Insurance Adviser - March 2021

MARCH 2021

PASSING THE BATON Dianne Phelan takes over as President

WE SHALL OVERCOME

Landlord and strata insurance challenges

CARAVANS, CAMPING AND CAVEATS An update on the domestic tourism sector

CONNECTIONS AND COLLABORATIONS

An interview with Vice President Ward Dedman

WE ARE YOUR VOICE

CONTENTS March 2021

ACN 006 093 849 ABN 94 006 093 849

FEATURES

Insurance Adviser magazine is the monthly magazine of the National Insurance Brokers Association (NIBA).

Insurance Adviser magazine is published by NIBA

Publisher

Dallas Booth, CEO, NIBA T: (02) 9964 9400 E: dbooth@niba.com.au W: niba.com.au

Communications Manager Tiffany Eastland

NIBA Editor Tanaya Das

Editorial enquiries

E: editor@niba.com.au

National Sales Manager Tony May E: tmay@niba.com.au

Design

Citrus Media www.citrusmedia.com.au NIBA gives no warranty and makes no representation that the information contained in this magazine is, and will remain, suitable for any purpose or free from error.

22

TAKING OVER THE REINS Dianne Phelan is the new NIBA President

To the extent permitted by law, NIBA excludes responsibility and liability in respect of any loss arising in any way (including by way of negligence) from reliance on the information contained in this magazine or otherwise in connection with it.

The contents of Insurance Adviser are protected by copyright and NIBA reserves its rights in this regard.

Cover image: www.dmfotographica.com

26

FOSTERING COLLABORATION Get to know the NIBA Vice President Ward Dedman

NIBA.COM.AU / 3

CONTENTS March 2021

FEATURES 28 WE SHALL OVERCOME

The challenges facing the landlord and strata insurance segment

38 CARAVANS,

CAMPING AND CAVEATS

An update on the domestic tourism sector

IN EVERY ISSUE NIBA CEO welcome.................................... 6 Representation............................................ 8 Why be a NIBA member?......................... 12 Forthcoming events ..................................54 Insurance Journey: Kelly Qualmann.........................................58

NEWS

Industry bulletin.........................................14

PROFESSIONALISM

Explaining the scope of cover .................20 ‘Testing’ for COVID-19: A final determination ............................... 21

REFERENCE Community Hub ........................................46 Insurer strength ratings ..........................56

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DISPLAY ADVERTISING INDEX – MARCH 2021 QBE...................................................... IFC Vero............................................................5 Zurich........................................................7 Technosoft.............................................. 11 HMIA advertorial................................ 13 CBN ........................................................ 17 ANZIIF ...................................................19 McLardy McShane............................ 25 Focusnet .............................................. 27 CHU......................................................... 31 SUU......................................................... 32 Flex Insurance..................................... 33 ASTA....................................................... 35 NIBA Awards..................................37, 41 Ebix.........................................................43 QPIB.............................................45, IBC NTI..................................................... OBC

CEO / Welcome

WELCOME MADAM PRESIDENT

I

am absolutely delighted to welcome Dianne Phelan, from BJS Insurance Brokers in Adelaide, as the new President of NIBA. Dianne is a very experienced and highly regarded insurance broker, and her appointment as President has been warmly received across broking and insurance circles.

At the same time, we welcome Ward Dedman from EBM insurance brokers in Perth as our Vice President. Ward is a long-time supporter of NIBA and of insurance brokers in Western Australia, and I am extremely delighted he has agreed to take a leading role on the NIBA Board of Directors.

I would also like to pay a special tribute to our outgoing President, Eric Harris of Aon. With the release of the Royal Commission report and recommendations in February 2019, the 2019/2020 Black Summer fires in eastern and southern Australia, and the COVID-19 pandemic across Australia during 2020 and beyond, Eric has had a very challenging time as President, but he has provided great leadership during that time.

While a number of things slowed down or were deferred during the COVID crisis, the NIBA Board had the opportunity to spend considerable time developing a draft new Code of Practice. Eric Harris led those discussions very effectively, and it is pleasing we are now able to undertake a wide consultation with all interested parties on the future direction of the Insurance Brokers Code of Practice.

Eric also had a major role in leading the Board’s consideration of strategic directions for insurance broking in Australia over the next three to five years. The work on this is nearing completion, and we look forward to presenting the results of these discussions to members in the near future.

mechanism, and I do believe the current remuneration arrangements have significant advantages for broker clients. We will develop and present our arguments on this during the course of the year, in preparation for the 2022 review.

ARE WE “ON THE OTHER SIDE”?

In recent weeks (at the time of writing) we have had real progress with the eradication of the COVID-19 causing coronavirus, accompanied by virus transmissions from quarantine hotels. With Australians returning home from overseas, it is inevitable that the virus will continue to come into the country. I suspect this will continue to be the case for some time to come.

I do believe we are now “on the other side”, and we must all follow all relevant instructions and recommendations from the health authorities. It is pleasing that the vaccine is about to be rolled out across the community, but it will take some time before the population is substantially vaccinated. In the meantime, we must all take great care with our own health and hygiene, and that of our staff, clients, family and friends.

NIBA is slowly moving back to our office in North Sydney, but a number of staff are still working from home. I am keen to make sure our people feel safe and secure at work, and when commuting to and from work. For the time being, the best way of contacting NIBA is by email. Your message will get to the relevant person very quickly.

A YEAR OF CHANGE

With the passage of legislation implementing a number of Royal Commission recommendations just before Christmas 2020, we now look at the implications for insurance broking and the changes that will need to be implemented in insurance broking processes and procedures.

Please have a careful look at the Representation pages of this edition, and you will start to appreciate the range of matters which will take effect in October 2021, and which insurance brokers will have to become familiar with during the course of this year.

REVIEW OF REMUNERATION IN GENERAL INSURANCE

NIBA has commenced preparations for the 2022 review of remuneration in general insurance, including the role of commissions. Our members have indicated a strong desire to maintain the role of commissions as a remuneration

6 / INSURANCE ADVISER MARCH 2021

DALLAS BOOTH Chief Executive Officer, NIBA

Consistency can be very exciting.

Our consistent and stable approach to underwriting gives you the confidence to recommend Zurich so you and your customers can grow business. Now that’s exciting.

Zurich Property Insurance This information is general advice only and does not take into account your objectives, financial situations or needs. You should obtain and consider the relevant Product Disclosure Statement and Policy Wording (as applicable) from zurich.com.au before making a decision.

The issuer of general insurance products is Zurich Australian Insurance Limited (ZAIL), ABN 13 000 296 640, AFS Licence Number 232507 of 118 Mount Street, North Sydney NSW 2060. ZU24150 V2 0121 TFMC-016337-2021.

NEWS / Representation

WE ARE YOUR VOICE!

2021 is off to a roaring start, with a flurry of activity scheduled for the coming months.

The following are the key developments all members need to be aware of.

COVID-19 & BUSINESS INTERRUPTION

The Insurance Council of Australia (ICA) has sought leave to appeal to the High Court of Australia in relation to the Business Interruption (BI) test case that was undertaken in the Supreme Court of NSW. The ICA has provided an update on Business Interruption matters generally, which is available here: insurancecouncil. com.au/issues-submissions/bi-test-case

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The Financial Conduct Authority ran a similar test case seeking clarification of the pandemic exclusion clauses in a number of London market policies. The Supreme Court unanimously ruled in favour of policyholders stating that the vast majority of policyholders with nonproperty damage BI cover could make valid claims for their business interruption losses caused by the UK Government’s response to the COVID-19 pandemic.

ACCC NORTHERN AUSTRALIA INSURANCE INQUIRY

The Australian Competition and Consumer Commission (ACCC) has released its third and final report under the Northern Australia Insurance Inquiry.

It makes a number of recommendations, most of which are likely to have limited if any impact on the availability and affordability of home, contents and strata

NEWS / Representation

insurance in northern Australia.

The final report repeated an earlier recommendation that insurance broker commissions be abolished. NIBA has spoken with the Federal Government in relation to this issue, and understands the government remains committed to the 2022 review of remuneration arrangements for general insurance products and services. NIBA is currently preparing a formal response to the report, which will be provided to Treasury for consideration.

FEDERAL

Royal Commission Reforms

Legislation implementing a number of Royal Commission recommendations passed the Federal Parliament prior to Christmas and will take effect over the course of 2021. The key provisions of interest to insurance brokers are as follows: Use of the terms “insurance” and “insurer”: There are now stronger provisions which prevent use of the word “insurance” for products and services that are not insurance, such as risk management advice.

Claims handling and settling services: these reforms make insurance claims handling and settling services a financial service, and therefore they must operate under a financial services licence and be subject to the requirements of Chapter 7 of the Corporations Act. It is important to note that any insurance broker who has authority to make decisions in relation to claims must discuss the matter with the relevant insurance company and must take steps to either obtain a claims handling endorsement on their AFS licence or become an authorised representative of the insurer.

Reference Checking and Information Sharing: new provisions require AFS licence holders to comply with new reference checking and information sharing protocols to be released by ASIC. These requirements will apply to authorised representatives of life risk brokers, and do not apply to representatives giving advice only in relation to general insurance products. The new rules take effect on 1 October 2021.

Breach reporting and remediation: detailed new laws in relation to breach

reporting and remediation take effect on 1 October 2021. All member principals will need to thoroughly review their breach monitoring and reporting processes and procedures to take account of the new laws. NIBA will provide detailed information on this shortly.

Hawking of financial products: complex new provisions relating to the “hawking” of insurance products will take effect on 5 October 2021. The provisions do not apply when an insurance broker is giving personal advice to a retail client, but they will apply to insurance brokers operating under a general advice model. Essentially, the provisions will prevent the unsolicited marketing and sale of financial products to retail clients. The definitions and concepts are difficult and complex, and NIBA will provide further information to members in relation to these changes.

Deferred sales model for add-on insurance products: These reforms essentially ban the sale of an insurance product in conjunction with some other product or service. Examples include insurance sold in conjunction with the rental of a motor vehicle, travel insurance purchased after the purchase of a travel product, and so on. The legislation introduces a complex array of obligations which defer the insurance transaction for a period of four days. The reforms do not apply to comprehensive motor insurance, or products recommended by financial advisers in a very limited personal advice situation. NIBA liaised with members to determine areas where exemptions should be given from these reforms and provided this advice in a submission to Treasury.

There are a number of areas where insurance has been provided in conjunction with another sale, and the immediate supply of insurance cover provides genuine protection for the consumer.

Duty to take reasonable care not to make a misrepresentation: these reforms relate to a newly defined category of “consumer insurance contracts”. They apply to insurance obtained wholly or predominantly for the personal, domestic or household purposes of the insured.

Where the new definition applies, the insured only has a duty to take reasonable care not to make a misrepresentation to the insurer before entering the consumer

insurance contract. The changes relate to insurance contracts entered into on or after 5 October 2021. For non-consumer insurance contracts, the existing provisions in sections 21 and 22 of the Insurance Contracts Act (duty of disclosure obligations and misrepresentation provisions) apply. NIBA will provide more information on these reforms to members.

Design and Distribution Legislation

As previously advised, legislation to implement new obligations on insurers and distributors of insurance products has been passed by the Federal Parliament.

ASIC has indicated that commencement of the new rules has been delayed until October 2021. While this is welcome, there is no room for complacency: the new rules will apply to every product that currently has a PDS attached to it.

NIBA is continuing to work with the Insurance Council of Australia to develop an understanding of how the legislation will work. We are also aware that a number of insurers have contacted members directly to discuss these matters. It would be unfortunate if insurers were to take differing approaches to this issue.

