August/September 2020 Insurance News (magazine)

We were warned The pandemic shouldn’t have been a surprise to anyone

Window on renewals How brokers viewed a tough and troubling season

Parting gift Allan Fels backs insurers on tax

SUNCORP’S NEXT BIG STEP Steve Johnston sees opportunity emerging from crisis

August/September 2020

• • • • •

Contents 4 Newsmakers 8 Beyond the threat

Suncorp’s new operating model is designed to take advantage of a coronavirus-shaped opportunity

12 Challenging times

The recent renewals were tough going, say major brokers and authorised representative networks that participated in an Insurance News survey

18 It was never about if, just when

Warnings of an imminent pandemic were left on the shelf, resulting in the biggest public health crisis to confront the world

22 The travel bug

The pandemic crisis has decimated demand for travel insurance and a lengthy recovery is the best the industry can hope for

26 Personal protection

Emergence says households should consider cover for cyber crime as risk levels are heightened

30 Going for gold

Vero had a “best ever” claims target, and was rewarded with victory at this year’s Mansfield Awards

34 Making waves of a different kind

The industry gets ready for its annual Dive In to encourage diversity and inclusion

36 Steps forward

50 Time to axe the tax

Pressure is growing to finally ditch inefficient and damaging taxes on insurance, with one regulator signing off with a message of support

52 State of flux

It’s not just the virus – the industry is dealing with a maze of key regulatory reforms

56 Best of the best

How NTI earned accolades as an outstanding employer even as it adapted to challenging new norms

companyNEWS 60 Supporting SMEs

Vero offers grants to help businesses recover

60 Tracking for safety

IAG invests in location data startup Bluedot

60 Building momentum

360 Construction and Engineering set for growth

61 Family ties

The Morgans at MGA Warrnambool mark three generations

peopleNEWS 63 Industry CEOs raise thousands in sleepout 66 maglog >

Studies have shown that a diverse workforce is a stronger workforce, and the insurance industry is increasingly blessed with professionals from a range of backgrounds

40 Adjusting to change

Jaye Kumar is promoting the importance of the loss adjusting profession as the focus on claims handling increases

We were warned The pandemic shouldn’t have been a surprise to anyone

46 Demographic dilemma

Window on renewals How brokers viewed a tough and troubling season

Parting gift

Insurers are eyeing an emerging army of millennial consumers while delicately trying to retain their lucrative Boomer and Gen X markets

Allan Fels backs insurers on tax

Pictured: Steve Johnston, Suncorp Group Chief Executive

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SUNCORP’S NEXT BIG STEP Steve Johnston sees opportunity emerging from crisis

August/September 2020

August/September 2020

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insuranceNEWS.com.au is a free daily online news service for the general insurance industry. The website has more than 28,000 subscribers. In June/July we published 481 articles online.

These were made up as follows:

64 Local

64

Corporate

46

Regulatory & Government

54

Life Insurance

50

The Professional

48

International

Analysis

144 Daily

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The Federal Court or the Supreme Court of NSW will decide whether insurers will face a massive exposure over business interruption (BI) claims.

In late July the Insurance Council of Australia (ICA) agreed to file a test case seeking a ruling on outdated policy wordings that have been described as potentially “one of the biggest drafting blunders in history”.

Many Australian insurers’ policies still include exclusions referring to the Quarantine Act 1908, which was replaced by the Biosecurity Act five years ago. As a result, some claimants hope the exclusions will not apply to COVID-19 claims.

Macquarie Research says insurers could take a $535 million hit on BI claims – even if court challenges go the industry’s way.

A report on business packs says the outlook for the segment

is “murky”, with BI included in 35-40% of business pack policies.

“Our analysis concludes a $535m market loss could result if all court cases were ruled in favour of insurers and losses run for 18 months,” the report says.

Macquarie says the figure is “one of many possible scenarios” and excludes claims from the corporate and global segment.

IAG has a 22% market share in business pack, followed by Suncorp and QBE both on 19%.

ICA says it has agreed with the Australian Financial Complaints Authority to file the case in a “superior court”. It says the primary purpose of the case is to decide whether references to the old act should be construed as references to its replacement.

Maurice Blackburn Principal Josh Mennen told The Australian newspaper: “If this goes the

wrong way for the insurance industry, I don’t think it’s overstating it’ll be one of the biggest drafting blunders in history”. 0

I read a lot of Insurance News over the “ course of the last little while. It wasn’t a journal that I turned to regularly before… ” Senator Tim Ayres reveals his information source while chairing the Senate Finance and Public Administration References Committee inquiry into the 2019/20 bushfires

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BLUNDER OR BLIP? TEST CASE WILL DECIDE

August/September 2020

OMBUDSMAN CALLS INQUIRY FOR SMEs The increasingly hard insurance market is unpopular with everyone, so it was hardly surprising when Australian Small Business and Family Enterprise Ombudsman Kate Carnell called a wide-ranging inquiry into insurance practices that affect SMEs. “Small businesses that have held insurance policies for over a decade without a single claim have been refused renewal,” she said. “Others have discovered their renewal cost has more than doubled.”

She alleges that businesses with current policies “have been

subjected to major changes that have reduced their coverage without consent and with no refund”.

Ms Carnell told insuranceNEWS.com.au concerns have been highlighted about classes including trade credit cover, public liability and insurance for continuity of business operations.

The terms of reference are broad, including coverage denials, policy exclusions and how they are communicated, use of definitions that may create de facto exclusions and the fitness for purpose of market offerings.

The inquiry will also look at any impact of the “current market’s lack of diversity in insurance providers, underwriters and types of insurance”, price increases that amount to coverage denial and government models of support or control in Australia and internationally that facilitate access to cover.

The role of brokers, unfair contract terms, dispute resolution frameworks and the effectiveness of relevant codes of conduct and legislation are also included.

The final report will be complet0 ed before the end of the year.

SUNCORP MERGES TEAMS Suncorp is merging its Commercial and Intermediary Distribution teams as the implications of a new operating model revealed in July work their way through the business.

Former CEO Insurance Gary Dransfield, pictured, left on July 17 as leadership of the insurance division was split in two, with Lisa Harrison appointed as Insurance Product and Portfolio CEO and

Paul Smeaton as COO Insurance.

Now, in a note to brokers, Ms Harrison says the merger will “simplify our structure, create greater clarity and make it easier for you to do business with us”.

The merged team will be led by EGM Commercial Darren O’Connell, while EGM Intermediaries Andrew Mair will leave the company.

Beyond the threat – Page 8 0

HACKED: INDUSTRY TARGETED The insurance industry has the fourth-highest number of data breaches in the six months to June, emerging for the first time in the topfive list of sectors with the most cases reported to the Office of the Australian Information Commissioner (OAIC).

Of the 35 breaches reported by the industry, 28 were caused by malicious or criminal attack,

the OAIC says. The remaining seven breaches were caused by human error.

The health sector remained as the industry with the most breaches, with 115 notifications or 22% of the cases reported. Finance was second (15%), followed by education (8%), insurance (7%) and legal, accounting 0 and management services (5%).

BIG BUSINESS JOINS CLASS ACTIONS ATTACK The insurance industry is pushing for reforms to arrest the sharp escalation in directors’ and officers’ (D&O) premiums.

And its case before the Parliamentary Joint Committee on Financial Services and Corporations is being backed by Big Business, with peak employer body Ai Group saying stronger laws on class actions are needed to address the soaring cost of D&O insurance premiums.

“Those opposing reforms to class action and litigation funding laws often dress up their arguments with liberal references to access to justice, in order to take the focus off the excessive profits that they are earning from class actions,” Ai Group CEO Innes Willox said.

The insurers also are calling for increased oversight of litigation funders via a mandatory licensing regime.

Insurance Council of Australia (ICA) Senior Policy Manager Tom Lunn says the industry supports the role that class actions play in helping Australians access justice, but also warns the prohibitive cost of acquiring D&O in the current climate is not sustainable. Premiums rose at least 75% last year and an average of 88% in 2018. Major broker Marsh told the inquiry that ASX200 companies saw an average premium increase of 118% last year, with extreme cases at a “staggering” 600%.

“Those insurers who are willing to provide cover are increasing their premiums,” Mr Lunn said. “They are also reducing coverage limits.

“This is making D&O insurance very expensive, and for many smaller listed companies the premiums may be close to 0 unaffordable.”

‘MEDICARE-STYLE’ IDEA HOSED DOWN Actuarial firm Finity has cautioned against a Medicare-style pricing model to tackle the growing premium affordability problem facing residents who live in bushfire-prone areas.

The proposal by a University of NSW report fails to recognise the gulf that exists between health insurance and property insurance.

Finity says while there is an incentive for equitable access to a universal heath scheme because every Australian resident runs the risk of becoming injured or ill, the same can’t

be said for property risk – because not everyone lives in a bushfire-threat area.

“Social justice advocates often favour cross-subsidies to protect against higher prices, but often the impact on those asked to pay these subsidies (those with lower risk) is overlooked,” it says in a blog post.

“In property insurance most policyholders are not exposed to significant bushfire risk, and some will never be even under climate change.

“From a social fairness perspective,

should property owners pay a bushfire premium without the prospect of ever benefitting?”

The university report, Social Justice and the Future of Fire Insurance in Australia, suggested a publicly funded scheme modelled after Medicare as the best approach to countering the impact of rising premiums caused by climate change-fuelled bushfires.

Finity says the current pricing mechanism used by insurers has created a “vibrant private market” to set premiums according to the risks 0 involved.

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From the

PUBLISHER

WESTPAC GM TAKES UP ICA PRESIDENCY Life at the top of the corporate tree is unforgiving, and recent years have seen that fact all too regularly impact on the prestigious presidency of the Insurance Council of Australia (ICA).

The latest industry CEO to step down as president is Gary Dransfield, whose role as CEO Insurance at Suncorp was eliminated in July via an ongoing corporate restructure. His replacement in the top seat at ICA is Westpac GM Insurance Sue Houghton,

who will serve as President through to the end of next year. Ms Houghton was previously finance director at Wesfarmers Insurance and held a number of senior positions at IAG. Other changes on the ICA board included the resignations of Swiss Re Head of Australia and New Zealand Mark Senkevics and RAA Insurance CEO David Russell, while Suncorp Insurance Product and Portfolio CEO Lisa 0 Harrison was appointed.

INSURANCE WILL BOUNCE BACK IN 2021 Global insurance premium volumes will recover to pre-coronavirus crisis levels next year, Swiss Re says.

Before bouncing back in 2021, the magnitude of premium losses will be similar to that seen during the global financial crisis in 2008-09, even though this year’s economic contraction of around 4% will be much more severe.

“The insurance industry is showing resilience in face of the COVID-19-led economic downturn,” Group Chief Economist Jerome Jean Haegeli said.

“Unlike for the global economy, we expect a strong V-shaped recovery in insurance premiums, a remarkable showing

considering that the world is currently in the throes of the deepest recession ever,” he said.

Swiss Re estimates that total premium volumes in advanced markets will shrink by 4% this year and return to positive growth of more than 2% in 2021.

In emerging markets, premium growth will remain in positive territory in both years, up 1% this year and a robust 7% in 2021.

The reinsurer says this year’s recession will be the deepest since the Great Depression of the 1930s, but it will also be short-lived.

Global general insurance premiums are forecast to be down 0.1% after growing by 0 3.5% in 2019.

Terry McMullan

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It would be trite to state that the insurance industry is living through unprecedented times, with a coronavirus emergency, a massive change in working arrangements for all of us and a variety of local and global influences forcing insurers to make decisions that have unleashed a rush of official inquiries and some occasional inter-industry friction.

So we will refrain from any “light at the end of the tunnel” cheer to mention only that, as this edition of Insurance News reveals, we’re all getting on with the job.

On the micro-scale, most of us have adapted to working from home, using technology to do what we do while interacting with colleagues, clients and services.

But on the macro-scale, it’s not business as usual. The coronavirus is serving to push the industry into a greater acceptance of the need for fundamental change.

Our cover story subject, Suncorp’s Steve Johnston, illustrates the air of cautious optimism that is emerging even as the pandemic casts gloom across the country. Insurers are embracing innovation and technology with renewed enthusiasm, and we may one day look back on this period as the time when gradual change became an irresistible upheaval.

Will people adapt to a permanent state where the office is a place they visit only occasionally? Will the daily commute to and from work become a memory? Will our cities ever return to their former glory as the hubs of business?

Time will tell. What we can say with certainty is that the Baby Boomers are moving on as the industry’s primary market focus and we must now embrace and adapt to the revolutionary Millennials.

Our article on Page 46 underlines the fact that these customers demand flexibility in products and the way those products are priced – a demand that is seeing the personal lines insurers, in particular, adopting new approaches that lean on technology and innovation.

As IAG Managing Director Peter Harmer warned six years ago, we must adapt to new challenges and opportunities or become irrelevant. Aware of the potential for small innovative competitors to nibble away at the established insurers’ market dominance, his company is already introducing new brands aimed squarely at Millennials. Others are moving in the same direction.

The explosive impacts of the coronavirus crisis may have been the catalyst for the intensified winds of change moving across the industry. Whatever the cause, we’re more ready than we have ever been for whatever blows our way.

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August/September 2020

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Changing it up: Steve Johnston

T

he COVID-19 pandemic continues to hurt Australia’s society, economy and insurance industry. While the scale of the damage is not yet clear, Suncorp Group Chief Executive Steve Johnston is determined to see positives, and equally determined to capitalise on them.

The major insurer last month announced a dramatic shift in the way its insurance division is organised.

Former Insurance Chief Executive and industry stalwart Gary Dransfield has left the group, with leadership of the division now split in two.

Lisa Harrison, previously Chief Customer & Digital Officer, has been appointed to the new role of Insurance Product and Portfolio Chief Executive, encompassing distribution channels, customer strategy, brand and marketing, product and pricing and innovation.

The new role of Chief Operating Officer – Insurance is being taken up by Paul Smeaton, who has led the Suncorp New Zealand business for the past five years.

Mr Johnston says while he’d been contemplating such changes “for some time”, COVID-19 “sped up the desire” to implement them – because Suncorp believes the current environment offers a unique transformation opportunity that cannot be missed.

“It really comes off the back of what we see as a defining moment for financial services, which is the pandemic and the response to the pandemic,” he told Insurance News.

“We’ve been able to do things faster and cheaper than we’ve ever been able to do before. So these changes to the insurance business will allow us to significantly

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Beyond the threat Suncorp’s new operating model is designed to take advantage of a coronavirus-shaped opportunity

By John Deex

increase the pace at which we transform.”

Mr Johnston says the “generation-defining pandemic” has been joined by other significant forces.

There are the bushfires and claims events “which have had a very material impact on global reinsurance markets and the cost of insurance generally”, alongside the “firmly entrenched low yields” which have hit insurers’ investment returns.

“These three forces coming through are somewhat macro in their nature, which means it really is time to move quickly to speed up our ability to think about our business differently, and to meet customers in a different way than we have historically or traditionally,” Mr Johnston says.

“These dynamics are certainly going to be embedded for a period of time, and the last thing you want to do in that environment is keep a static business model and keep doing what you’ve done in the past.

“I’ve always felt we need to move at a faster pace. The environment is dictating that and COVID is our opportunity to galvanise ourselves.”

This is not the first significant change Mr Johnston has presided over. Shortly after taking the Group Chief Executive role almost a year ago, he culled the highly controversial Marketplace strategy.

His predecessor Michael Cameron aimed to transform customer experience, attempting to emulate companies like Apple with a series of concept stores.

But Mr Johnston believed the strategy was too ambitious, with the narrative eclipsing other good work, and pushed customer functions back into the core insurance and banking divisions.

“We have de-emphasised the aspirational elements of the Marketplace strategy, and realigned our focus and structure to strengthen the performance of our core businesses,” he told Insurance News.

“The Marketplace investments put the foundations in place, particularly around digitisation, which we continue to leverage.

[The stores] continue to operate across various locations.”

Tackling Marketplace was step one, and now COVID-19 has opened the way for a second major change.

Mr Johnston breaks down the opportunity into key areas – brands, products, distribution and claims.

Suncorp, as a “multi-brand manager”, needs to go through a process of reinvigorating and realigning its brands, he says. This will involve making sure they are “pointed to the right market segment and the right geography”.

Products need to be simplified, and evolved, with digital offerings “embedded in the product suite”.

“Customers will have different needs coming out of the pandemic than they had going into it,” Mr Johnston says.

“Their cashflows are going to be disrupted for a period of time. Product simplification and evolving products to be more innovative, using digital and data at the core, is a really big opportunity.”

More flexible products and insurance-on-demand offerings could all be considered, he says.

“Everything should be on the table to make sure that during this period of time we have an opportunity to continue to provide people with adequate cover – because people will still want to be protected.

