Insurance Adviser May 2023

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

Insurance Adviser magazine is published by NIBA

Publisher Philip Kewin, CEO, NIBA

T: (02) 9459 4305

E: pkewin@niba.com.au

W: niba.com.au

Communications Manager

Wendy Martin

NIBA Editor Virat Nehru

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.

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.

This edition of the Brokers’ Guide delves into emerging industry issues on the horizon and what resilience looks like for brokers in a post-pandemic world.

Global experience that drives your local partnership

As one of the world’s largest insurers with over 100 years’ experience in Australia, Allianz is here to help when you need it most. With state-based sales and underwriting experts working alongside our dedicated claims team, we’re ready to assist you and your customers, no matter where you are.

For more information, speak to your Account Manager today or visit www.allianzengage.com.au

Go Further, Together.

A RESILIENT FUTURE

Recently, I had the privilege of judging the final presentations of the NIBA Presentation Skills workshop sponsored and supported by Protecsure. This is one of the more rewarding parts of my role. I get to see many brokers, of all ages, step out of their comfort zone and present in front of their peers and hear them speak on industry topics they are passionate about.

Participants come together over several weeks and learn from professionals, picking up tips and techniques in the important aspect of public speaking, all of which culminates in their final presentation to their fellow peers and industry representatives. Topics ranged from the importance of cyber insurance, strata, employment practices and the importance of diversity and inclusion, among others. The most popular topic of choice was around the advantages of working with a broker to fulfil one’s insurance needs. If you could bottle up the passion and enthusiasm of these brokers, as they talked about how a broker can address a client’s needs, nobody would dream about taking out insurance without a broker.

More broadly, communication and presentation skills are critical to what brokers do, and I congratulate all participants in their desire and willingness to grow, irrespective of the driver that led them there in the first place. Some enrolled to address their number one fear: public speaking. Some wanted to hone their skills, while some were pushed by the boss or manager, and speaking to them afterwards, no matter what the motive, all were glad they invested themselves in the experience. A special thank you to Gabriele McDonald and Protecsure, who have been supporters of this program for many years. Also, thanks to Nikki Heald, Managing Director of CorpTraining and Michael Kelly, Director of Kelly Speech Communication who have committed their time and effort. Nikki will also be featured at the 2023 NIBA Convention in October.

The NIBA Quality of Advice Review webinar was well subscribed this month, as brokers and their teams were keen to understand the implications of the review and any ensuing legislation. NIBA is broadly supportive of the proposed reforms and as mentioned previously, much of what has been proposed in terms of broker remuneration and transparency, has already been introduced via the Insurance Brokers Code of Practice, which fully transitions on 1 November 2023. While we still await a formal response from the government, recognising the need for certainty, NIBA will ensure the Code aligns as best as possible in terms of the disclosure requirements in advance of the final transition date.

Be that broker with a deeper perspective

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WHY NIBA MATTERS TO ME

Members share why NIBA is important to them, and how their involvement has enabled them to support the broking industry.

“Being an active NIBA member to me means being a part of the solution rather that part of the problem. NIBA is actively involved in representation, professionalism and community and will continue to lead the way for insurance brokers in Australia.

NIBA is the one voice for our profession and this will not change. It is for these reasons I have been involved with NIBA over a significant period of my career.”

STEVEN HILL (QPIB) Director, Capital Innovation Insurance Group

NIBA SAYS CONGRATULATIONS

NIBA CONGRATULATES THE FOLLOWING MEMBERS FOR RECEIVING THEIR QPIB DESIGNATIONS

Olivia Hancock, Honan Insurance Group Pty Ltd t/a Honan Insurance

Rachael Hirsch, Aviso Select Pty Ltd | Stellar Insurance Brokers Pty Ltd

Louise Wheeler, Lavaro Pty Ltd t/a Interlink Insurance Brokers

Natalie Bridges, Oracle Group (Australia) Pty Ltd

Katie Gleeson, Oracle Group (Australia) Pty Ltd

Amber Tucker, STEADFAST TASWIDE INSURANCE BROKERS

Michele Dumpleton, CCINSURE

Thanya D’mello, Elkington Bishop

Molineaux Insurance Brokers Pty Ltd t/a

EBM Insurance Brokers

Matthew Terry, EBM - West Perth

Daniel Laws, Bracesure Insurance Brokers

Judith Doddridge, Guardian Insurance Brokers Pty Ltd

Adam George, WTW

Molly-Rose Ross, Adroit Insurance & Risk

NIBA CONGRATULATES THE FOLLOWING MEMBER FOR BECOMING A FELLOW

Kim Stewart, Australian Insurance and Financial Group Pty Ltd

NIBA CONGRATULATES THE FOLLOWING MEMBER FOR BECOMING AN ASSOCIATE MEMBER

Wendy Back, Lockton Companies Australia Pty Ltd

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 a state and national level to ensure that your interests are represented.

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 has brokers’ best interests at the core of everything we do. Find out what we can do to help benefit your business and your team at niba.com.au/membership

NIBA EVENTS

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

UPCOMING EVENTS

2023 NIBA / UAC MELBOURNE UNDERWRITING EXPO

WHERE: The Palladium, Melbourne

WHEN: Friday 19 May 2023

Looking to stay ahead of the curve in the ever-evolving world of insurance? Join us in the Palladium at Crown Melbourne for the annual 2023 NIBA/UAC Melbourne Underwriting Expo.

Discover the latest products and services from a range of underwriters and explore new opportunities to grow your business. Are you a member of UAC and interested in exhibiting? Register today to showcase your people and capabilities while connecting with important local decision-makers and creating new business leads.

2023 NIBA VIC GALA LUNCH (SOLD OUT)

WHERE: Crown Aviary, Melbourne

WHEN: Friday 19 May 2023

Connect with industry peers over a two-course plated lunch and hear from Dr Dan Pronk, The Combat Doctor, as he shares his inspiring story of battlefield medicine and resilience.

The event also celebrates the very best in Victorian and Tasmanian broking and will see the announcement of the QBE-sponsored Vic/Tas Broker of the Year, and the Verosponsored Vic/Tas Young Broker of the Year state winners.

2023 NIBA NSW GALA LUNCH

WHERE: The Fullerton Hotel, Sydney

WHEN: Wednesday 12 July 2023

Enjoy a two-course plated lunch, live entertainment, and an opportunity to connect with industry peers at the 2023 NIBA

NSW Gala Lunch, held at the prestigious Fullerton Hotel Sydney.

The event highlights the very best in NSW/ACT broking and will see the announcement of the NSW/ACT Broker of the Year, sponsored by QBE and NSW/ACT Young Broker of the Year, sponsored by Vero.

2023 NIBA WA GALA LUNCH

WHERE: Crown Perth

WHEN: Friday 14 July 2023

Join us for the 2023 NIBA WA Gala Lunch and unwind after the end of financial

year. Enjoy a two-course plated lunch and opportunity to connect with industry peers.