It is crucial that broker firms who use “broker wordings”, or their own schemeswhere the broker has been involved in the design of the policy and the development of the cover that is provided, work closely with the insurer/underwriter to determine how the Design and Distribution obligations will operate in respect of those policies, who will be responsible for the preparation of the Target Market Determination, and how the product review obligations will be implemented. Firms will most likely need to obtain legal assistance for this process, in order to ensure they are meeting the new legislative obligations.

Unfair Contracts Terms Legislation

As previously advised, legislation which will apply existing unfair contracts terms legislation to insurance contracts has been approved by the Federal Parliament. It is important to note that implementation of this legislation has NOT been deferred by the Federal Government. The reforms will take effect in early April 2021. By that time all retail policies will need to be reviewed to identify and remove any potential unfair terms.

As noted above in relation to Design and Distribution obligations, where

NIBA.COM.AU / 9

NEWS / Representation

brokers have policies with their own wordings and cover, they will need to review the terms of cover and the wording of the policies to determine whether the policies might be caught by the Unfair Contract Terms legislation.

This should be done in collaboration with the relevant underwriter. We also note that these are technical legal questions, and we strongly urge brokers to obtain legal support for this purpose.

Other reforms

In addition to the above, a number of other reforms were passed by parliament that have the potential to impact a small number of members including insurer avoidance of life insurance contracts and caps on commissions for products sold in conjunction with the sale or long-term lease of motor vehicles. Brokers that operate in these areas are advised to familiarise themselves with the upcoming changes.

ASIC

ASIC recently issued Regulatory Guide 271 – Internal Dispute Resolution. It is a condition of every AFS licence that the licence holder have a system for managing

and resolving complaints and disputes, preferably before they are elevated to AFCA. RG 271 reviews and updates ASIC’s requirements in this area. The new requirements take effect on 5 October 2021.

Emergency Services Levies

We continue to encourage members with clients in New South Wales and Tasmania, where emergency services levies add considerably to the cost of property insurance to discuss the matter with their clients and if appropriate, contact their local state member of parliament.

To assist brokers with these conversations, NIBA has provided a fact sheet, template letter and MP contact database on the Emergency Services Funding Hub available on the NIBA website.

Review of NSW workers compensation

The NSW Government has launched a major review of workers compensation, including the operation and management of icare, and the operation of the NSW workers compensation scheme more broadly. NIBA has provided a submission to this review, and has met with Counsel

advising Justice Robert McDougall, who is conducting the review.

General Insurance Code of Practice

The full General Insurance Code of Practice will take effect from July 2021.

Provisions relating to family violence and vulnerable persons and distressed clients were introduced last year.

Any insurance broker operating under a binder on behalf of insurers will need to undertake training on the new Code of Practice and to implement procedures to adopt the General Insurance Code in respect of those operations. This is particularly important for the new Code provisions relating to vulnerable persons and clients in distress, mental health, disclosure of information and the sale of insurance products through motor dealers.

A summary of key features of the new General Insurance Code of Practice is available at: codeofpractice.com.au.

2022 Review of the Intermediated Insurance Industry

To prepare for ASIC’s upcoming review of the intermediated insurance industry and to support the release of the Deloitte report on the economic value of insurance broking, NIBA has been conducting briefings with state and federal departments of Finance, Small business and Treasury as well as meeting key stakeholders within the consumer and business space to help educate them on the role of brokers and the importance of maintaining the current broker remuneration model.

Insurance Broker Code of Practice

Last month, NIBA released a consultation paper inviting feedback and submissions as part of the review of the Insurance Brokers Code of Practice. The independent reviewer is closely engaged with consumer groups, insurers and other stakeholders to ensure that the broker code remains industry leading and positions brokers as trusted advisors. A copy of the consultation paper and draft code can be found at: niba.com.au/html/niba-cop-review.cfm

CONTACT NIBA

As always, brokers who have questions about these or any other government or regulatory matters should feel free to contact NIBA CEO Dallas Booth at: dbooth@niba.com.au

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NIBA / Member Benefits

WHY NIBA MATTERS TO ME Members share why NIBA is important to them and the broking industry.

“NIBA is the voice of our profession – an important vehicle to influence change and plan for a future where we can remain relevant and continue to create value and opportunities for customers.”

ADAM HINES Vice Chair of the NIBA NSW Divisional Committee and Director at Aether Insurance & Risk Pty Ltd

WELCOME TO NIBA

NIBA is thrilled to have the following new principal member on board: • Insurance Services Holdings Pty Ltd in NSW

ABOUT NIBA OUR MISSION

NIBA is the one voice for insurance brokers in Australia, representing their interests and promoting high standards of professionalism and competence.

OUR OBJECTIVES Representation

We represent the interests of members and their clients to governments, regulators, industry stakeholders, the media and the community in a manner that is respected and relevant. We have forged strong relationships at state and national level to ensure that your interests are represented.

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Professionalism

We set and promote high standards of professional practice for insurance brokers for the benefit of their clients and the community through the development of professional standards, QPIB, CPD accreditation and the Insurance Brokers Code of Practice.

Community

We provide members with opportunities to meet, share, grow and prosper and build professional networks with the wider intermediated insurance community that will last throughout whole careers.

GET IN TOUCH!

Whatever your age, or level of experience, NIBA ha s brokers’ best interests at the core of everything we do. Fin d out what we can do to help be nefit your business and your tea m at niba.com.au/membe rship

ADVERTORIAL / HMIA

A SMART NEW BRAND FOR HMIA CAPTURES ITS CLEAR BROKER FOCUS

“We’re putting brokers in the driver’s seat,” is the statement that best captures HMIA’s new broker-focussed website, complete with a sharp logo, and equally smart look and feel.

As a specialist mid-to-large fleet heavy motor insurer, HMIA has been pushing the industry towards simpler and more efficient ways of supporting heavy motor brokers for some time—and now they have a website to match their vision.

CEO Michael Zaknic admits that for their first few years in the market, marketing hadn’t been a big priority.

“Instead, we wanted to figure out how we could make it simpler for heavy motor insurance brokers to get the support they need to provide the best advice to their clients. We wanted to spend our time getting our service and insurance offering right, and we knew if we could provide the right expertise and service that success would follow.”

Now that it has, and the company is rapidly expanding, Zaknic realised it was time to ensure the brand was on message, too.

“As we continue to expand our market reach, we realised it was important for our brand to really convey our purpose, our culture and what heavy motor insurance brokers can expect from working with us.”

Zaknic wanted the new brand to capture the essence of the business. “We wanted a brand that reflected the simple yet intelligent way we do business. We offer great value, great service and no complications.”

“We insure heavy motor fleets and we do it well.”

To bring his vision to life, Zaknic enlisted the help of brand designer Berny Bacic, to create a new visual identity and brand

strategy that expressed the business’s values and purpose.

“For us, we really are about empowering heavy motor insurance brokers, so they have the support they need, and the expertise at their disposal, to deliver for their clients. At HMIA, we realise the increasing importance of an effective insurance program, especially to businesses that rely on heavy motor fleets. It’s more than just smart risk management—it’s about helping to keep Australia’s heavy motor industry thriving.”

Zaknic recognises that the more efficiently insurers can work with brokers, the more their clients can focus on what truly matters— limiting their risk so they can grow their businesses.

“Brokers today play a pivotal role in their

client’s business strategy. We want them to be well supported so there is minimal impact to their clients in the event of an unexpected situation.”

For Zaknic, this means taking out any barriers to his team that impede the expertise heavy motor brokers need.

“If we can provide brokers with direct access to the decision-makers, efficient inhouse claims management, and heavy motor insurance cover that’s specific to fleet needs, we are helping them set up an effective insurance program for their clients.”

The new HMIA website is now live at HMIA.com.au.

For further information, please call Vicky Takos on 02 9227 8431 or email at victoria.takos@hmia.com.au

HMIA CEO Michael Zaknic

HMIA Pty Ltd distributes the product as agent for the insurer of the product, HDI Global Specialty SE – Australian Branch. Any advice contained in this email is general advice only and has been prepared without taking into account your client’s objectives, financial situation or needs. Your client should consider these, having regard to the appropriateness of this advice, and the relevant Product Disclosure Statement, available at www.hmia.com.au, before deciding to acquire, or to continue to hold, this product.

NIBA.COM.AU / 13

NEWS / Industry Bulletin

T

LAST CHANCE: NOMINATE OUTSTANDING BROKERS FOR THE NIBA BROKER AWARDS

he National Insurance Brokers Association (NIBA) along with QBE and Vero are now searching for Australia’s most outstanding insurance brokers.

Nominations are now open for the prestigious NIBA Broker of the Year Award and the Young Professional Broker of the

Year Award.

The awards honour the best professional insurance brokers in each of the five NIBA divisions – NSW/ACT, Vic/Tas, Qld, SA/ NT and WA. Those crowned the winner of their division will go on to compete for the national Stephen Ball Memorial Award and Warren Tickle Memorial Award.

The NIBA awards are the broking profession’s most prestigious. They are independently judged by leaders in the industry and brokers are nominated by you, their peers. Therefore, winning is true recognition from the industry.

You can find more details on the NIBA website: niba.com.au/html/awards.cfm

For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/

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NEWS / Industry Bulletin

ICA PROJECT TO EXAMINE COVERAGE GAPS

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he National Insurance Brokers Association (NIBA) has welcomed the Insurance Council of Australia (ICA) review of the insurance sector’s options for reforms to improve its contribution to national economic recovery and growth, amid concern from insurers, stakeholders and the community about the availability and affordability of some categories of cover for certain groups of customers.

NIBA CEO Dallas Booth said, “I have spoken with ICA CEO Andrew Hall and with John Trowbridge and have indicated to both the difficulties brokers are facing in the market at the present time, and the fact that there are a number of sectors struggling to get any cover at all. It is reassuring to see the Insurance Council taking this matter very seriously, and I look forward to the consultation paper that is currently being prepared.”

The aim of this review, which is being led by former insurance executive and regulator John Trowbridge in collaboration with leading economist Michael Blythe, is to provide a summary of practical solutions to problems that have been challenging sectors

of the economy for a decade or more.

ICA CEO Andrew Hall said insurance exists to transfer risk from consumers and businesses in a manner that enables them to pursue their affairs confident they will receive support to recover financially from any insured risks.

“As our nation navigates the COVID economic recovery, it’s important to understand that nothing can happen without insurance providing essential coverage for insurable risks,” Hall said.

“NIBA will support this project with all available information and assistance,” Booth added.

Hall said, “While changes in availability or affordability of insurance send a price signal about the risks that are present, we know that where there are acute issues, we need to find ways forward so economic prosperity is not hindered or risk shifted back on those without the capacity to properly manage it.”

“That is why the Insurance Council has engaged industry expert John Trowbridge and leading economist Michael Blythe to undertake this important review and

recommend ways forward for the industry and policy makers.”

Trowbridge said that while the issues around affordability and availability were well known, there has been a lack of agreement on potential solutions.

“As has been recognised by the recent Royal Commission into National Natural Disaster Arrangements, the ACCC Northern Australia Insurance Inquiry, and Australian Small Business and Family Enterprise Ombudsman’s report, some of these issues can be addressed with industry initiatives or regulatory reforms, but some may be beyond the ability of the private insurance industry to resolve on its own,” Trowbridge said.

“The consultation paper will review various potential solutions and flag questions for policy makers, stakeholders and the industry to consider in order to move these important issues forward.”

Engagement with stakeholders has started and a consultation paper will be released in March, and a final report including recommendations is expected to be released mid-year.

