its submission around improving transparency more generally.

CHAIR: Thank you very much for your submission. You quite rightly focus on the rising cost of premiums. The Insurance Council of Australia draws some reasons for this—the number of natural disasters, higher claim values, higher cost of meeting claims, higher asset values and rebuilding costs. Are you at all sympathetic to those explanations for the rising cost of premiums?

Mr Rolfe : Absolutely, but I am not sure that it accounts for a 154 per cent increase over the period of time we were asked to look at in our submissions. That is an enormous increase and it is leading people to wind back the coverage that they have, leaving them more exposed. Our insurers are highly profitable businesses and I think they are taking advantage of the lack of transparency in this industry to take us all for a ride.

CHAIR: The value of homes has also outpaced CPI and wages growth. Do you see that as being a relevant part of the equation?

Mr Rolfe : Certainly. As a person who has built their own home, I know that the cost of laying a brick has almost doubled. So, yes, when you rebuild, it is more expensive now and that would be a factor. But, as I said, I do not think it fully explains what is going on here. Even if it were entirely true, it still would not change the fact that it is too difficult to compare insurers. If you receive a renewal notice you do not know what you paid last year and you do not know what anyone else is offering; you do not know if you can get a policy with similar or better coverage for less. I would invite the committee to take a look at the work that the Emergency Services Levy Insurance Monitor, Allan Fels, has produced in this state. He found that for identical homes in the same suburb, with similar coverage, insurance premiums can vary by up to 2.5 times.

CHAIR: Do you think consumers are fully aware of the concentration of ownership in the insurance market?

Mr Rolfe : No. This is not only the case in insurance. I look at all cost-of-living pressures that families face. There is an impression that there are a lot of different brands out there. One of the submissions—perhaps it was APRA's—says that there are something like 30 brands. But it really just boils down to two major players and then two other players. IAG and Suncorp control just about everything. IAG—it is not a company that resonates in people's minds—is the old NRMA. So they are NRMA in New South Wales and RACV in Victoria—all those old motoring brands. There are also other brands that people might think are competing with each other. Similarly, Suncorp itself is AAMI, GIO and other brands. And then you have QBE and Alliance, which are third and fourth with about six per cent of the market each. After that, it is minnows—and even some of those give the impression that they are competing against themselves and choose to run their own comparison websites. And I believe that all the private comparison websites leave a lot to be desired, which is why I am so in favour of a public comparison site.

CHAIR: You have touched on that. There are the private comparison sites such as comparethemarket and choosi. Can you tell us a bit more about how you think they are run? What sort of questions do you think we should be asking of those companies?

Mr Rolfe : I have been encouraged by what iselect has said to me in recent times as I have sought to shed further light on this issue through stories that I have published. They are very willing to look at changing the way that they evaluate insurance products; it might be on some sort of rating and less about price only. They would tell you already that they are not just about price, that they are about trying to help people find value. The insurers would say something very different. I think the truth is somewhere in between. The problem we have with the likes of comparethemarket is that, when you look through its structure and deep within it, what you will find is that it is run by an insurance company—the same insurance company that offers some of the insurance products sold on comparethemarket. So I do not know that you can trust it. And choosi has a similar problem; it could be argued that it is as much a marketing channel as anything else. And that is the criticism of private comparison sites elsewhere in the world. Of course, no such criticism could be levelled at any public sector comparison website.

CHAIR: You have drawn attention to the Norwegian and Californian models. Can you tell us what you like about those particular sites?

Mr Rolfe : Norway clearly has a lot of money, and perhaps that is why they have been able to do the world's most advanced public sector comparison website. But it really allows people to size up all the products virtually instantaneously. You put in information and then it sends out a request to all the insurers and then comes back so that you can evaluate them side by side. You are not buying insurance there and then, but you do have the information that allows you to considerably narrow the consideration set—and that is what I think this is all about. It is going from having a renewal notice and not knowing whether it is a 10 per cent increase, a one per cent increase or a five per cent fall, which is the situation in Australia, to rather quickly being able to say: 'Here are four or five people whose websites I can now go and visit or ring up and know that I'm getting pretty much the best value that I can.' So I think it is the gold standard and what the committee should look to, in addition to, in terms of a template for the way forward.

What is going on in California is more akin to what has been set up here in North Queensland. It is much simpler. And I see that even some of the insurers are in favour of what is being done in North Queensland: you tick a few boxes—again, it is done in under a minute—and you get an idea of what the different insurers might be willing to offer you. When you go through things in fine detail with them—as you should—it may turn out quite differently. However, I think it will streamline the process for people and increase the number who are doing a better job of shopping the market, with some assistance, in order to get value for themselves and their family.