The event also celebrates the very best in WA broking and will see the announcement of the QBE-sponsored WA Broker of the Year, and the Vero-sponsored WA Young Broker of the Year state winners.

This event is a sell-out every year, so be sure to secure your tickets early.

2023

WHERE: Brisbane Convention & Exhibition Centre

WHEN: Wednesday 19 July 2023

Showcase your latest products and services at the 2023 NIBA/UAC Brisbane Underwriting Expo at Brisbane Convention & Exhibition Centre.

This event offers an exciting opportunity for underwriters to connect with key local decisionmakers and generate new business leads.

Are you a member of UAC and interested in exhibiting? Register today to showcase your people and capabilities while connecting with important local decision-makers and creating new business leads.

2023

WHERE: Convention & Exhibition Centre, Brisbane

WHEN: Wednesday 19 July 2023

Registrations are now open for 2023

NIBA Qld Gala Lunch on Wednesday,

19 July at Brisbane Convention & Exhibition Centre. Indulge with a two-course plated meal and live entertainment while networking with industry professionals and make lasting connections.

The event highlights the very best in Queensland broking and will also see the announcement of the Qld Broker of the Year, sponsored by QB, as well as the Qld Young Broker of the Year, sponsored by Vero.

WHERE: The Star, Gold Coast

WHEN: Sunday 8 October to Tuesday 10 October 2023

2023 NIBA SA GALA LUNCH

WHERE: SkyCity, Adelaide

WHEN: Friday 21 July 2023

UAC EXPO – SAVE THE DATES

9 AUGUST 2023

UAC Norwest Sydney Underwriting Expo

14 SEPTEMBER 2023

UAC Adelaide Underwriting Expo

18 OCTOBER 2023

UAC Wollongong Underwriting Expo

15 NOVEMBER 2023

NIBA UAC WA Underwriting Expo

More information is available on the UAC website, www.uac.org.au/events/

NIBA / UAC BRISBANE UNDERWRITING EXPO

NIBA QLD GALA LUNCH

2023 NIBA CONVENTION

PEEKING BEHIND THE CURTAIN

The NIBA Convention returns to its traditional, face-to-face format after three years. From 8–10 October, the industry will come together in one place at the Gold Coast. We caught up with four members of the Convention Committee who have been hard at work to bring us an exciting, inspiring and thought-provoking program. Let’s take a look behind the curtain to see what we can expect.

We are counting down the days to the 2023 NIBA Convention, when the industry will converge on the Gold Coast to discuss some of the most burning issues, topics and trends that will shape the future of the industry.

While the specific details of the program are still hush-hush and under wraps, we were able to catch up with four members of the Convention Committee comprising of Daniela Zaccone, Principal, Power & Renewable Energy, Marsh Specialty, Sam Giorgatzis, Director, Praden, Emma Keegan, Head of Strategic Sales Operations (Corporate), Gallagher, and Tom Wheeler, Client Service Officer, Lockton Companies Australia to pick their brains about what fills them with excitement as October comes closer.

Challenging the norm with this year’s theme

The theme of this year’s Convention is – Reimagine: Think Differently. The open-ended nature of the theme invites us to embrace new ways of thinking in a post-pandemic world that has experienced significant disruption impacting every facet

of our lives. Mr Giorgatzis invites us to think of this year’s theme as a prompt to let go of the old ways of working.

“The world has been through an incredibly challenging few years with COVID and whilst there appears to a great deal of positivity in the industry around getting back to business, there have also been significant changes to how we conduct business and to how we engage with our clients, our teams and our insurer partners,” he said.

Meanwhile, Ms Keegan sees the theme as a nod to the resilience of the broking profession and the ability of brokers to embrace innovation.

“In order to stay ahead of the game or to simply keep up, brokers have to challenge themselves to think differently to give them a competitive advantage. The conference is one way for brokers to learn how to challenge the norm,” she said.

Coming together to build connections –old and new

This will be the first traditional, face-to-face Convention after three years. Many across the industry have missed the invaluable relationships you can form and strengthen by being in the same room. Our Committee members agreed that you cannot emphasise the significance of face-to-face networking enough. They are extremely excited to be able to see their peers and colleagues from across the industry in a non-virtual capacity.

“Human connection can only be successfully achieved in real life, face-toface,” said Ms Zaccone.

“The insurance industry has been built on this for the past three hundred years. Coming together again after a mini hiatus will be a valuable experience that cannot be replicated via Zoom. This feeling of togetherness, engaging in various conversations with peers that haven’t met for a while, and the chance to hang out in one common space will be special.”

Mr Giorgatzis acknowledged the adoption of new technologies has changed the way we connect with each other but reaffirmed the value of the old school approach.

The conference is one way for brokers to learn how to challenge the norm.

DANIELA ZACCONE

TOM WHEELER

SAM GIORGATZIS

EMMA KEEGAN

NIBA CONVENTION / Peeking Behind the Curtain

“The rapid increase in the use of videoconferencing and other online communication platforms and applications over the last few years has undeniably brought with it many positives, however there is no substitute for in person networking and engagement,” he said.

“Taking the opportunity to spend time with colleagues and peers in a less formal and structured environment, where relationships can be nurtured and strengthened is incredibly important.”

Mr Wheeler emphasised the significance of networking for young professionals looking to make a mark in the industry and build lasting professional relationships that can help further your career.

“Personally, as a young professional in the industry, I understand the importance of networking and building connections,” he said.

“I am excited about the experience and networking opportunities that the NIBA Convention provides, and I believe it is an excellent platform for young professionals looking to grow their career in the insurance industry.”

Ms Keegan is proud of the diversity of knowledge and experiences that has helped the Convention to stand out and make its mark.

“The NIBA Convention brings together brokers from large corporates, independents, AR networks and small businesses,” said Ms Keegan.

“It’s the only conference that has such a diverse range of attendees, so the diversity of knowledge and experience is what makes it great from my perspective and really differentiates it from the other conferences.”

Mr Wheeler highlighted the fact that the NIBA Convention is a specially curated experience that catered to a diverse range of attendees and their needs – whether that is networking, career progression, industry insights or business growth.

“The NIBA Convention provides me with an opportunity to meet with industry leaders and regulatory officials, gaining insight into market trends and regulatory changes,” he said.

“The Convention’s diverse range of panel discussions, keynote speeches, and networking events allows me to learn and understand new concepts and perspectives.”

Mr Giorgatzis noted that the energy and enthusiasm that the Convention brings with it are second to none. This energised atmosphere that promotes a robust exchange of ideas and new ways of looking at the world will leave a lasting, positive impact.

“All in all, it is shaping up to be a fantastic Convention, loaded with thought-provoking content,” he said.

The NIBA difference: A community like no other

While there are other conferences held throughout the year, the NIBA Convention has always held a special place and has captured the hearts and minds of everyone in the industry.