For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/

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NEWS / Industry Bulletin

NIBA PARTNERS WITH NEXTGEN JOBS TO DEVELOP NEW TRAINEESHIP MODEL

I

n an initiative led by the Victorian Divisional Committee, the National Insurance Brokers Association (NIBA), in partnership with NextGen Jobs (NGJ) have developed a cost-effective traineeship model to attract leading entry level talent into our industry to meet current and future workforce needs.

The traineeship model has been designed to provide employers with supported, career-ready candidates equipped with workplace-specific, cutting-edge training managed by the team at NGJ. NGJ is Australia’s newest Group Training Organisation (GTO) and Australia’s first GTO focused exclusively on the delivery of ‘new collar’ traineeships in emerging hightech and high-growth occupations.

NGJ manages the entire recruitment process and ensures the candidate is the right fit for the position, team and overall workplace environment. Furthermore, it facilitates trainee orientation, training, payroll, OHS and ongoing mentoring.

As part of the traineeship model, trainees will undertake a Certificate III in Business with modules specifically selected

to compliment workplace learnings in business administration and insurance.

The Federal Government’s ‘Boosting Apprenticeships Commencement’ wage subsidy presents an excellent opportunity to engage a new trainee. The subsidy is designed to cover 50 per cent of the trainee’s wages,

capped at $7,000 per quarter and is running to 30 September 2021. However, places are limited (100,000 nationwide), so hurry!

For more information contact Evan Henry, NextGen Jobs Operations Manager on 0412 363 328 or email ehenry@nextgenjobs.org.au

Above As part of the traineeship model, trainees will undertake a Certificate III in Business with modules specifically selected to compliment workplace learnings in business administration and insurance.

NIBA RELEASES CODE OF PRACTICE DISCUSSION PAPER FOR CONSULTATION The National Insurance Brokers Association (NIBA) has released a discussion paper inviting feedback and submissions from consumers, organisations, representative associations, and any other interested stakeholders as part of the review of the Insurance Brokers Code of Practice (the Code).

NIBA CEO Dallas Booth said, “As part of our commitment to professionalism and continuous improvement, NIBA is undertaking a review of the Code to ensure continuing high standards of service allowing the profession to remain in step with stakeholder, community and regulator expectations.”

The NIBA Board has engaged a third-party consultant to conduct an

independent review of the Code with a view to submitting the revised Code to the Australian Securities and Investment Commission (ASIC) for approval of the Code under Regulatory Guide 183.

Booth added that the NIBA Board recognises the importance of ASIC approval of the revised code, “It is a signal to consumers that this is a code they have confidence in.”

In the interest of transparency and continuous improvement, the Code review is not limited in its scope, with NIBA’s intent being to ensure that the Code remains relevant and a benchmark of industry self-regulation in a regulatory environment that has turned its focus

more keenly to community expectations, culture, and conduct.

Booth has encouraged stakeholders to consider the discussion paper, which can be downloaded on the NIBA website: niba.com.au/resource/CoP_ Discussion%20Paper_FINAL.pdf, and a submission can be provide on there as well: niba.com.au/codeofpractice/c3complaints-and-disputes-resolution-1.cfm.

“Submission may be made confidentially, or you may choose to make a publics submission which will be available on the Code Review Submissions page,” he said.

Submissions will remain open until 9 April 2021.

For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/

16 / INSURANCE ADVISER MARCH 2021

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NEWS / Industry Bulletin

NIBA SUPPORTS INDUSTRY CALLS FOR INCREASE IN DISASTER MITIGATION

T

he National Insurance Brokers Association (NIBA) has put its weight behind Insurance Council of Australia (ICA) and Master Builders Australia (MBA) calls for the Federal Government to increase investment in disaster mitigation and building resilience funding.

NIBA CEO Dallas Booth said, “Major natural disasters and significant weather events have caused billions of dollars worth of losses in Australia over the past 10 years.

The Black Summer fires were just one of many events over that period. The insurance

industry has paid billions to policyholders to help them recover, but ultimately that financial support from insurers needs to be paid for – by the policyholders of Australia.

This has led to significant challenges regarding affordability of insurance cover.”

Both ICA and MBA are calling for the Federal Government to increase disaster mitigation funding and education programs to reduce the physical loss and economic disruption caused by bushfires, cyclones, storms, flood and other extreme weather events.

ICA CEO Andrew Hall said greater

Above Major natural disasters and significant weather events have caused billions of dollars worth of losses in Australia over the past 10 years

investment by governments across Australia would significantly help communities bounce back from the impact of extreme weather events, “Mitigation and infrastructure improvements increases a property’s resilience, reduces the risk of damage from a natural disaster, and reduces insurance premiums.”

Booth said, “NIBA fully supports efforts by the insurance industry and others to raise the debate about the need for mitigation of risks and making sure Australian communities are resilient, and are able to deal with the weather events we now experience.”

“We look forward to continuing to support mitigation and resilience strategies, so we can keep insurance premiums affordable and available for policyholders across Australia.”

MBA CEO Denita Wawn said it is important to address reforms and develop effective guidance material for the construction supply chain and consumers on property protection and building resilience.

“Industry welcomes the opportunity to work with government to get this right and to develop information and education programs that address how improvements to existing homes can improve building resilience,” Wawn added.

ASIC SEEKS FURTHER FEEDBACK ON INTERNAL DISPUTE RESOLUTION DATA REPORTING The Australian Securities and Investment Commission (ASIC) is seeking further feedback on proposed requirements for internal dispute resolution data reporting.

National Insurance Brokers Association (NIBA) CEO, Dallas Booth, said: “NIBA has been examining the discussion paper and will provide a submission to ASIC on behalf of members.”

This request follows the regulator’s

earlier consultation through Consultation Paper 311 Internal dispute resolution: Update to RG 165 (CP 311) which was published on 15 March 2019.

New internal dispute resolution (IDR) standards and requirements will apply to financial firms that deal with retail clients, including superannuation trustees, from 5 October 2021. This includes the requirement to record all complaints that a firm receives. Mandatory IDR

data reporting will not commence on that date, but ASIC wants to give firms some certainty about what information will be collected as they make changes to their systems now.

In response to feedback received to CP 311 the regulator reached preliminary positions on a number of issues related to data reporting.

ASIC has also simplified the draft data dictionary and reduced the number of data elements from 37 to 23.

For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/

18 / INSURANCE ADVISER MARCH 2021

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PROFESSIONALISM / AFCA Case Study

EXPLAINING THE SCOPE OF COVER

AFCA has confirmed that the duty of an insurance broker includes explaining the scope of cover. Where a policy exclusion or limitation impacts the client’s needs, the broker is required to properly inform the client. This does not mean that a broker must explain all policy exclusions or limitations. What is reasonable will depend on the facts and circumstances of each individual case.

The Complainant’s Case

The complainant submitted that: • on 7 March 2019, he phoned the broker to tell him to lodge a claim – or at least of his intent to lodge a claim – regarding the bookkeeper dispute; • the broker had breached its duty of care by failing to: o lodge a claim with the insurer following the call; o advise the complainant to contact the insurer or to contact the insurer on the complainant’s behalf regarding the action by the bookkeeper; o explain that the policy would only respond if the complainant incurred expenses in proceedings before the FWC; and o advise the complainant that the insurer could manage / defend the action by the bookkeeper.

• on several occasions between March and October 2019, he spoke to the broker about other matters and from time to time the broker inquired about the progress of the bookkeeper dispute.

This led the complainant to assume that the insurance company knew about the dispute and would only get involved after it was settled.

The complainant had no contemporaneous documentation to establish the purpose, content and context of the 7 March 2019 conversation or subsequent contact between the parties.

The Broker’s Case

The broker submitted that: • the complainant did not give express or implied instructions to contact the insurer during the 7 March 2019 conversation. Instructions were not provided until 23 October 2019 when

20 / INSURANCE ADVISER MARCH 2021

the claim was lodged; and • between March and October 2019, the complainant mentioned the bookkeeper dispute “possibly twice” before lodging the claim but sought no further guidance advice or action in relation to the policy.

The broker provided a statutory declaration and its file notes for the period between March and October 2019 as evidence. However, there was no note of the key 7 March 2019 conversation or the discussion with the complainant when the claim was lodged, only an email of that date discussing whether the bookkeeper might or might not be an employee.

The AFCA decision

AFCA was not satisfied that the broker breached its duty of care.

AFCA held that: • it did not accept that the broker’s duty of care required it to tell the complainant that the policy would only respond if the matter were heard by the FWC. The substance of the remedy sought by the bookkeeper was employment benefits and, the policy would not have responded to the complainant’s principal claim. This was so, regardless of the forum in which the proceedings were heard or the way the claim was settled by negotiation; • it was not satisfied that a reasonable broker in the circumstances would have lodged a claim with the insurer or notified the insurer of the bookkeeper dispute. Such an action would have been premature; • it was satisfied that the complainant did not ask the broker about coverage in the event the dispute was dealt with in some other way, and the circumstances did not oblige the

BY MARK RADFORD

Principal, Radford Lawyers

broker to canvass the matter, pending further contact from the complainant; • the complainant did not take the broker’s advice or consult the broker as he was invited to do during their correspondence; instead, the complainant sought legal advice and handled the dispute independently of the broker.

However, AFCA did note that: • the broker did not meet good industry standards by not recording the particulars of the 7 March 2019 conversation or confirming any advice with the complainant. The emails provided did not detail any advice provided by the broker or the particulars of the conversation.

Despite this, AFCA did not find that the broker had breached its duty of care; • the broker did in the email of 7 March 2019 misadvise the insured by stating that the policy would cover penalties imposed by FWC or legal expenses. This was because loss in relation to employee benefits were excluded from the policy.

Nevertheless, the complainant neither relied on this breach in his submissions nor shown how it may have caused any loss. This meant the broker was not liable for the claimed loss.

Lastly, AFCA concluded that the complainant failed to establish that he suffered loss because he failed to establish that he: • would have been covered for the principal loss, being the sum paid to the bookkeeper; • would have allowed the insurer to manage the bookkeeper dispute on his behalf in a hearing before the FWC; • would not have incurred legal fees or would have been covered for them under the policy; and • would have suffered the stress and inconvenience of the legal action.

ANALYSIS / Legal

‘TESTING’ FOR COVID-19: A FINAL DETERMINATION

The UK Supreme Court’s delivery of judgment on 15 January 2021 in the test case instigated by the Financial Conduct Authority (FCA) marks the end of a process which commenced in June 2020, when proceedings were commenced before the High Court of Justice in London.

I

n November 2020, the Supreme Court granted leave for six of the eight insurers involved in the test case, as well as the FCA, to appeal aspects of the High Court’s judgment.

The Supreme Court substantially allowed the appeals brought by the FCA on behalf of policyholders and dismissed those brought by the insurers.

Whilst acknowledging the risk of oversimplifying the scope and variety of the issues considered, the test case primarily concerned three types of insuring provisions, referred to generally as: • “Disease Clauses”, which provide cover for business interruption resulting from the occurrence of disease within the vicinity, or a specified radius, of insured premises; • “Prevention of Access Clauses”, which provide cover for business interruption resulting from access to, or use of, insured premises being prevented due to restrictions imposed by, or the action, advice or order(s) of an authority; and • “Hybrid Clauses”, which broadly reflect a blend of the above two types of clauses and respond to business interruption resulting from closure of insured premises due to the occurrence of disease within a vicinity, or a particular radius, of insured premises.

The Supreme Court took a different view of the construction of Disease Clauses to the High Court, however, the effect of the decision remains essentially the same. That is, in order to qualify for cover under a Disease Clause (and the corresponding elements of Hybrid Clauses), policyholders need to

demonstrate, firstly, that they suffered business interruption as a result of the pandemic and, secondly, that at least one case of COVID-19 occurred within the vicinity, or the relevant radius, of the insured premises. The Supreme Court also took a different view of the phrase “restrictions imposed” to the High Court, determining that it is not necessarily limited only to legally binding measures and may also include governmental instructions which did not carry the force of law, but which businesses and members of the public would reasonably understand had to be complied with.