CHAIR: My understanding is that that North Queensland website provides a range of costs for premiums rather than a specific amount. Does that goes some way towards addressing the issue of the insurance companies saying that a publicly run comparator website would just drive price competition, with quality of coverage suffering as a result?

Mr Rolfe : I think it does more than that. I must admit that I am not entirely familiar with its operation, but I have looked at it. I believe it is possible to do better than what has been put in place there. North Queensland is a peculiar market, and I think some of the prices that come back are perhaps representative of some insurers' unwillingness to really be offering coverage in the tropics.

Senator HUME: Mr Rolfe, thank you for your submission; you have a lovely turn of phrase. And I agree—I have had my will to live sapped by occasionally shopping for insurance!

Mr Rolfe : Sorry to hear that!

Senator HUME: Can I ask you specifically about the Norway and California experiences. They required legislative change as well as the creation of the site. What is your understanding as to what might be required in Australia to establish a similar site?

Mr Rolfe : The Insurance Council would tell you that they are here to help and they are here to improve things, so perhaps they are willing to have this information made available without needing to be compelled. There is no particular reason that it has to be forced out of them; it would be their choice. If they were willing to make it available, then it would not be forced out of them. My understanding—and I have read this—is that in Norway it initially was not the case that it was being compelled is, but later on they did have to make it so. If that is what it takes, then so be it. They have been given ample opportunity to make information readily available. But when you will not put last year's premium on a renewal notice I really think it sends a pretty clear message about your willingness to assist your consumers to make sure they have the best value cover possible.

Senator HUME: The private health insurance site is based on ratings. Do you think ratings are always the appropriate comparator? Will they work in general insurance?

Mr Rolfe : That is a good question. I think it is the best measure that we can apply. We are not asking people to click on a button, provide their credit card details there and then, and make a decision. What we are trying to do is narrow the consideration set. We are trying to make it easier for them, against some criteria that they might supply, to find the most appropriate product for them. And that will be a mix of coverage, price, features and other things. So I think a rating is a good place to start. It is much better than starting with price. I think a rating goes closer to finding value, and that is what we need to be aiming at here. So I think if all the relevant players were able to agree on what might be a reasonable rating system, we would have a good place to start. We could say this is the gold standard and this is silver and bronze. That is something that is being explored in private health insurance right now. I think it would simplify things for people. They would understand what they are getting in return for their money. They would understand how the different products that they are looking at on that screen size up against one another.

Senator HUME: The private health insurance site did not stop the proliferation of junk insurance policies, for want of a better expression. Do you think there is a chance that that may also occur in the general insurance industry?

Mr Rolfe : I would hope not. Insurers and insurance brokers would tell you that car insurance is somehow more complicated than health insurance—which I did not believe. Health insurance has so many other factors at play because of the incentives that different governments have put in place to force about half the population into the private health insurance market. So I think what might also be a factor in health insurance is that people are seeking to take out coverage that they do not really want; they are trying to get out of paying the Medicare Levy Surcharge and they could not care less whether it gives them any coverage whatsoever. They just want to pay the absolute minimum so that they do not have to contribute additionally to the ATO—and that is not the case in general insurance.

Senator HUME: The ICA is going through a process of product disclosure and transparency work at the moment. Do you think that that potentially has an opportunity to improve consumer confidence in the industry or provide a better understanding of the products that are out there? I get a sense that there is a lack of understanding as to what needs to be insured and how that is priced. I think a lot of work needs to be done here. Do you think that is adequate?

Mr Rolfe : There certainly is a lot of work that needs to be done. There are novels that are shorter than product disclosure statements. It is extraordinary. They run to 30,000 words. It would take hours to read just one of them. So let's say you were going to look at half a dozen of them before you picked an insurer. It is beyond belief that anyone would do that. So no-one is ever really going to know the detail of their insurance product. And that is the fault of the providers. They have done that. They have made it impossible to understand insurance. They do not want people to understand it. I really wonder sometimes if they even care whether they do. If they did, then they would not have product disclosure statements that run to 100 pages; they would be of one or two pages that covered all the essential details. As I have said a couple of times already, they might like to tell you what you paid last year when they ask you to pay again.

Senator HUME: One thing you did not touch on in your submission is the role of insurance brokers in the industry. Do you have any comments to make?