Our Committee members have their own theories as to what sets this Convention apart from the others. According to Ms Zaccone, it is the NIBA community that truly makes the Convention a unique experience.

“I think the NIBA community offers something really bespoke and different to the others, it’s more personal,” said Ms Zaccone.

“Attendees will walk away with new information, new contacts and new ideas that they will be able to take back to their businesses and leverage for their clients’ benefit and their own professional development.”

I think the NIBA community offers something really bespoke and different to the others, it’s more personal.

It’s the only conference that has such a diverse range of attendees, so the diversity of knowledge and experience is what makes it great from my perspective and really differentiates it from the other conferences.

REGISTER NOW!

Be quick to secure your full NIBA Member Convention registration ticket at the super early bird price of $990. That’s a $380 saving off the standard price. Group tickets of eight or more delegates are available. Conditions apply.

WE ARE YOUR VOICE!

The following is an overview of some of the things NIBA has been examining on behalf of members.

AUSTRALIAN FINANCIAL COMPLAINTS AUTHORITY

The Australian Financial Complaints Authority (AFCA) has announced it will undertake public consultation on proposed changes to its official rules and operational guidelines. The proposed changes are largely designed to implement recommendations of the Treasury-led Independent Review of AFCA.

Consistent with the recommendations of the Review, the proposed changes do not seek to increase AFCA’s jurisdiction or the monetary limits, of the AFCA Scheme but rather provide clearer guidance about AFCA’s jurisdiction and processes.

AFCA proposes changes to its Rules and Operational Guidelines in the following general areas:

1. Excluding complaints lodged by professional or sophisticated investors unless exceptions apply.

2. Ensuring complaints do not progress to case management or decision status where an appropriate offer of settlement has already been made.

3. Excluding complaints that share the same subject matter and content as a previously discontinued complaint.

4. Enabling determinations to be corrected or reissued where a clerical error or mistake has been made.

5. Enabling AFCA to not consider complaints lodged by a “paid representative” where they do not hold an ACL/AFSL or are not acting in the client’s best interests and where appropriate exclude them from lodging future complaints for up to 12 months.

6. Excluding complaints who submit multiple complaints that are closed or discontinued by AFCA.

7. Discontinuing complaints because of unreasonable and inappropriate conduct including bullying, harassment, intimidation, and abuse.

8. Enabling AFCA to discontinue a complaint where the complainant has not suffered any loss.

9. Minor changes to definitions and language to update certain areas of the Rules arising from legislative change, to provide greater clarity

and transparency of the scheme’s operation overall.

Many of the proposed changes are positive for financial firms who will no longer incur fees where they have made genuine attempts to compensate the complainant for financial loss, or where the complaint has previously been discontinued. NIBA will be providing a submission on behalf of members to the consultation later this month.

CONTACT NIBA

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

AFCA REAPPOINTS ITS CHIEF OMBUDSMAN, WITH COMPLAINTS COMPENSATION REACHING A NEW HIGH

AFCA has reappointed Mr David Locke as the Chief Ombudsman and Chief Executive Officer for a second five-year term. AFCA Board Chair Professor John Pollaers OAM believes the organisation is delivering positive results for consumers in a difficult environment.

“As AFCA’s inaugural Chief Ombudsman, David has met the challenge of bringing together three separate dispute resolution bodies to build a new, world-class scheme,” he said.

“He has also led the organisation through a period of significant growth in complaints as a result of the COVID pandemic, natural disasters and scams.”

During his tenure, Mr Locke has overseen significant initiatives. These include – the development of the publicly searchable

AFCA Datacube that allows firms and consumers to compare complaints performance, a new funding model, a significant review of the AFCA Rules, and an ongoing IT transformation that will help ensure a more efficient and user-friendly experience for firms and consumers.

Mr Locke begins his new term on 28 June 2023 and said he is honoured to be reappointed Chief Ombudsman.

“AFCA plays a very important role in Australia’s financial services system, and it is a great privilege to lead such an amazing group of people who are passionate about access to justice and fairness to all,” he said.

“We will continue to work in partnership with financial firms, consumer bodies, and regulators to share lessons from our work

and drive improved practices. We want to see financial firms resolve more disputes themselves, so fewer matters have to be escalated to AFCA.”

In other positive news, AFCA also announced that the amount of compensation that it has been able to secure for consumers since the organisation’s inception has now crossed $1 billion. Since opening its doors AFCA has:

• Closed more than 320,000 complaints

• Seen about 70% cases resolved via agreement

• Worked with more than 26,000 people in financial difficulty

• Worked with more than 5,000 victims of about 50 weather disasters

• Handled more than 17,000 COVID-related complaints.

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Over 50 new features

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Just one of the fabulous Not for Profit organisatons that we have been able to assist with funds from our annual Small Grants Program.

Insuring Not for Profits - it’s all we do

A NIBA Brokers’ Guide: The new business resilience

ISSUE 8 – MAY 2023

The NIBA Brokers’ Guides are brought to you through a partnership between Allianz Australia Insurance Limited (Allianz) and NIBA. We hope the knowledge of our subject matter experts, coupled with Allianz’s industry expertise, helps you and your clients prepare for the future. We welcome ideas for future subjects – please email your suggestions to editor@niba.com.au.

Welcome note

PHILIP KEWIN Chief Executive Officer, NIBA

PHUONG LY Chief General Manager, Commercial at Allianz

The new business resilience

The past few years have thrown challenges at businesses from the left, right and centre. From a global pandemic to natural disasters, geopolitical troubles, and supply chain difficulties to the high interest rate environment we’re all living through, there’s been no shortage of hurdles for businesses to overcome.

Looking back, we had a relatively straightforward run from the GFC to COVID-19, and maybe that lulled us into a false sense of security. It’s become abundantly clear that, in order to ride out whatever comes along next, we’ve got to be well-informed and well-prepared. While we don’t have a crystal ball to gaze into, we do have knowledge to access to prepare ourselves for the challenges that will undoubtedly lie ahead.

And having a thirst for that knowledge is important as brokers because having a solid understanding of what’s on the horizon is something that’s imperative to build a solid, robust and resilient business.

Things can change in an instant – and your clients need to be prepared.

Resilience in business is something that’s been talked about since the early days of COVID-19, and it’s important we don’t consign the notion to pandemic history.

Having a resilient business is vital – but by resilient, we don’t mean withstanding whatever is thrown. It’s more proactive than that – it’s about creating a business that has the knowledge and understanding to react in a positive way and can alter course swiftly and easily based on market and global conditions.

In this edition of our Brokers’ Guide, we’ve delved into a number of topics that we see on the horizon as having emerging issues and implications for businesses – and, naturally, for brokers, too.

From the risks that come hand in hand with new technologies and emerging property risks to business interruption in plant, machinery and vehicles, there are a whole host of challenges that are increasing in prevalence and importance – and which you and your clients need to be prepared for.