The Supreme Court largely agreed with the High Court in relation to issues of causation, resolving them in favour of policyholders. The Court determined that the availability of cover under Disease Clauses was not impacted by the fact that there may have also been cases of COVID-19 outside of the vicinity, or relevant radius, which may have also played a causative role in the interruption of a policyholder’s business. Similarly, the Court determined that the availability of cover under Prevention of Access or Hybrid Clauses was not diminished, even if business interruption loss would have been caused by the pandemic in any event, regardless of whether the insured premises were closed or inaccessible.

The Supreme Court applied a similar line of reasoning in its consideration of trends clauses. The Court held that, when calculating a policyholder’s loss, no adjustment should be made to account for interruption to the policyholder’s

BY CLANCY O’DONOVAN

Senior Associate, DLA Piper Australia

business that would have occurred due to the pandemic in any event, regardless of the insured premises being closed or inaccessible. Rather the Court determined that, when developing the counterfactual standard turnover or gross profit, the pandemic and its associated consequences should be stripped out of the calculation.

The delivery of a non-appealable judgment in the UK raises the question: where to from here? The FCA wasted little time in issuing a “Dear CEO” letter, directing insurers to promptly reassess all business interruption claims affected by the judgment, inform policyholders of the outcomes of such reassessments and pay valid claims as soon as possible.

The FCA foreshadowed a period of further close regulatory oversight, indicating it would be making on-going, regular requests for information from insurers regarding the progression of policyholders’ claims. It noted the key role that brokers and other intermediaries play in working with insurers to ensure that policyholders’ claims are resolved quickly.

The UK Supreme Court’s decision is not binding authority in Australia and the extent to which it may be regarded as persuasive by Australian courts remains to be seen. The Insurance Council of Australia recently announced that a second test case (further to the initial test case concerning exclusions referring to the Quarantine Act 1908 (Cth)) will be filed in mid-February 2021, for the purpose of determining the availability of cover under a range of policy wordings – no doubt, a space to be watched closely in the months to come.

NIBA.COM.AU / 21

FEATURE / Dianne Phelan

Passing of the torch

After two years supporting the work of the National Insurance Brokers Association in the role of Vice President, Dianne Phelan takes charge as the President. Insurance Adviser caught up with her to discuss her plans and vision for the Association.

INTERVIEW BY TANAYA DAS

Insurance Adviser: What was your journey into insurance?

Dianne Phelan: I am one of those that fell into insurance. I was considering leaving school and at the time, my older sister was finding it difficult to get a job so dad suggested that I try and find a job before making a final decision, so I wrote to many banks and insurance companies. Back then, many companies had a system of an annual intake of new staff, I was offered a job at Lumleys as part of that and have not looked back since.

IA: You have been on NIBA’s National Board for a few years now, what have you learnt in that time?

DP: I have learnt so much, I certainly have a much better understanding of the work involved in everything that NIBA does. The number of issues that need addressing at any given time and the level of understanding required by Dallas and the team to effectively represent us is immense. Not to mention the mammoth work involved in putting together the events that NIBA arranges to bring the insurance community together.

My own understanding of the various issues has certainly improved as a result of being on the Board. We are representing the broking community, the knowledge and diligence that is needed to provide meaningful input to the decision-making process is considerable.

I have got to know many of the divisional committee members who I would otherwise not have had the opportunity to meet and I have learnt that we have a vast network of insurance professionals working tirelessly for the best possible outcome for their clients.

I have also learnt that NIBA is in the very privileged position of having Dallas Booth as our CEO. His ability to articulate our message and represent the profession so effectively is something we should all be thankful for.

22 / INSURANCE ADVISER MARCH 2021

IA: What is your vision for NIBA as its new president?

DP: My vision is to ensure we continue the good work NIBA has been doing to support our core strategies of representation, professionalism and community. Now more than ever, we need the ‘one voice’ of the profession to ensure the best possible outcomes for brokers and our clients during the Royal Commission recommendation implementation process.

I would like to see more of our members taking an active interest in the journey and potential changes we have ahead of us.

IA: What do you hope to achieve during your term?

DP: We will have many changes thrust upon us in the next few years and it is incumbent on all insurance brokers to adopt these changes where necessary to ensure their continued relevance. I want to achieve improved consumer understanding of the value an insurance broker provides to them.

When I came onto the Board I wanted to see that all insurance brokers understood the value of being a NIBA member. We are now at the point where this goal has largely been achieved but I would like to see more individual brokers supporting and getting involved with the association.

It is vital that brokers are hearing our messages and understand the work NIBA is doing and what we can all do as individuals to support that one voice message to governments, regulators and others. I would also like to see the progression of improved qualifications and expertise in all broking staff being finalised and introduced. I think this is going to be critical to ensure our continued relevance.

To become a QPIB should be career goal and I would like to see that the value of having an adviser who is a QPIB is fully understood not just by clients, but by insurers

and all other suppliers brokers utilise.

We have a new code of practice currently undergoing independent review. The introduction of this code will be an opportunity for all NIBA members to embed the expected conduct into the staff training and as a result see an improvement in the compliance reporting members provide to the Code Committee.

All of these things have been started by Eric and Tim before me. We are coming to the pointy end of many important campaigns in the next two years and I want to assist Dallas and the team to achieve positive outcomes for our members.

IA: Why is NIBA important to you and why should the association be important to brokers?

DP: I am proud to work in insurance, which is a vital consumer protection service. I have always believed that to be a successful insurance broker, you must have a desire to give and use your skills to help protect others.

Having a strong professional association has always been important to me. As individual brokers or licensees, it is difficult to educate and advocate the importance of insurance broking to the wider community.

We cannot generally get a voice with those that can make a difference and help to shape change, not for the sake of it, but because it will provide better outcomes.

NIBA does this tirelessly as the one voice of the entire broking fraternity. It does not distinguish between internationals, members of cluster groups or those who are not aligned at all, that one voice encompasses us all. It provides an avenue to bring us all together, to share ideas and experiences, to learn from each other and become the best we can be.

Why should the association be important to brokers? For the very same reasons that it is so important to me.

FEATURE / Dianne Phelan

NIBA.COM.AU / 23

FEATURE / Dianne Phelan

IA: Do you believe that the role of NIBA is evolving and the association is setup to meet broker needs?

DP: The Board has recently undertaken a strategic review to focus our thoughts on what our profession might look in five years’ time, the challenges we will all face (some we already know, others not previously thought of ) and how or whether brokers will need to change to thrive and survive in a changing environment. From that we are turning our attention to the goals we need to set to ensure we are clear on the role NIBA needs to play to help members through these changing times and to that extent, I expect that the role of NIBA may evolve to be a little different but at the moment, I believe the fundamental pillars of representation, professionalism and community remain completely relevant.

We are lucky that we have a strong reputation and relationship with governments, our regulators and industry stakeholders. This is not taken for granted but is something that Dallas and others have worked extremely hard to achieve and I think this has already set us up to be in the best position to meet the needs of members as we navigate the raft of regulatory changes that are being considered.

IA: What do you see as your immediate challenge coming into this role?

DP: At the moment, the biggest challenge is not being able to travel around freely.

The Board has met remotely for the best part of a year now. We have been able to achieve many things, the strategic review and the Deloitte report being two of the most recent achievements. That said, it is not the same as working around the board table and the collaboration that is going to be needed to focus and make decisions, in my opinion, would be made easier if we can all get together.

I am really hopeful that the wonderful job Australia has done so far during this pandemic will continue, and in turn the relaxation of restrictions will become more certain and we won’t have to worry about border closures without notice for much longer. This will allow us more freedom which in turn will help not only with the Board getting together, but being able to meet face to face with various stakeholders and the NIBA membership as a whole, all of which are crucial to the Association being able to achieve successful outcomes.

IA: What are some of the key issues that the profession is likely to face in 2021 and how do you see brokers addressing them?

24 / INSURANCE ADVISER MARCH 2021

DP: I have no doubt that most consumers will have changed their business model or had changes to their assets, turnover and staff numbers as they navigate the pandemic journey.

Coupled with that I think we will experience an insurance market that continues to get more challenging every day. We will continue to face increases in premium, reduced capacity and in some cases, reductions in cover or the inability to find a market at all.

The importance of getting the right advice about insurance needs and what changes might be necessary, whilst always critical, is not necessarily something that will be front of mind for our clients. Therefore maintaining and strengthening our relationships, providing the advice they need, whilst working harder than ever to secure suitable insurance protection at a premium that is affordable, will continue to be probably the biggest issue in 2021. Brokers are working harder than ever to achieve positive outcomes for their clients in an environment where much is out of our control.

We must have many more difficult discussions with both insurers and clients.

I think most intermediaries would feel that at times it is relentless with no relief when many have been working from home.

Whilst we should always be looking after our people, it has probably never been more important, but sometimes this can get lost in amongst all that is being thrown at us, not just professionally but personally as well.

I think most brokers appreciate this and have good support systems in place, but our own wellbeing and that of our people will continue to be a key issue for 2021. Hopefully at some point this year, we will get back to a relatively normal office environment, having people around us to collaborate with and share the good and bad that comes with being an insurance broker.

IA: What are your views on the current professionalism and competency standards and the need to raise them?

DP: I have seen the work of many competent brokers over my many years of working in insurance broking. That said, nobody is perfect and there is always room for improvement. For insurance intermediaries to stay ahead, we need to self-regulate the level of study required to be a broker and for this reason, the Board is fully committed to raising the level of qualification for an insurance broker to a Diploma in Financial Services (Broking).

We need to ensure that the study involved reflects current trends and be of sufficient

standard to ensure that upon successful completion, individuals have acquired the skill set necessary to be a trusted adviser to clients. As I said, it is one of the things I want to see achieved in the next couple of years, along with the status of QPIB being recognised as an individual’s commitment to ongoing training and excellence in their field.

IA: As a leader, what has been your most important takeaway from 2020 and what has made you proud of the broking profession during the most tumultuous year we have known?

DP: I suppose it would be to expect the unexpected and take nothing for granted.

Whilst I am glad 2020 is behind us, there is much to take from it and hold onto, the importance of appreciating the simple things in life, the friends and family we have and the realisation that if we have our health, a roof over our head and food on the table, this is the essence of what it means to be rich.

I am proud of so many things; the way we supported our own clients through the catastrophic end to 2019 and beginning of 2020.

I am proud of the NIBA initiative to assist those people who did not have their own broker, and the wonderful number of volunteers that came forward in such a short space of time. Whilst there was not a great take up by consumers, it was humbling to see so many prepared to put in their own time to help others in need and just reaffirmed my belief that to be successful in this profession, you must have an underlying desire to give to others.

I am proud of the way that brokers adjusted to a new working environment in a very short space of time, whilst helping clients in what was akin to an opening of the floodgates when the first lockdown occurred.

We did not have time to take stock of our own situation and the stories of clients in need and the work we did to assist, and in some cases, just reassurance was gratifying and we saw the resilience in people to reframe their thoughts to overcome fears and uncertainty.

And last but certainly not least, I am proud of the way that NIBA broke new ground after watching the framework of our events fall apart overnight. The virtual convention was one of the first of its kind in the industry and whilst there were certainly challenges, hiccups and lessons to learn along the way, I am proud to think that NIBA have such wonderful staff that stood up, took on the challenge and against all odds, produced a quality product which can now form the framework for some future events.

what’s the

attraction to McLardy McShane?

Come find out.

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Call Don or Meg for a confidential discussion.