“There are plenty of opportunities for us to innovate new products to do that. We’ve done that with Bingle Go and other products already, so we will just be speeding that up.”

In distribution, COVID-19 has shifted the goalposts significantly, with customers now significantly more prepared to interact with sales and service digitally.

“Insurance is going to make a stepchange in terms of the propensity of customers to interact with companies like ours digitally, simply because in a pandemic they

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“We’ve implemented things in a matter of weeks that we otherwise anticipated taking us months or even years to do.”

have been forced to do that.

“We’ve got good digital capability in our group. We’ve just got to make sure we work our way through how we make that even better and when a customer wants to interact with us digitally that we can meet them through that process as efficiently as we can.”

Mr Johnston says digital sales have increased by 20-25% over the past three months, and he believes the companies that perform the best in the current environment will inevitably be those that “serve their customers efficiently in a digital construct and build products that align with the digital sales activity”.

That doesn’t mean other channels become less important, however. Brokers, in particular, remain vital as “a significant contributor to profitability”.

“I’m a very big fan of the relationship aspect of our business, and one of the mistakes that we made in the Marketplace structure and narrative of days gone by is that it didn’t put enough emphasis on the intermediated end of our business,” Mr Johnston says.

“We are respectful of the role of brokers in terms of serving customers. All that I’ll be looking to do in these structural changes

is to enhance that.

“There is a digital story that plays out there to improve the way that we work with brokers. We can digitise more of our processes, work alongside the intermediated market, all with the endgame of delivering better service to customers.”

Mr Johnston also sees claims as “a huge opportunity” and another area that needs to evolve.

Suncorp aspires to have a “best in class” claims service, and to enhance the way it tackles claims costs. That aspiration was rewarded in July when brokers’ votes resulted in Suncorp’s intermediated brand Vero winning the prestigious Gold Mansfield Award for claims excellence.

“I was very keen to elevate the role of claims within the business,” Mr Johnston says.

“In a business of our size with insurance so big within the group, it is a very big business in its own right.

“I’ve always felt that at the heart of any insurance company is the management of claims, and we do that exceptionally well at Suncorp.

“When we have bushfires and floods and hailstorms our claims teams work together and really live the purpose of the company.

“Lifting that up a level in the organisation, putting someone like Paul [Smeaton] in charge, with his deep experience in managing claims teams and his demonstrated success in New Zealand, will not only improve our claims management processes and align them even better with the customer. It will also allow him to really focus in very specifically on what needs to be done to digitise more of the claims and take manual processes out.

“We ultimately aspire to be the best in class for both short and long-tail claims. It’s great for our customers but I think will also drive down material costs across the group.”

Mr Johnston says the structure at the highest level is in place “for the foreseeable future”. But there will likely be further reorganisation as the new model is embedded, and lower staffing layers are brought into play.

“There will be changes as you work your way through the organisation,” he says. “But I don’t come at it from a staff reduction perspective. It’s more aligned to increasing the pace of implementation.

“Our opportunity here is to really grow our revenues as a proportion of our costs, as opposed to slashing and burning our cost base.

Processing a pandemic While Suncorp can now turn its thoughts to the opportunities presented by COVID-19, the fast-moving and deadly virus initially brought a set of challenges that the insurance industry has never faced before.

Mr Johnston says Suncorp took a series of measures to make sure it could cope with everything the pandemic could throw at it.

“In a business like ours when you front into something like a pandemic you’ve got some immediate challenges,” he says.

The first measure was the switch to

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remote working at a much larger scale.

“We had to work very quickly to establish our ability to move from an environment where 20-30% of our workforce was working from home on any one day to having 95-100%.

“We had to make sure that our IT systems, which are very strong, could cope with that level of support remotely.”

The business also had to ensure it could serve its customers while maintaining a strong balance sheet and appropriate funding levels.

“We went through all of those steps to

make sure that we had a very safe, robust, resilient business from a funding, liquidity, balance sheet, operational point of view – that we could continue to serve our customers as they’d expect us to.

“Once you work your way through that part of the cycle, we quickly turned our minds to what could we do differently.

“The fourth priority is to do what we are doing today, which is to align the business to make sure that we emerge from the pandemic in better shape than we entered it.”

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“We need to be efficient and we’ve done that – we’ve demonstrated that over many years with big programs of work that generate huge headline cost savings.

“I continue to expect the business to become more efficient, but ultimately if you serve customers better and you have got your brands working well and your products sitting beneath those brands being relevant to customers and you can distribute digitally, then by definition you are going to be growing your revenues.

“So I see continued prudent management of an efficient cost base but growing revenues through being able to serve customers better and meet more of their needs.”

For Mr Johnston, dealing with a oncein-100-year pandemic has been a huge challenge.

But now he has set his sights on the opportunities it brings – a new impetus for transformation, and evidence that fastpaced change is possible.

“I look at lots of things that have sat on our project slate for many years that we haven’t done because we felt that the cost was too great or the time taken to implement was too long.

“We’ve done some of those things, like webchat on claims that would’ve sat on our project slate for 12-18 months, in weeks.

“We’ve implemented things in a matter of weeks that we otherwise anticipated taking us months or even years to do.

“The whole dynamic of the organisation has changed. We’re doing things that we never thought we could do. We’re working differently [and] our customers are interacting with us differently.

“Everything has come together to provide this unique opportunity for us as we move through the threat to the opportunity.

“The whole structure of the organisation and speed of the organisation needs to reflect the opportunity set that we have in front of us – and that’s why the changes 0 have been made.”

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Challenging times The recent renewals were tough going, say major brokers and authorised representative networks that participated in an Insurance News survey

By John Deex

S

ome sections of the insurance market were already problematic in hardening conditions made worse by a record-breaking summer of catastrophe claims. Then along came COVID-19.

Rising claims, reduced capacity, increasing reinsurance costs and an “aggressive” tightening of terms by insurers have resulted in soaring rates that have put clients under significant pressure.

Brokers report the most challenging conditions for almost two decades, with some admitting that it was impossible to find cover at any price for some clients.

Insurance News asked intermediaries for their reaction, and the following is a summary of their responses.

What are your broad observations on rate movements during the recent renewals?

“We would say that the increases experienced in Q2 exceeded what we saw in Q1 and capacity was further constrained,” says Marsh Head of Placement Asia Pacific John Donnelly.

“It is the most challenging market environment we have seen in 17 years.”

Aon says unprecedented bushfires followed by the COVID-19 pandemic “have

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exacerbated challenges on rate movement”.

It draws attention to APRA statistics for the March quarter, which show an after-tax loss for the industry of $997 million, and highlights the “dual shock” where insurers’ underwriting and investments have suffered simultaneously.

“Because of this, there is a general trend in upward rate movement across almost all policy lines,” Aon says.

Gallagher says the market is hardening and “we are seeing a shift in insurer risk appetite and more scrutiny on premiums at renewal, particularly for high-risk occupations where pricing can be more aggressive”.

Insurance Advisernet Managing Director Shaun Standfield says premium rates are “generally continuing their upwards trajectory”.

He says this is due to claims frequency and values increasing, “combined with ongoing restriction of capacity supply both within local and offshore (Lloyd’s) markets”.

Are there any particular sectors that stand out? Can you estimate the price movements in these sectors?

PSC Group Chief Executive Rohan Stewart says financial lines and hard-toplace property are the areas where the

impacts “are hardest felt”.

“Professional indemnity (PI) saw rates increased 10-15% and directors’ & officers’ (D&O) policies have seen 75-150% rate increases with upwards of 200% when Side C covers are in place.

“Hard-to-place property risks where expanded polystyrene (EPS) is present [and] high-hazard occupations including manufacturing and processing is more a capacity issue.”

MGA Broking and Technical Operations Co-ordinator Josh McDonald says hotels, large strata, snowline risks and some manufacturing stand out.

“So does domestic,” he says. “I would guess domestic insurance has increased about 20%. Insurers are not just increasing the premiums, they are really tightening up on risk criteria.”

Insurance Advisernet’s Mr Standfield highlights “above 26th parallel” property risks as increasing 50-100%, and financial lines PI and D&O seeing 20-200% increases with “higher increases towards sectors including publicly listed entities [and] businesses with AFSL obligations”.

Community Broker Network Chief Executive Richard Crawford says PI “has been moving and contracting for some

Toughest in 17 years: Marsh’s John Donnelly

time and we are not seeing this improve at all”.

“The estimation of the price movement is defined by class of risk and occupation, as insurers are implementing sweeping changes across certain risks and occupations, rather than underwriting on the quality of the risk.”

Resilium Director of Sales and Distribution Ben Hastie says “the usual sectors” stand out, including North Queensland property, EPS construction and metal recyclers.

These areas remain difficult to place with premium increases of 25% or more, he says.

“Management liability and PI are also seeing significant increases of 15-20% on average.”

Marsh’s Mr Donnelly says listed company D&O premiums “continue to soar”.

“Downstream energy property rates were also at the higher end of rate increases,” he says. “Bushfire liability is very challenging from a price and capacity perspective.”

Aon picks out industrial special risk (ISR) and general liability, with March quarter combined ratios of 121% and 125% respectively.

Are price increases contributing to underinsurance?

Marsh’s Mr Donnelly says “there is no evidence of deliberate underinsurance in the corporate sector of the market”.

Aon agrees that while the rising cost of risk transfer is challenging, “the volatility that self-insurance or underinsurance brings remains a key consideration for many”.

Insurance Advisernet’s Mr Standfield says “affordability of insurance premiums is contributing to underinsurance, as well as capacity constraints” and CBN’s Mr Crawford says “clients are looking to save every penny”.

“It is our role to make sure we are educating the communities on what underinsurance means,” he says.

MGA’s Mr McDonald says that while his company advises against deliberately underinsuring, “some of the price increases are forcing clients to not insure certain sections as it is just unaffordable”.

“We also discuss with our clients and provide advice on alternate ways of reducing the price increase, by either increasing excesses and working with the client to improve their risk to allow the insurer to feel

more comfortable.”

Resilium’s Mr Hastie says the network refuses to let clients use underinsurance as a means of cost saving. But he adds that “many clients have agreed to take a higher deductible to help affordability”.

Highlighting problematic lines: PSC’s Rohan Stewart

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Negotiation a constant: AUB Group Chief Executive Mike Emmett

Are there any areas where you have been unable to secure cover for clients at any price?

Insurance House’s Victorian Broking Manager Rob Currenti says that “for the first time ever since I have been broking we actually have accounts that cannot be placed and/or there is limited capacity”.

“This applies mainly to some PI placements. In the property space we are having great difficulty placing EPS risks, anything with combustible cladding and recycling risks.”

Insurance Advisernet says new bushfire risk mapping is “identifying areas insurers will not accept”, while CBN says leisure clients including inflatable activities and trampoline park operators are particularly problematic.

CBN also reports an increase in layered cover. “This can mean a risk that an insurer would [previously] hold 100% of can now be split up to five times with layered insurance.”

MGA says the only sector it has been unable to find cover for is recycling plants.

“We have had a few that we have been unable to offer any form of property cover due to the risk appetite of the insurers,” Mr McDonald says.

AUB Group Chief Executive Mike Emmett says the group managed to get all risks placed, or at least obtained extensions where placement wasn’t completed for renewal.

“However, as risk appetite has changed for some insurers, negotiation around increased pricing and increased deductibles was a constant. Liability for the leisure and tourism sector and risks with EPS were the worst affected.”

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PSC also says it has been able to provide an insurance option for all clients. “The deductibles and how you structure the program can provide pricing relief and some protection to insurers,” Mr Stewart says.

Marsh says it completed placements for all clients at the June renewal period on time.

But Mr Donnelly adds that “some large clients have not been able to secure the limits that were previously available for Side C D&O, bushfire liability and major complex property risks.

“Cyclone-exposed locations continue to struggle to find capacity.”

Have you seen an increasing trend for clients to seek alternative insurance options, such as self-insuring?

CBN’s Mr Crawford says there is “an element of this in the market”.

“People have the option to make more informed decisions on what self-insurance and the risk might look like,” he says.

“We have seen the trend of people wanting to revisit their insurance program and reconsider the covers they have and the risks they are willing to take to reduce cost.”

MGA says some larger clients are “definitely considering and open to self-insuring, or at least opting for huge excesses to keep the premium down”.

Higher deductibles and reduced cover is a recurring theme, Insurance Advisernet says.

Mr Standfield says there are “more requests for mutual/captive information on formation and operational costs of these vehicles”.

Gallagher says it sees examples of clients

seeking alternate insurance solutions, “and generally being more attentive to policy wording inclusions and exclusions”.

Marsh says it has not seen clients electing to not insure, but “several clients have sought alternative quotations with increased retentions with a view to softening the premium increases”.

Have client connections with the fossil fuel industry (direct or indirect) made it harder to secure coverage?

AUB Group’s Mr Emmett says pressure campaigns are having an impact.

“As expected, yes, with the global pressure on insurers providing coverage to the fossil fuel industry, it is becoming harder for clients to secure coverage if they participate in this sector,” he says.

Insurance Advisernet agrees, saying problems are becoming “more prevalent”.

Mr Standfield says this is true “even as to commercial motor risks where the insured discloses works/visitations in and or around mining operations. If coal mines are serviced/customer locations, cover will not be offered.”

CBN and MGA highlight issues for farmers with coal seam gas liability.

“We are aware of farm clients with coal seam gas extraction plants on their property having challenges with declined cover from the major players,” Mr Crawford says.

Marsh, Aon and Gallagher declined to answer the question.

Has the COVID-19 pandemic impacted renewals in any way?

Gallagher says while the pandemic has led to “a number of clients” reconsidering

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Hard slog: Insurance Advisernet’s Shaun Standfield says conditions could last another two years

coverage priorities, it has also increased interaction with brokers.

“In many respects this is motivating a good quality conversation with clients about risk management for their business,” it says.

Marsh says the impact of COVID-19 on pricing “is relatively minor but it is there”.

“It has given insurers an additional reason to increase premiums,” Mr Donnelly says.

“The market has also imposed communicable disease exclusions on major classes of insurance. This has caused quite a deal of confusion and disruption in the market with lack of consistency in the wordings and strategies being adopted by different insurers.”

AUB Group says there has been “a discernible increase in the level of discounting of broker fees and commissions across the market”, while MGA says the pandemic has caused some clients to cancel cover.

“Some of our clients have decided not to renew as their businesses have not returned to ‘normal’ as yet or are unable to afford the premiums,” Mr McDonald says.

He adds that the stance insurers have taken in relation to rent default covers in domestic landlord policies since COVID-19 hit has had a “major impact”.

“Clients are unable to move policies between insurers if rent default was previously selected. Most insurers are honouring cover if had previously but won’t offer it as new,” he says.

“This places clients in an impossible situation if they wish to keep rent default, as they do not have an option to source alternate quotes if the holding insurer applies premium increases, excess changes or policy endorsements.”

Insurance Advisernet says management liability insurers are taking a cautious position “given that certain risks associated with Employment Practices Liability & Crime generally trend upwards in losses during

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recessionary periods”.

Insurers are reducing limits and increasing deductibles in such areas, he says.

Insurance House’s Mr Currenti says most clients are not cancelling cover but many “have reduced turnover and coverage, especially those business which have been forced to shut down”.

Do you expect the market to continue to harden?

If so, for how long?

PSC believes the hard market has 12-18 months to run “at a minimum”.

“We were already in a hardening cycle with bushfires, floods and now [there’s] a pandemic thrown in on top to challenge the operating ratios of insurance companies both here and overseas,” Mr Stewart says.

CBN’s Mr Crawford agrees. “This is a market unlike many have seen, or perhaps [are] unlikely to see again in our careers,” he says.

“We expect the market to continue to harden over the next two years. With this we expect mergers and acquisitions will rise, new players may enter and some likely may leave.”

Insurance House’s Mr Currenti believes the pandemic has injected a new sense of uncertainty.

“Before COVID I would have said that we still have 12 months of a hard market. I am now not sure,” he says.

Insurance Advisernet says it’s hard to see new capital entering when margins remain tight and predicts technical underwriting will remain for some time.

Mr Standfield believes the hardening market will run for 18-24 months but the severity and frequency of natural catastrophes will be a key factor.

Marsh says the market will continue to harden during this year and into next, as increased reinsurance costs are passed on to buyers.

“The increased pricing and restriction on wordings will continue until the market globally restores profitability and maintains that profitability for a reasonable period of time,” Mr Donnelly says.

Aon says insurers are increasingly taking aggressive action to firm up underwriting performance after successive years of poor insurer performance.

“With rating agencies casting a watchful eye on the industry and investors more willing to demonstrate a removal of capital, insurers must prove that they can return to profitability,” it says.

