The Insurance Council of Australia (ICA) has submitted its response to the Productivity Commission’s Interim Report on “Building a Skilled and Adaptable Workforce,” emphasising the need for coordinated reforms to address skills shortages and streamline occupational licensing in the insurance industry and its dependent trades.
The ICA has identified persistent workforce shortages as a significant concern for the sector.
According to its recent analysis, the insurance industry is experiencing a shortage of skilled professionals in key roles – including claims consultants, underwriters, and workers’ compensation specialists.
The ICA notes that nearly 30% of the current insurance workforce is projected to reach retirement age by 2030, further intensifying recruitment and retention challenges.
Recruitment timelines reflect these pressures. For example, claims managers may require up to six months to achieve full competency, while new claims staff typically need between four and nine weeks to become proficient in customer service.
These factors can hinder the industry’s ability to quickly scale operations in response to increased demand, such as during natural disasters.
The ICA has expressed support for the Productivity Commission’s proposal to establish a nationally consistent system for credit transfer and recognition of prior learning (RPL).
The council argues that such a framework would enable faster entry into critical insurance roles by recognising existing skills and reducing duplication in training.
“A well-insured nation is a productive nation. An insurance safety net enables communities and businesses to recover more quickly and effectively when disaster strikes or when the unexpected happens,” the ICA stated in its submission.
The ICA’s submission highlights the importance of aligning RPL processes with industry-specific requirements and ensuring reliable, timely data to support recruitment and upskilling decisions.
The council also points to the need for consistent assessment of micro-credentials and informal learning, as well as careful management of the transition to new systems to avoid unintended skills gaps.
The ICA supports recommendations to simplify and harmonise occupational entry requirements for trades that support insurance claims, such as builders, electricians, and motor repairers.
The council notes that inconsistent licensing rules across states can create unnecessary barriers, contribute to labour shortages, and delay claims resolution.
Data from ICA members, who collectively oversee more than 1.5 million motor repairs annually, indicate that repair quality is consistently high regardless of whether licensing is required.
The ICA suggests that removing excessive licensing for certain trades could improve efficiency without compromising consumer outcomes.
At the same time, the ICA recognises the need for robust regulation in high-risk trades and calls for greater consistency in licensing standards across jurisdictions.
The submission points out that differing insurance requirements for electricians in various states complicate the deployment of skilled workers during disaster recovery.
The ICA’s recommendations are part of a wider strategy aimed at improving the insurance industry’s efficiency and resilience.
This strategy includes reforms in tax policy, climate adaptation, digital innovation, workforce flexibility, and healthcare investment.
The council also advises caution regarding the introduction of a net cash flow tax, citing potential impacts on industry operations.
