Claims inflation and how it affects your insurance

Claims inflation and how it affects your insurance. Claims inflation and how it affects your insurance.

The challenges just keep on coming for Australia’s building industry who’ve The challenges just keep on coming suffered the impacts of bushfires, for Australia’s building industry who’ve earthquakes, the pandemic, and eversuffered the impacts of bushfires, increasingly damaging floods. But the earthquakes, the pandemic, and everbuilding industry has not suffered in increasingly damaging floods. But the isolation. These hardships have caused building industry has not suffered in flow-on impacts to many industries, isolation. These hardships have caused desperately trying to move forward flow-on impacts to many industries, after several taxing years. Sadly, as a desperately trying to move forward result of these challenges, it’s often the after several taxing years. Sadly, as a end consumer who’s left frustrated and result of these challenges, it’s often the counting the cost of a situation they end consumer who’s left frustrated and have no control over. It also leaves your counting the cost of a situation they insurance company trying to balance have no control over. It also leaves your these losses while still providing a insurance company trying to balance great service. these losses while still providing a great service. Business insurance Business insurance If you have business insurance, there’s a good chance you’re covered for If you have business insurance, there’s damage to the physical building, the a good chance you’re covered for contents of the premises and even damage to the physical building, the financial losses stemming from your contents of the premises and even business being unable to operate for financial losses stemming from your various reasons. Right now, given business being unable to operate for what’s happening in building and various reasons. Right now, given construction, business insurance claims what’s happening in building and are becoming more costly. In the case construction, business insurance claims of early learning centre claims, the are becoming more costly. In the case average cost of a building and contents of early learning centre claims, the claim has risen by up to 20% since the average cost of a building and contents start of the pandemic alone. We’re also claim has risen by up to 20% since the finding claims are taking significantly start of the pandemic alone. We’re also longer to finalise. Let’s deep dive. finding claims are taking significantly longer to finalise. Let’s deep dive. What’s the problem? What’s the problem? Well, there’s quite a few, and some of them are linked. The bushfires in Well, there’s quite a few, and some late 2019 and early 2020 decimated of them are linked. The bushfires in Australia’s domestic wood supply and late 2019 and early 2020 decimated so we’ve been forced to look overseas Australia’s domestic wood supply and to fill the gap. On top of bushfires, so we’ve been forced to look overseas we’ve also had several catastrophic to fill the gap. On top of bushfires, flood events, which have increased we’ve also had several catastrophic demand for not only building materials, flood events, which have increased but construction workers to help demand for not only building materials, rebuild. Some builders have pivoted but construction workers to help from wood to steel, but the cost of rebuild. Some builders have pivoted steel has also risen due to high demand from wood to steel, but the cost of and won’t reduce until wood becomes steel has also risen due to high demand freely available again. and won’t reduce until wood becomes freely available again.

At the same time, we’ve also been dramatically affected by COVID-19 through lockdowns, quarantine and labour shortages. Problems arising from the pandemic have been felt across the globe with many countries experiencing similar difficulties. These factors have compounded supply chain issues, where labour shortages due to illness, means that there is no one to transport materials from overseas and no one’s available to transport them once they arrive in Australia. This has culminated in businesses being interrupted for far longer than they previously would have been.

On top of all this, if there is a workforce available to transport and rebuild, they’ll be charging a premium to do so. Unfortunately, these costs all add up. According to Australia’s oldest quantity surveying firm and construction cost consultancy, Rawlinsons, the cost of building a new kindergarten has increased 11% since 2019. Similar increases have also been seen in rebuild estimations provided by the Cordell’s calculator. Here at Guild Insurance, we’ve also seen a proportionate rise in claims costs over the last two years.

What does the future hold? Unfortunately, we’re looking at another 12-24 months of uncertainty, particularly since new COVID-19 strains are a possibility, the La Niña weather system may be with us for a while longer and global political instability remains an issue. On the domestic front, experts warn that there won’t be much timber available for construction for the next 12 months and we should continue to expect the cost of materials and labour to further increase. These events are impacting the insurance industry across the globe and as a result, the cost of insurance is going up across the board.

How can Guild Insurance help? Your Guild Account Manager is here to make sure you have the right insurance for your business. We’re happy to discuss how these global issues might affect your cover and perform a review of your insurance requirements that reflects these circumstances.

The rate of global claims inflation is challenging industry-wide, and we want to make sure you’re comfortable with the amount you’re insured for. Please call us to check that your cover is adequate to keep your business protected.

1800 810 213 guildinsurance.com.au

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Tinkering

Habitat Early Learning

Habitat Early Learning have recently implemented a Manual Arts Program after participating in a research project which was based on ‘tinkering’ with technology. Honor Mackley, a research student from Australian Catholic University reached out to Habitat in late 2021 to conduct a series of observations where Kindergarten aged children were invited to tinker with a range of different technological resources.

They used equipment such as keyboards, computer hard drives, gaming controls and phones and combined them with everyday resources such as playdough. Children used screwdrivers and other tools to take the resources apart and discover the make up of each device. Through a series of observations, it was evident that children were thoroughly engaged in these sessions and fine motor development was strengthened as a result of intricate manipulation of the resources. In addition to the physical skills that were acquired throughout the process, exposure and experimentation with technology was also of benefit. Children have become so competent in using screen devices, however a differing perspective on how we can use technology and the functionality or make up of the devices is equally of value within the curriculum. At the conclusion of Honor’s tinkering sessions with the children, and after conducting a series of critical reflections with the teaching team, it was imperative that the learning experiences were continued within the curriculum. Strengthening fine motor control is a key goal within the Kindergarten curriculum at Habitat and the tinkering sessions saw progression in this area. The sessions also saw an increased awareness of technology and a practical understanding of its purpose within society. Through consultations with various educators, community members, families and children, Habitat developed a Manual Arts Program. Resources such as screwdrivers, hammers, nails, screws, wood and other loose parts were donated by families and local community services. Families were advised of the intention of the Manual Arts Program and were encouraged to share ideas to strengthen this program. Habitat received offers from families to join the tinkering sessions and support children to create various structures. Habitat’s Building Supervisor, Edy, has also been a key contributor to the program as he shares his expertise in building and using various tools such as drills and hammers.

Prior to implementing the Manual Arts Program, all children participated in an induction session. They brainstormed safety elements of the program, identified the risk benefits and the general purpose of the program. After significant engagement in the research project with Honor, it was inevitable that the children were excited to incorporate this new program into the curriculum. Since the implementation of the Manual Arts Program, children have developed greater confidence in using the equipment and are beginning to make purposeful structures that represent their thinking. They use drills, hammers, nails and screws to adhere pieces of wood or other loose parts together and are experimenting with different ways of constructing and manipulating. In addition, children can combine a range of technology and loose parts to create new structures and represent their thinking through various mediums. Habitat’s partnership with Honor and Australian Catholic University has continued to inform quality learning experiences for children and has set a precedent for playbased learning with technology. The tinkering sessions have instilled a new meaning of engagement with technology at Habitat Early Learning and the introduction of the Manual Arts Program has created an exciting venture for the kindergarten children.

The intent of this program is to be accessible to children at all times of their day and is inclusive in their outdoor environment as a permanent learning experience. As confidence and fine motor skills continue to strengthen, it is anticipated that children will incorporate sustainable measures to maintain their environment. Where resources may become damaged, they will have developed the skills to maintain and repair their resources.