“We see the current environment continuing in the medium term, although there is light at the end of the tunnel for those mid-market buyers in benign geographies in medium-hazard occupancies.

“These clients are very much the target for the majority of insurers and this will soon become the battleground for competition as insurers shed premium in other areas to 0 reduce portfolio volatility.”

Every penny counts: CBN Chief Executive Richard Crawford warns clients are under pressure

Global impact: Hong Kong residents were early mask adopters as the COVID-19 pandemic swept across the world

M

onths of life-changing lockdowns have not suppressed the coronavirus. Second and third waves of the pandemic emerged as restrictions were eased, with the exception of New Zealand, Iceland and a handful of other countries.

As laboratories race to find a vaccine, several post-mortems into the worst public health emergency to unfold this century are underway. Predictably there will be many pressing questions but few ready answers.

On one aspect, however, there is near universal agreement: the world finally ran out of luck after years of skating on thin ice.

For years the medical community has been sounding alarms about the risks of a new super-virus spreading rapidly around this interconnected planet. So has the insurance industry, led by the likes of Swiss Re, which had been looking at the risk for many years, assessing the probable threats infectious diseases would pose.

“Pandemics have been part of the risk models of reinsurers and insurers for 20 years,” Bernd Wilke, Zurich-based Senior Risk Manager with Swiss Re, tells Insurance News. “As reinsurers, we know that a pandemic is a major risk for which we must always be prepared.”

Swiss Re had warned in its first Sonar report in 2013 of the potential dangers of emerging infectious diseases.

The reinsurer returned to the subject two years later, detailing how a global pandemic could affect global

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supply chains and rattle financial markets.

“We went back to the theme again, in 2017,” Swiss Re says in a Sonar report in June. “We said the question isn’t whether another deadly infectious disease will appear, but when and how well society is prepared to cope with it. Impact potential is high.

“As our Sonar reports to date testify, the warning signs were there. The reach and depth of impact – on economies, financial markets and societies – from the containment measures imposed to halt spread of the virus were probably underestimated.”

Technology billionaire and philanthropist Bill Gates joined the cause in 2015, warning an infectious virus posed a greater threat to humanity than a nuclear war.

A year earlier, then United States President Barack Obama had ominously predicted a pandemic would likely strike in as little as five years.

“In order for us to deal with that effectively, we have to put in place an infrastructure – not just here at home, but globally – that allows us to see it quickly, isolate it quickly, respond to it quickly,” Mr Obama said five years ago.

“It is a smart investment for us to make. It’s not just insurance… It is knowing that down the road we’re going to continue to have problems like this, particularly in a globalised world where you move from one side of the world to the other in a day.”

While no one could have foreseen the chaos and death that would strike when COVID-19 hit the US, he

It was never about if, just when Warnings of an imminent pandemic were left on the shelf, resulting in the biggest public health crisis to confront the world

By Bernice Han

was close to the mark in understanding the possible impacts.

When the World Health Organisation (WHO) finally declared the virus outbreak a pandemic on March 11, it didn’t shocked Michael Toole, an epidemiologist at the not-for-profit Burnet Institute medical research body in Melbourne.

He knew this day would come. It was not a matter of if, but when.

“This has been predicted for many years,” Professor Toole told Insurance News. “Of course, I wasn’t expecting this particular virus, but yes, I was expecting a pandemic.

“Many experts predicted that this could happen and asked governments to prepare for it, but there was just not the investment.”

In a comment that parallels the insurance industry’s call for large-scale mitigation projects to prevent catastrophes in climate change-exposed regions, Professor Toole says: “Prevention is better than cure, but there’s very little investment in prevention.

“All this money we are spending now in response could have been saved if we were better prepared. And I mean the world, not just Australia.”

For example, the last time Australia tested its pandemic response plan was in 2008 – 12 years ago. The Severe Acute Respiratory Syndrome epidemic that mainly affected the East Asian region in 2002-2004 jolted many countries into drawing up contingency plans,

but fears of public health emergencies gradually eased, despite signals that the world at large remained in a danger zone.

The Middle East Respiratory Syndrome that first surfaced in Saudi Arabia in 2012, Ebola in Central Africa in 2014 and the mosquito-borne Zika virus epidemic in 2015 were all serious outbreaks. But because they were contained within geographical areas and did not lead to a total shutdown in global commerce, initial concerns inevitably gave way to complacency.

The WHO declaration in March came more than three months after a mysterious virus emerged in the Chinese city of Wuhan and spread like wildfire, sending cities and countries into forced lockdowns.

It’s the first time that a pandemic has been sparked by a coronavirus – a pathogen that is named after the crown surrounding each virus particle. In Latin, corona means “halo” or “crown”.

Taming the SARS-CoV-2 virus, which causes the COVID-19 disease, has proved elusive. So have the efforts to develop a vaccine, despite massive investments and significant advances in research. By August the number of confirmed cases had risen to more than 19 million globally, including more than 712,000 deaths, according to Johns Hopkins University in the US. Many have compared the current situation to the 1918 Spanish flu pandemic, where an estimated 500 million people, or one-third of the world’s population at that time, were infected. At least 50 million people died,

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Warning signs: Insurance News outlined the threat in 2016

making it the deadliest pandemic of the 20th century.

Top US infectious disease expert Anthony Fauci says the world is now “living through a historic pandemic outbreak” and he doesn’t think the nightmare will go away soon.

“We are certainly not at the end of the game. I’m not even sure we’re halfway through,” said Professor Fauci, who is Director of the US National Institute of Allergy and Infectious Diseases.

In places where suppression measures appeared to have initially worked the virus has struck again with a vengeance when lockdowns were lifted, forcing the re-introduction of containment measures. In Australia, Victoria is struggling to quell a series of fatal outbreaks while in the region, South Korea and Hong Kong are seeing new outbreaks after initial success with containing the first surge of infections.

Repeated failures to pay heed to the warnings of a

Insurers’ mistake becomes a high-stakes game When it emerged that standard business policies contained communicable diseases exclusions, pandemics included, the outcry from all sides was predictable: blame the insurers.

That’s hardly a phenomenon. Bashing the industry has been the go-to playbook for critics. Can’t afford directors’ and officers’ premiums? Can’t get professional indemnity cover for a building surveyor that includes cladding protection? Don’t blame the factors that caused the problems, like funder-driven class actions or dodgy building practices; blame the insurers.

But now insurers, among the most cautious and legalistic of businesses, are playing a high-stakes poker game as they seek to sort out a mess of their own making that could conceivably end in them paying claims for a risk they never intended to cover and were never paid to include.

Some Australian insurers used outdated policy wordings referring to the now-repealed Quarantine Act 1908 which was replaced by the Biosecurity Act 2015.

Now a court case will decide if they are exposed to claims for losses that were never insured for in the first place – and therefore weren’t included in calculations of reserves and reinsurance.

Insurers, by default, do not provide cover for a pandemic risk, unless it has been specifically requested and paid for, as was the case with the All England Lawn Tennis Club.

Not every business has pockets as deep as the organiser of the Wimbledon Championships grand slam tennis tournament. The club paid a total of $US34 million in premiums for the past 17 years, and will get about $US141 million after COVID-19 forced the cancellation of this year’s tournament.

The hundreds of billions in fiscal debt that governments

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globally have taken on to hold up their economies and save jobs offer perhaps the best indicator of the cost of providing pandemic coverage.

As Rade Musulin, a principal with actuarial consultancy Finity, puts it: “Pandemics fail a lot of tests for what is insurable.”

“To start with, it’s difficult to define the event as they happen over a long time, not like a cyclone which makes landfall on a specific date,” he told Insurance News. “The magnitude of the losses is huge, beyond the capacity of the insurance system.

“Losses are global and correlated with economic shocks, so it’s hard to diversify risk. And modelling is difficult. If you can’t measure the risk, it’s difficult to insure it.”

It’s an assessment shared by Swiss Re. Bernd Wilke, its Zurich-based Senior Risk Manager, says pandemics are not insurable from a private sector perspective.

“By definition, a pandemic occurs worldwide and at the same time, which makes geographical and temporal diversification impossible. In actuarial terms, this would correspond to annual risk premiums that would probably be unaffordable for the insured.”

There’s a growing sense of concern as the industry prepares to defend its position in a test case being mounted by the Insurance Council of Australia and the Australian Financial Complaints Authority that will be filed in “a superior court”.

The industry says the intent of the pandemic exclusions are clear, even if many of the business interruption policies held by businesses make no mention of the Biosecurity Act which replaced the Quarantine Act. How the court will rule is, at best, a guessing game. For the industry, the stakes have possibly never been so high.

pandemic risk have proved extremely costly.

Since March, governments have been forced to pump in hundreds of billions of dollars in financial aid to avert an economic collapse.

More fiscal support could be on the cards if Dr Fauci’s belief there is still a long way to go before the virus runs its course is accurate.

It remains to be seen if pandemic risks will be taken more seriously after the world overcomes COVID-19. If history is any indication, it appears the cycle will recur over and over again.

“We are going to forget about this and move on,” Harry Rosenthal, a retired risk professional and academic, told Insurance News. “I could be wrong, but I think it will fade from memories again.

“It’s a human behaviour thing,” he says.

“There is an idea that humans have a mastery over nature. You can build a house in a swamp, you can build near a river, you can build in a bushfire area and you’re going to take your chances.”

Insurance News interviewed Mr Rosenthal about the pandemic threat in 2016, when he was the general manager risk management services at mutual insurer Regis. He said then that it was “drawing a long bow” to describe pandemics as an “emerging” issue.

No matter what critics or doubters say, being well prepared holds the keys to handling a pandemic effectively. Lost among the chaotic state of affairs has been the stellar example of Taiwan.

The island nation has been hailed as a role model for its handling of the outbreak.

Authorities acted swiftly, screening arrivals from Wuhan as soon as reports of the infections in the Chinese city emerged. It also moved quickly to co-ordinate testing and tracing of suspect cases as part of its pandemic response plan.

“Taiwan was ready on day one,” the Burnet Institute’s Professor Toole says. “As soon as they heard about the Wuhan outbreak they had a plan ready and they rolled it out.”

He says when a future pandemic strikes, the work to contain and eliminate it must be a united global effort, led by the WHO. “Decisions need to be based on science, and the countries that have based their policies on science have done very well,” Professor Toole says. “I’m hoping the world will give the WHO the resources to develop a 0 plan that is a global plan.”

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The travel bug The pandemic crisis has decimated demand for travel insurance and a lengthy recovery is the best the industry can hope for

By Miranda Maxwell

I

t’s not an honour anyone would choose, but the travel and tourism industry has nevertheless taken the blue ribbon for the industry most devasted financially by COVID-19.

Australia’s “Do Not Travel” restrictions are at the highest level in history, putting major airlines in jeopardy and seeing jobs in the sector vanish almost overnight.

Extraordinary lockdown measures and closed borders have decimated global tourism and led to bankruptcies or profit warnings across the tourism, travel and hospitality sectors around the world.

Travel insurers are among the industry victims.

They have hit unprecedented hard times after claims spiked and premium refunds were demanded, while pandemic exclusions have also placed travel insurers in the regulatory and media spotlight.

TravelCard Chief Executive Peter Klemt told Insurance News every travel insurer will need to demonstrate real value to prosper going forward.

“I don’t see a V-shaped recovery – more an L on its side, slower and more spread out,” he says.

“The days of high commissions, in some cases over 40% of the premium, will be under immense pressure.”

The mothballing by Qantas of its 12 A380 super-jumbos for three years is a particularly worrying barometer and a stark hint at the airline’s true demand outlook for air travel.

A blog published by the International Monetary Fund in July singles out air travel as a sector that may permanently shrink, and recommends that affected staff should be supported while they retrain in areas such as digital services.

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“Any company exposed to international tourism, whether it is an airline, travel agency, tourist operator or an exposure to the international student market needs to be considered in the context of a five-year timeline to the resumption of the previous volume of business, if at all,” says Michael Goldberg, the founder and managing director of Collins Street Value Fund.

The recovery will be prolonged as the initial suppression from COVID-19 is extended by the economic recession that will follow.

This year departures from Australia will plummet to around 2 million – levels not seen since the recession of the early 1990s and in stark comparison to recent averages of 12 million, according to projections from Finity Consulting, with reference to the Australian Bureau of Statistics.

The vast majority of the world’s population has lived in a country where cross-border travel restrictions prevent anybody from leaving or entering, with the lack of international tourists decimating every tourism-associated company, from airlines and cruise companies to hotels and hospitality venues.

TravelCard predicts it will take until 2023 to return to 2019 volumes. Even then business travel will lag as professionals use the technology they have embraced during lockdown as a replacement for more costly faceto-face trips.

Business travel makes up only about 8% of Australian overseas trips. The crucial ingredient will be the return of international travel, which dominates cover.

Although prospects for travel within Australia are improving as some states cautiously open up to select

Grounded: global air travel has been devastated by COVID-19

travellers, Finity says most of this type of interstate visitation is uninsured. While 90% of overnight trips are domestic, only about 10% of policies sold online are for domestic travel, and such trips are generally low value.

Travel premium volumes will remain a small fraction of pre-pandemic levels without international voyages.

“It’s going to be a slow return to normal,” Finity Actuarial consultant Danielle Casamento says.

Encouragingly, she says that though more cautious travellers may take less trips, they will likely buy higher-value products and demand more coverage. Insurers able to pivot coverage to better align with new customer demands “could gain considerably,” Ms Casamento told Insurance News.

“While price will always be a consideration for customers, COVID-19 will highlight the need to spend a little more to get the right coverage in the future,” she says. “Many Australians would be reluctant to travel internationally without medical cover for COVID-19, even to ‘safer’ destinations.”

Finity estimates that if there had been no pandemic exclusions, the additional cost for COVID-19 related cancellation insurance claims could be in the order of $150 million-$250 million.

The actuarial firm says insurers which effectively manage customer frustrations will build brand value and strengthen their pipeline of future sales.

“Given the volume of people impacted by cancelled travel plans, customers will consider how insurers managed and responded to the current pandemic in making decisions on their next policy purchase,” Finity says.

Ms Casamento recommends insurers tailor cover to complement flexible offerings from airlines and hotels and encourage consumers to feel safe to travel again, and also work on improving the perceived value of the ‘automatic’ cover provided through credit cards.

“I am trying to encourage the industry to think about new ideas, using artificial intelligence and customer behaviour insights to improve the marketing experience as they have time to do it,” she says. “This is an opportunity for travel insurers to reset the status quo and think about their products, and potentially rethink their overall business model.”

Customer demands will change after the pandemic. Ms Casamento points to the use of technology by US insurers using weather forecasts to automatically offer compensation for a cancelled camping trip due to rain.

Behaviour insights could help build an online marketing tool helping customers identify holiday destinations suited to their individual profile.

“How can product design help travellers feel safer when overseas travel to nearby destinations starts to open up? Travel insurers might need to reconsider their offering, product design and coverage in response to short-term changes in travel habits and longer-term market expectations.”

The Australian Prudential Regulation Authority (APRA) says 96 general insurers suffered a loss of $997 million in the March quarter, after a net profit of $220 million in the final three months of last year.

“The microscope is on all product classes in insurance, and travel insurance is likely to be close to the top of the list,” Mr Klemt says. “Some smaller players may withdraw from the market. Those without a strong

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support and the required capital to weather the downturn will be in a difficult position.”

Looking to 2021, TravelCard is bracing for what it expects to be a material decrease in travel insurance volume, which it describes as “a direct reflection of a world impacted by COVID-19 with no vaccine”.

Mr Klemt has pushed back earlier recovery forecasts by a few months after COVID new infections topped 700 in one day in Victoria, and New South Wales was “teetering on the brink” of a second community-transmitted wave.

TravelCard has also brought forward product diversification plans and swiftly reduced operating costs by more than half, and is insulated for now by ongoing revenue from its annual corporate travel contracts.

A new expat health insurance product is to be added to TravelCard’s offering after parent company The David Shield and PassportCard Group saw a spike in enquiries and policy sales from expatriates for medical insurance during COVID-19.

“The market remains dynamic, and our ability to pivot makes us ready to work with our partners and insured businesses to keep them on track as business recovers and push past this difficult period,” Mr Klemt says.

TravelCard plans to offer COVID-19 cover later this year, which it expects will provide a sense of security to travellers, though policyholders will be expected to “take greater care, avoid unnecessary risks and be mindful COVID-19 is still out there”.

“The future of travel insurance will be a little more limited,” Mr Klemt says. “Some travellers will find it harder to find travel insurance to cover them.”

Competitor Cover-More, which is owned by Zurich and holds a dominant 30.7% revenue share of the $1.2 billion Australian travel insurance market, has retrenched close to 10% of its 2300-strong workforce.