It’s a challenge, no doubt. But with the right information, insight and guidance, brokers can help clients chart a successful path through whatever lies ahead. It’s a serious opportunity for the proposition of ‘insurance broker’ to be truly elevated beyond writing and placing policies – firmly establishing risk advice as a business essential.

Things can change in an instant – and your clients need to be prepared.

Building resilience with emerging technologies

Embracing renewables is a critical step for a brand’s reputation, not to mention the environment. But with new technology comes emerging risks – pretty big ones – that are worth being aware of.

Solar energy, lithium batteries and electric vehicles have all been great achievements in sustainability, but they’re still far from perfect. Until safety measures catch up, brokers need to stay vigilant about the risks.

The two biggest risks? Fire safety and the scarcity of lithium.

According to data from Australian fire departments, more than 450 fires have been linked to lithium-ion batteries in the 18 months leading up to February 2023. It’s a problem that brokers need to be aware of.

“We’re getting battery fires that are burning down a factory because they either weren’t charged safely, the batteries were of unknown quality, or they weren’t being supervised when they were being charged,” says Chris Wood, Automotive Risk Manager and Technical Specialist at Allianz.

“And they’re not just taking out the business. They’re taking out the businesses around them. I was looking at an example the other day. It was $120,000 for the commercial property fire, but then we got a $1.9 million liability claim from the businesses around it. And that fire was caused by charging scooters,” Wood added.

If you’re working with a business that works with e-scooters, there are lots to think about.

“We give these products of questionable quality to kids, then they use them as kids do. We know rough use/abuse is one of the major causes of lithium battery fires. It’s called thermal runaway,” says Wood.

“If you’ve ever seen a thermal runaway, it has jet-like flames that chew out a couple of metres from each side, it gives off toxic vapour. And if it’s in a confined space, like a garage, it can fill the whole void up and then explode.

“The incidents are very low, so it’s not a frequency issue but it’s the severity.”

There are simple but important safety measures that brokers can pass on to their clients to minimise risk. Director of Steadfast Risk Engineering, Josh Giansiracusa, recommends all electric vehicle owners have a blue diamond sticker on their cars for quick identification.

“So that if you were in an accident, or if there was a certain emergency situation, responders will respond differently to an electric vehicle as opposed to petrol,” he says.

Changing the way we approach refuelling

It’s likely that in the next few years, our home and work garage setup will change, along with the safety needs of a home with an electric vehicle charging unit.

“Even a thermographic scan is very beneficial because what that does is picks up hotspots within your electrical system.

“So you can take imaging and it’ll give you a heat rating and say, ‘Oh, since you’ve installed the battery charger, your whole property’s electrical system seems to be lighting up like a Christmas tree,” Giansiracusa adds.

Safety is one aspect brokers need to consider – the other is the reputational risk to big businesses.

According to the Office of the Chief Economist, demand for lithium worldwide is set to rise by 40 per cent in the next two years, while Australia is looking to triple its lithium exports in the next 12 months. With all this demand, the risk of misrepresenting what a business may be able to achieve is real.

“When organisations are making representations as to the availability of lithium and supply from a particular prospect or mine, as always, proceed with caution,” says Dylan Moller, Senior Technical Claims Lead with Gallagher.

“With lithium in particular, there are a number of risks from the mining process, to the ability to reach targets (both in terms of availability and timing), and safety, with a risk of harm or misrepresentation.”

Risks of harm and misrepresentation are important considerations from an insurance perspective. However, one of the most topical risks at the moment comes from the crack-down on false or misleading representations on ESG and carbon targets (greenwashing). Companies may face accusations and charges related to greenwashing if they say they’ll reach certain targets and then don’t.

“There is always a difficulty in being as accurate as you can be. The critical matters are having the evidence to support those representations, not using vague language, and constantly reviewing progress,” adds Moller.

Moller believes there will be standardised expectations and regulations across sustainability and carbon targets soon to bring Australia in line with G20 and global initiatives, and it’s something businesses and brokers need to stay up to date with.

“Brokers can help their clients through understanding what their targets are and understanding the evidence that backs it, and to ensure the data, evidence and strategy behind checking these targets is really up to date, reasonable and achievable.”

Reaching net zero is commendable, but are we moving too quickly to meet those targets safely?

Basil Taylor, Manager at Allianz Risk Consultants Australia, says the real hazard is misunderstanding what each individual business needs to move to a sustainable model.

“If we’re going to do this net zero transition, what does that look like for my business when we think of turnover, supply chains, volume, and growth? And how can we do things smarter and differently, but at the same time, keep the business sustainable and profitable?” says Taylor.

It’s a Catch-22 because as customers seek out businesses with a sustainable footprint, there’s also a reputational risk of not going green.

“So, when we think of reputational brand value and brand awareness, how does that look for that business? What can they do and what shouldn’t they do to enhance their reputation?”

There’s a feeling this space will change a lot over the next decade, and sharing knowledge will be key to staying on top of those changes.

Taylor says, “I think that learning partnership is crucial and sharing experiences is key to that learning. So, sharing experiences for the broker and the client and the insurer and then taking that further to ask, ‘What did we learn from that experience?’”

Tips for brokers

1. Sustainability targets are important benchmarks towards a greener world, but we’re still playing catch up in the renewables space when it comes to safety and supply.

2. Lithium batteries are a fire waiting to happen, if not handled correctly.

3. A brand poses considerable risk to its reputation if it doesn’t look to reduce its carbon footprint. At the same time, businesses need to be confident in what they’re promising so as not to be seen as greenwashing.

4. Sharing experiences around these emerging technologies is the best way to protect everyone.

Property assessments come with a new set of risks: how should brokers and businesses prepare?

Tips for brokers & business

1. Take steps to thoroughly familiarise yourself with the product and understand its unique risks. Be aware of the potential for things to go wrong and the specialised response methods that may be required.

2. A ssess and review expected service life, safety data, manufacturer’s service conditions and maintenance guides. Be sure to keep an eye out for any product recalls.

3. With new technologies comes a need for continuous awareness-raising campaigns and staff training.

4. A comprehensive, tailored and site-specific approach to insurance is the key to successfully managing the risks associated with emerging technologies.

As new technologies and business innovations take hold, carrying out comprehensive and tailored risk assessments is becoming vitally important for building resilience and effectively responding to – and limiting – losses from incidents and accidents..

When it comes to property risks, claims analysis by Allianz shows that fire remains the largest single cause of business interruption and corporate insurance loss.

Ageing buildings and infrastructure, human error and lack of training have long been identified as contributing factors, but new and emerging risks such as lithium-ion batteries, solar power and energy storage systems are now also contributing to fires and other property-related risks.

We take a look at what brokers and businesses need to know and pass on some practical risk mitigation tips.

