Assistant Treasurer and Minister for Financial Services & Superannuation
14 September 2010 - 14 December 2011
Interview with David Oldfield
2UE News Radio
9 December 2011
SUBJECTS: Older Australians and travel insurance
Bill Shorten, as you know, is a very important man in the Federal Government. A man who is often tipped to be at some stage a leader, and possibly even the Prime Minister of the country. Now we've had a few emails lately from people complaining about insurance companies denying elderly people travel insurance. Apparently these travel insurance companies – and they're names you have heard of – are rejecting applications for travel insurance and not really justifying why, but it would seem just because people are older.
Now, if it's accurate, it would seem clear that some of these companies have quite old fashioned stereotypes of elderlies in mind themselves. Some of the sharpest, fittest, healthiest people we have others might also consider elderly.
Bill Shorten, the name I just mentioned a moment ago, is the Minister for Financial Services and Superannuation. His portfolio covers this area and he is always happy to come on this program. I'm glad he has been able to join us this morning.
Minister, thanks for your time.
Good morning David.
Now you've heard of this happening? Where senior Australians are finding it hard to get travel insurance?
Frankly I was surprised, but I heard about it a couple of weeks ago when I read an article in the Daily Telegraph, and then I started asking people I know if they had experienced trouble getting travel insurance , and I was genuinely surprised. Very fit and healthy people in their 70s told me they can't get travel insurance to go to America.
What amazes me even more, even if there was a medical reason and certain forms of insurance for some people – and I don't accept that there is automatically – when older people can't get lost baggage travel insurance... losing your bags has got nothing to do with the age of the person whose bags they are. And then some people weren't able to get travel insurance which affected them during the Chile volcano – remember that volcanic ash cloud that stopped planes flying around the world? The age of the person that couldn't fly had no bearing on whether or not the volcano erupted.
No, none whatsoever. It's an extraordinary story and one that reeks of discrimination. Do you have any plans to do anything about it?
Yes I do. The first step is to sit down and talk to the insurers. I'd always rather self-regulation over regulation where it can work. And I do accept that insurers, as the law stands, have exemption from certain forms of discrimination law if they've got actuarial or statistical evidence to justify the policies they take. What I would like the insurance industry to do is start having a new look at the people who we are talking about. What it means to be 70 and 65 and 80 now is very different to 30 years ago. People are redefining what it means to be retired. They travel, they are adventurous. A lot of older people actually make more responsible travellers than some of the young ones who get into trouble in certain spots.
Yes, it's not very often that we hear of an elderly person falling off the side of a cruise ship or having those types of accidents. They are often very, very responsible travellers.
That's right. So my first plan is to talk to the industry. The industry, when I've had informal discussions with them, have said 'well we do what we do and we've got actuaries', and I just ask them 'is there a market opportunity here?'. There are three million Australians over 65 now. By 2050 there will be 8 million of us.
Well you wonder if this is allowed to continue how soon it will start spreading to other areas of the insurance, just like insuring your car. 'Oh I'm sorry, you're over 70, we'll have to bump up the cost'.
That's right. And a lot of consumers are confused by what they are covered for, and what they're not covered for. I did work constructively with the industry, as no doubt they'll get a transcript of this interview, and tut tut and say 'that's the Minister complaining about the situation'. We did get a definition of flood this year. Again, you might not think that shouldn't be as hard as it is, but it took 40 years and the last flood to kick us into action.
I think there is common ground here to improve the product offerings for older people. If the industry was disinclined to say there is an issue or a problem and keep the status quo, there probably are more regulatory based methods to push the envelope. But let's try and work out what works for people and what can be done by cooperation not conflict.
Excellent indeed. Thank you for taking up this cause. It is important to Australians who, frankly, deserve better.
Finally, you'd be aware of the rumour and I can't help but ask about the likelihood that you may be promoted to Cabinet over the weekend?
Listen, I'm aware of the rumour, but I'm certainly not aware of anything else. These matters are always in the preserve of the Prime Minister and there's nothing I can add that would change any of the facts.
Well, we'll wait and see. I appreciate your time this morning Mr Shorten.