New Zealand’s largest travel insurer, Southern Cross, pared back its staff from 116 to 45 while at Nib Travel, employees have had their hours cut back and management is relying on the JobKeeper payment scheme to avoid redundancies.

Larger and mature players in the market will more easily reposition themselves. Notably, IAG has revealed

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a net benefit of around $100 million as higher claims costs in travel and landlords’ insurance were offset by lower motor claims frequency in April and May. “For some of them it’s kind of a rounding error in the overall scheme of things – it’s a small component of their overall portfolio,” says Ms Casamento, who does not expect widespread industry consolidation, as the number of insurers selling purely travel cover in Australia is small.

Various COVID-19 covers are expected to become available in the market, though Ms Casamento says customer and regulatory pressures mean travel insurers will need to carefully consider the pricing and product responses needed to provide future pandemic coverage in a sustainable way.

“All insurers are considering pandemic cover at the moment, but affordability is the question,” she says.

“There’s obviously a cost to the customer for that.”

Travellers might face higher premiums in the short term due to claims costs as well as a rise in the average cost of flights and accommodation.

“You are insuring a higher-value trip because of that,” she says.

Finity says the few players in Australia which offer “cancel for any reason” cover have withdrawn these policies from the market. It believes this type of cover will be less generous going forward as insurers and reinsurers globally are paring back their offering and tightening policy wording.

Even when the pandemic is over, many countries are likely to still impose restrictions in ways they didn’t before, particularly with mandatory quarantining regulations. For the medium-term, people will travel differently, with significantly fewer international trips and shorter, cheaper holidays.

Mr Klemt says he is reminded of the adage that out of adversity comes opportunity. He says the eventual rebound, when it comes, could be fast and furious.

“As a challenger brand we are excited about the opportunity the restart creates for us as we view it as an equalisation of the market,” he says. “Within three months of a vaccine, all bets are off and we expect to see 0 a sharp recovery.”

Personal protection Emergence says households should consider cover for cyber crime as risk levels are heightened

By Wendy Pugh

W

orrying about the impact after online activities take a turn for the worse has been occupying many people’s minds during the COVID-19 pandemic as risks from criminal activity have heightened.

The Australian Competition and Consumer Commission received more than 3600 scam reports mentioning the coronavirus this year, with some $2.4 million in losses reported by late July.

Texts offering grocery vouchers and links to fake stores selling facemasks and COVID-19 cures have been among the scams, while criminals are also exploiting trust in banking and government services, and demand for virus-related information.

Cyber insurer Emergence says the pandemic has heightened criminal activity, adding to an existing trend, and scams are only one of a number of criminal and anti-social online threats that can wreak financial and personal damage.

Head of Underwriting and Product Development Jeff Gonlin says after two decades of proliferation online devices are now simpler to use and more sophisticated in their technology, compounding risks for consumers.

“They are really black boxes,” he told Insurance News. “What is happening behind the scenes, with our data and so forth is really a big mystery, and what we are uncovering is that it is not always to the consumer’s advantage.

“Every day people are going to use these devices, one way or another, but they don’t necessarily know how to do it safely or what to do when things go wrong.”

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Emergence was established more than five years ago as a cyber specialist distributing insurance through brokers and focusing on SMEs. Founder and Chief Executive Troy Filipcevic says the company also provides cover for larger companies, but for some years it has also been considering the rising risks faced at the personal end of the market.

The firm, partly owned by Steadfast, made the move this month with the introduction of what it describes as Australia’s first stand-alone personal cyber product – Emergence Personal Cyber Insurance.

Security is provided by Lloyd’s, distribution is through brokers and risks covered include hacking, malware, viruses, cyber espionage, denial of service attacks and identity theft. It also responds to anti-social issues such as cyber bullying, stalking and harassment.

Emergence notes that victims often have no idea what to do in the event of an attack, and personal cyber cover can provide practical assistance as well as addressing financial impacts.

“Cyber insurance is not like home and contents, where if you lose a laptop or something you throw in an invoice and they give you some cash back,” Mr Filipcevic says. “Cyber typically provides more than that. It is the experts and the help and the services that come along with a cyber insurance product that make it unique.”

Consumers tend to underestimate their online risks and have not typically thought of insurance as something to consider, Mr Filipcevic says. Even in the

corporate arena cyber is considered a relatively new product.

The NotPetya and WannaCry ransomware attacks in 2017 raised awareness of risks on a broad scale, but at the smaller end of the business market it has remained a challenge to encourage firms to look beyond traditional insurance to consider cyber protection.

The Australian Cyber Security Centre (ACSC) says incidents cost businesses an estimated $29 billion every year, but one in five small businesses that use Windows have an operating system that stopped receiving security updates in January.

Complacency has long been a problem, Mr Filipcevic says, with the sheer size of major cyber attacks affecting large US corporations earlier in the decade contributing to views that it is more an issue for large firms than SMEs. US incidents from that period included a 2013 breach at Target where around 40 million credit and debit card accounts were affected. The following year cybercriminals compromised Home Depot’s network and likely stole information related to more than 50 million cards.

“They have been hearing about these large megaglobal corporations and have been thinking ‘this isn’t going to happen to me’, when the reality is that SME businesses are more vulnerable than ever,” Mr Filipcevic says.

Business risks have increased this year as COVID-19 has sent people home with little time for IT preparation

beforehand. Employees have spread suddenly across multiple locations, with people logging on to equipment of varying ages and with different levels of security.

Emergence says its commercial policy covers firms for people working from their homes, but even those with cyber cover can be tempted to cut back given pressure on profits and optimism that a breach will never eventuate.

“I think cyber insurance is very cheap for what they get, but we are in a world where currently insurance is a grudge spend,” Mr Filipcevic says. “Insurance on other lines of business is starting to harden and become quite expensive and people still think it won’t happen to them.”

Emergence says there are cases where businesses have experienced an attack by cyber criminals only weeks after cancelling a cyber policy, highlighting that social distancing shutdowns don’t translate to any halt in malicious activity.

“These people don’t lie down,” he says. “They are looking for every bit of leverage to get into people’s systems and they are using [the coronavirus crisis] as a great opportunity.”

The Office of the Australian Information Commissioner (OAIC), which has a privacy focus, last month reported data breaches increased 16% in the first half of this year compared to the previous corresponding period, with malicious or criminal attacks accounting for three in five incidents.

OAIC breach reporting obligations include firms

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Expert advice: Troy Filipcevic, left, and Jeff Gonlin

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“We know the stakes are extremely high on this, that nearly 20% of people are exposed to cyber bullying in their lives.”

that have an annual turnover of more than $3 million that have discovered unauthorised access to personal information that is likely to cause serious harm.

Last year the ACSC ReportCyber site received 13,672 reports in the September quarter, its first three months of operation, an average of around 148 reports a day. Individuals and SMEs self-reported an average financial loss per incident of $6000, with totals of more than $890,000 each day. The data indicates annual estimated losses to cybercrime of $328 million.

Claim numbers for cyber crime, and incident severity, have been growing and the trend is likely to continue, but Mr Gonlin says it may be difficult to separate out the actual impact of COVID on claims and it is also still early days.

“There is typically almost a half a year lag between when someone enters your system and when it finally manifests itself,” he says. “Some things manifest very quickly, like ransomware, but even there the new variants will get in and follow you around for a while and infiltrate data and they will decide when to pull the trigger.”

An Emergence white paper released with the launch of its personal product says 88% of the Australian population, or 22.3 million people, use the internet and 71% of the population use social media.

That provides fertile ground for cyber crimes and anti-social behaviour particularly with so many people working from home and so many children learning online with remote schooling.

“For many this is the new norm and has opened the floodgates for greater exposure to data theft and cyber bullying,” Mr Filipcevic says.

Scenarios outlined in the white paper include cases of cyber stalking and reputation damage, where insurance responses may include legal advice, removal of photos or harmful information and the blocking and reporting of a perpetrator.

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Another scenario highlights the experience of a 12-year-old girl bullied at school because of a disability, who is then persecuted through social media forums. A claim could trigger help from a cyber security coach to reduce future risks, while the family could be referred to counsellors for support. Wage replacement may be covered if required.

Emergence notes children are often reluctant to admit a bullying problem, adults may simply not know what they can do to improve the situation and it’s a complex area.

“We know the stakes are extremely high on this, that nearly 20% of people are exposed to cyber bullying in their lives,” Mr Filipcevic says. “We think we can play a key role in ensuring the welfare of children by providing help when it is required.”

Surreptitious cyber crimes include identity theft and online financial losses that occur when passwords are broken or unauthorised access gained through other means.

The white paper gives the example of a woman who finds her superannuation balance has been drained by someone who hacked into the computer and recorded keystrokes previously used to open the account.

Cover would include assistance recovering the funds, or submitting a claim for financial loss, surveillance of the dark web to check for further issues, and credit and identity fraud monitoring for 12 months.

Mr Filipcevic says businesses and individuals tend to underestimate the potential randomness of cyber attacks and their elusive nature. There is no need for criminals to run down streets wearing balaclavas to escape from police after an online heist.

“It is hard to get caught,” he says. “These people are doing it from home. They don’t care who you are, where you live, what you look like. If you have an 0 internet connection, you can be vulnerable.”

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Going for gold Vero had a “best ever” claims target, and was rewarded with victory at this year’s Mansfield Awards

By John Deex

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wo years ago Vero made plain to its staff that it was aiming for a “best in class” claims service – and the aspiration and associated hard work paid off in July when the insurer was presented with the Gold Mansfield Award for overall excellence in claims.

The Mansfield Awards, named after the English Lord Chief Justice who introduced the concept of utmost good faith to the insurance process in 1766, are organised by Insurance News and LMI Group.

This was the fourth year of the awards, and the first to be held online, attracting a national industry audience.

More than 2300 survey responses were received ahead of this year’s awards as part of the adjudication process. Unlike most awards focused on the insurance industry, companies and individuals are not invited to make submissions.

NSW state insurer icare and Steadfast have sponsored the event each year since it was launched in 2017, making possible an event that has filled a vacuum in recognising excellence in claims.

While COVID-19 meant that the traditional awards presentation had to take place via webinar, the awards themselves were considered too important to fall victim to the virus.

Category winners were Allianz (personal lines), HCi (SME property and casualty), FM Global (corporate property and casualty) and GT Insurance (specialty).

Vero Executive Manager Commercial Property and Specialty Claims Luke Whenman accepted the Gold Mansfield on behalf of 250 team members at the Suncorp-owned insurer.

EGM Claims at Suncorp Michael Miller told Insurance News Vero’s victory was a sweet success after the efforts made by the team.

“We want to deliver a best-ever claims service. That is what we’ve been aspiring for two or three years,” he says.

“We talk about the Vero claims promise, internally and externally. We make it very clear in terms of what we are trying to do.”

Mr Miller says brokers and other partners were consulted “to really understand what brokers wanted from a claims service from a commercial insurer”, before the

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claims promise was crystallised into three elements.

“The first is expertise,” he says. “We need to have people who know what they are doing, and when brokers lodge claims they can get expert advice.

“Next is the service element. I look after all claims – motor, home and the commercial area. The thing that strikes me around commercial insurance is that the brokers use us time and time again, whereas with home it’s once every 20 years and motor once every 10 years.

“So it’s really important that we have a consistent service going to brokers. We’re investing in people, in technology as well. We’re also trying to settle SME claims first touch under $10,000, to just make it as smooth as possible.

“We also know that we need to be flexible for our broker clients, in terms of how we fulfil and pay out claims.”

The third point is culture – something Mr Miller says cannot be emphasised enough.

“Our job is to absolutely pay out within the terms of the agreement, but we need to look at each case individually, with an overlay of fairness and compassion.

“The Australian Financial Complaints Authority has a very clear view on fairness for customers which I think is a really good way for a business to set itself up – to have that fair lens on top of what we are doing.”

Applying fairness is particularly important on claims that could go either way, Mr Miller says.

He likens such claims to a window in a wall.

“If it’s in the middle of the window there’s no judgment there and it’s covered by the PDS. If you have a claim on the wall clearly outside the window that’s not a claim.

“But if you look at the edge of that window and a claim is sitting there just on the edge, that’s where the judgment is really important in terms of intent, and what the circumstances are, really understanding the customer’s point of view.

“In the end our job is to pay within our product disclosure statement. We can’t cover things that aren’t covered. But we try and work with our broker clients and customers to make sure that if it’s around the edge of that window we have a good hard look at it and make sure we are being fair.”

Mr Miller says his department has been through a challenging time thanks to “close to record numbers of claims” stemming from Australia’s Black Summer of natural disasters.

He also believes climate change will result in such periods becoming more normal.

He says a huge amount of planning takes place in relation to disaster season, with other Suncorp employees given the ability to “swarm” into claims.

“Within the whole claims team for home, motor and commercial there are about 3000 people. A lot of that team are part-time and they can scale up at Christmas time.

“We also cross-train our distribution teams so that they can come across and help us out when the claims really start to come through.

“But inevitably we end up hiring. We probably hired about 300-400 extra people this season, just to cope with the amount of claims coming through.

“We know that the longer a claim goes, the more likely a customer is not going to be happy with us.

There are more costs as well, so it’s in everyone’s best interests to get in there and get the claims fulfilled and make the customer happy with their life rebuilt.

“It is challenging but enormously rewarding for the team.

“The team has done such a good job. When I look at our commercial insurance team, they are a very ethical and skilled group of individuals who really care about customers. We’re immensely proud of them.”

COVID-19 has not had a drastic impact on claims to this point, Mr Miller says, but it has encouraged greater levels of

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Winning feeling: Vero’s Luke Whenman accepts the Gold Mansfield trophy

August/September 2020

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In the field: Suncorp EGM Claims Michael Miller, left, meets Vero panel builder Paynters at the fire-hit Malua Bay Bowling Club in February

Winners and finalists The full results in the Mansfield Awards for claims excellence, with the finalists, were as follows: Personal lines: The winner was Allianz.

The other finalists were Australian Seniors, Millennium Underwriting Agencies and RACT. SME property and casualty: The winner was Hollard Commercial Insurance (HCi). The other finalists were AFM, Catholic Church Insurances and Vero.

Corporate property and casualty: The winner was FM Global.

The other finalists were Berkshire Hathaway Specialty Insurance Company, Liberty Specialty Markets and Zurich Insurance (Australia) Limited.

Specialty: The winner was GT Insurance. Other finalists were Interruption Underwriting Agencies (IUA), NTI, RentCover and TravelCard.

The Gold Mansfield Award for overall excellence in claims: The winner was Vero.

The other finalists were Allianz, Hollard/HCi and Zurich.

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technological development.

“We are spending a lot of money in terms of trying to do online assessing. We can’t get out as much as we could before. “[COVID] has probably given us some good lessons about what can be done to make better outcomes for our customers. You do get used to a certain way of doing things, now we are finding different ways to do it.”

He says there have been instances where customers “haven’t been comfortable with our builders coming into their homes, if they could be susceptible to infection”.

“We are very respectful of that and will delay the claim until they are more comfortable, or sometimes move them out if that works best.”

Allianz Australia won the personal lines category for the second year running and Chief Customer Services Officer Brendan Dunne says to be recognised by industry stakeholders is “a privilege”.

“This recognition is testament to our Allianz claims team and their expert and empathetic claims-handling,” he said.

“I’m very proud of our people and partners. As an industry we play a very important role, even more so in these unprecedented times, and have immense gratitude for the hard-work and passion demonstrated.

“The Australian bushfires and other severe weather events, along with the global COVID-19 pandemic, have had a significant impact on our customers, and our claims team has worked tirelessly to support our customers.”

Hollard Commercial Insurance (HCi) took out the SME property and casualty award, and Interim Chief Executive Jack Joubert says he’s proud of his claims team’s response during “a very turbulent year”.

“To be recognised for our claims service under these conditions is a real highlight of our journey so far,” he said Mr Joubert says the core of HCi’s claims service is “delivering the promise made to the policyholder to protect them when things go wrong”.

“The HCi claims team is a specialised intermediated

August/September 2020

claims team,” he said. “They are empowered to make decisions and guide the broker through the claim process to help the policyholders get their business back up and running as soon as possible.

“The volume of claims from the back-to-back events in early 2020 created a real challenge for the HCi claims team and the entire industry as a whole.

“Their agile approach and experience in managing catastrophe claims has helped the claims team navigate through this very busy period.”

GT Insurance won the specialty category, and Chief Executive Tony Dodd says the company recognises the “vital role” played by brokers.

“To be recognised through the Mansfield Awards is a great honour as it is judged by brokers themselves,” he said.

“Our core value is ‘fairness’ and this positive acknowledgement confirms that this value is being shown in our claims outcomes. I’m extremely proud of our claims team. We are committed to continually improving and ensuring better outcomes for our customers.”

FM Global won the corporate property and casualty category for the third year running.

