My turn came this week, via a car insurance bill.After navigating a menu voiced by a computer for 5 minutes, I began speaking with a customer service officer located in the Philippines.
Some of the factors, they said, are the type of cover, optional benefits, previous claims and incident history, whether the premium is paid annually, monthly or in instalments, government taxes and any state or territory duties or levies, the level of cover, the insurer's risk assessment and the level of excess.To be fair, life has ups and downs, so it stands to reason that these factors have led to higher insurance premiums.
Economists think elevated services inflation is largely related to higher labour costs, including wages and increased superannuation contributions. What if, say, 15 million Australians called their insurance providers and demanded a significant discount? Could that materially lower inflation to within the Reserve Bank's target band of between 2 and 3 per cent?Rate rise after rate rise should have sent the economy into a tailspin, but the RBA isn't fighting a textbook case of inflation."That's how markets work, right?