Don McLardy M. 0411 868 092 E. don@mclardymcshane.com.au Meg Long M. 0434 613 546 E. meg@mclardymcshane.com.au

mclardymcshane.com.au

INTERVIEW / Ward Dedman

Fostering connections and seeking collaboration Get to know the the current Vice President of the NIBA Board and a long-time contributor to the Association; the Chief Executive Officer and Executive Director of EBM in Western Australia, Ward Dedman.

BY TANAYA DAS

W

ard Dedman was appointed as the new Vice President of the National Insurance Brokers Association (NIBA) Board in early February this year.

NIBA CEO, Dallas Booth has credited Dedman for being the catalyst that encouraged the Association to seriously consider the future of insurance broking, which the Board has put much time into this exercise in recent months. “This is a great achievement for Ward and for the full Board of Directors,” says Booth.

Dedman’s journey into the insurance industry and his rise within the broking profession has been fascinating. The 2007 Warren Tickle Memorial Award recipient for Young Professional Broker of the Year was one of the many accolades he has collected in his two-decade career in the profession.

Dedman began his foray into a professional career at university in Perth with the aim to do a sports psychology degree, but it was not for him. He was, however, able to gain employment in the insurance industry doing administration at a direct insurer, GIO. His first foray into insurance broking came another couple of years later, with a startup broking firm with a large agribusiness (IAMA), through a previous colleague. Apart from the insurance connection, the other aspect of interest for him was working in the agricultural sector, which he has long had a connection and strong personal interest in.

He has also been a long-time supporter of NIBA and has been deeply involved in the Association’s work for many years. He says, “EBM and in particular, Alan Bishop, have been strong advocates and supporters of NIBA since its foundation, and it quickly rubbed off on me. It was clear from my first introduction to the work that NIBA young professionals do, that this was a very

26 / INSURANCE ADVISER MARCH 2021

“It was clear from my first introduction to the work that NIBA young professionals do, that this was a very worthwhile cause and it has only grown from there.” worthwhile cause and it has only grown on me from there. It also is one of the few ways we now connect with the broking industry at large, coming from a non-aligned private broking group.”

Dedman is a big believer in the power of mentorship, especially in a dynamic profession such as insurance broking, he says, “I have been very fortunate to have had access to a number of diverse mentors along my journey to date, all bringing with them different skills, views and learning opportunities.

“For me they have been invaluable

but somewhat accidental, so I strongly encourage professionals who have access to formal mentoring opportunities to jump at the chance to learn and grow. The experience and views of others cannot be underestimated in value when added to your own intellect and capacity to grow.”

Dedman also maintains that in a profession such as broking, the power of collaboration for the good of the client and the larger community, is immense.

Especially in the current climate where many of us are dealing with incredible amounts of change, challenge and opportunity.

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FEATURE / Landlord and Strata Insurance

28 / INSURANCE ADVISER MARCH 2021

Landlord and strata insurance The past couple of years have placed immense strain on landlord and strata insurance providers, but they are well placed to overcome challenges.

BY NINA HENDY

NIBA.COM.AU / 29

FEATURE / Landlord and Strata Insurance

C

ladding issues, a pandemic, and a temporary ban on landlords evicting their tenants has placed unprecedented pressure on brokers in the landlord and strata insurance sector in the past year.

For the most part, the subsequent fall-out has played out behind closed doors across the country. With some notable exceptions that spilled into mainstream media.

But for those in the industry, what has been tough has been the individual cases of financial hardship, introducing a level of emotional turmoil that has put brokers in a tricky position as they try and navigate

the best way through such unforeseen circumstances.

But insurance brokers do not tend to shy away from a challenge, particularly given the opportunities that it holds. And insurance industry leaders insist that the opportunities are immense.

STRATA MARKET

This is a decent-sized market by anyone’s measure. According to UNSW Australian National Strata data, more than two million Australians live in apartments, units, flats, townhouses and villas. Meanwhile, half of all apartments are rented, meaning there are many landlords who own investment

properties within strata complexes.

Meanwhile, strata property has experienced long and sustained growth as populations in key urban areas evolve towards increased density living. It all presents a significant growth opportunity for brokers.

Despite this, members of strata owners corporations are not always aware of the many specific and detailed obligations and risks they face. For example, the unlimited liability exposure that owners, owners corporations and committee members have in relation to various activities associated with management of the strata property,

“Brokers can most effectively improve their communication capability with strata clients by ensuring they have a comprehensive understanding of their needs, as well as the unique stakeholder network that operates in this segment.”

ANDREW ROBSON, STRATA UNIT UNDERWRITERS

30 / INSURANCE ADVISER MARCH 2021

FEATURE / Landlord and Strata Insurance

says Andrew Robson, Head of Distribution and Service Delivery for Strata Unit Underwriters.

Sustained population growth in key urban areas and an evolution towards increased density living is an opportunity

that should not be wasted. “This presents a significant growth opportunity for brokers who are prepared to invest in their people, operational efficiency and technology to support strata customers with their unique requirements,” he says.

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“Brokers can most effectively improve their communication capability with strata clients by ensuring they have a comprehensive understanding of their needs, as well as the unique stakeholder network that operates in this segment,” Robson adds.

Kimberley Jonsson is the CEO for CHU Underwriting Agencies, part of the Steadfast Group.

The strata sector is growing each year, presenting many opportunities, she says.

“The structure of the schemes is growing in complexity as are the building sums insured. Many buildings require multiple participating insurers to cover their property.

“At the end of the day, advice from brokers will continue to be vital, especially with more complex insurance cover, such as for strata properties. There has never been a greater opportunity to show professionalism in creating risk management and insurance programs for these complex schemes,” Jonsson says.

FEATURE / Heavy Vehicles and Fleet

FEATURE / Landlord and Strata Insurance

“At the end of the day, advice from brokers will continue to be vital, especially with more complex insurance cover, such as for strata properties. There has never been a greater opportunity to show professionalism in creating risk management and insurance programs for these complex schemes.”

KIMBERLEY JONSSON, CHU UNDERWRITING AGENCIES

LANDLORD INSURANCE

Of course, those operating in the landlord insurance space have had their fair share of challenges in the past year, too.

While landlord insurance is hard to come by due to market exits in recent years, demand was unprecedented last year after the government announced a temporary ban on evictions at the height of the pandemic, in a bid to ensure that thousands who lost their jobs were not left homeless.

Landlords were also encouraged to reduce the weekly rent for tenants amid the crisis, prompting a surge in interest in landlord insurance and a massive uptick in enquiries in a bid to stem the financial loss from tenant defaults.

The fall-out from the pandemic was a stark reminder that some customers are still in the dark about what strata and landlord insurance covers, given that having a landlord insurance policy rarely includes loss of rent or tenant default cover options.

UNPREDICTABLE WEATHER

Not surprisingly, increasingly unpredictable weather patterns are adding to the complexity for underwriters, particularly in northern parts of the country.

In recent years, northern Australia has been subject to repeated severe weather events, battering residential homes and

apartment complexes. In response, premiums tripled in some instances as underwriters attempted to take matters into their own hands.

Robson is open about the fact that the probability of a severe cyclone is a key risk for customers in northern states, which is reflected in premiums.

“We’re dedicated to supporting customers in northern Australia, however the availability of insurance in the region is a growing concern as providers continue to exit the region, or significantly reduce capacity and risk appetite,” he says.

Robson points to the latest research from IAG and the US-based National Center for Atmospheric Research (NCAR) – the Severe Weather in a Changing Climate report, found that extreme weather events are becoming more frequent and intense in a warmer world, which is impacting Australian communities now.

The report highlighted that cyclones will also move south towards regions that typically haven’t experienced these types of events – particularly parts of south-east Queensland and north-east New South Wales.

Meanwhile, the Australian Competition and Consumer Commission (ACCC) Northern Australia Insurance Inquiry Final Report, released late last year, outlined 38 recommendations to help improve the affordability and availability of insurance, including strata insurance, and provide additional customer information.

2021 will be a year of reckoning, as insurers work their way through the recommendations and consider what to implement in policy documents.

CLADDING DANGERS

Cladding issues have also plagued the industry. Flammable cladding has made life difficult for brokers, with many insurers unwilling to accept the risk,

34 / INSURANCE ADVISER MARCH 2021

FEATURE / Landlord and Strata Insurance

Five emerging risks in this sector Legislation: It is not clear what the long-term impact of the pandemic could mean and how legislation may change as a result.

Cladding: The cladding issues are still playing out, and navigating this space needs to be handled on a case-by-case basis, which is often complex.

Climate change: Global warming is resulting in far more unpredictable weather patterns, which present unique challenges for underwriters.

Less players: The strata and landlord insurance sector has contracted, putting pressure on existing players.

The unknown: The insurance market in northern Australia is facing a deep crisis, prompting the ACCC to launch an investigation into the issue.

Among the worst affected are owners of units in large complexes.

36 / INSURANCE ADVISER MARCH 2021

according to Jonsson.

Her comments come after moves to legislate against the use of flammable cladding at the start of this year. The Victorian Government has outlawed the sale of flammable aluminium composite panels or rendered expanded polystyrene, enforcing penalties of $80,000 or up to $400,000 for building companies that don’t adhere to the ban moving forward.

“CHU continues to work with brokers to find insurance solutions for cladding and many defect-related issues. We have continued to support brokers as the market appetite has changed for properties with cladding and defects. We also support them during the remediation process,” Jonsson says.

The good news here is that the NSW Government is following the Victorian Government’s lead of funding rectification work, Flex Insurance General Manager Frank Samarcia says.

“Now the NSW Government has announced that apartment owners will be forced to replace flammable cladding on

high-risk buildings across NSW, many will be able to access interest-free loans,” he says.

CUSTOMISATION THE KEY

The key to navigating such a complex range of issues is providing some level of customisation for clients, Samarcia says.

“The cover can be customised to suit the unique needs of a strata building, from small to large residential strata buildings – allowing customers to only pay for what they need. It meets the minimum legislative requirements for strata that can be optioned up to comprehensive cover.”

Ease of purchase is also vital. “This led to the original launch of Flex as a digital underwriting agency, offering a seamless online experience from quote to policy issue,” he says.

“In these unprecedented times, brokers’ customers may face financial hardship through unemployment, job insecurity and reduced cash flow, but still need to ensure their residential strata property is adequately insured,” Samarcia says.

2021 BROKER

OF THE YEAR

Stephen Ball Memorial Award

Do you know a broker that rises to every challenge?

Accepting nominations for Broker of the Year.

Nominate now - It’ll take just 5 minutes. $20,000 in professional development up for grabs.

For full details, and to nominate online, visit:

www.niba.com.au/brokeroftheyear Nominations close 14 March 2021

Sponsored by

NIBA and QBE are proud to partner in the Stephen Ball Memorial Award

38 / INSURANCE ADVISER MARCH 2021

FEATURE / Domestic Tourism

CARAVANS, CAMPING AND CAVEATS International travel is off the cards for the foreseeable future, so does that mean caravan and camping parks across Australia are in for a great year? On the surface of it, the answer is yes – but there are a few hurdles to overcome first.

BY MARTIN WANLESS

A

ll things considered, 2021 should be something of a boom time for domestic tourism.

With little prospect of international borders reopening this year, COVID-19 management programs working relatively effectively and the vaccine program getting into full swing, there’s likely to be a growing inclination for people to travel within Australia to get their tourism fix. Whether that’s intrastate or interstate depends on the respective state governors and their propensity for closing borders at a moment’s notice.

“The caravan and camping industry has thrived over other sectors,” says Peter Clay, General Manager of Insights and Advocacy for the Caravan Industry Association of Australia. “And domestic tourism is going to

be favourable for the next 12 to 18 months.