Vice President – Operations Claims Manager Andrea Garske told Insurance News the company was “absolutely thrilled” with another accolade as “it shows we are consistently doing a good job”.

“FM Global does claims quite differently from the rest of the industry,” she said.

“We’re a mutual owned by our policyholders, and that gives us a different perspective in building relationships. We also have an in-house loss adjusting team and that is a model that really works for us.”

Ms Garske says the Mansfield Awards have “filled a big gap” in recognising claims teams.

“It’s helping to raise the profile of claims and encouraging people to understand that you need to think about the quality of the service you will get when the rubber hits the road, and not just the premium cost.

“When that claim happens, it’s when clients find out if they bought a good policy or a not so good one. It is 0 make or break.”

Making waves of a different kind The industry gets ready for its annual Dive In to encourage diversity and inclusion

By Bernice Han

S

eptember’s Dive In Festival will take place in the most unsettling of situations, against the backdrop of a pandemic that continues to sow chaos throughout the world.

But that has hardly dented the insurance industry’s support for the annual festival, which will be held over three days from September 22-24 in more than 30 countries including Australia and New Zealand.

Coming together to rally for a more diverse and inclusive DNA within the industry is a cause that has united people and this year will be no different.

If anything, the event and what it represents have taken on even greater significance because of the pandemic, says Lloyd’s General Representative in Australia Chris Mackinnon.

The health crisis has cast the spotlight on critical issues such as workplace

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arrangements and employees’ mental wellbeing, areas that Dive In has advocated strongly for in the early years of its campaign.

“In the past few months the whole world has gone to flexible working,” Mr Mackinnon told Insurance News.

“We want to look at the impacts of COVID-19. We want to explore what impact that is having on businesses, issues like mental health that are clearly important, and also flexible working.”

For employees working remotely since March, the circumstances have been challenging. Some are doing so in isolation with little face-to-face social interaction as they live alone, while others are juggling work and parental duties.

“A lot has changed, which means we have an awful lot to talk about during the festival,” Mr Mackinnon says.

“We have talked about what is needed to be an inclusive employer, to give staff some opportunity to have some flexibility to be able to manage care and responsibilities as working parents.”

In line with the festival’s theme this year – Local Voice, Global Impact – Dive In is intended to highlight the pivotal role local voices play in global change.

Videos of festival attendees discussing the impact the pandemic has had on diversity and inclusion around the world were aired on the campaign’s social media channels in July. Also high on the agenda next month will be issues around racial inequality faced by minorities – something that has risen in public consciousness because of the Black Lives Matter movement.

The festival is also revisiting themes that it has been working on in the past few years.

These include gender parity, physical disability and barriers faced by employees who identify as lesbian, gay, bisexual, transgender or intersex (LGBTI).

“It will be a very important conversation piece,” Mr Mackinnon says, referring to Black Lives Matter. “But it won’t be the only conversation piece. It’s one of a number of really important conversations we need to have. We will be tackling a lot of the most pressing topics within the festival.”

List of local events The Dive In Festival will be held from September 22-24 in Australia and New Zealand. Australia has been a part of the Lloyd’s-inspired diversity and inclusion platform since 2016 and New Zealand joined in 2018. This year’s program will take place virtually, and people can register at: https://diveinfestival.com/2020-events/ Here are the events for Australia and New Zealand:

September 22 Domestic and family violence – we all have a role to play for an equal future: Lead sponsor: Steadfast Steadfast has invited Rosie Batty to share her personal story as a survivor of family violence. She is 2015 Australian of the Year and family violence campaigner.

Virtual opportunity: Chris Mackinnon says more people can get involved in this year’s event

In a first for the Lloyd’s-inspired festival since it was launched in 2015, the three-day event will take place virtually because of the pandemic. The format resonates with one of the campaign’s key values, inclusion.

Going virtual means attendees can sign up from anywhere to participate in the 90-plus programs that are taking place in Australia, the UK, the US, Canada, China, Singapore and other countries.

“We are quite excited about the virtual festival, because it gives us the opportunity to appeal to a broader audience, share the messaging, share the conversation and even cross borders as well,” Mr Mackinnon says.

“I think we are going to be having somewhere around 50,000 people attending the festival this year from around the world.

“There are no geographic boundaries, so people in Singapore, for example, who are interested in understanding diversity and inclusion in Australia can join our festival here. So that is quite exciting for us.”

This will be the fifth straight year that Australia has been part of the festival, with industry support for the campaign as strong as ever despite the challenges of dealing with the pandemic fallout.

“When we started the event here, we engaged with industry leaders to see whether we could get their support,” Mr Mackinnon says. “I was surprised at how quickly and how energetically the industry got behind us.

“I’ve been blown away by the speed of engagement and change and co-operation that has come in an industry that is normally

highly competitive. It’s been really, really quite fantastic to watch and be a part of this development over the past five years.”

Lloyd’s, for its part, recently announced insurers and brokers operating in its marketplace must have at least 35% of their leadership roles filled by females by 2023.

These positions must either be on boards or executive committees and include direct reports of the executive committee members.

The requirements are part of actions Lloyd’s has promised to take to improve workplace behaviour, after a culture survey last year found women’s responses were more negative than men’s.

About 8% of 6000 Lloyd’s passholders interviewed said they had witnessed sexual harassment, but only 45% were comfortable with raising their concerns.

Inside Lloyd’s Corporation women already account for 47% of its leadership positions. The business has also launched a “culture dashboard” to track its progress in areas such as gender, ethnicity, sexual orientation and disability.

Referring to the issues around sexual harassment, Mr Mackinnon says the Lloyd’s Corporation is the responsible entity for regulating and overseeing the market, and “took it very personally. We reacted quickly and seriously, because we don’t want that kind of behaviour in our marketplace.

“So we have already done a huge amount of work, which has accelerated our thinking on our acceptance of what is 0 appropriate behaviour.”

Indigenous inclusion Lead sponsors: Dual Australia and Kennedys law firm Former AFL star Adam Goodes is the keynote speaker on the topic of Indigenous inclusion at this year’s Dive in Festival. He will share his story, talking about purpose, values and resilience. His talk will be followed by a Q and A.

Empowerment and Connectivity – Balancing leadership Lead sponsor: Axa XL Supporting sponsor: Gallagher AIA Chief Executive Damien Mu is one of two speakers in this session that will reflect on the aspects of diversity and inclusion.

The other speaker is Angie Greene, Chief Executive of Stand Up Events, a not-forprofit fighting sexual and gender discrimination in Australian sport.

The architecture of inclusivity Lead sponsor: Gallagher Bassett This panel session explores how workplaces can be more inclusive through the incorporation of universal design, neuro-architecture, and by creating queer and gender diverse spaces within a corporate context.

Inequality and how it is brought to life Lead sponsor: Aon Further details not available at time of going to print

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Steps forward September 23 Levelling up business - Talent is everywhere. Opportunity is not Lead sponsor: Aon Supporting sponsor: DLA Piper This panel discussion will explore how prepared businesses are in enabling social mobility in Australia and New Zealand.

Studies have shown that a diverse workforce is a stronger workforce, and the insurance industry is increasingly blessed with professionals from a range of backgrounds. Insurance News spoke to employees at some of Australia’s top insurers

How experiences of workplace inclusion are affecting psychological safety in 2020 Sponsors: SURA Supporting sponsors: Wotton + Kearney and Liberty Specialty Markets This session will explore, among other things, the way COVID-19 has impacted how included and psychologically safe people feel at work in the “new normal”.

Gender Equality Visibility vs. Silence Sponsor: National Insurance Brokers Association YP Supporting sponsor: Gilchrist Connell Amna Karra-Hassan, who founded the first AFL Women’s team in Western Sydney, will talk about gender equality.

Life lessons from Turia Pitt: Strategies for chasing down big achievements Sponsor: Willis Towers Watson Supporting sponsor: mlcoa-IPAR Turia Pitt, one of Australia’s most admired and widely recognised motivational speakers, speaks on resilience and overcoming adversity.

Diversity in the C Suite: Why we need more voices around the table Lead sponsor: QBE Ming Long, an independent non-executive director at QBE, shares her passion for inclusion, her personal journey to date, the importance of diverse role models in leadership, and celebrating success.

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Racheal McDonald Employer: IAG Role: Consultant People Experience Location: Sydney

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acheal McDonald is often asked about what she thinks of issues that are affecting the Indigenous and Torres Strait Islander community. Not that she minds the questions, but the IAG Consultant, who has Indigenous and Torres Strait Islander heritage, believes asking in itself is not enough.

She believes taking actions to address the barriers that are encountered by the community, and investing in education to raise awareness of the groups’ culture, is what will make a difference.

“While I do have views on some issues, I don’t have all the answers,” Ms McDonald said.

“It’s important to remember that each person has their own individual views and different knowledge of Aboriginal history and culture.

“I am on my own journey of self-discovery with my heritage, uncovering what it means to be a young Aboriginal person whose ancestors were displaced from their families, so I still am navigating my own identity.”

Ms McDonald recently became the Co-Chair of IAG’s First Nations Employee Network Group.

The network group is an initiative for IAG employees with Aboriginal and Torres Strait Islander heritage to connect and share their stories. It also organises events to

celebrate First Nations culture and history.

“As an Aboriginal, Malaysian and Australian woman, I believe that there is always work to be done when it comes to diversity and inclusion,” Ms McDonald says.

“The gap in knowledge and understanding of Indigenous cultures still exists in parts of corporate Australia.

“I believe this is partly due to the lack of education in the Australian school system, particularly for those generations that are already in the workforce.

“This presents an opportunity for organisations to step in and look for opportunities to educate and engage their workforce about First Nations history and culture – whether that’s through cultural awareness training or participating in events like Reconciliation Week, to ensure that we are creating an inclusive workforce.”

Ms McDonald, who worked previously in pharmaceuticals and other financial services sectors before joining IAG in 2017, says the insurance industry has put in a lot of effort to advance diversity and inclusion in the workplace.

Beyond the industry, she says there should be an increase in focus on educating students about the history of Indigenous and Torres Strait Islander people.

“I believe that changes to the Australian school syllabus – specifically how Australia’s history is shared with our youth and greater appreciation for Australia’s First Peoples – is vital for promoting greater reconciliation in 0 Australia.”

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Peter Moo Employer: Suncorp Role: Claims specialist Location: Adelaide

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alaysia-born Peter Moo, who joined Suncorp eight years ago, strongly believes in greater diversity and inclusion in the workplace, especially for LGBTIQA+ employees like himself.

He is involved with advocacy work for Amplify, one of the insurer’s employee resource groups created by its staff to provide support for colleagues.

“Suncorp, through Amplify, has been conducting LGBTIQA+ awareness training to all our offices across the country, and in this training we talk about what each letter of the acronym means and the diversity that is in sexual orientation and gender identity,” Mr Moo says.

“I’ve had very supportive leaders that have always given me the opportunity to speak about various LGBTIQA+ awareness days and events in my team.

“They have fostered a very inclusive and supportive environment for queer people like me to feel accepted and listened to.

“I personally feel that Suncorp’s senior leadership team do care about the LGBTIQA+ community in Suncorp and they have been very vocal about their support for everyone to be accepted for who they are regardless of sexual orientation or gender identity.”

He says significant – if slow – progress has been made across the industry to improve diversity and inclusion in the workplace. The proactive effort from management has played a critical part in fostering the changes.

Despite the progress that has been made, he says the LGBTIQA+ community still faces a significant amount of discrimination in the industry. Like other business sectors, there is not much in the way of human resources policies to support or protect the community.

“Until we have policies set in place that will support and protect the whole of LGBTIQA+ community, we must continue with our advocacy work, speak out against discrimination and be visible at all times so that we become a beacon of hope.”

He notes that at Suncorp he has been able to be himself without fear of being discriminated against because 0 of the support from his managers.

September 24

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Embracing Inclusiveness: Attracting & Retaining Diverse & High Performing Talent Lead sponsor: Marsh Supporting sponsor: AIG Marsh & AIG take a closer look at the specific organisational diversity and inclusion characteristics for professionals seeking meaningful careers and how to embrace these.

August/September 2020

Sema Musson Employer: Allianz Australia Role: General Manager Governance, Customer Advocacy & Social Impact Location: Sydney

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he difficulties of working in a demanding job and raising a family at the same time are things Sema Musson knows firsthand. By day she works in a key cultural and managerial role at Allianz, and by night she devotes her time and attention to her two daughters.

“I acknowledge that there are always challenges, particularly for women who are multi-tasking both within and outside of the workplace,” Ms Musson said.

“Speaking from my past experience as a mother first, for example, I’ve seen women be more risk-averse, and take time out of the workforce for family. And sometimes women won’t go for a role unless they feel they can do 100% of what the role requires.”

But she is an optimist, having observed the strides the insurance industry has made in drawing up family-friendly policiesCLASSIFICATION: for women so that they also can purINTERNAL sue a career.

“As an industry we have made huge progress in championing women over the past decade, and are continually seeing more women in leadership roles,” Ms Musson says. “While there is always more to be done, I’m optimistic about positive change continuing.”

She is proud that at Allianz Australia women occupy about 44% of senior leadership roles.

“This is above our target of 40% and was achieved ahead of time. What has been great is that this number has continued to increase during the COVID-19 pandemic and that says a lot about our culture of supporting women.”

She says flexible work arrangements have enabled her to carve out a career without compromising the time she spends with her daughters.

Whether the industry can continue to achieve more progress on this front will be determined to a large degree on the tone set by the people at the top.

“We need to continue to adopt a culture of diversity as part of our business as usual. We should never stop working towards learning and looking for ways to be more inclusive towards our employees and customers.

The culture of diversity in the workplace is evolving 0 and it starts with us as leaders.”

Future opportunities for leadership Lead sponsor: Zurich Supporting sponsor: Sparke Helmore Lawyers Tim Plant, Chief Executive of Zurich General Insurance, hosts on whether the widespread shift to flexible work will provide future leadership opportunities for women.

Kitty Leung Employer: Zurich Insurance Group Role: Senior Pricing Actuary General Insurance: Pricing & Analytics Location: Sydney

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itty Leung discovered a few things when she joined the industry years ago. One, men were paid significantly higher salaries; and two, they occupied most of the top jobs.

The other area that didn’t quite seem right to her was the sparse number of senior leaders from Indigenous and ethnic groups.

In one year, she went to check the Workplace Gender Equality Agency data, and that was where she found the scale of the gender divide.

Just 10% of CEOs and 32% of key management personnel in the financial and insurance services sector were women, despite them making up more than half of the workforce.

“Clearly there is more work to do in this space,” Ms Leung says.

“Even though Australia has a diverse population, only 5% of senior leaders come from a non-European or Indigenous background.

“Don’t we want our industry to truly represent and relate to the diverse backgrounds of our customers?”

That the industry is talking about diversity and inclusion is itself a sign of progress, she says, but more progress will only come if senior management continues to lead the way.

“Leaders have the ability to create a culture that embraces change,” Ms Leung says.

At Zurich, where she has been working since 2014, the business has a program to monitor pay equality twice yearly and has committed to a 40% target of female representation in leadership roles by 2021.

Other measures the insurer has taken include investing in resources to advocate for LGBTIQ inclusion and innovation for women.

Ms Leung sits on the Women’s Innovation Network committee, a Zurich employee resource group that provides mentoring, career development activities and raises awareness of domestic violence issues.

To be personally involved is important for Ms Leung, who is balancing her career while raising a toddler.

“The challenges have shifted and mainly revolve around balancing work with caring responsibilities, including how to do a full-time role part-time – when I first returned from maternity leave – and how to manage a team and stakeholders while working flexibly,” she says.

“Employers can encourage men to take on a greater share of caring responsibilities through reviewing their flexwork and parental leave policies and role-model0 ling, so it becomes the cultural norm.”

Lisa Hilton Employer: QBE Australia Pacific Role: Head of Technology Location: Sydney

U

ntil she joined QBE Lisa Hilton had made it a point to conceal her sexual orientation. She is gay, but had been told in previous jobs that being open about it would be bad for her career, so she kept quiet about it.

All that changed when she took up her present role as the insurer’s Head of Technology in June last year, where she realised that, among other things, the insurer has a Pride Committee to provide support for LGBTQI employees. The existence of such a support group was a welcoming sign, a sharp departure from other places where she has worked.

Ms Hilton had never worked for an insurer before she joined QBE, but was drawn to the industry’s potential for technology transformation.

“I’ve had a lot of different experiences over my career – some good, some bad,” she says. “As a member of the LGBTQI community, QBE has by far been my most positive experience to date.

“Given the visibility of QBE Pride and so many openly ‘out’ people in the organisation, including in the leadership team, I felt comfortable enough to be ‘out’ as soon as I arrived.

“This was liberating. I didn’t need to worry and could just get on with doing the job I was hired to do.”