Lithium battery risks

Lithium-ion batteries in the workplace are becoming more and more common – they power mobile phones, tablets, electric vehicles and other equipment.

The fact that they’re incredibly compact and have such a high storage efficiency, unfortunately, also makes them vulnerable to runaway overheating when there’s a short or damaged cell. The potential for fires, accidents, property damage and business interruption is a real concern.

Basil Taylor, Manager, at Allianz Risk Consulting Australia, says rechargeable lithium-ion batteries are different from regular lithium batteries. The former are especially risky and their use calls for careful storage, maintenance, and supply chain management.

“Taking a site-specific approach, businesses need to identify unique risks associated with their particular locations and implement rigorous processes to effectively manage and mitigate the risks,” he says.

“Educating yourself and your staff on safe use, charging, and storage is key, as is reviewing your business insurance coverage to deal with the risk.”

Kenji Hosaka, Risk Manager at Allianz Risk Consulting Australia, says that awareness needs to extend to businesses of all categories from SMEs to heavy industrial worksites.

“Insurers and brokers should ask their clients about their practices and plans for battery storage and charging activities and know the unique risks,” he says.

“We’re not talking about a ‘normal fire’ here. The sorts of fires generated by thermal runaway incidents can be particularly severe and hard to contain.”

Alarmingly, lithium-ion batteries can even reignite after they have been extinguished. Awareness, training and having the right sorts of extinguishers on hand are critical.

Solar power and energy storage system risks

With clear environmental and energy cost-saving benefits, the demand for solar energy is growing in the commercial sector alongside its increasing popularity for householders.

As Hosaka points out, sustainability goals and governmental requirements are also playing into the demand. “Australia is targeting an 82 per cent share of renewables across the energy grid by 2030 and reducing the use of fossil energies is a big part of this.”

As with any sophisticated energy system, however, solar poses unique risks and insurance considerations.

Substandard workmanship, environmental impacts to a cell or water infiltration can lead to electrical fires in a roof or inverter and can result in significant damage to a building and its contents. Weather-related risks from wind, storm or hail damage should also be considered.

When it comes to managing solar panel risks, quality and oversight are key according to Taylor. He says this involves, “Having adequate manufacturer warranties around the system and setting it up by an approved contractor. Also making sure there’s a solid process around installation and supply. And, finally, you need to ensure that maintenance and support of the solar system are adequate.”

The importance of tailored solutions

When it comes to weighing these new business and property risks, it’s important to examine your unique circumstances and determine what’s really relevant to you, rather than relying on an industry-wide approach to assessments.

Having an informed broker on your side can help you evaluate insurer recommendations and justify necessary adjustments. And with accurate information at your disposal, you can save both time and money when renewing a policy.

“Insurer, broker and client need to come together to work out the best and most customised approach,” Taylor says.

“This could include education to increase product awareness, having one of our SMEs attend the site and host a training session or help you partner with a third party to find the best solution to managing risk.”

Business, interrupted

When a business stops producing at capacity, even for a short time, the financial flow-on can potentially be devastating. For brokers, it’s important to understand your client’s plan B to get a clearer picture of the risk profile – and to help them build resilience.

Recent supply chain issues first started alongside the COVID-19 pandemic, but the end of lockdowns has not seen supply and demand even out.

In the plants, machinery, and vehicles sector, waiting for parts is still a major pain point and can cause significant disruption to your client’s business if they don’t have strategies in place.

“It’s important to understand your client’s business and its business continuity plan,” says Kenji Hosaka, Risk Manager at Allianz Risk Consulting Australia.

“So if one supplier is out, then what can we do? And often we do have options to get alternative suppliers and alternative products.”

Brokers can help clients minimise risk by negotiating long indemnity periods, which can offer businesses support when they need it most.

Head of Interruption Underwriting Agencies, Christopher Connolly, says brokers should ensure clients have a minimum cover of two years, with some businesses needing three to five years of cover.

“I’m insuring your turnover, and if you’re not back up and running in 12 months, the policy finishes and then you’re left out on a limb,” he says.

Vehicle supply

Since Australia stopped making vehicles in 2017, we’ve become more reliant on vehicles and parts from overseas.

There are several reasons for the supply chain hold-ups of late, but this one might surprise you.

“It’s gone from issues with COVID-19 to microchip shortages, and now for Australian vehicles supply, it’s bugs,” says Chris Wood, Automotive Risk Manager and Technical Specialist from Allianz, “Bugs and grubs.”

“Because of the other supply chain issues, the vehicles have been sitting out in fields around the world, and what customers have discovered is that a lot of the cars have been found with bugs and other things attached to them.

“In Australia, we’re pretty good at protecting our agricultural industries, so what happens is every 100 vehicles they do an inspection, and if they find any bugs those 100 vehicles have to be quarantined.”

It’s an interesting example of how everything in the global supply chain is inherently linked, and these relationships can have ripple effects far and wide.

New risks in renewables

You don’t have to look far to find appliances, tools and machinery run on electrics. Specifically, lithium batteries that can be powered by the sun. These renewable energy choices mean running costs can be reduced along with their carbon footprint, which is a great thing, but there are risks too.

“When we think about installing these electrified solutions, we are talking about minimising cost, and coming up with a contingency plan, “ says Hosaka.

“So, if the grid is out, we can still maintain the business by using batteries. And if we’re installing solar panels, we still have the option to go offline so we can run the factory.”

As is the way with new technologies, a broker’s best defence is knowledge.

“Know the client’s business, know their products, know their services, know their activities,” says Hosaka.

“So, if the client is thinking about using lithium batteries, electrified systems or energy storage, then they can contact the underwriting team or insurance company, and they have lots of knowledge about managing those risks and pricing them.”

Staff shortages set to continue

Staff shortages are intensifying the business interruption caused by supply issues.

Even when everything is up and running, retail and hospitality, in particular, are often not working to full capacity because they can’t find the staff. And that reduction can be detrimental, especially in this financial climate.

“And so not only is there inflation and people aren’t coming [to restaurants and shops], but then you can’t operate your restaurant or retail at full scale because you can’t get the staff to support it,” says Connolly.

“This has been going on now for two years, and it doesn’t look like it’s going to change.”

His advice? Brokers must be careful not to underinsure.

“It’s a commercial decision for the business. Generally, in the market they have to insure the full values otherwise, they’ll penalise themselves, and that’s where it hurts.”

Communication is key

Getting insurance coverage just right in the current financial climate is challenging – and the best way for brokers to help their clients is to talk with them.

“I think now, more than ever, is a great time to engage in conversation with your customers. There’s never been a better time to talk more about the business and what the business depends on,” says Wood.

Tips for brokers

1. Long indemnity periods of two-five years will help cover turnover.

2. Diversifying where and how a business imports its products can help to ensure productivity.

3. New technologies in the renewables space have helped profit margins but there should be a contingency plan to keep businesses running if renewables fail.

