54 minute read
AFCA Case Study
ALTERING THE CLIENT’S PROPOSAL RESPONSE AND MAKING A CLAIM UNDER A PRIOR POLICY
This determination involved a denied claim regarding prior circumstances not notified to the insurer. The insurance broker had changed the insured’s response on a proposal and created confusion regarding what circumstances were actually notified.
BY MARK RADFORD
Principal, Radford Lawyers
KEY LESSONS
• Amending an insured’s proposal response is not recommended. If you do this and fail to keep any form of contemporaneous record of the alteration, what was communicated to the client about the alteration and their agreement to this, you will breach your duty of care and become exposed to potential loss. • Where a claim is rejected by an insurer under a claims made liability insurance policy, regarding a failure to notify circumstances when applying for cover, consider whether a claim can be made on the operation of section 40 or other provisions of the Insurance
Contracts Act (the Act). • For example, even if no claim is made against the insured in the prior insurer’s period of cover, section 40(3) can deem a claim to have been made in that period if the insured gave the insurer notice in writing of facts that might give rise to the claim ultimately made against the insured, as soon as was reasonably practicable after they became aware of those facts, but before the cover provided by the policy expired.
BACKGROUND FACTS
The complainant had engaged the broker to arrange new directors and officers liability insurance after they ended their relationship with the previous broker due to a deteriorating relationship. The new broker arranged cover with a new insurer.
During the policy period, a claim was made due to legal proceedings issued against the complainant and several of their officers.
The insurer rejected the claim on several grounds, one of which was because of the complainant’s failure to disclose that they had been aware of circumstances that led to these proceedings (i.e. denied circumstances).
The previous insurer appears to have been made aware of circumstances that led to the denied claim by the new insurer, although during the proceedings the subject of the claim under the new policy was issued after the previous insurer’s policy had lapsed.
The complainant did not dispute the insurer’s decision. They argued that the broker was responsible for the failed claim, as the circumstances had been disclosed in the proposal but this was altered by the broker without their consent.
The complainant had answered ‘yes’ to questions on prior claims or proceedings or notices regarding attendance at investigations etc., however the broker had changed the responses to ‘no’.
The broker alleged that: • They did so after discussing this with the complainant, but did not keep any contemporaneous record of the discussion. • It had been another individual’s circumstances that the ‘yes’ response was intended for. These circumstances had already been notified to the insurer, which had applied an exclusion to them.
Whilst not stated in the determination, we assume this was the logic for the broker changing the answer from
‘yes’ to ‘no’ (i.e. no new circumstances beyond those already notified). • The complainant never disclosed the denied circumstances.
The complainant maintained they were never informed of the change and that they had answered ’yes’ by reference to the denied circumstances and had included paperwork related to those circumstances. However, the complainant was not able to produce any contemporaneous evidence of this.
The broker also appears to have alleged that the prior policy might have responded to the circumstances as a notified claim under section 40 of the Act.
The broker had provided a 2015 file note of a discussion between the broker and the previous insurer that noted they may have accepted notification of a potential claim and said they advised the complainant to continue to pursue this matter and offered to assist, but the complainant never took them up on this offer.
The complainant sought compensation from the broker arising from the lack of cover.
AFCA DECISION
AFCA concluded the broker’s failure to keep any contemporaneous records of the alteration of a signed proposal was a breach of their duty of care to the complainant.
However, AFCA found that the complainant suffered no loss, seeing as: • even if the complainant had disclosed the denied circumstances and these were removed by the broker, there was insufficient evidence to show that this caused the complainant’s loss because, consistent with the exclusion placed on the policy by the insurer for the other circumstances, AFCA formed the view that if the insurer was made aware of the denied circumstances, it would likely have placed a similar exclusion on those too. • it was unlikely that a broker, exercising reasonable care and skill, could have secured a policy that would have covered the denied circumstances.
No evidence was produced to show the complainant could have purchased any form of cover from either the current insurer, or any other insurer, that would have covered the denied circumstances. • it was also unlikely that the complainant would have renewed the policy with their previous insurer (whilst not stated in the determination, we assume the logic was it might have then covered the claim) given the deteriorating relationship with the previous broker and the fact that the previous policy had only been available through that broker; and • it was unclear whether the complainant had reasonably mitigated their situation even though the subsequent proceedings were issued after the previous insurer’s policy had lapsed.