As a parent and a woman, she values the supportive and inclusive environment that QBE has created for employees from the LGBTQI community.

She says the push for more inclusiveness and diversity is not just about equality for LGBTQI employees.

The same should also be extended to everyone who is under-represented. Included in that list are part-time workers, especially mothers.

“I do feel that in some areas of diversity and inclusion we are just beginning the journey. However, it does seem like there is a real impetus for change right now,” Ms Hilton says. “We need to keep actively working towards creating equal opportunities – the world is not equal for everyone.

“We need to keep the dialogue open and really listen to the challenges that people are facing.”

Ms Hilton believes the ongoing pandemic has thrown up more challenges, further increasing the impetus for more change. Again, it will be in the hands of senior management to show the way.

“After all, leaders set the tone for an organisation’s culture and what is, and isn’t, acceptable,” she says.

“The power of allies should not be underestimated.

“I also think that it’s up to everyone to speak up and 0 call people out on their biases.”

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Industry figurehead: Jaye Kumar

J

aye Kumar is keeping a close eye on the progress of Federal Government legislation that will make claims handling a financial service, ultimately supporting improvements in the process and advancement of a profession for which he is a passionate advocate.

The reforms outlined in the draft legislation would see claim service providers become authorised representatives under insurer licences in a move the Australasian Institute of Chartered Loss Adjusters (AICLA) says would benefit insurers, consumers and the industry as a whole. “If that change comes about as proposed, then it will ensure loss adjusters continue to play an integral part in the claims handling process,� says Mr Kumar, the AICLA President and Managing Director of ANA Chartered Loss Adjusters.

Whatever the final shape of the new laws, Mr Kumar tells Insurance News it is clear claims will be more closely regulated by the Australian Securities and Investments Commission and loss adjusters will be an important part of the process.

The reforms, recommended by the Hayne royal commission, aim to lift standards and could help reverse a trend that has seen some insurers seek to reduce costs through bypassing loss adjusters and instead relying on builders, repairers or others who may not be qualified to assess damage and decide on policy cover.

Loss adjusters, who enter the field from a multitude of professional backgrounds, must undertake extra formal and on-the-job training to become full members of AICLA.

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Adjusting to change Jaye Kumar is promoting the importance of the loss adjusting profession as the focus on claims handling increases

By Wendy Pugh

The role involves examining the causes of a loss, which are often complex and may require involvement of other specialists; looking at what is covered under policy terms; and determining the best options for resolving matters in the interests of all parties. They highlight the reality that it is much more than inspecting a loss and accepting the lowest quote to settle the claim.

Mr Kumar, a Chartered Mechanical Engineer and Chartered Loss Adjuster, has become a leading figure in promoting the profession locally and internationally since arriving in Australia in the late 1980s via his home country of Malaysia and the UK. Previously, he worked as a loss adjuster in Kuala Lumpur, specialising in engineering losses and travelling to other parts of the region, while he has also spent some time in financial services in Britain, where he completed his high school and tertiary education.

After settling in Perth he set up his own business in the early 1990s, formed a national network company called ANA and completed a Master of Business Administration. He joined the AICLA board in 1999, after becoming Chairman of the WA Division, and will complete a two-year term as President this October.

At the time Mr Kumar became involved, AICLA was looking at ways to enhance its position as a global professional body, and realised opportunities existed on its doorstep as developing Asian insurance markets were seeking avenues for training and education.

“The vision was there and we could see that expansion internationally through Asia was important,” Mr Kumar says. “Loss adjusters in the region were looking

for some kind of assistance and we could provide that for them.”

Mr Kumar carried out some exploratory work for the group and was appointed to the new role of International Development Director, a position he still holds. The initial focus was on Malaysia, Singapore and Hong Kong, while key markets also extended to Indonesia, Thailand and Vietnam.

“I spent a lot of time travelling in Asia meeting with the local professional institutes, the insurance institutes, meeting the regulators,” Mr Kumar says. “The whole focus was to work collaboratively to support them in the emerging area of insurance claims.”

In tandem, AICLA focused on the development and delivery of professional training and education and has worked closely with the Australia and New Zealand Institute of Insurance and Finance (ANZIIF) to offer the Diploma of Loss Adjusting.

“That has been instrumental in helping us to be relevant internationally,” Mr Kumar says. “The program is one of the most comprehensive loss adjusting courses available and many countries use it, especially in Asia, as a benchmark qualification.”

AICLA has also developed a claims technicians course (CTC) that is well supported by the insurance industry in Asia, especially Singapore where it is approved for government funding.

“This is a great endorsement of AICLA as a professional trainer. We are currently developing an online CTC to make it available internationally and to introduce it to Australia later this year,” Mr Kumar says.

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Expanding horizons: Mr Kumar has helped AICLA grow in Asia

AICLA now has almost 300 members in Asian countries following rapid growth, and also has members in the Middle East, Africa and Europe.

Meanwhile in Australia, the industry in the past two decades has had to navigate a changing environment that has led to some loss adjusters leaving the industry, reducing the number of skilled practitioners.

Insurers have centralised claim operations and moved to deal with fewer service supplier companies, while the trend by some insurers to reduce use of loss adjusters, particularly for some straightforward claims, has had an impact by reducing opportunities for young loss adjusters to gain experience.

Mr Kumar says the ANA network, which brought together some 40 adjusters in the early 2000s, was largely a response to insurers centralising operations to Sydney or Melbourne, and concerns about sidelining of the smaller independent operators.

ANA has since continued as a fully Australianowned independent company with offices around the country. Mr Kumar says ANA sits among the five largest loss adjusting firms in Australia. The firm is also the local partner of international group VRS Adjusters.

“ANA does not operate in domestic lines, and focuses on commercial and corporate claims,” he says. “That is the niche area we focus on and importantly [we] are able to work for clients who value the services we offer.”

Following waves of consolidation loss adjusting in Australia is dominated by two main international firms.

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Mr Kumar says there’s a strong possibility of further mergers with more smaller operations being absorbed by the bigger companies.

“Having said that there will still be room for specialist loss adjusting services in areas like liability claims, or business interruption, or marine,” he says. “You will still have specialist loss adjusters working independently who are able to provide services to insurers looking for specific skills.”

Balancing the supply and demand for loss adjusters remains one of the challenges for the industry looking ahead, particularly given it takes several years to become fully qualified, and training opportunities are reduced when insurers move to handle the simpler cases through other approaches.

“We need the buy-in by insurers to support loss adjusting companies who are committed to training the next generation of qualified loss adjusters,” Mr Kumar says.

“I have spoken to many claims managers who are on the front line of claims handling and they have come to the realisation that they have actually made a rod for their own back by looking at alternative models.

“They have made it difficult for loss adjusters to train up people to be ready for the next five or 10 years. To be a loss adjuster you can’t just start in the job today and go out and do a claim, you have to work under somebody for a time, sit the exams and get the experience.”

Models for loss adjusting vary internationally. Mr

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“To be a loss adjuster you can’t just start in the job today and go out and do a claim, you have to work under somebody for a time, sit the exams and get the experience.”

Kumar says US loss adjusters prepare a full scope of work that is priced up and offered by the insurer to the policyholder for payment acceptance.

In Australia insurers have changed their focus over the three decades since he joined the industry to increasingly try to find ways to pay claims, as they seek to enhance the experience of customers.

Loss adjusters, he says, play a vital role in ensuring that what needs to be done to resolve a claim is done

fairly and correctly, and it’s important arrangements are in place to ensure standards remain high and the right professionals are used and remain available to meet demand in the future.

“Otherwise you will have people coming out of the woodwork saying ‘I am not a loss adjuster but I can assess the claim’,” he says. “You cannot have unqualified, untrained people making decisions and offering opinions. It leaves policyholders in a vulnerable position.” 0

‘No two days alike’ Perth was a somewhat accidental destination for Jaye Kumar, who stopped to visit friends in the city before planning to travel onward to settle in eastern Australia.

Mr Kumar was born in Malaysia and completed high school and mechanical engineering studies in the UK. Later he worked in both countries before deciding to embark on the next stage of life in Australia.

“I had been to Australia previously, and it seemed like a great place,” he says. “I was on my way to Sydney or Melbourne and came to Perth because friends had said ‘come to Perth and see if you like it before moving on’.”

After a few days, the decision was made and soon he had returned to the loss adjusting profession after knocking on the door to meet with a Perth contact at Robins MBS in 1987.

The city remains home more than 30 years later and Mr Kumar says it offers both a wonderful place to live, as well as travel and time zone advantages when it comes to visiting and liaising with businesses in Asia.

Mr Kumar’s first experience with loss adjusting came when he joined an international firm in Malaysia after a friend in underwriting correctly suggested his mechanical engineering skills would be highly valued in the role.

The job he applied for also offered the incentive of a company car and Mr Kumar says it was too good an opportunity for a 25-year-old to pass up.

“We were the only loss adjusting company in Malaysia that employed engineers – an expatriate engineer and myself. Anything to do with engineering, we would get the job.

“It was fantastic. We were valued for our expertise and the services we provided. I learned a lot and it really made

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it very interesting.”

Mr Kumar continued to put his engineering expertise to good use after moving to Australia, working on claims across a range of areas while building a career in loss adjusting.

Memorable experiences include a power station breakdown claim. The firm was losing $1 million a day due to a turbine failure, but couldn’t claim during the first 45 days time excess.

“We pulled out all stops to have repairs completed in 48 days rather than the 65 days initially estimated,” he says.

“We arranged for engineers from the German manufacturers to get the repairs done. We negotiated with them to divert a turbine for another customer, who was going to receive it as a spare, to be used for our repairs and have a new spare manufactured for the same customer.”

Mr Kumar says people enter loss adjusting from all sorts of professional backgrounds. They may have studied law, accountancy, engineering, building, refrigeration or have any number of different life experiences.

Importantly, loss adjusters must have strong personal skills, in addition to their technical training, as they liaise with policyholders facing some difficult situations.

He says they understand that when they are asked to assess a claim they are being asked to find solutions to a problem that a policyholder has. And finding the most appropriate solution for the benefit of the policyholder and insurer should be the aim.

“You don’t come into this industry for an easy job, but it is very interesting. No two days are alike, no two claims are alike, and you have to find innovate ways of settling claims.”

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Demographic dilemma Insurers are eyeing an emerging army of millennial consumers while delicately trying to retain their lucrative Boomer and Gen X markets

By Miranda Maxwell

A

YouTube channel called Debt Free Millennials which posted a video explaining how to purchase car insurance has garnered thousands of upvotes and hundreds of comments from young adults.

The video, aimed at American millennials, promises to demystify insurance and starts by asking viewers if they “selected the same coverage as what your parents had because, idk, it’s confusing as heck”.

“Such a dope video,” responded someone called Mr Twitch. (“Dope”, in millennialspeak, is a positive thing.)

“Man, that was the best,” says Nena Vasquez. “You explained everything in English (Lol) and not insurance mumble jumble.”

“Amazing!! I am 26 and I still don’t know how to adult, so this was very informative!!” added Michelle Baltazar.

Millennials – people born between 1981 and 1996 – are a difficult yet increasingly important market for insurers to crack. These consumers, currently aged 2339, are estimated to represent 46% of income earned by 2025.

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Acutely aware of this, insurers are significantly ramping up their efforts to understand what motivates this generation in order to capture their spend when it takes over from the post-war Baby Boomers (1946-1964) and Gen X (1965-1980), who together are aged 40-74.

“They want to trust who they shop with and they’re turned off by ‘corporate speak,’” Phil Wilson-Brown, the executive manager of IAG’s Poncho brand, tells Insurance News.

IAG has full-time teams dedicated to understanding the needs of distinct customer groups and the best ways to apply innovation. Poncho, launched last year, targets millennial customers – digital natives engaged with subscription-based purchasing models like Netflix.

They seek flexibility, convenience and transparency, Mr Wilson-Brown tells Insurance News, and the demographic has “really responded” to Poncho being a digital insurer that’s on-demand and simple to access.

“We’ve deliberately avoided stuffy corporate-speak on our website,” he says.

Indeed, the Poncho website homepage colourfully

promises “serious insurance know-how, mixed with a dash of new-school wizardry and tech-brilliance, a massive dose of that-made-my-day, [and] worldly-as-heck charm.”

KPMG National Leader, Brand & Reputation, Scott Guse says millennials “don’t want to read instructions” and prefer video. Knowing this, more insurers are advertising on YouTube, embracing targeted “how to” guides on the platform as they work on capturing younger adult customers.

Insurers have always carefully categorised their consumers in order to assess risk, but now the focus of attention by insurance decision-makers is moving to shopping behaviour.

There is a rush of research underway on generational differences, says Mr Guse, who has worked with Google and major insurers in Australia and was previously KPMG’s Asia Pacific International Financial Reporting Standards insurance leader.

“It is always talked about behind the scenes. They don’t actually come right out and say they are marketing for millennials or anything like that, but that is what they specifically target,” he says.

Market segregation and profiling is paramount for insurers from the perspectives of risk, growth, marketing and distribution, Mr Guse says.

“It is across the board, absolutely.”

IAG says Poncho is an example of how it’s responding to evolving lifestyle trends, which are transforming how its customers choose and consume. It is “collaborating with innovators inside and outside our business to design products and brands that meet the needs of millennials and the customers of the future”.

“The way our millennial customers live their lives differs from past generations,” Mr Wilson-Brown says.

“They might be stretched across multiple part-time gigs.”

For now, older customers remain very much the industry’s main source of revenue, dutifully signing up to the same policies each year when their annual renewal notice arrives.

“As long as premiums haven’t gone up 10% I will just roll it over and pay for it, and I am a good risk,” Mr Guse says. “Insurers do not want to do anything to disrupt that or to lose those cash cows, for want of a better term, but they need to cater for the millennial generation that will eventually replace us one day down the track.

“It is an interesting dilemma, because the millennials will in time be that next driving force, but they certainly aren’t at this point in time.”

He says the approaches that work for older generations won’t always be embraced by the millennial cohort. “There is some crossover but a lot of the time they don’t always work.”

KPMG says the biggest issue for insurers is having to run different platforms and distribution models for the different generations, which is costly but unavoidable if they hope to capture the different customer markets.

Millennials move quickly and will jump to a competitor without hesitation if they don’t find what they want or need quickly, industry experts say. These tech-savvy, impatient consumers demand a seamless customer experience, and know how to shop around and compare offers.

Many millennials are first-time buyers of insurance services and are unclear what they need or what is available. This makes it critical that insurers have an informative, easy-to-navigate website with an advanced search function, ideally powered by artificial

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intelligence.

Lucidworks Vice-President Scott Ho, whose company builds AI-powered search solutions for top brands, says insurers need to act now, because millennials represent the primary supply to the workforce and are usurping Gen X to be the dominant purchasing power in economies.

“They are tipping over,” he says. “They will be the next big spenders. Insurers are still focused on Gen X but are starting to pay attention to millennials. A lot of things need to catch up.”

He says insurance websites can be “stuffy”, slow to navigate and uninviting for younger workers buying their first policy. “It’s very formal.”

Mr Ho points to the wildly successful June IPO of New York-based insurance startup Lemonade Inc. which became the best-performing 2020 listing after the stock ended its first day up 139% on the New York Stock Exchange with a value of around $US3.8 billion.

Lemonade is part of a wider trend of new firms who are reimagining a legacy business for a new world.

Founded in 2016, Lemonade uses artificial intelligence and big-data algorithms to streamline the processes of buying insurance and making a claim, and talks of “maximising trust and social impact”.

It reported a loss of $US108.5 million in 2019 even as it donated $US600,000 to 26 non-profit causes.

With ambitions to be “the world’s most loved insurance company” it reveals 70% of its customers are under the age of 35. Quotes for renter and homeowner, and claims, take just minutes, the company says.

“Companies built on human brokers and claims agents have many strengths, no doubt, but appealing to millennials and Gen Zers is not chief among them,” Lemonade says. “As transformative as the prior revolutions were for insurance, there is reason to believe that today’s will be even more so. No part of the value chain is immune this time.

“Forget everything you know about insurance,” Lemonade continues. “Instant everything. Great prices. Big heart,” runs its tagline, while its prospectus stated: “We are making insurance more delightful, more affordable, more precise, and more socially impactful.”

It also boasts of “playful bots” for a generation that grew up with a smartphone.

Mr Ho says the millennial generation knows only of a world with Google and its algorithms and data scientists in the background, and responds to “social ambassadors” which can create upsell opportunities, a well-implemented technology in the ecommerce arena.

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Millennials expect self-populating forms you can complete on a smartphone without having to laboriously type in personal details or switch to a larger device like a laptop.

Lucidworks recommends all insurers profile their customers, asking simple questions like age, gender and level of education, and have AI generate suitable and relevant options from social media or earlier contact.