4. Consider the impacts that staff shortages are having in reducing the overall level of productivity and exacerbating business interruption caused by supply chain issues.

5. Communication between client, broker and insurer helps to educate clients about potential risks.

Building resilience

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A NEW WAVE OF RISK

The marine and cargo sectors have had their fair share of challenges over recent years – and consequently, risks are emerging at pace.

By MARTIN WANLESS

The global pandemic brought with it a seismic challenge to the marine and cargo industry, and today it’s still charting its path to recovery after port closures and enduring supply chain difficulties.

Of course, we now know that we can never be complacent as to what the world might throw at us, and the inflationary environment and subsequent cost of living crisis have added new challenges to what was an already challenging environment.

“Inflation has been a key influence on the sector over recent months, with higher prices of goods and supply and rising labour costs contributing to an increase in overall business costs, and thereby insurance premiums,” says Dan Morrison, Head of Marine Portfolio at NTI.

James Butchart, Head of Marine at Zurich, agrees, pointing out the impact inflation is also having on claims.

“Inflation continues to have an impact on marine insurance both in terms of claims inflation and an increase to the value of goods. By working closely with their intermediaries, customers can make sure they have sufficient limits in the policy

to cater for these value increases.”And inflation’s creating other challenges, too. With the cost of goods on the rise and less disposable income, theft is becoming more prevalent – which subsequently impacts premiums.

Gunna Sinniah, Senior Claims Administrator – Marine, NTI, says, “A significant contributor to the issue of increasing theft at ports is inflation and the consequent rising costs of living.

“For insurers, the resulting claims and claims handling costs are increased with the requirement to appoint investigators to help establish the facts, while brokers face increased needs to manage the insured’s expectations while investigations are being conducted, and clients must deal with the heightened costs of doing business associated with product loss and consequent delays.

“The severity of the theft issue is demonstrated by the shifting nature of goods that are stolen.”

Valuable cargo has, naturally, always carried a higher possibility of theft –however, Damien Mulvenna, Director and Broker at Cornerstone Risk Group,

says the level of sophistication of criminals is increasing.

“There’s a greater target on high value, easy-to-handle and easily-sold-on-the-black market products,” he says.

“The obvious implication to insurers, brokers and clients is the increase of premiums and excesses, and reductions in insurers’ willingness to insure certain valuable cargo.

“For clients, it may also be a case of improved shipping techniques and security protocols to deter the criminals – unfortunately, this usually comes at a cost for the client.”

EMERGING RISKS SPARK CONCERN

There’s been much talk of the risks that come with transporting Li-ion batteries, and the risks that are subsequently attached. “The increased volume of products powered by Li-ion batteries being shipped around the world has highlighted the risks that these batteries pose to the vessels carrying them,” says Mulvenna.

“Many vessels may not be appropriately prepared due to the specialised

equipment and knowledge required to safely contain and extinguish such fires. Also at risk are the cargo owners of goods with Li-ion batteries, who may be held liable for injuries or loss to other parties caused by a Li-ion battery fire.”

For brokers, this is one to be particularly aware of.

Mulvenna continues: “Brokers need to ensure that the description of cargo given to carriers specifically mentions electric vehicles or goods containing Li-ion batteries. They should also find out whether cargo owners’ liability insurance can fill the gaps between traditional general liability insurance and a standard cargo insurance policy.

“Clients must declare goods containing Li-ion batteries and ensure they are packaged in compliance with the International Maritime Dangerous Goods (IMDG) Code. These actions help promote safer carriage of dangerous goods aboard the vessel, and help protect clients against accusations of ‘misdeclaration

should a fire be caused or exacerbated by the Li-ion batteries within their shipped goods.”

Kurt Herron, Logistics Risk Engineer – Marine, NTI, says the transportation of Li-ion batteries as well as electric vehicles, is beginning to lead change.

“Multiple industry bodies are now publishing guidelines for the safer transit of Li-ion batteries and to lower the incidence of cargo fire-related claims. These guidelines push for industry standards and elevation in the manufacturing process of Li-ion batteries, as well as implementing updated monitoring technologies and training in the detection and fighting of Li-ion battery fires.”

Herron also calls into question the suitability of vessels to handle Li-ion fires.

“As it currently stands, generally vessels are not yet fully equipped to handle EV or Li-ion fires completely, which makes correct declarations and adequate monitoring vital in increasing the safety of life and property at sea.

“New build Ro/Ro ships are combatting this with newer temperature and

THE CYBER THREAT

The recent spike in cybercrime has also played a key role in shaping marine insurance, highlighted by cyberattacks on both Maersk and Toll Group over recent years. The malware attack crippled the company’s delivery and tracking systems, causing many insureds to hastily seek alternative supplies.

Last year, Maersk’s Australian subsidiary was hit by an attack on its email system, while in 2020, Toll Group was victim to two ransomware attacks. Cybercrime is a significant threat across the business landscape, and having provisions for coverage in the event of a cyberattack is becoming increasingly important.

CASE STUDY: MOISTURE IN TRANSIT RENDERS SENSITIVE MEDICAL EQUIPMENT REDUNDANT

Damien Mulvenna, Director and Broker at Cornerstone Risk Group, shares a recent example of where having a good policy – and a good broker –paid dividends.

We recently had a shipment of sensitive medical equipment worth approximately $100,000, which was exposed to weather due to the road carrier allowing moisture to enter the vehicle and subsequently enter the shipment.

Due to the sensitive nature of the equipment, the entire shipment had to be disposed of, and the product

chemical monitoring systems and education across the board in regards to correctly declaring, packaging and segregating nominated cargo needs to continue.”

Fire’s a huge issue – and it’s imperative boxes are ticked correctly prior to cargo being shipped.

Mulvenna says, “Fire is the top cause of claims by value, as Li-ion batteries add a new loss dimension. Misdeclared or nondeclaration of dangerous cargo is also an issue.”

HAVING INFORMED CONVERSATIONS

For brokers, it’s another case of the closer you can work with a client, the better –particularly at a time when prices are increasing by the day.

was unsalvageable. Our insured was paid in full, however, the carrier who subcontracted the work out is currently arguing the cause of loss with the insurer, despite photo evidence showing the poor condition of the carrying vehicle (damage to the roof of the truck), which allowed the water to enter.

Ultimately the insurer will likely recover. However, if the insured did not have insurance and had to fight the battles himself without a broker, it would be costly and time-consuming.

“Brokers need to ensure they have accurately accounted for the inflationary increases in the value of their goods being transported,” says Butchart.

“In addition to this, brokers need to discuss ‘plan B’ with their clients. If, owing to supply chain constraints, the client’s goods are redirected from their original planned route, clients need to be aware of potential delays to the delivery of the goods as well as additional costs incurred.

Keeping clients informed on changes to their exposure is vital, says Morrison of NTI.