Mr Rolfe : That is because I was not really sure what their role was. I am a bit clearer on it now. I asked the Insurance Brokers Association for some data on what proportion of the individuals market they are accounting for. They could not give me any statistics, but they said it was not very big. In some private conversations I have had with one major insurer, they said that the Australian market has evolved in a way that means people do not use brokers any more. Businesses might use brokers, if they have large needs and large exposures, but individuals not so much. So I am not sure that brokers are the solution here. And, in a way, I do not see them as being all that different from iselect or comparethemarket inasmuch as they are not offering you the entire range of products.

Senator HUME: Going back to the Norwegian and Californian examples, do you think that those sites operate in a different market from Australia's and might not be transferable? Do you think the Australian market is perhaps different in some way or another—wider, deeper, broader—that will make replicating the sites more difficult here?

Mr Rolfe : I cannot really offer any expert analysis on the differences between, for example, here and Norway. But California would perhaps be one of the most similar geographic locations to Australia in the world. They suffer the ravages of bushfire just as we do. They seem to be very keen on transparency there. They have that proposition which I referred to in my submission, which is very wideranging: every insurer has to submit what it is that they want to charge next year to an ombudsman like role for it to be approved beforehand, in much the same way as we do for health insurance. I am not suggesting that should happen for general insurance, but it seems that it is operating in a somewhat similar fashion.

Senator XENOPHON: Mr Rolfe, thank you very much for your submission. The Insurance Council of Australia and a number of insurers say that this is not necessary, that it is overkill. In terms of consumer choice, they are saying consumers should be able to choose distinct products. I think one argument is that otherwise we will just have the same bland products being offered. What do you say to those sorts of arguments? I think you are familiar with them as you have read the submissions.

Mr Rolfe : It has not happened in private health insurance. Medibank, Bupa, NIB and the not-for-profit insurers all seem able to distinguish themselves. In many ways, the increased transparency that has been brought to that market over the past 10 years has led to increased innovation. It has made it easier for people to say: 'Do you know what? That's quite appealing to me. I like the fact that I can take a photograph of my chiropractor's invoice and send that in and know that I'll get my rebate straightaway and don't have to fill in any paperwork. I like the fact that they're going to offer me a rebate if I undertake some sort of formal exercise'—a gym program or whatever the case might be. So I think it has actually driven innovation. The general insurers appear to be scared of innovation, scared to have to work hard for their premium dollar. Given that they will not do it themselves, I think it is high time that they be made to do so.

Senator XENOPHON: The Insurance Council Australia, at point 5 of its submission, says:

It is critical that the general insurance sector remains financially strong and stable so that it can continue to meet its claims liabilities. Indeed, the collapse of the HIH Insurance Group in 2001 continues to serve as a reminder of the importance of maintaining system stability.

They have thrown in HIH as an argument. Could you see an insurance comparator in any way undermining system stability for insurers?

Mr Rolfe : No.

Senator XENOPHON: Why do you think they would use HIH as an example?

Mr Rolfe : It scares people. In my reporting work, I recently spoke with Justice Neville Owen about HIH. There were a lot of changes made after HIH. We have improved the strength of APRA and ASIC. We have put in place a scheme that would protect people if we saw a repeat of HIH—thankfully, we have not; and that scheme has only had to pay out a couple of millions of dollars after one small collapse in the 16 years since HIH. So I think it is a spurious argument and rather desperate.

Senator XENOPHON: The Financial Legal Rights Centre has given a number of case studies of where people either could not get insurance—it was denied and they had it previously—or they had a massive hike in premiums and could not get an answer. From the work that you have done, what do you say is a remedy to that? That would go beyond a price comparator. Do you get complaints from consumers who have had a jump in premiums of 300 or 400 per cent or cannot get insurance when they have previously had it?

Mr Rolfe : I have certainly received many complaints over time—I am not talking about the immediate past—from people in, say, the Richmond-Windsor area or Goulburn. They might have had a flood. There has been some work done by one of the insurers to redo their maps and, suddenly, all the premiums jump 300 or 400 per cent and they cannot get insurance. It is very concerning because, when things go bad, either the taxpayer will be asked to clean up and pay or those people will be left in the lurch. I would love to say that I have a solution for that particular problem. I think insurance needs to be affordable for everybody. I am not sure we can community rate it in the way we do with health insurance. It is a problem. I would be very interested to hear what Allan Fels has to say tomorrow. In the conversation I had with him yesterday, he felt that insurers were very quick to talk up natural disasters and the massive amounts that they cost them. That, of course, is why they collect premiums. So it should hardly be surprising to them; they can budget for it. I think that sometimes premiums go up by these big amounts because the insurers want those people off the books; they can become some other insurer's problem.