“Stop showing me a whole lot of plans. Ask something related to me,” Mr Ho says.

Too many chat bots are rudimentary and should be updated to be able to anticipate expected answers based on things like sentence syntax. These insights can be used to engage, not just generate standard answers.

Another “game changing” challenge for insurers is a demand for flexible monthly or semi-annual agreements.

IAG, which says more than 50% of all its direct customer interactions are online, designed on-demand single item personal property insurance, Insurance 4 That, with the millennial renter in mind. A customer might choose to insure their TV and phone, or their favourite furniture and sports equipment.

For drivers, Poncho offers millennials multi-car, multi-driver monthly car insurance that IAG says works in a similar way to familiar subscription services, granting monthly car insurance policies instead of traditional annual contracts. It makes it easy and affordable and “less daunting” to make changes such as adding another car or driver to the policy or cancelling insurance online.

“Millennials are early adopters of new and emerging brands and so we understood that if we could build trust, credibility and alignment with the brand, we could make insurance a quick purchase and investment for millennials,” Mr Wilson-Brown says.

As insurance companies try harder to promote themselves in a way that appeals to millennials – with many paying search engines so a query for ‘best insurance policy’ offers their brand first – millennials are likely to witness a significant shift in the kind of insurance on offer, and the premiums charged, as new technology alters the risk landscape significantly.

This will no doubt be taken in their stride by a generation known to walk the talk when it comes to flexibility.

“They do pick up change and challenge easily,” Mr Guse says. “They do adapt very well and they overcome problems probably better than my gener0 ation.”

Time to axe the tax Pressure is growing to finally ditch inefficient and damaging taxes on insurance, with one regulator signing off with a message of support

By John Deex

H

e’s been one of general insurance’s harshest critics in recent years, but former New South Wales Emergency Services Levy (ESL) Monitor Allan Fels ended his tenure as an unlikely ally.

Professor Fels’ position ran out on June 30, marking the end of a tumultuous period during which the NSW Government introduced reforms to scrap the controversial ESL, and then abandoned them at the last minute.

Professor Fels – initially employed to ensure that insurers passed on savings when the levy was removed – ended up providing a much broader commentary on the industry, investigating issues such as an alleged lack of competition and a “loyalty tax”.

This infuriated the Insurance Council of Australia (ICA) and its members, but they would have found a submission from Professor Fels to the bushfires royal commission much more palatable.

The submission backs up ICA arguments that the rising cost of the ESL increasingly contributes to underinsurance.

“Further increases in ESL are likely to see more policyholders reduce or eliminate their cover as consumers are more sensitive to price increases than price decreases,” the submission says.

Since Professor Fels’ submission, more reports have been added to the plethora already in existence that recommend reform.

The draft report from the NSW Review of Federal Financial Relations says “all specific taxes on insurance products” including the ESL “should be abolished and replaced by more efficient and broad tax bases, to improve the affordability and uptake of insurance”.

The Independent Review into South Australia's 2019-20 Bushfire Season found that “the removal of taxes from insurance would encourage a wider section of the community to take out insurance”.

In an interview with Insurance News, Professor Fels says he wasn’t in the role as the NSW Monitor “to report on the rights and wrongs of the [ESL]”.

“But we can certainly say the following,” he adds. “A lot of people find property insurance unaffordable and don’t take it out.

“We have emphasised that with the steady rise in premiums, fewer and fewer people can afford to pay, and the levy is a significant factor in that.

“If the levy was taken off or put on rates there would be a pick-up in the number of people who insured.”

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Professor Fels says he is “well aware” of the argument that a broad-based property levy would be more fair.

“The shrinking population that chooses to take out home insurance bears more of the burden, and those that don’t get insurance get a free ride on fire services,” he says.

“That would not happen if it was transferred to rates. We are very conscious of the case for reform but that’s up to the [NSW] Government.”

Was it a mistake in hindsight to abandon the reform, given the devastating bushfires that ripped through the state last summer, with an estimated 80% of victims likely to be underinsured?

Professor Fels won’t be drawn on that argument.

“They made a political call on the matter and there is certainly an ongoing cost and disadvantage about doing things the way they are. Maybe the Government will have another look at it in the light of the recent report.”

As Professor Fels looks back over his time as Monitor, he stresses that insurers overall coped well with a complex situation. This was despite a series of public spats between him and the industry.

“The whole situation was difficult because the reform was abandoned at the last minute, and after the initial price adjustments had been made. So it was complex and messy.

“Generally [insurers] handled it well. After all, if they hadn’t we probably would have been happy to go to court about it and we haven’t. So, where we found big problems they were exceptions to the general rule.

“In practice we talked with [ICA] a lot, but at a public level there was a certain amount of confrontation.

Naturally I want to blame them, but I’m sure I had something to do with it. That often goes with the tense regulatory situation.

“Obviously we didn’t agree on certain things, but each side understood the other. We certainly made some adaptations in the light of what they said.”

Professor Fels identified more than $14 million in over-collection during his tenure, but he says for the most part it wasn’t deliberate.

“It is inherent in the situation that there may be over-collection, or under-collection. It’s just the way the tax is raised. The industry doesn’t know exactly how much to collect at the beginning and the end of a period.”

Over and out: Allan Fels’ NSW ESL Monitor role has concluded

He says he has no regrets about straying into areas beyond the specific application of the levy.

He always knew his position was temporary, and as such wanted to leave a lasting mark on the industry while he could.

Professor Fels is particularly pleased that he was able to push NSW insurers to include the previous year’s premium on renewal notices.

“There was very strong resistance from the industry to that,” he tells Insurance News. “The industry told me it would cost massive amounts of money to make this change. It turned out that in NSW, I as the Monitor could use my regulatory powers to change that, and I did.

“I am somewhat afraid that once I’ve departed from the scene the price may be removed. But there is lurking the possibility of a federal law on this anyway.

“Incidentally, I assume it is equally costly to remove it as it is to put it on, and their computers would struggle with a change to remove last year’s prices. I’m pleased to have brought about that change and I hope it persists.”

Consumer groups have expressed concern about Professor Fels’ departure, saying there should be a permanent national insurance monitor.

But Professor Fels isn’t convinced.

“Some people would say ‘well, they should be there permanently because there is a chance of permanent exploitation from the insurance industry’. We didn’t want that and the Government didn’t want that.

“But there is a case for light-touch price monitoring and the Australian Competition and Consumer Commission would be an ideal body.

“There is already legislation that says if the minister so requires they can do monitoring. Not heavy-handed price regulation or control, just monitoring.

“I wouldn’t want to go over the top. Even though we have reservations about competition in quite a few industries, on the whole Australia’s approach is not to apply price regulation, or even pricing surveillance.”

Professor Fels points out that if ESL reform

is reintroduced, the NSW Government will likely need to re-appoint a monitor.

“The case for monitoring on this is quite strong, because with price reductions there are pretty strong reasons to think that they wouldn’t be passed on very quickly if at all, and that is where the regulator is really important.”

And he isn’t ruling himself out for the job, if such a situation should develop.

“I think I know the story pretty well. What the Government wants to do, who knows?”

Despite his clashes with the insurance industry, he says insurers should be grateful for the work he has done, and that a monitor could do again in future.

“Without us the Government wouldn’t have proceeded to try to bring about the reforms, because they knew that politically they weren’t on unless the public was completely convinced that the benefit would be passed on in lower prices,” he says.

“Had the reform finally gone through I would have asked the industry to come out and congratulate me for our excellent efforts and to have shown the appreciation I know they must feel in their hearts.

“Alas, the deferment of the tax reform means that we won’t have that opportunity.”

So will reform on the ESL, and other insurance taxes finally go through?

The case has never been stronger, thanks at least in part to Professor Fels’ intervention and the latest reports from government-appointed expert groups. NSW Treasurer Dominic Perrottet is also making determined noises on large-scale reform.

However, there is the distraction of a global pandemic and the fact that wider changes to the tax system – of which insurance taxes are just one part – may have powerful opponents.

In a recent release ICA acknowledged these issues – but once again emphasised the benefits.

“We know tax reform is a big ask at present,” Chief Executive Rob Whelan says. “However, we believe updating the tax system will help reduce pressure on consumers as we work to address the 0 impacts of COVID-19 on our economy.”

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State of flux It’s not just the virus – the industry is dealing with a maze of key regulatory reforms

By Bernice Han

O

n April 5 next year unfair contract terms (UCT) law will apply to insurance contracts, bringing the industry into line with other financial services providers that have been complying with the provisions since July 2010.

The extension of the UCT regime to standard insurance contracts issued to consumers is a major shakeup for the industry – one that will require insurers, brokers and other intermediaries to relook at, and rewrite if need be, the way existing policies are set out.

In 2016, UCT protections were given to small businesses.

For the insurance industry it will no doubt be a tedious, complex process. As the National Insurance Brokers Association told its members in May, the change is something that the industry is going to have to “come to grips with and to learn about”.

But the UCT reform is not the only change the industry has to adjust to. The insurance industry is presently in a state of flux as it faces a raft of reforms coming together at much the same time.

In the pipeline are many other measures that will overhaul the way the industry goes about its business.

From the way products are designed and distributed to the handling of claims, no stone has been left

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unturned as Canberra makes good on its promise to act on every recommendation that Kenneth Hayne made in his royal commission final report last year.

As insurance lawyers like to point out, a number of Hayne’s key proposals aimed at the industry aren’t new. Work on a number of them, such as ending the UCT exemption to insurance contracts and the introduction of a deferred sales model for add-on products, had already started before the royal commission into financial sector misconduct in 2018.

Pressure for increased oversight of the industry was already running high before then-Prime Minister Malcolm Turnbull finally caved in and agreed to the royal commission. What the final report from Commissioner Hayne did was hasten the urgency of reform, speeding up the pace at which the changes would take place.

And it may not be a bad thing to have to deal with the changes all at once, according to Mathew Kaley, a principal at law firm McCabe Curwood.

“I think there are advantages in all of it happening at once. You can focus on these things,” Mr Kaley told Insurance News.

“Do it once, meet all of these new requirements and it’s done. It’s a broad and deep change to the regulatory environment.”

He says a lot of the planned legislative changes are aimed at producing products that meet customer needs and expectations more effectively.

“It is placing more of an onus on the product issuers and insurers to design their products to meet those customer needs and to only sell them to the target market customers,” he said. “I do think that will have a beneficial end result for consumers.”

One of the biggest regulatory changes came into effect last year, when the Australian Securities and Investments Commission (ASIC) was given new powers to ban financial or credit products if they cause significant consumer detriment.

The move to boost ASIC’s enforcement toolkit with Product Intervention Power (PIP) stemmed from the Government’s response to the December 2014 report of the Financial System Inquiry (FSI), which made 44 recommendations.

Apart from having the powers to ban products, the PIP also gives ASIC the authority to impose restrictions on the way a product can be sold, order the removal of certain features and attach conditions to the way it is marketed. Issuers and distributors of financial products must comply with the design and distribution obligations from October 2021.

ASIC has the discretion to also amend or ban

remuneration arrangements that are tied to a product’s commercial success.

While the PIP is now in effect, with UCT changes to follow in April next year, the progress of other items on the reform agenda has been held back because of the pandemic disruption.

In May Treasurer Josh Frydenberg announced a deferment of six months for the implementation of some Hayne royal commission reforms, to allow the industry to focus on the immediate challenge of supporting customers during the coronavirus pandemic.

Measures that the Government had been planning to introduce into Parliament by June 30, when the last financial year ended, will now enter the House of Representatives by December. Those that were due to be introduced by the end of this year are now set to take place by next June.

The UCT changes will begin on April 5 next year as planned, because the legislation has already secured passage in Parliament. The Insurance Council of Australia (ICA) says its members have advised they are well advanced in reviewing their policy documentation in preparation for the UCT regime.

ICA spokesman Campbell Fuller says the body and its members are in talks with Treasury and the Government about several key policy issues that will be

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addressed in the legislation scheduled to be passed by the end of the year.

Since the deferrals were announced in May, ASIC has followed up with an update in the following month, outlining its revised timetable of ongoing regulatory projects.

Here’s an update on some of the major regulatory changes that the industry can expect in the months ahead:

• Internal dispute resolution (IDR) review ASIC has released regulatory guide RG271, updating its requirements for how financial firms deal with consumer and small business complaints under the regulator’s IDR procedures. The guide sets out, among other things, reduced timeframes for responding to complaints and what information firms must include in written IDR responses to allow consumers to decide whether to escalate their complaints.

The guide comes into effect on October 5 2021.

• Product design and distribution obligations The new laws were due to start on April 5 next year after a two-year transition period, but have been pushed by six months to October 5. The changes are intended to force issuers and distributors to adopt a consumer-first approach when they develop, market and sell products.

Status: ASIC plans to publish a regulatory guide in the third quarter, responding to industry requests for guidance to be finalised as soon as possible.

• Internal dispute resolution data collection and reporting Status: ASIC will commence the second phase of its targeted consultation on IDR data collection and reporting in the third quarter.

• Removal of claims handling exemption Status: ASIC says it may engage in targeted consultation with a new information sheet on how to apply for an Australian financial services licence and comply with licence obligations, pending introduction of legislation into Parliament.

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• No hawking of insurance and deferred sales model for add-on products ASIC has put up a revised draft product intervention order on the sale of add-on insurance and warranty products sold with motor vehicles for consultation. The consultation closes on August 19. One of the suggestions in the revised draft involves changing the definition of an add-on insurance product to an add-on motor vehicle financial risk product, which is defined to include both insurance and warranty products.

• Enforceable code provisions ASIC intends to consult on a draft update to Regulatory Guide 183, which covers approval of financial services sector codes of conducts.

• Remediation policy review The measure aims to put consumers at the heart of the process and provide guidance on how licensees can achieve fair, transparent and timely outcomes.

Status: ASIC will consult on its proposals to extend Regulatory Guide 256 beyond financial advice licensees in the third quarter of this year – that’s around about now.

The start date for the new General Insurance Code of Practice has also been interrupted by the pandemic, with the deadline for implementing most of the new provisions extended by six months to July next year.

However, vulnerable customer and financial hardship provisions were fast-tracked by at least six months to July 1, when the current financial year started. The requirement on insurers who are Code signatories to have measures in place to support customers facing domestic violence went ahead as planned on July 1.

In the new code, key changes include requiring subscribers to use plain English in communications materials given to customers and giving the Code Governance Committee enhanced sanction powers in the event of a breach.

Mandatory standards for claims investigators have also been introduced and subscribers must provide consumers with information on cash settlements and 0 a scope of works statement.

Reassuring staff: Tony Clark

Best of the best How NTI earned accolades as an outstanding employer even as it adapted to challenging new norms

By Wendy Pugh

N

TI’s focus on workplace culture has come to the fore as staff have dealt with coronavirus outbreak impacts while supporting an industry that’s key to keeping the economy moving.

Employee engagement is a key performance measure at the firm, and it has risen to new heights this year even as staff set up home offices and the trucking industry faces unexpected challenges in delivering supplies across the country.

Brisbane-based NTI, a joint venture of IAG’s CGU and Suncorp’s Vero, has about 320 staff and offices in every state. The operations include heavy transport cover, the roadside Truck Assist business, Marine Protect and mobile plant and equipment specialist Yellow Cover.

Amid such uncertain times NTI’s engagement result has reached 93%, the business is performing strongly, and data shows 99% of those who have made a claim would recommend NTI to a friend.

International management consultancy Aon Hewitt has recognised NTI as one of Australia and New Zealand’s top employers, awarding it the “Best of the Best” accolade in 2014 and ranking it as one of the leading companies in 2017 and last year.

“Our people have been absolutely wonderful in what they have done,” Chief Executive Tony Clark told Insurance News. “We have had our highest customer satisfaction score and we have record sales across all our lines of business.”

The high employee engagement rating, assessed by an independent company, is seen as a considerable achievement in a business world context where 70%

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typically represents top quartile and above 80% puts a company into top employer territory.

“I think we have looked after our people very well and I think that has been reflected in how they think about us as an organisation,” Mr Clark says.

The Aon Hewitt awards recognise businesses that create a sustainable competitive advantage through employee engagement, agility, engaging leadership and a focus on talent, noting excellence in these areas is typically reflected in higher sales and operating income growth.

Mr Clark says engagement has been a long-term focus and commitment for NTI. It includes ensuring clear and effective communication throughout teams. It’s treated as a project with clear reporting requirements and as a “hard skill and not a soft skill”.

“If I or any of the leaders of the organisation say we have all the solutions, we are kidding ourselves. It has to be driven by our people to look at the issues we need to improve or change or do a different way and make sure that happens.

“The main thing is having the conversations. They are different for every team, and you can’t have a hard and fast rule about what works for particular teams.”

