OP reporting back. I got through to QBE Travel Insurance just minutes before they closed down for Christmas. They advised that payment via PayPal was fine, but I should keep with me while travelling the PayPal receiptas well as the ANZ card statement on which the charge occurs. So I went ahead and paid via PayPal. The downside was that although I have both the ANZ Visa Platinum and the ANZ Amex Platinum cards linked to PayPal, on this occasion I could charge only the Visa card, so I'll reap fewer award points on the transaction. That's the first time I've encountered that with PayPal. If I'd paid SQ directly with Amex I would have been stung for the 3% CC charge.
Anyway, all done now and I have the flights and seats I was wanting, so all's well.