AFCA concluded that it was not clear what action was taken by the complainant to pursue the previous insurer. Following the broker’s 2015 file note, it appears the next communication with the insurer was in 2020 and by that time, the previous insurer refused to provide any indemnity given the passage of time and the failure to comply with relevant policy conditions.
AFCA was of the view that had the matter been more actively pursued in 2015, it was possible that the previous insurer may have been compelled to cover the claim, given that: • the circumstances that gave rise to the denied claim arose when the previous insurer was on risk; • the previous insurer was aware of these circumstances; and • section 40 of the Act could potentially put that insurer on risk for them. As a result, the loss was due to a failure to pursue the previous insurer, and this could not be attributed to the broker.
Meet the state finalists of the 2022 Young Broker of theYear awards
MEET THE FUTURE OF THE INSURANCE BROKING INDUSTRY.
THE 2022 YOUNG BROKER OF THE YEAR AWARD, SPONSORED BY VERO, HAS SHONE A SPOTLIGHT ON THE REMARKABLE ACHIEVEMENTS OF YOUNG TALENT FINDING SUCCESS IN A CHALLENGING MARKET. THIS YEAR’S STATE FINALISTS EACH HAVE HEARTWARMING STORIES AND VALUABLE LESSONS TO SHARE.
INTERVIEWS BY AMY CAI AND WENDY MARTIN
Victoria/ Tasmania Award Winner and Finalists
WINNER OF THE VIC/TAS YOUNG BROKER OF THE YEAR AWARD
Greg Shallard
Client Manager, Aon/Affinity Insurance Brokers
How did you get started in the insurance broking industry?
My transition into the insurance broking profession was from the leisure and equine industry. I grew up being involved with the youth outdoor camping industry and was a qualified horse-riding instructor and camp leader. During this time, I was introduced to the insurance broking industry through the Chairperson of the youth outdoor camp that I worked at, who happened to be the Risk Manager at Affinity. He managed the equine accounts and he offered me some work experience, which later led to a part-time role. This then led to a full-time position at Affinity in 2011. Today, I oversee a team which manages more than 7,500 accounts from small family businesses to national sporting associations. It is an absolute honour to represent the leisure and equine industry, an industry which I have been involved with for over 20 years and an industry which many of my family, friends and colleagues are employed in.
What is the most important lesson that you have learnt in your career so far?
Insurance brokers are here to help people and organisations achieve their goals and dreams. And to make a difference. It is very satisfying not just helping my clients, but also knowing that I’m helping their clients indirectly as well.
What does becoming a finalist of the Vic/Tas 2022 Young Broker of the Year award mean to you?
To me, being the winner of the Vic/Tas 2022 Young Broker of the Year award is a reflection of the work of my team, the leaders at Aon and Affinity Insurance Brokers who have put their trust in me in this role and the faith that my clients in the outdoor and equine industry have in representing their industry. Being the winner of the Vic/Tas 2022 Young Broker of the Year award also gives me another platform to better represent and support the outdoor and equine industries, help clients achieve their business goals and provide a safer and more secure environment for people to participate in.
Josh Meyer
How did you get started in the insurance broking industry?
My career in insurance broking began in 2012, while I was still a college student in Ohio. I was offered an internship with a brokerage firm called Avatar Brokers in Melbourne and enjoyed the experience so much that when Avatar offered me a full-time position, I instantly accepted and permanently relocated to Melbourne shortly thereafter.
Since then, I have become Avatar’s Chief Executive Officer and Account Director. I also play a key role in growing Avatar by expanding our staff, fostering their continued education and nurturing talent.
What are the most important lessons that you have learnt in your career so far?
The first lesson is the art of saying ‘I don’t know the answer at the moment, I will find out for you’. This shows strength and confidence, and it builds rapport and trust with your clients. The second lesson is being a curious learner. Being willing to learn and grow your knowledge base, it will carry you in your career and develop your creative mindset.
What does becoming a finalist of the Vic/Tas 2022 Young Broker of the Year award mean to you?