“It’s really important for brokers to be talking to clients about changes to their exposure, either driven by the customer

themselves or by external factors and making sure the cover provided is adequate to protect the client’s risk.

“Supply chain disruption, inflation, economic factors and changes in shipping and logistics have all changed the exposures cargo owners and shippers face.  Brokers need to be talking to customers about these changes and the potential impact to their business. Reviewing their requirements and sharing this information with underwriters provides the detail the underwriter needs to provide appropriate cover.”

As with many sectors today, things are changing fast in marine – and it’s good business to keep yourself and your clients up to speed on emerging risks that challenge their livelihoods.

“THE OBVIOUS IMPLICATION TO INSURERS, BROKERS AND CLIENTS IS THE INCREASE OF PREMIUMS AND EXCESSES, AND REDUCTIONS IN INSURERS’ WILLINGNESS TO INSURE CERTAIN VALUABLE CARGO.”

– DAMIEN MULVENNA, DIRECTOR AND BROKER AT CORNERSTONE RISK GROUP

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CONSTRUCTING THE FUTURE

Construction’s continuously in the headlines, and brokers need to be in constant contact with clients in this ever-changing industry.

By MARTIN WANLESS

For the past few years, the demise of building companies has frequently made front-page headlines. The failures of Opal Tower at Sydney Olympic Park and Mascot Towers have been well documented, while in March, Porter Davis Homes Group and Lloyd Group both collapsed, causing yet another round of headlines.

The bigger names are just the tip of the proverbial iceberg, however, with data from ASIC showing that 1236 companies in the construction sector have gone into liquidation, receivership or administration in the 22-23 financial year to the end of March.

Supply chain difficulties, price increases and labour shortages have contributed to the construction industry’s troubles, and the impact for insurance is significantly more awareness around coverage and wordings.

“Builders going into administration has been around for decades, but the frequency of this has increased dramatically in the past two years,” says Steven Duong, National Construction Manager at ATC Insurance Solutions.

“This is not new to the construction insurance market, but the frequency of companies going into administration –particularly when it’s some of the larger,

more reputable builders going into liquidation – does raise awareness within the wider industry.

“When we talk about awareness, it’s around policy coverage with insurer wordings and how they will respond. There is such an increased exposure to partially complete projects when the building contractor is unable to complete the work, so, insurers and brokers need to understand how the policy will respond, if at all, and communicate this accordingly.”

FIXED-PRICE CONTRACTS SPELL TROUBLE FOR CONSTRUCTION CLIENTS

One of the many challenges in the construction industry at present is, of course, the rising costs every construction company is encountering. With prices surging in response to increased demand, supply chains are under stress to deliver –which means difficulties getting materials in the first place, not to mention the increased price tag they arrive with.

While a fixed-price contract is completely understandable from the end customer’s perspective, the practice of issuing fixed-price contracts is one of the longer-term lessons that will have to be taken on board – and it’s one to watch out for when assessing clients’ exposures.

“Hopefully, we take on board the lessons learned from the circumstances of peers who have faltered,” says Glenn Ross, CEO and Founder of MECON Insurance. “Those who don’t could be the next to falter.”

“However, those who recognise the risks and dangers that contributed to the issues others encountered –such as fixed-price contract exposures, supply chain delays, and inflation and labour cost increases –and manage these risks and their clients’ expectations accordingly, will be stronger in the future.”

POTENTIAL PROJECT DELAYS NEED TO BE TAKEN INTO CONSIDERATION

Supply chain shortages and workforce difficulties can mean projects blow out time-wise, and that needs to be reflected in policy schedules.

Projects will also require extensions when a contractor becomes insolvent. Owners will need to source alternative contractors to complete the project, and that brings with it additional potential risk for brokers’ clients.

“Often these policy extensions are not automatic and will require negotiations with insurers, who will often use the opportunity to request significant additional premiums and reductions in policy terms,” says Alister Burley, National Construction Practice Leader at Aon.

“This is further complicated when the insurance is procured by the contractor that has gone insolvent, and project values

will often increase substantially as the new contractor is engaged, requiring policy limits to be reviewed.”

Burley also says insurers are putting contractors’ financials under far greater scrutiny than ever before when assessing a risk – as well as a number of other factors.

“Insurers are now factoring in the solvency of contractors as an underwriting requirement and will request financial statements as part of the renewal process.

“The market cycle is currently in a technical underwriting phase with insurers requesting in-depth information in order to consider a risk. Exposure to weather and other CAT events, access to skilled workers and management to inflationary factors are all risk factors being considered by insurers.”

Lizzie Nelson, Director at Insurance Mentor, adds, “Site theft has become a prominent issue for various trades and principal builders. Insurers now require full details of the security that will be in place on-site. Increased security such as site cameras, additional fencing and security patrols to help deter thieves are of the utmost importance.”

And that comes in alongside a number of other challenges, continues Nelson.

“We see construction clients facing a myriad of challenges currently, including but not limited to increases in worker-toworker claims, not only in frequency but claim settlement costs, increases in worker-to-worker deductibles, and the requirements of builders to hold professional indemnity insurance,

MOULD EXCLUSION –MORE THAN MEETS THE EYE?

Most, if not all, insurance companies have a mould exclusion in their policies passed to them via treaties.

Following the recent La Niña catastrophe events in New South Wales, MECON Insurance saw an upsurge in claims where erected building timbers had been physically damaged, triggering cover.

“In some of these circumstances, and where the builders were prevented from attending sites due to floods and road closures, the dampness present caused mould to grow on relatively undamaged timber, thereby rendering it unusable,” says MECON’s Glenn Ross.

“We have taken the view that, in these circumstances, despite our policy exclusion for mould –and even when our Contractors Pollution Cover (including mould cover) had not been taken – we would indemnify these claims for our clients.”

“BUILDERS GOING INTO ADMINISTRATION HAS BEEN AROUND FOR DECADES, BUT THE FREQUENCY OF THIS HAS INCREASED DRAMATICALLY IN THE PAST TWO YEARS ”

– STEVEN DUONG, NATIONAL CONSTRUCTION MANAGER AT ATC INSURANCE SOLUTIONS

regardless of whether advice related services are 100 per cent subcontracted. There are also requirements on various construction clients for their subcontractors to at least hold their own sickness and accident policy if they do not have income protection.

“Clients must ensure they are carrying out appropriate due diligence along with their broker to ensure a comprehensive approach to risk management.”

WORKING WITH CONSTRUCTION CLIENTS

For brokers, working with construction clients presents many challenges, and Ross says they can be managed with regular communication.

“One thing that brokers must do with the dynamic risk that is construction, which doesn’t exist the same in static property risk insurance, is touch base with their builder clients regularly to see what is changing with regard to values, duration and

COST INCREASES PRESENT RISK IN PLANT AND MACHINERY

Trent Rogash, National Plant and Machinery Manager at ATC Insurance Solutions, on the challenges in plant and machinery.