“The challenge we have is that it’s a twospeed economy. If you’re located a couple of hours away from the city, you’re going to see lots of visitation. However, places further out, like the Northern Territory or Far North Queensland – which are reliant on the interstate market, and typically heavily reliant on the international market – are going to struggle with the uncertainty over domestic borders.”

BUSINESS: INTERRUPTED

As well as a two-speed economy at play, there are multiple layers within the sector itself – some of which have been hit harder than others.

“You have the corporate parks, the council parks and the ‘mum and dad’ parks,

and it’s the latter that has been hit hardest throughout the past year,” says Julie Pernecker, Director at All Parks Insurance.

“The inland parks in particular have found it difficult, and they’re concerned about what happens when JobKeeper stops.”

In addition to the COVID challenges, many parks, by virtue of their location, were affected by bushfires as well in the past 12 months, and are at continual risk of facing severe weather events.

“We speak to clients and they’ve not had a review for three or four years – sometimes longer. This then may lead to cases of underinsurance and policies simply being just rolled over on renewal,” says Pernecker.

“The cost of cabins, for example, has risen incredibly in that time, so it’s vitally important that reviews between the NIBA.COM.AU / 39

FEATURE / Domestic Tourism

“A NUMBER OF LOCATIONS WE SAW CLAIMS FROM WERE UNDERINSURED BY 45 PER CENT OR GREATER.” REUBEN ROSE, MSM LOSS MANAGEMENT

CLOSE EYE ON BI TEST CASE Whether business interruption should be triggered by COVID-19 has dominated many column inches over the past year, and a caravan park based in Tamworth, NSW, was one of the policyholders involved in the test case that ruled in favour of the policyholder.

Peter Clay of the Caravan Industry Association of Australia says the organisation is keeping a close eye on this and is reserving judgement at present.

“We’re watching this space cautiously,” he says. “At the moment, we can’t say if it’s a good thing or a bad thing. The risk is that every business starts to claim, premiums go through the roof and insurance is brought to its knees and can’t provide coverage.

“We’ve been working with the government and with the ombudsman about various opportunities to support the industry. One idea is providing codes of conduct around the use of equipment and leisure facilities for parks, such as waterparks, to make sure insurers and brokers are more aware of what these facilities are and what exactly they are insuring.”

40 / INSURANCE ADVISER MARCH 2021

broker and client are conducted on a yearly basis.”

Reuben Rose, of claims preparer MSM Loss Management, tells a similar tale.

“A number of locations we saw claims from were underinsured by 45 per cent or greater,” he says.

“There had been very rare reviews carried out into the declared values for business interruption to determine whether the value was accurate and the nominated indemnity period sufficient, which presented a significant potential professional indemnity exposure.”

For many people, says Rose, financial disaster was only averted due to JobKeeper payments, which were able to mitigate the losses. In future, that safety net is unlikely to be there.

In addition, many business interruption policies had limited periods of six months on the basis that structures were relatively simple and fairly easy to replace – which sounds perfectly understandable on face value.

What was not considered in many cases, however, were other time-consuming aspects – debris removal, for example – as well as some other issues.

“Few of these sites were connected to town water. Therefore, before buildings could be reinstated, significant works across the entirety of the site for plumbing and water supply were needed,” says Rose.

“This required council involvement and certification as well as compliance with current water-management policies, which all added significantly to the timeline.”

As a consequence of the bushfires,

2021

YOUNG PROFESSIONAL

BROKER OF THE YEAR

Warren Tickle Memorial Award

Help us recognise and reward a rising star. Accepting nominations for Young Professional Broker of the Year.

Nominate now - It’ll take just 5 minutes. $10,000 in professional development up for grabs.

For full details, and to nominate online, visit:

www.niba.com.au/youngbrokeraward Nominations close 14 March 2021

NIBA and Vero celebrating 32 years of partnership in the Warren Tickle Memorial Award

FEATURE / Domestic Tourism

adds Clay, there are an increasing number of operators, particularly in Queensland, that are unable to find bushfire and natural disaster provision.

“A number of providers are either increasing premiums significantly or leaving the market,” he says. “We understand insurers have their commercial model, but this leaves operators either unable to operate or taking significant risks themselves.”

David Summers, Principal and Broker at Ausure Horizon Insurance in Newcastle, NSW, knows this only too well.

“For some of the parks that are located around bushland, we’ve seen some crazy

terms offered up,” he says. “We’ve seen fire excesses, huge rate increases, and little alternatives.

“There’s a broad-brush approach to a hardening market. A lot of our clients have been running quite profitably for insurers over the years, but they’re not looked at individually.”

As a result, says Summers, clients are having to insure for less – which causes its own problems – or completely remove the business interruption section from their cover.

“Some are looking at not insuring buildings and covering the risk themselves,” says Summers – and that is a risky strategy.

“A LOT OF CARAVAN PARKS HAVE INSTALLED MILLIONS OF DOLLARS OF EQUIPMENT AND ARE UNABLE TO GET COVER.” PETER CLAY, CARAVAN INDUSTRY ASSOCIATION OF AUSTRALIA

THE TOURISM CHALLENGE Caravan parks and camping are, of course, just one aspect of domestic tourism – many tourist attractions are also feeling the strain that results from the closure of international borders, and the stop-start nature of domestic border openings.

“We at SLE are committed to our current clients and the leisure industry in general to ensure their sustainability during these trying times. A number of our broker partners are constantly talking with us before renewals, just so there are no hidden surprises.”

It is important, however, that corners aren’t cut.

From a broker’s perspective, having regular conversations with clients and underwriters is critically important, particularly prior to renewals.

“Risk evaluation is priority number-one, and it’s important that tourism operators do everything possible to ensure their risk-management protocols remain in place,” says Peter McKenzie, General Manager of SLE Worldwide Australia.

42 / INSURANCE ADVISER MARCH 2021

“Its important clients are educated on implementing COVID-19 protocols at their premises, ensuring their doors stay open” says McKenzie.

In terms of outlook, however, McKenzie believes 2021 will simply be more of the same.

“There’s not going to be any international tourism this year. Hopefully borders will start to loosen a bit, which will enable more domestic travel. Due to the current uncertainty of borders constantly opening and closing, 2021 looks to be tracking very similar to 2020 at this point in time.”

FEATURE / Domestic Tourism

POSITIVE SIGNS Research from KPMG backs up the notion that Aussies could embrace domestic travel this year.

Its report, Beyond COVID-19: Rise of domestic travel and tourism in Australia, notes that there’ll be three primary drivers for domestic travel over the next 12 to 24 months: ticking things off the bucket list, experimenting with the working holiday, and finally getting around to the ‘great Aussie roadtrip’.

It also reports that affordable accommodation (think camping and caravan parks) are in a strong position to capitalise, as are rural and regional businesses.

WORKING THE DAY TO DAY

Aside from major events, however, there are many aspects of parks that need to be covered by insurance. The primary risks, says Pernecker, are on the liability side.

Issues such as insufficient lighting, trip hazards, playground areas and supervision, along with a robust treemaintenance program.

“There’s a lot more litigation happening in the caravan park, and it’s wise to have CCTV with a minimum retention period over things such as play areas,” she says.

Changing legislation around adventure tourism has also had repercussions, says Clay.

“Public liability is particularly affecting parks that have waterslides, BMX tracks and inflatable trampolines, for example – and all of this activity-based equipment has been caught up in legislation change,” says Clay.

“A lot of caravan parks have installed millions of dollars of equipment and are unable to get cover.”

And, while increased domestic tourism is great, Pernecker sounds a word of warning.

“Because everyone wants a break, parents aren’t supervising their children as much as they should – some of these parks are almost becoming a babysitting service.

So having CCTV and staff around the pool and playground areas is crucial.”

She also advises brokers to visit the park at night to identify other problems that may arise.

“Parks look great during the day, but what about at night? Is there sufficient lighting?

“One trip on uneven ground could result in a claim, and premiums go up again.”

And in a hardening market, with so many issues to contend with, that’s the last thing anyone wants.

“THERE’S A BROAD-BRUSH APPROACH TO A HARDENING MARKET. A LOT OF OUR CLIENTS HAVE BEEN RUNNING QUITE PROFITABLY FOR INSURERS OVER THE YEARS, BUT THEY’RE NOT LOOKED AT INDIVIDUALLY.” DAVID SUMMERS, AUSURE HORIZON INSURANCE

44 / INSURANCE ADVISER MARCH 2021

“QPIB has never been more relevant than right now.”

ING IS

U

RA

K

ER

QPIB

S

Apply online at niba.com.au or email NIBA Memberships Manager Audi Witsen – awitsen@niba.com.au

D PRAC IE T F I

IN

QPIB – A STATEMENT OF PROFESSIONALISM

• QUA L

– JORDYN GILBERT, 2019 WA YOUNG PROFESSIONAL BROKER OF THE YEAR

NCE BR

O

COMMUNITY HUB

COMMUNITY HUB MARCH 2021

The COMMUNITY HUB is your space to showcase your products and services to a specialist audience.

INDEX AB Phillips ..................................................... 46 ASR Underwriting...................................... 47 MGA Insurance Brokers.......................... 48

Moran Insurance Brokers ...................... 48 Newline Group............................................ 49 Affinity Insurance Brokers...................... 49 Tudor Insurance .......................................... 50 Brookvale Insurance Brokers.................50

Wellington Underwriting.......................... 51 AIBI..................................................................... 51 NIBA Mentoring............................................ 51 Marsh & McLennan Agency.................. 52 All Parks Insurance...................................... 52

WANT TO ADVERTISE IN THE INSURANCE ADVISER? If you’re a NIBA member with a product or scheme you’d like to promote to a broker audience in our Community Hub section, please contact Tony May E: tmay@niba.com.au

Exclusive timber and sawmill insurance facility AB Phillips has been insuring the Timber and Sawmilling industry for more than 25 years. We have an exclusive underwriting facility which is available to select brokers.

Our insurance facility is for clients in the following sectors: • • • • •

Timber yards Timber storage Timber processors Sawmills Roof truss and wall frame manufacturers

Commission is paid on placements.

