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section heading icon     insurance referencing

This page considers insurance referencing in Australia, ie industry-wide and enterprise-specific identification of whether insurance consumers are good risks.

It covers -

Please note that this site is wholly independent of the insurance referencing sector. We do not act for any of the services and contrary to the belief of some readers cannot make your insurance reference problems disappear.


Insurance is a fundamental aspect of Australian personal and business life, both because it can relieve some pain when things go wrong and because insurance cover is often a requirement for operation of a business or access to finance. The absence of finance may have a crippling effect. Access to insurance at what the consumer considers to be punitive rates may also be detrimental.

The life and general insurance industry, which historically has been quite profitable (significantly more so than the operation of overseas-based parent corporations), has argued that it faces substantial difficulties because of customer dishonesty.

In 1994 the Insurance Council of Australia (ICA) estimated that up to 10% of all insurance premiums paid by the public were lost to fraud. Tony Baldock in a report for the Australian Institute of Criminology notes a study reporting that 9% of 8000 insurance
proposal forms did not disclose the applicants' full claims history and that a further 2.5% had "adverse credit and public record information on file".

The industry, like its overseas peers, has responded in three ways.

The first is to maintain enterprise-specific blacklists. If your relationship with the particular insurer has been 'suspicious' or 'adverse' (eg 'too many' claims or disputed claims) you either will not receive insurance from that provider or will pay a premium.

A second response has been sharing of information between insurers regarding past contact with 'bad' or 'suspect' customers. That sharing is feasible because of the oligopolistic nature of the Australian industry, with a large number of brands and agents but a small number of insurers, many of which have the same parent.

A third response, of increasing significance, is for insurers to rely on data provided by third parties - such as the information brokers discussed here - and to engage in predictive assessments using algorithms that may result in inappropriate discrimination rather than maintaining the industry's viability (and ensuring that law-abiding consumers do not carry the burden attributable to fraudulent claims).


Insurance referencing is one of the more obscure parts of the insurance or finance industries.

Veda Advantage, the behemoth discussed earlier in this profile, has an arrangement with Insurance Reference Services Ltd (IRS), an Australian insurance industry referencing agency. Veda's annual report boasts that it has commercialised data from IRS since 2001.

IRS was established in 1991 by the major insurers as a not-for-profit central register of insurance claims, levering the database operated by the Credit Reference Association of Australia since 1984. By 1995 its database covered 11 million claims (with an average 45,000 enquires per month), climbing to 18 million claims by 2002.

IRS boasts that it is -

Australia's only national database of insurance claims. It offers an easily accessible record of insurance claims by individuals. Some insurance companies use this database in deciding whether to accept an insurance proposal or as part of the investigation process when a claim is made.

and claims that its -

insurance claims database provides insurers with an invaluable tool for the identification of fraudulent claims, the verification of claims history and as a measure of the underwriting risk.

IRS membership comprises most general insurance companies, which report claims to IRS and access to its databases to identify the claims history of consumers.

IRS is regulated by a voluntary code of conduct. Clause 2(b) of that Code requires insurers to disclose membership of IRS to consumers and advise that personal information may be passed on to IRS. If a proposal or claim is refused principally on the basis of information from the IRS database the insurer is expected to notify the consumer and indicate that a copy of the file may be obtained by writing to IRS. Consumer queries must be investigated by the IRS.

Membership of IRS as of 1995 included the largest domestic insurers (ie home & contents insurance) and most commercial insurers (eg plant and business premises), including AAMI, AIM, American Home Assurance, AMP General, Australian Alliance, Catholic Church, CIC, Club Marine, Colonial Mutual General, Commercial Union, FAI, GIO Australia, HBF, Lumley, Mercantile Mutual, MLC, MMI, Mutual Community, NRMA, NZI, QBE, RAA, RAC, RACQ, RACT, RACV, SGIC-SA, SGIO-WA, Sun Alliance & Royal, Suncorp, TIO, VACC, Western Underwriters and Zurich.

It also included 130 insurance assessors, loss adjusters and claims investigators.


There have been no major studies of insurance referencing. Two works are Tony Baldock's
'Insurance Fraud' (Trends & Issues in crime and criminal justice No. 66, 1997) (PDF) and 'The insurance reference service - An overview' by Bruce Bargon in 2 Privacy Law and Policy Reporter (1995) here.

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version of October 2007
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