Senator XENOPHON: So it is a deliberate policy?

Mr Rolfe : Yes. I think it is called 'redlining'.

Senator XENOPHON: You said that some product disclosure statements run to 30,000 words, the size of a novella. You said the insurers do not want people to understand them. That is a pretty harsh call. They need to give some specificity in terms of what the policy covers. Do you think there is scope to have a standardised, simplified product disclosure statement that runs to a few hundred words, or 2,000 or 3,000 words, rather than 30,000 words?

Mr Rolfe : ASIC is doing what I think is quite exciting work on electronic disclosure statements. At News Corporation, every few weeks I have to do some form of update to ensure that I am across, for example, our rules regarding bribing public officials. It will be a video that—

Senator XENOPHON: I presume that is a bad thing!

Mr Rolfe : That is what the video says.

Senator XENOPHON: Good. I am glad you need a video for that!

Mr Rolfe : It will present some scenarios for me and I have to pick the right scenario—I have to have read the policy—and along the way it will share information with me. This is what ASIC is looking at doing: how can we ensure that people have a better understanding of the financial products that they are buying?

Senator XENOPHON: We can take that up with them.

Mr Rolfe : I think that is very encouraging. I think we do need to get the important details on a couple of sheets of paper. I have dealt with more consumers than I can think of who have discovered nasties in their cover. I will give you a travel insurance example of: when a relative dies, they are either too old or born in the wrong country and, therefore, are not covered by their insurance—and that is exactly what they thought they were buying coverage for.

Senator XENOPHON: We have insurance comparison websites, including the one with the cute critters, the meerkats. You are saying they are actually owned by insurers. Should that be disclosed up-front?

Mr Rolfe : It is not disclosed up-front.

Senator XENOPHON: Should it be?

Mr Rolfe : It should absolutely be disclosed up-front.

Senator XENOPHON: Should there be a bit of a warning that says they are owned by—

Mr Rolfe : Yes. I do not think you should be able to begin the process of buying insurance through a comparison site when the insurance you are about to buy is sold by the comparison website's parent company—absolutely not.

Senator SMITH: Mr Rolfe, what has been your personal experience with insurance and insurance providers? I heard that you have built a house.

Mr Rolfe : Yes, that's right. In building my home, I had to make a claim against the home warranty insurance after the builder went bust—and that was paid very quickly. That was not a home and contents policy; that was the home warranty insurance I paid as part of the construction. I have made a couple of small claims. I ran up the back of a car—and that was promptly paid by the insurer. In that particular instance, my insurer was Real. I am not with Real anymore. I change insurers every year that I find a better premium than what my renewal is charging me. I am quite diligent about it—as you might expect of someone whose job is to look at the cost of living. So I do not have any bad personal experiences of dealing with insurers. I think the general community would not rate them as the worst industry out there, but that does not mean there is not substantial room for improvement—and improvement is what we should be aiming at.

Senator SMITH: Just to be clear: your personal experience to date has been a positive one?

Mr Rolfe : Yes; it certainly does not colour what I am saying.

Senator SMITH: Again from a broader perspective, I am wondering whether you, like me, trust private insurance markets or would prefer to see much greater government activity and involvement in insurance markets?

Mr Rolfe : No, not at all. I am reminded of the words of Ronald Reagan, who said—

Senator SMITH: Good. I have some Ronald Ragan quotes as well. We can share them.

Mr Rolfe : He said: 'The scariest nine words in the English language are: I'm from the government and I'm here to help.' People know that quote but what they forget is that he was in fact talking about the need to assist farmers—and, in that press conference, he would go on to offer that help. So even if you come to things with a philosophical view that the government cannot fix everything—which is my position—that does not mean that it does not have a role when markets are not functioning as efficiently as possible. You could use the term 'intervention' here. But it is not serious intervention; it is really just making some more information available to people; it has got to be the lightest form of intervention you could possibly imagine. And I think it has less impact on insurers than it does on the comparison websites, yet they are not squealing as loudly as the insurers are. Comparethemarket are in favour of this. They are willing to get on with it. I do not understand why the insurers are so scared of an initiative that they say will not even work.