For more information please contact Rose Dee on:

Phone: 1800 819 394 | Direct: 03 8586 9316 | Email: rose@abphillips.com.au AB Phillips Pty Ltd. Australian Financial Services Licence No. 234457. ABN: 91 007 075 934. PO Box 832 Moorabbin VIC 3189. 445 Warrigal Rd Moorabin VIC 3189. e: info@abphillips.com.au t: 03 8586 9333 f: 03 8586 9394 w: www.abphillips.com.au

COMMUNITY HUB

48 / INSURANCE ADVISER MARCH 2021

COMMUNITY HUB Key Liability Industries:

Key PI Occupations:

Key FI Occupations:

• Alternate & Complementary medicines • Automotive • Biotechnology • Clinical Trials / Research • Defence – machinery, weaponry & protective equipment • Life Science / Pharmaceuticals • Medical & Surgical Devices (including invasive implants) • Medical Cannabis • Medical Equipment / Products • Mining • Rail, Products, Maintenance, Locomotive Engineering, operators, Rolling Stocks & Engine Manufacturers • Tyres – new, re-threading, lugging, repair & sales • Universities • Veterinary Medicines

• Accountants • Architects • Engineers • Environmental Consultants • Insurance Brokers / Underwriting Agencies • Law Firms • Management Consultants • Miscellaneous Risks • Real Estate Agents • Valuers

• Fund Managers/Investment Managers • Insurance Companies • Managed Investment Schemes • Excess lines for Financial Planners

Chief Executive Officer / Underwriting Manager – Liability

Underwriting Manager - PI

Key D&O • Insured firms can be not-for-profit, privately held or publicly traded • Side A/DIC placements • Medical Cannabis risks • All industry sectors, both commercial and financial, are underwritten

Key Crime Commercial Crime Insurance is also offered alongside other Financial Lines products

Linda Sepala Underwriting Manager – D&O & FI

PH: 03 9998 1900

Newline Australia Insurance Pty Ltd ABN 81 118 089 651 PO Box 16208 Collins St West VIC 8007 PH: 03 9999 1901 FAX: 03 9670 0045 newlinegroup.com.au info@newlinegroup.com.au

NIBA_Newline_Sep20.indd 1

15/9/20 3:54 pm

AFFINITY EQUINE, ADVENTURE & LEISURE LIABILITY Abseiling Accommodation Agistment Animal & Petting Zoo Archery Bush Walking Camping Campsites Canyoning Caving Team Building

Equine Associations Equine Events Equine Therapists Farriers & Dentists Fishing & Boat Cruises Four Wheel Driving Flying Fox Horse Carriage Driving Horse Trainers Horse Riding Schools Initiatives

Kayaking Mountain Biking Orienteering/Rogaining Paddle Boarding Pony Rides Paintball & Skirmish Riding Schools River Rafting Rock Climbing Ropes Course Rowing

Sailing Sea Kayaking Snorkelling Snow Skiing Surfing Swimming Trail Running

1300 130 535 www.affinityib.com.au

NIBA.COM.AU / 49

AFS License No. 214 185

COMMUNITY HUB

Benefits of dealing with LSM:

Demolition and Asbestos Removal Liability Insurance

$20M Asbestos Liability now available Security of dealing with local office of a major insurer

Contact us for a confidential review of your clients insurance needs.

Local claims and underwriting service working closely with you to meet your clients business needs Automatic addition of Errors & Omissions coverage when Asbestos Liability is purchased

service@tudorinsurance.com.au

You can also apply for enhancements when you purchase this policy - coverage for Statutory Fines & Penalties, coverage for Shoring & Underpinning and coverage for transportation of asbestos (clean-up-costs)

(03) 9707 3033

15% commission of all placements

Tudor Insurance Australia Cameron McKerchar tudorinsurance.com.au

MOBILE BUSINESS SCHEME (Food Vans, Coffee Trailers, Dog Grooming, Mobile Offices, Mobile Dentists etc. all considered) • Security 100% Australian Insurer • Combined Package (Motor & Business Combined) • All Motor Vehicles Trucks & Trailers cover includes Fitout (Reinstatement & Replacement Coverage) • Public & Products Liability • Optional Downtime (loss of income) Machinery Breakdown, General property & Money Covers • Dedicated Internal Claims staff

Contact: Tom Saddington (02 9934 9700) toms@bib.com.au

50NIBA_Classifieds_Brookvale_HPH.indd / INSURANCE ADVISER MARCH 1 2021

Also at Brookvale we have a National Motorcycle Dealership Scheme, with competitive rates and comprehensive offerings. Your contact is Peter Timosevski on 02 9934 9700 / 0421 440 552 or pt@bib.com.au

18/2/21 3:43 pm

COMMUNITY HUB

Wellington Underwriting Agencies specialise in labour hire/recruitment, complex liability risks and niche property solutions.

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Labour Force includes Broadform Liability, Professional Indemnity and Management Liability and has been developed for: • labour hire companies • recruitment companies • group training and registered training organisations Our Combined General Liability wording has been tailored for complex risks including: • construction • manufacturing • rail • resource sector; and • other hard to underwrite risks Wellington’s Property capabilities are focussed on niche exposures including: • catastrophe-exposed properties • mining sector

AIBI is a registered trading name of Capital Mutual Insurance Brokers Pty Ltd. Capital Mutual Insurance Brokers Pty Ltd is a Corporate Authorised Representative of McLardy McShane Partners Pty Ltd, Australian Financial Services Licence No 232987 ABN 14 064 465 309.

McLardy McShane Partners Pty Ltd is a member of The Steadfast Group.

Contact our Underwriters today or visit our website at

www.wellingtonu.com.au

MENTORING

NIBA Mentoring – Promoting Professional Development for 10 Years

WHAT WILL THE PROGRAM DO FOR YOU? For more information and to express interest visit www.niba.com.au/ mentoring

NIBA Mentoring 2018 FP HP.indd 3

NIBA.COM.AU 51 18/2/21 1:50 / pm

COMMUNITY HUB

MARSH& MCLENNAN A G E N C Y OUR INSURANCE PRODUCTS INCLUDE:

■

Advertise with the most influential and trusted voice in the Australian intermediated insurance industry · Insurance Adviser · Insurance and Risk website · Broker Buzz · Need a Broker website · Targeted eDMs · NIBA events (Annual Convention)

■ ■ ■ ■ ■ ■

Demolition & Asbestos Liability - demolition, asbestos removal and transport, asbestos and environmental consultancies and similar occupations Kidnap, Ransom & Extortion Personal Accident & Illness Income Protection Motor Trades - public and products liability Tyre Retailers - property Window Cleaners - public and products liability

PLEASE VISIT OUR WEBSITE, AND CLICK ON "PRODUCTS AND SERVICES" FOR MORE DETAILS www.marshmc.com.au

CONTACT Michael Beveridge

08 8385 3630 or

Tara Nadge

08 8385 3583 enquiries@marshmc.com Marsh and McLennan Agency Pty Ltd ABN 33 000 668 584 / AFSL 238984

Contact Tony May National Advertising Sales Manager T: 02 9459 4303 E: tmay@niba.com.au

52 / INSURANCE ADVISER MARCH 2021

517-3776

BE PART OF NIBA Advertise with the most influential and trusted voice in the Australian intermediated insurance industry ·Insurance Adviser

· Insurance and Risk website · Broker Buzz · Need a Broker website · Targeted eDMs · NIBA events (Annual Convention)

WE ARE YOUR VOICE Contact Tony May National Advertising Sales Manager E: tmay@niba.com.au

NIBA / Events

STAY UPDATED!

NIBA EVENTS

NIBA stages a variety of educational and social events across Australia for the whole intermediated insurance community.

EVENTS UPDATE Mark your calendars to meet, share, learn and grow with your industry peers at NIBA events across the country.

Please note that in light of COVID-19, NIBA will continue to follow and implement national and state health authorities’ recommendations.

Please join us for the following national webinars:

2021 LIABILITY TRENDS – PRESENTED BY PROCLAIM

WHEN: Tuesday, 20 April 2021 TIME: 12.30pm – 1.30pm WHERE: Live webinar This webinar will cover current public

NIBA YOUNG PROFESSIONALS: REGULATORY UPDATES AND THEIR IMPORTANCE FOR YOU (11/02/2021) Dallas Booth, CEO, NIBA and Mark Radford, Principal Lawyer, Radford Lawyers provided a high level, easy to understand, overview of the Royal Commission for the benefit of young professionals. They were joined by a millennial spokesperson comedian and journalist, Jordana Borensztajn. Anthony Pagano from Vero who sponsored the event, provided an update on Vero’s commitment to young professionals and urged them to take head of the regulatory landscape ahead.

54 / INSURANCE ADVISER MARCH 2021

liability trends that we are seeing below and above deductible. Including claims settled without going to litigation, as well as what precedents are currently being set by court decisions and how they will impact insured’s daily operations.

In a hard market, immediate and comprehensive data insights on your risks are invaluable. Identification of trends through easy to understand and visually striking data presentation tools has the power to reshape and empower your risk response and management.

2021 CONSTRUCTION CLAIMS | WHERE ARE WE NOW? – PRESENTED BY PROCLAIM WHEN: Tuesday, 11 May 2021

Check out what’s happening close to yo u and registe r via the events cale ndar at niba.com.a u/ events

TIME: 12.30pm – 1.30pm WHERE: Live webinar Join us for this informative session, where we discuss the ramifications of the current claims climate and how best to contain your claims from blowing out of control.

We will look at two significant Court of Appeal cases which have also had an impact on daily operations: 1. Contractors and Vicarious Liability – ANM Building Services Pty Ltd (deregistered) versus Brett Harford.

2. Occupation Certificates – Impact of Kur-ring-gai Council v Chan [2017] NSWCA 226 Coupled with the hardened insurance market, this webinar is not to be missed.

INSURANCE BROKING IN A HARD MARKET (12/02/2021) This was NIBA’s first COVID-safe, face to face event for the year. A small group of brokers joined us in Geelong where Proclaim put together a presentation to assist insurance intermediaries with managing claims. The seminar also delivered information that can be provided to their clients when discussing increased insurance rates. The event was followed by a light networking lunch provided by Dial-a-Lunch (DAL) whose vision is to provide adults with special needs to experience meaningful employment in a commercial environment.

If you’d like to advertise your products and services through NIBA, please contact Tony May today on (02) 9459 4303.

MENTORING

NIBA Mentoring – Promoting Professional Development for 10 Years

WHAT WILL THE PROGRAM DO FOR YOU? For more information and to express interest visit www.niba.com.au/mentoring

INSURER STRENGTH RATINGS

S&P GLOBAL

INSURER FINANCIAL STRENGTH RATINGS

The following list of S&P Global Ratings insurer financial strength ratings assigned to insurance companies in Australia and New Zealand. Ratings at 1 February, 2021.

Contact: Craig Bennett, S&P Global Ratings Telephone: 03 9631 2197

NEW ZEALAND

RATING

NON-LIFE INSURERS

AUSTRALIA

RATING

NON-LIFE INSURERS AAI Ltd.

A+/POSITIVE

AIG Australia Limited

A/CreditWatch Negative

Allianz Australia Insurance Ltd.

AA-/STABLE

BHP Billiton Marine & General Insurances Pty Ltd. A/STABLE Chubb Insurance Australia Ltd.

AA-/STABLE

Great Lakes Insurance S.E (Australia Branch)

AA-/STABLE

Hallmark General Insurance Co. Ltd.

BBB+/STABLE

Insurance Australia Ltd.

AA-/STABLE

Society of Lloyd's

A+/STABLE

AA Insurance Ltd.

A+/POSITIVE

Medical Insurance Australia Pty Ltd.

A-/STABLE

AIG Insurance New Zealand Ltd.

A/CreditWatch Negative

QBE Insurance (Australia) Ltd.

A+/STABLE

QBE Insurance (International) Ltd.

A+/STABLE

Zurich Australian Insurance Ltd.

A+/POSITIVE

Chubb Insurance New Zealand Ltd.

AA-/STABLE

Hallmark General Insurance Co. Ltd. (NZ Branch) BBB+/STABLE

LENDERS MORTGAGE INSURERS

IAG New Zealand Ltd.

AA-/STABLE

Society of Lloyd's

A+/STABLE

Medical Insurance Society Ltd.

A-/POSITIVE

Southern Cross Benefits Ltd.

A/STABLE

Southern Cross Pet Insurance Ltd.

A/STABLE

LIFE INSURERS

Teleco Insurance (NZ) Ltd.

BBB+/STABLE

AIA Australia Ltd.

A+/STABLE

Vero Insurance New Zealand Ltd.

A+/POSITIVE

AMP Life Ltd.

A-/NEGATIVE

Vero Liability Insurance Ltd.

A+/POSITIVE

Challenger Life Company Ltd.

A/STABLE

A/NEGATIVE

QBE Lenders' Mortgage Insurance Ltd.

A/STABLE

Westpac Lenders Mortgage Insurance Ltd.

A+/NEGATIVE

Colonial Mutual Life Assurance Society Ltd. (The) A+/STABLE

HEALTH INSURERS Southern Cross Medical Care Society

A+/STABLE

NIB NZ Ltd.