“The increasing value of machinery and cost of repairs are current key risk factors – we encourage our clients to review their sums insured at every renewal or whenever they know there has been a change in the market. This is very important as being underinsured come claim time can not only mean a lower settlement offer or contribution towards repairs by the client, but can also cause relationship damage between the client, broker, and insurer.

“I believe this will continue to remain an issue for the foreseeable future. On top of the increased cost of repairs, the wait time on some machinery and parts is still significant, which can have a financial impact on the client while waiting for their machine to be repaired.

“Have your clients review their sums insured on a regular basis and make sure you have some financial protection cover in place. The correct sum insured will ensure the machine is covered correctly, and the financial protection cover will lessen the impact of these wait times.”

“HOPEFULLY, WE TAKE ON BOARD THE LESSONS LEARNED FROM THE CIRCUMSTANCES OF PEERS WHO HAVE FALTERED. THOSE WHO DON’T COULD BE THE NEXT TO FALTER.”

– GLENN ROSS, CEO AND FOUNDER OF MECON INSURANCE

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building types, which were estimated at the commencement of the insurance.

“Things might have changed –particularly in light of the current developments – and you need to ensure covers are still adequate and valid.”

Duong agrees that close relationships between brokers and construction clients are essential.

“Brokers need to work very closely with their clients to ensure their insurance program reflects the adequate levels of cover given the current economic conditions,” he says.

“Maximum contract values in policies need to be closely looked at to ensure the limit is correct – this would also include policy sub-limits and ensuring the limits are sufficient or if additional sub-limits need to be included. For example, transit limit, removal of debris, professional fees and claims preparation costs.

“Given the delays in the completion of projects, the period of insurance (maximum contract periods in policies) needs to be factored in when setting the maximum duration, and make sure policy clauses relating to client insolvency, liquidation and bankruptcy are carefully reviewed.”

Nelson says, “Disruption in the wider construction market requires a comprehensive approach to sourcing new policies for clients as well as renewal terms

from both holding and alternate insurers. Insurers are clearly uneasy across a wide range of construction occupations at present and have increased their requirements of insureds in terms of understanding and mitigating risks, particularly for certain projects and site locations.

“Brokers need to be sitting with their clients, fully understanding their position and risk profile and then covering the market in a progressive manner to ensure they are securing the best cover available. There has never been a more important time than right now to be in the broader market, talking to insurers and opening up those communication channels nice and early.”

The construction industry certainly has challenges at present. However, from an insurance perspective, as long as building continues, those challenges will remain –and one contractor going out of business means opportunities for others.

However, as Duong warns, it’s vitally important clients only take on business they can fulfil.

“There will be opportunities to take over projects where builders have gone into liquidation, but it is essential that clients ensure they operate within their means, particularly regarding supply chain issues.”

Because if they don’t, they could be making the next round of headlines.

“OFTEN THESE POLICY EXTENSIONS ARE NOT AUTOMATIC AND WILL REQUIRE NEGOTIATIONS WITH INSURERS, WHO WILL OFTEN USE THE OPPORTUNITY TO REQUEST SIGNIFICANT ADDITIONAL PREMIUMS AND REDUCTIONS IN POLICY TERMS.”

– ALISTER BURLEY, NATIONAL CONSTRUCTION PRACTICE LEADER AT AON

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Tel: +65 9633 6118

Email: rob.curtis@ambest.com

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.

The Hollard Insurance Company Pty Ltd (New Zealand Branch)

The New India Assurance Company Limited (New Zealand Branch)

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

Tower Limited

Union Medical Benefits Society Limited

Veterinary Professional Insurance Society Incorporated

Virginia Surety Company, Inc. (New Zealand Branch)

S&P GLOBAL INSURER FINANCIAL STRENGTH RATINGS

The following is a list of S&P Global Ratings insurer financial strength ratings assigned to insurance companies in Australia and New Zealand. Ratings as at 26 April 2023

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

NEW ZEALAND

Society

LENDERS MORTGAGE INSURERS

Helia Insurance Pty Ltd. (New Zealand Branch)

QBE Lenders’ Mortgage Insurance Ltd.

LIFE INSURERS

Asteron Life Ltd.

Hallmark Life Insurance Co. Ltd.

Medical Life Assurance Society Ltd.

NIB NZ Insurance Ltd.

REINSURERS

HDI Global Specialty SE

AUSTRALIA RATING

NON-LIFE INSURERS

AAI Ltd.

A+/STABLE

A/STABLE

A/STABLE

AA-/STABLE

BBB/STABLE

A/STABLE

A-/STABLE

A+ /STABLE

HDI Global Specialty SE

Reinsurance Co. of Australasia Ltd.

Pacific Life Re (Australia) Pty Ltd

AA-/STABLE

AA-/STABLE

QBE Blue Ocean Re Ltd. A+/STABLE

RenaissanceRe Europe AG A+/STABLE

RGA Reinsurance Co. of Australia Ltd.

AA-/STABLE

SCOR Global Life Australia Pty Ltd. A+/STABLE

SCOR Reinsurance Asia Pacific Pte Ltd.

Swiss Re Asia Pte. Ltd., (Australia Branch)

Swiss Re International SE

A+/STABLE

AA-/NEGATIVE

AA-/NEGATIVE

Swiss Re Life & Health Australia Ltd. AA-/NEGATIVE

Transatlantic Reinsurance Company

AA+/STABLE

* See page 59 for S&P Global disclaimers and additional information

VIC SEMINAR: EYE ON THE HORIZON

We’re excited to share images from our recent seminar in Melbourne, Eye on the Horizon. The seminar featured an engaging panel discussion on what brokers can expect to see in the market in 2023 and beyond.

Facilitated by Kevin Baker, Aon and NIBA Vic/Tas Divisional Committee Chair, the panel featured experts in placement and broking:

• Theresa Lewin, Financial Institutions Practice Leader, Professional & Financial Risks – Gallagher

• Matt Schinck, Head of Placement, National – Aon

• Callum Brown, Director – Comprehensive Insurance Solutions

• Mark Chisholm, National Underwriting Manager, Property – CGU

• Anita Lane, Director – Solution Underwriting

Thank you to our event sponsor partners, CGU and Solution Underwriting.

NIBA launched the 2022 Insurance Brokers Code of Practice on 1 March 2022, and it came into effect on 1 November 2022. It is important that all members have implemented the necessary policies and procedures to comply with their new Code obligations. A number of resources are available on the NIBA website to assist members in implementing the Code.

WORKERS’ COMPENSATION WITHOUT THE COMPLICATION

A simpler broker experience. That’s what you can expect from CGU Workers’ Compensation. You’ll deal with our specialised team end-to-end, across all functions including underwriting and claims. With reduced touchpoints, our process is less complex so together we can reach efficient outcomes for you and your clients.

To chat about Workers’ Compensation for your clients, contact your Broker Relationship Partner.