The company has sought to foster a culture that is inclusive, empowering and supportive and it was well down the path of increasing flexibility and looking at work-life balance before COVID-19.

Roughly 80% of people were coming into the office before the pandemic and the internal IT team was already improving arrangements for those working from

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“We have had our highest customer satisfaction score and we have record sales across all our lines of business.”

home so they could directly access company systems rather than using external means.

NTI acted ahead of Government orders to escalate remote arrangements as the pandemic’s global reach widened and was able to quickly ensure staff at home had required equipment.

Zoom meetings have replaced travel for meeting with colleagues and clients, and there has been plenty of informal engagement using Facebook and other technology within and between teams.

Mr Clark says people have welcomed opportunities to keep in touch with each other and ensuring communication across all levels has been a focus.

“We made a point with our leaders to make sure they kept in more contact than they ever have before with their team members,” he says. “We need to make sure they are okay and we need to make sure we make more of an effort to connect.”

Mr Clark has touched base with as many employees as possible while working remotely and, particularly in the rapid-moving early stages of the pandemic, provided video updates to help put any concerns to rest.

The message to employees has been that NTI is a strong company with well capitalised shareholders, that it’s well placed despite uncertainty generated by the wider economic repercussions of COVID-19.

“They are working for a robust, strong company that can trade through this, even if there is unforeseen further downturn,” Mr Clark says. “We want them to be really positive in our organisation.

“We have done scenario analyses for a significant downturn through to business as usual, so we can reassure our people that we understand what the business will look like irrespective of the impact of COVID-19 on the economy.”

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Government-mandated restrictions have diverged following early successes, with Western Australia opening up more widely as risks subsided, while Melbourne last month went back into lockdown.

Mr Clark says some staff want to return to their offices as soon as possible, while others are happy to remain at home. But as restrictions ease it is likely fewer personnel will be on site at any one time, with attendance depending on requirements.

“We won’t be forcing people to come back in,” Mr Clark says. “What COVID-19 has done is teach people how they can work from home and balance work and life, and I think that will change the way businesses operate in the future.”

Whatever happens over the next few months, it will be a case of talking with the various teams across the business to see how that works best for the company and its people.

The pandemic has seen NTI’s expertise drawn upon as it has worked with groups such as the Australian Trucking Association and provided input for a Federal Government land transport industry weekly meeting.

Issues for the transport industry have included keeping facilities open and clean to prevent driver fatigue and ensure safety, and making sure freight can reach destinations amid border restrictions and other obstacles.

Against that background, employees have responded by working hard to meet client requirements and to help keep trucks on the road.

“Our purpose as a business is to keep Australian industry moving to a safer and more sustainable future,” Mr Clark says. “I think when our people saw us working at the front line of trying to keep transport moving, that really inspired them that we were living 0 our purpose.”

companyNEWS 0

Building momentum: 360 Construction and Engineering set for growth 360 Underwriting Solutions has made significant changes to its construction and engineering business after building a platform for growth through key acquisitions.

The firm purchased a controlling stake in construction, mobile plant and equipment agency eSentry in July last year supporting plans to develop a capability in the sector to meet demand from brokers.

Since then, attention has been focused on integrating the eSentry team, bedding down the renewal portfolio and establishing a platform for the future. Earlier this year additional scale and capability was provided through acquisition of the

Ensurance Construction business.

The changes culminated in the July launch of 360 Construction and Engineering, with the eSentry brand being discontinued in the market. Capacity for the construction portfolio is provided by QBE. 360 says the eSentry brand will continue as a technology provider to the group, and it will power much of the online placement facility requirements. The existing 360 Mobile Plant and Equipment business and the Ensurance Construction business will trade as separate subsidiaries, contributing to the 0 overall offering.

Supporting SMEs: Vero offers grants to help businesses recover Vero has provided $250,000 in Business Recovery Grants to help SME customers affected by the COVID-19 outbreak.

The grants aim to help SMEs regain traction through practical support, with funds available for advertising, equipment, consulting and promotional printing.

“Vero understands for many SMEs rebuilding momentum quickly will be crucial for their recovery,” Head of Commercial Intermediaries Anthony Pagano said.

“These funds will help struggling

businesses across a variety of areas, including local area marketing, advertising and advice on strategy and business development.”

The grants were open to eligible Vero Business Insurance, Vero Corporate Insurance and GIO Workers’ Compensation customers.

The program included five grants of $20,000, ten grants of $10,000 and ten grants of $5000, with applying firms, or brokers acting on their behalf, required to outline how the funds would help the

SME’s recovery.

Vero says applications will be closely examined and even businesses unsuccessful in receiving a grant would benefit from additional support made available through their broker.

“Now more than ever it’s important we support our small and medium businesses to reconnect with their customers and return to profitability,” Mr Pagano said. “Vero will continue to back brokers, and their SME customers, as they get back to business.” 0

Tracking for safety: IAG invests in location data startup Bluedot IAG Firemark Ventures has become the first financial services company to invest in startup Bluedot, which has developed customer location tracking technology being used by fast food companies and for toll roads.

Bluedot was founded in Melbourne with a focus on automating road payments, but it has since identified wider opportunities and has moved its headquarters to San Francisco.

The firm’s offering includes predictive

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customer arrival technology that can ensure takeaway orders are hot when collected, and which can also facilitate minimal contact curb-side pickups for purchased items.

IAG says it will be exploring how Bluedot technology can help customers protect against risks. That could include sending alerts on road safety hazards and providing information to identify the safest routes to destinations.

“We recognise the potential of Bluedot’s

location data capabilities and the enormous opportunity for the business to scale,” Firemark Ventures General Partner Scott Gunther says.

“We are pleased to be the first financial services company to invest in Bluedot and look forward to expanding the partnership over the coming months.”

Bluedot’s technology has been used to help food brands including Dunkin’, KFC and McDonald’s and has assisted companies 0 such as Transurban and retailer OTR.

companyNEWS 0

Family ties The Morgans at MGA Warrnambool mark three generations Working together: from left, Dennis, Sam and Gareth Morgan

D

ennis Morgan would not have guessed when starting in general insurance decades ago that in 2020 he would head a brokerage where three generations of his family would be working together.

The milestone arrived at MGA Warrnambool last month when 18-year-old Sam Morgan officially came on board, joining his father Gareth and grandfather Dennis at the business.

Dennis started his business career in banking, transferring to Warrnambool in Victoria’s southwest from nearby Camperdown in the 1960s, and working with AMP before a move into general insurance broking.

The opportunity came in 1999 to manage MGA’s Warrnambool business, and after a few years it reached a size where Mr Morgan welcomed the chance to take over the portfolio and independently run the business, under the MGA umbrella.

“The figures were there to indicate it would be a decent-sized business and we could grow it ourselves,” he says. “It has been ideal for us and gave me the incentive to get Gareth into the business first up, and now Sam has come along.”

The industry has seen plenty of changes over the journey. Technology was advancing rapidly at the time Gareth joined, while the hardening market and shifts in underwriting approaches are a feature for the current generation of entrants.

Rising rates and the impact of the coronavirus pandemic is creating challenges, particularly for business clients that have lodged a previous claim. Some insurers have become more cautious, Gareth says.

It has also made the role of brokers more important,

whether it’s providing risk management advice to minimise the likelihood of clients having a claim, accessing markets for the right cover or following through after a loss occurs.

“They have got to be set up correctly,” Gareth says.

“If you go direct and something goes pear-shaped you are really on your own, whereas the broker can back them up, help them through the process of a claim and make sure it is paid out according to the wording.”

Dennis, now 70, has eased back to three days a week with plans to transition to retirement, while offering his experience and knowledge to the younger generations.

“They are probably good at helping me with the computer side of it, and the face-to-face contact and being able to negotiate and deal with clients is probably where I have a bit of an advantage,” he says. “We can help each other out.”

Brokers Gareth and Glenn Skilbeck are now looking after more of the brokerage’s clients, while Sam is testing out the broking world on a one-year traineeship.

Dennis’ wife Sue, daughter Penny and daughterin-law Michelle are also among the business team. The brokerage has a branch office in Portland and Gareth also looks after clients in Melbourne, travelling between the two locations before the recent lockdowns came into effect.

The family involvement in the business does mean there are some lines to be drawn.

“You have to be careful that you don’t let the business side interfere when you get home into the domestic situation,” Dennis says. “We have family gatherings and we do talk a bit of work, but we try 0 and keep that to a minimum.”

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peopleNEWS 0

Marsh Australia Chief Executive Scott Leney

Swiss Re Corporate Solutions Chief Executive Melanie Slack

Aon Australia Chief Executive James Baum

Steadfast Managing Director and Chief Executive Robert Kelly, right, receiving last year’s Highest Fundraiser award from The Australian Managing Director Nicholas Gray

Industry CEOs raise thousands in sleepout

QBE Chief Risk Officer Jonathan Groves

Pen Underwriting Chief Executive Ken Keenan

Insurance leaders bunkered down for an online version of Vinnies annual CEO Sleepout on June 18, spending the winter night in their backyards.

Perth-based Zenith Insurance Services Director Kim Gilbert, registered for the ninth time to raise more than $14,000.

Now in its 15th year, the streamed event raised more than $5.76 million to support people facing homelessness.

Ken Keenan, Chief Executive at Pen Underwriting, raised $6239 in his third Sleepout and Geelong Insurance Brokers Chief Executive Don Shields raised $3373 in his fourth sleepout.

Steadfast Managing Director and Chief Executive Robert Kelly raised more than $100,000 in his third sleepout – topping the leaderboard of 458 Sydney-based executives – and said he drew inspiration from watching his grandfather struggle with homelessness and gain support from Vinnies.

QBE’s team of three – Australia Pacific Chief Executive Vivek Bhatia, Lenders Mortgage Insurance Chief Executive Phil White and Chief Risk Officer Australia Pacific Jonathan Groves – raised almost $38,000.

QBE LMI Chief Executive Phil White

Chubb Country President Jarrod Hill

Marsh Chief Executive Australia & Pacific Scott Leney – who is an ambassador for the event, as well as being on the organising committee – raised $42,500 in what was his seventh sleepout.

Sleeping out for the second time was Swiss Re Corporate Solutions Country Head ANZ Melanie Slack, who contributed $11,125, Berkley Re Chief Executive ANZ Tony Piper, who raised $4328, and IQumulate Premium Funding Chief Executive Raj Nanra, with over $7000.

Senior insurance executives bracing the elements for the first time were Eoghan Trehy, national head of insurance at Macquarie Business Bank ($14,629), Chubb’s Jarrod Hill ($13,242), Aon’s James Baum ($11,288), AIG Australia’s Nigel Fitzgerald (11,439), Willis Towers Watson’s Simon Weaver ($9000), Allianz’s Richard Feledy ($5918) and Suncorp’s Andrew 0 Mair ($1065).

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peopleNEWS 0

Geelong Insurance Brokers Chief Executive Don Shields

Macquarie Head of Insurance Broking Eoghan Trehy

Zenith Insurance Services Director Kim Gilbert

IQumulate Chief Executive Raj Nanra

Willis Towers Watson Head of Australasia Simon Weaver

AIG Australia Chief Executive Nigel Fitzgerald

QBE Australia Pacific Chief Executive Vivek Bhatia

Berkley Re Australia Chief Executive Tony Piper insuranceNEWS

August/September 2020

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maglog >

SUBJECT:

ZOOM MEETING TOMORROW

SUBJECT: PROJECTIONS

FROM: Roy Smith, GM Distribution

FROM: Geoff Rogerson

TO:

TO:

Geoff Rogerson, BDM

Roy Smith

Hi Geoff, Just wondering when I can see those projections you’ve been working on. They will be the centrepiece of my Zoom presentation tomorrow afternoon, and I’m keen to get my head around the figures well in advance.

Hi Roy. I’ve nearly finished the projections. Been a bit distracted today. Judy has gone to her hospital job and I’ve had to oversee the kids a bit. Didn’t stop working though, of course. It didn’t help that the four-year-old took his crayons to my printout, haha.

Cheers, Roy

Geoff

SUBJECT: URGENCY

SUBJECT: PHONE

SUBJECT: PHONE

FROM: Roy Smith

FROM: Geoff Rogerson

FROM: Roy Smith

TO:

TO:

TO:

Geoff Rogerson

Roy Smith

Geoff Rogerson

Geoff, I realise there are additional challenges to working from home, but I really need those projections now. I tried calling you but no response.

I think Judy might have taken my work mobile with her. She has the same model phone. You can call me on my personal mobile if you like.

No answer on that phone either. Geoff, this is getting urgent. The COO is sitting in on the Zoom meeting tomorrow, and we can’t afford to not be ready.

Cheers, Roy

Geoff

Roy

SUBJECT: PHONE

SUBJECT: PHONE

SUBJECT: PHONE

FROM: Geoff Rogerson

FROM: Roy Smith

FROM: Geoff Rogerson

TO:

TO:

TO:

Roy Smith

Geoff Rogerson

Roy Smith

Point taken, Roy. I’ll look for the phone when I take a break in half an hour.

Hi again Geoff. Did you find the phone?

Hi Roy. Boy, what a weird day! The kids are bored with iPads, movies and toys, so it’s a bit hectic around here. Still working on the projections. They’re coming along nicely. Cheers, Geoff

SUBJECT: PHONE?????????

SUBJECT: PHONE

SUBJECT: PHONE

FROM: Roy Smith

FROM: Geoff Rogerson

FROM: Roy Smith

TO:

TO:

TO:

Geoff Rogerson

From the lack of response when I call can I deduce that your wife does indeed have it? But what about your personal phone? No response to that either.

Roy Smith

Good news! Found them both. But they’re not working at present.

Geoff Rogerson

Try to avoid letting the phone batteries go flat, Geoff.

Keep it on charge while you’re working.

Roy

Roy

SUBJECT: PHONE

SUBJECT: PHONE

SUBJECT: PHONE

FROM: Geoff Rogerson

FROM: Roy Smith

FROM: Geoff Rogerson

TO:

TO:

TO:

Roy Smith

I do keep it charged. I’m very careful about that. No worries.

Geoff

Geoff Rogerson

Geoff, I still can’t contact you at either phone number. They should be charged enough after two hours.

What gives?

Roy

Roy Smith

Hi Roy, Yes, the phones won’t be working for a little while. The twins were using them as submarines in the fish tank. Took me ages to locate them. This home-schooling sucks, doesn’t it! I’ve put them in a plastic bag with salt and they should be okay soon.

The phones, that is, not the kids haha.

Cheers, Geoff

SUBJECT:

SUBJECT: PHONE

SUBJECT:

FROM: Roy Smith

MY PRESENTATION

FROM: Geoff Rogerson

FROM: Roy Smith, GM Distribution

TO:

TO:

TO:

Geoff Rogerson

What the hell is going on? Forget the bloody phones, where’s my projections? It’s been five hours since I asked for them. Not happy, Geoff.

Roy

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Roy Smith

Good @@@morning Roy. The ##########projections are((((attached.I’m22afraid33there44may ∞∞be66some77difficulty88interpreting 99them00to==the++executive))))))team. ****I@@@ had%%%to&&take XX one((()))of!!!!!the~~~~twins¡™to∞∞the££doctor’s¢after §§she••gotªªa ≠≠chip¢–¢the§§ediblekindhaha¢stuck ••up¶¶herªªnose. Theother¥twinwasƒsupposedtokeepaneye∞∞on§theªfour-year-old, ‘‘butlong§storyshort©heƒdidn’t. The§§ ittle¶¶bloke™ did¶¶something¶toººmy••computer™thatçIµµµcan’t≥≥fix.¡¡¡¡¡¡So∂∂ theprojections∞∞are55a77bit™like≠≠this √√page¡,I’m ßßafraid,∆maybe¥worse.≈It’s≈4.15am√√and˜˜I’ve£sto pped¬caring.YoursUUinresignation,µµGeoff!¡

TODAY’S SCHEDULE

Melanie Scruggs, Executive Assistant

Hi Mel, Please cancel all my appointments for today.

Apologies to the COO and the other Zoom participants, but I have a terrible headache.

Also please arrange for someone in HR to contact Geoff Rogerson. He doesn’t seem to be handling working from home as well as the other BDMs, and could need some assistance, if you know what I mean.

Cheers, Roy

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Epsilon’s policies offer a range of tailored benefits and available extensions to provide every Insured with the peace of mind they need in this niche market.

Contact Morgan, Dan, Michael or Kendra today: M (02) 9299 3466

E liability@epsiloninsurance.com S.1503, Lvl 15, 1 Market St Sydney 2000 Epsilon Insurance Broking Services Pty Ltd

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S.1203, Lvl 12, 133 Mary St Brisbane 4000

ABN 68 097 402 134 | AFSL 245612

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www.epsiloninsurance.com