Senator SMITH: My favourite Reagan quote—from when he was negotiating with the Russians—is 'trust and verify'. I will go to my third question. Your primary argument is that, because of the success of the private health insurance comparator website, there should be one in the general insurance market?

Mr Rolfe : Yes.

Senator SMITH: I am curious, then, that you do not know about the one experience that we have of a comparator website in this country—the North Queensland one, run by ASIC. Given your strong interest in comparator websites, why is there not more information in your mind about the success or otherwise of the ASIC-run Northern Queensland website?

Mr Rolfe : That is because I do not think it should be the template for the way forward here.

Senator SMITH: Why shouldn't it be the template?

Mr Rolfe : I think it is a second-best approach. I do not know what went on behind the scenes that led to the development of that particular site.

Senator SMITH: You do not have to be behind the scenes. There is consumer interest in the high cost of insurance, a lack of understanding of risk, poor building conditions et cetera.

Mr Rolfe : That is not necessarily what I was referring to. I would have thought that something akin to would have been of greater assistance to people. In that area of Australia, there might be particular things that mean it is more difficult to get into the absolute minute detail—because where live, from block to block, could make a substantial difference in the tropics. I just do not think it is what needs to be done for the entirety of Australia for home and car insurance. Yes, you can rightly criticise me for not knowing more about it, but I do not believe it is what needs to happen. I am not going to come here and criticise it—because I do not want it removed. At the same time, I would rather advocate for a government option that I thinks think works better, which is

Senator SMITH: Perhaps you can come back to us on notice with what you think might be the strengths and weaknesses of that particular comparator website.

Mr Rolfe : Absolutely.

Senator SMITH: The reason I draw your attention to the Queensland experience is that the Insurance Council of Australia submission draws our attention to the fact that it is under-utilised—those are my words, not the words they have used in the submission. And when you can look at some of the analysis around the other international comparator websites, it does look like they are under-utilised by consumers. Is that a point of concern? Is that a point of interest to you?

Mr Rolfe : Certainly, the North Queensland site has not been taken up by a large number of consumers. Amongst the submissions, there is some data that suggest that the Norwegian site has been used by about five per cent of people to change. If we have about 15 million cars in Australia, that would be some 750,000 people who would benefit. I think that we could aim much higher. What I think is lacking—for example, in—which would be a way to see it used more widely, is if, let us say, it could be used to begin the search for a better policy and I was then allowed to share the fact that I had done it on Facebook. That is, there was a button that said, 'I've just found a better value insurance product on'

If I could share that on social media with the people who trust me because I am their friend, that might lead other people to it. I am not suggesting that the government needs to get into the business of buying Google AdWords; but what I am saying is that if it were more widely known and more promoted—especially by people who we trusted, our friends, by their choice—then more people might use it. In 2017, even compared to a couple of years ago, there is much more opportunity to do that and to get it known more widely without it having to cost the public purse.

Senator SMITH: We could achieve that at the moment without a cost to the public purse because, by your own admission, you are one of those people who quite willingly shops around for insurance. You have shifted your insurance behaviour. You can easily go onto Facebook now to inform and educate people.

Senator XENOPHON: I do not know if Mr Rolfe is a typical consumer though.

Senator SMITH: This is the point that Mr Rolfe is making: you do not have to be a typical consumer because Facebook gives you the opportunity to amplify your own personal experience.

Mr Rolfe : Sure, but then what you would be saying to people is: 'I just laboured through one hour and 22 minutes of searching for car insurance. Hey, would you like to do that too?'

Senator SMITH: Call it a community service, Mr Rolfe.

Mr Rolfe : I am willing to do that, but you are saying to the other people, 'Would you like to that?' Whereas I am suggesting that a much more compelling message to be sending would be, 'Hey, I just saved a certain amount of money and got better coverage, and it only took me a few minutes because I used the new federal government website for home and car insurance.' It is a much more compelling message to be sending to your friends. I doubt too many people would say the former.

Senator SMITH: Just on a slightly different issue, the priority that government should give to mitigation: it is a very, very contemporary issue given Cyclone Debbie and the situation with the floods across northern New South Wales. Do you agree with the proposition that government should spend more money on mitigation and perhaps less money on disaster recovery?

Mr Rolfe : Sorry, I am not sure what you mean by mitigation.

Senator SMITH: That is quite okay. Thank you very much.

Senator XENOPHON: There is another Ronald Reagan quote for Senator Smith: 'When you can't make them see the light, make them feel the heat.'

CHAIR: Mr Rolfe, thank you very much for appearing before us.