A-/STABLE

LENDERS MORTGAGE INSURERS Genworth Financial Mortgage Insurance Pty Ltd. (NZ Branch)

Genworth Financial Mortgage Insurance Pty Ltd.

A/NEGATIVE

LIFE INSURERS

Hallmark Life Insurance Co. Ltd.

BBB+/STABLE

MetLife Insurance Ltd.

A+/STABLE

Westpac Life Insurance Services Ltd.

A+/STABLE

REINSURERS General Reinsurance Australia Ltd.

AA+/STABLE

General Reinsurance Life Australia Ltd.

AA+/STABLE

Asteron Life Ltd.

A+/POSITIVE

Hannover Life Re of Australasia Ltd.

AA-/STABLE

Hallmark Life Insurance Co. Ltd. (NZ Branch)

BBB+/STABLE

Munich Reinsurance Co. of Australasia Ltd.

AA-/STABLE

Medical Life Assurance Society Ltd.

A-/POSITIVE

RGA Reinsurance Co. of Australia Ltd.

AA-/STABLE

Westpac Life-NZ-Ltd.

A+/NEGATIVE

SCOR Global Life Australia Pty Ltd.

AA-/STABLE

Resolution Life New Zealand Ltd.

A-/NEGATIVE

Swiss Re Life & Health Australia Ltd.

AA-/NEGATIVE

*For the S&P Global Insurer Financial Strength Ratings Definitions visit: https://www.niba.com.au/resource/standardandpoors.pdf Copyright © 2020 S&P. This material is reproduced with the permission of S&P. Reproduction of this the S&P Information in any form is prohibited without S&P’s prior written permission. Neither S&P, its affiliates nor any of their thirdparty licensors: (a) guarantee the accuracy, completeness or availability of the S&P information, or (b) make any warranty, express or implied, as to the results to be obtained by Insurer Financial Strength Ratings or any other person from the use of the S&P information or any other data or information included therein or derived therefrom, or (c) make any express or implied warranties, including any warranty of merchantability or fitness for a particular purpose or use, or (d) shall in any way be liable to Insurer Financial Strength Ratings or any recipient of the S&P information for any inaccuracies, errors, or omissions, regardless of

56 / INSURANCE ADVISER MARCH 2021

cause, in the S&P information or for any damages, whether direct or indirect or consequential, punitive or exemplary resulting therefrom.

Ratings are statements of opinion, not statements of fact or recommendations to buy, hold, or sell any securities. S&P Global (Australia) Pty. Ltd. holds Australian financial services licence number 337565 under the Corporations Act 2001. S&P Global credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act). Ratings are based on information received by Ratings Services. Other divisions of S&P Global may have information that is not available to Ratings Services.

INSURER STRENGTH RATINGS

NEW ZEALAND

BEST’S

FINANCIAL STRENGTH RATINGS

RATING

COMPOSITE Quest Insurance Group Limited

B/STABLE

LIFE, ANNUITY AND ACCIDENT American Income Life Insurance Company (New Zealand Branch)

A/ STABLE

BNZ Life Insurance Limited

A u/NEGATIVE

CIGNA Life Insurance New Zealand Limited

A/STABLE

Co-operative Life Limited

B++/STABLE

DPL Insurance Limited

B++/STABLE

Fidelity Life Assurance Company Limited

A-/STABLE

Foundation Life (NZ) Limited

A-/STABLE

General Reinsurance Life Australia Limited (New Zealand Branch)

A++/STABLE

LIFE, ANNUITY AND ACCIDENT

Kiwi Insurance Limited

A-/STABLE

General Reinsurance Life Australia Ltd.

Lifetime Income Limited

B u/NEGATIVE

Momentum Life Limited

B++/STABLE

Partners Life Limited

A- u/DEVELOPING

Pinnacle Life Limited

B/STABLE

The following list of AM Best Financial Strength Ratings (FSRs) assigned to insurance companies in Australia and New Zealand. Ratings as at 28 February, 2021.

Contact: Scott Ryrie, Co-CEO A. M. Best Asia-Pacific (Singapore) Pte Ltd. Board Member and Commercial Director for Asia Pacific Tel: +65 6303 5007 Email: scott.ryrie@ambest.com

AUSTRALIA

RATING A++/STABLE

PROPERTY/CASUALTY Ansvar Insurance Limited

A-/NEGATIVE

First American Title Insurance Company of Australia Pty Limited

A/STABLE

General Reinsurance Australia Ltd

A++/STABLE

Guild Insurance Limited

A-/STABLE

Aioi Nissay Dowa Insurance Company, Limited (New Zealand Branch)

A+/STABLE

Pacific International Insurance Pty Limited

B++/NEGATIVE

Beneficial Insurance Limited

B++/STABLE

The Hollard Insurance Company Pty Ltd

A-/STABLE

Brightsideco Insurance Limited

B/STABLE

The New India Assurance Company Limited (Australia Branch)

B++/STABLE

Consumer Insurance Services Limited

B+/STABLE

First American Title Insurance Company of Australia Pty Limited (New Zealand Branch)

A/STABLE

FMG Insurance Limited

A/STABLE

General Reinsurance Australia Ltd (New Zealand Branch)

A++/STABLE

Health Services Welfare Society Limited

B+/STABLE

Mitsui Sumitomo Insurance Company Limited (New Zealand Branch)

A+/STABLE

New Zealand Medical Professionals Limited

B+/STABLE

Pacific International Insurance Pty Ltd (New Zealand Branch)

B++/NEGATIVE

Police Health Plan Limited

A-/STABLE

Provident Insurance Corporation Limited

B /STABLE

The Hollard Insurance Company Pty Ltd (New Zealand Branch)

A-/STABLE

The New India Assurance Company Limited (New Zealand Branch)

B++/STABLE

Tokio Marine & Nichido Fire Insurance Company Limited (New Zealand Branch)

A++/STABLE

Tower Insurance Limited

A-/STABLE

Union Medical Benefits Society Limited

A/STABLE

Virginia Surety Company, Inc. (New Zealand Branch)

A/STABLE

Rating Disclosure: Use and Limitations: A Best’s Credit Rating (BCR) is a forward-looking independent and objective opinion regarding an insurer’s, issuer’s, or financial obligation’s relative creditworthiness. The opinion represents a comprehensive analysis consisting of a quantitative and qualitative evaluation of balance sheet strength, operating performance and business profile or, where appropriate, the specific nature and details of a security. Because a BCR is a forward-looking opinion as of the date it is released, it cannot be considered as a fact or guarantee of future credit quality and therefore cannot be described as accurate or inaccurate. A BCR is a relative measure of risk that implies credit quality and is assigned using a scale with a defined population of categories and notches. Entities or obligations assigned the same BCR symbol developed using the same scale, should not be viewed as completely identical in terms of credit quality.

Alternatively, they are alike in category (or notches within a category), but given there is a prescribed progression of categories (and notches) used in assigning the ratings of a much larger population of entities or obligations, the categories (notches) cannot mirror the precise subtleties of risk that are inherent within similarly rated entities or obligations. While a BCR reflects the opinion of A.M. Best Rating Services, Inc. (AMBRS) of relative creditworthiness, it is not an indicator or predictor of defined impairment or default probability with respect to any specific insurer, issuer, or financial obligation. A BCR is not investment advice, nor should it be construed as a consulting or advisory service, as such; it is not intended to be utilised as a recommendation to purchase, hold or terminate any insurance policy, contract, security, or any other financial obligation, nor does it address the suitability of any particular policy or contract for a specific purpose or purchaser. Users of a BCR should not rely on it in making any investment decision; however, if used, the BCR must be considered as only one factor.

Users must make their own evaluation of each investment decision. A BCR opinion is provided on an “as is” basis without any expressed or implied warranty. In addition, a BCR may be changed, suspended, or withdrawn at any time for any reason at the sole discretion of AMBRS.

PROPERTY/CASUALTY

NIBA.COM.AU / 57

INSURANCE JOURNEY / Kelly Qualmann

DESTINY’S CALL

The SA/NT Broker of the Year, Kelly Qualmann from Gallagher was meant to be in the insurance industry even though she actively tried to pursue other paths.

“I

come from a family who have all been in the insurance industry and growing up I was keen to break the trend and try something different. While completing my degree in business management I worked for a credit union (in the insurance industry) and once I graduated I applied for a business development role, to my surprise it was in the insurance industry. I am currently in my 16th year within the insurance industry, so I guess it was meant to be.

I can not say that insurance was my first choice of profession, but I feel it was a profession I was destined to have.

Prior to insurance I was studying, working part-time in cafes and coaching sport. The insurance industry is more than a job for me – it is a passion - something I was definitely born to do. I love being able to build relationships, provide expert advice, deliver impeccable service all while ensuring I am transparent with my clients.

Having been in the insurance industry for well over a decade and half now, I have been fortunate to work on the underwriting side as well as the broking side, with numerous clients in a range of different industries and some with extremely challenging risk profiles.

From SME to mid-market clients in industries ranging from manufacturing, not for profit, aviation, aged and disability care - the list goes on. Every risk is different, and I love a challenge, so that’s what makes our insurance world so interesting and fascinating to me.

The biggest lesson I have learnt in my career so far is that relationships are key to everything we do and to not be afraid to ask questions.

I would definitely want to see more people choosing insurance as their profession, there is so much to learn, every day is different and no risk is the same, which makes the career a very interesting one.

If I had my time again I don’t believe I would change anything about my career

PROUDLY SUPPORTING

58 / INSURANCE ADVISER MARCH 2021

journey. I have worked in various roles for different brokerages, in two different states (SA and NT), provided advice to clients within numerous industries and I am quite proud of what I have achieved so far.

Being nominated for a NIBA award is such an honour and something all insurance professionals should strive to achieve. I was proud to represent Gallagher, and I was truly humbled to be nominated for the Young Broker of the Year award in 2020. I was the SA/NT state winner of this award and thoroughly enjoyed the professional development course, which was part of the prize, thanks to Vero. I learnt so much about myself and it allowed me to really reflect on my career so far and recognise where I want to be and what I stand for.

I believe mentorship is vital in our industry, be it a formal mentor arrangement or an insurance professional you trust for advice, guidance or even validation that you are on the right track. Collaborating with colleagues and

business associates makes our job much easier. The insurance industry is forever changing and there is so much to learn. Over my journey to date in our industry, I have been fortunate to work alongside a number of very experienced insurance professionals who are willing to share their knowledge. As a trusted risk adviser, professionalism is a corner stone of our industry.

Professionalism to me is being educated, ethical and always acting upon my business with integrity, putting my client’s interests first. I am a dedicated and honest general insurance broker who wears my heart on my sleeve. The QPIB designation builds credibility and adds to my professional profile.

It is something I would highly recommend to other insurance brokers as this may be what puts you in the lead compared to the candidate next to you, not only from an award perspective but when clients are going to tender and researching the team members they wish to manage their insurance portfolio.”

QUICK QUESTIONS Tell us something most people do not know about you? I love almost every sport and currently coach calisthenics and baseball.

Favourite tipple? South Australian wine and at the moment, I really love gin.

Favourite past-time? Spending time with my family. I wish there was more time in the day, that’s for sure.

Favourite food? I would have to say any Mexican food.

Share your insurance journey. Email editor@niba.com.au

“My QPIB designation gives my clients peace of mind that I’m a trusted professional.”

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Apply online at niba.com.au or email NIBA Memberships Manager Audi Witsen – awitsen@niba.com.au

D PRAC IE T F I

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QPIB – A STATEMENT OF PROFESSIONALISM

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– CRAIG ANDERSON, 2018 YOUNG PROFESSIONAL BROKER OF THE YEAR

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