Becoming a finalist of the Vic/Tas 2022 Young Broker of the Year award is a reflection of my commitment to the industry and my dedication and drive to continue to grow as an insurance broker, manager and leader.
It’s such an exciting opportunity for me personally, but is also a reflection of the broader insurance broking industry and the benefits of this industry. The Young Broker of the Year awards are proudly sponsored by Vero
Riley Glacken
Principal – Buying Groups, Marsh How did you get started in the insurance broking industry?
I started in the insurance broking industry with Marsh almost four years ago. I had just come back from overseas and finishing my University degrees in Finance and Journalism and I was wanting to secure a full-time role. I initially applied for another position in the operations team at Marsh but was offered a role in the broking team. Whilst it was initially daunting to start in a client facing role, I quickly found my feet and was assigned accounts within the Affinity team. This soon led to managing larger accounts, including food franchises such as Subway and Gloria Jeans and Australia Post, which enhanced my skills in learning a range of policy classes. After about a year, I was promoted from an Assistant Account Executive to Account Executive to manage the tyre portfolio. My career further progressed when I was assigned the social housing portfolio within my remit and was promoted to the role of Principal – Buying Groups. I have also had the honour of being appointed as the Chairperson of the Marsh Pride Australia Committee and am an active member of the Diversity and Inclusion Committee.
What are the most important lessons that you have learnt in your career so far?
I learnt early on that communication is key in this industry. Never underestimate the importance of a phone call to communicate with your clients and get on the front foot if you need to deliver bad news. Most clients are understanding if there are going to be delays in their claim, for instance, if they are kept well informed and you clearly communicate the situation.
What does becoming a finalist of the Vic/Tas 2022 Young Broker of the Year award mean to you?
I’m extremely humbled to be a finalist of the Vic/Tas 2022 Young Broker of the Year award and I’m very honoured to be selected for this award. Becoming a finalist acknowledges my contribution at Marsh and to the broader insurance broking profession.
I value this award as it recognises professionals early in their career and the contribution that they make, and the value that they bring to the industry.
Western Australia Finalists
Cameron Gaspar
Senior Associate – Construction, Lockton Companies
How did you get started in the insurance broking industry?
Unlike most, I knew in my early years of high school that I wanted a career in insurance broking. I have many family members who have been, or are currently employed in the profession, and through their experiences I have seen first-hand the career opportunities available and the kind of life that they have led working in the profession. My first role was as a Junior Client Relationship Manager at Willis Temby, which I joined in 2017 as an 18-year-old. After a two-and-a-half-year stint at Willis Temby, I joined EBM, initially within their Perth office. I was fortunate enough to work within EBM’s Victorian office before moving to their Karratha branch. This was a pivotal moment in my career – being on the ground in a cyclone prone area of a small regional town was a life-changing experience. From EBM Karratha, I transitioned to working for Lockton in Perth, where I have been exposed to a large variety of clients ranging from large private companies to ASX-listed and multi-national organisations.
What are the most important lessons that you have learnt in your career so far?
The most important lesson that I’ve learnt in my career is to firstly make a conscious effort not to lose my sincerity, and secondly to communicate honestly and genuinely, and not be afraid to have frank and difficult conversations when you need to.
I have found that clients, colleagues and other industry partners respect it when you are willing to have that difficult conversation, especially when it’s delivered in a sincere, considered and approachable manner.
Being sincere also means advocating for clients as if their businesses were my own.
What does becoming a finalist of the WA 2022 Young Broker of the Year award mean to you?
I strongly believe in the advocacy services and representation that NIBA provides for the profession. Both the Young Broker of the Year and Broker of the Year awards are a mark of NIBA’s professionalism and commitment to the industry. Both awards carry a high level of prestige, so being named as a finalist for the WA 2022 Young Broker of the Year award is an exciting and honourable achievement for me.
Nikita Piil
Client Manager – Mining and Construction, Aon
How did you get started in the insurance broking industry?
I distinctly remember whilst working at my first insurance job at an investigational claims firm, my senior colleagues would always reminisce amongst each other ‘back in the broking days’. Listening in fuelled my growing inquisitive mind and desire to get into the broking segment. Fortunately, I was recommended for a broker’s assistant role through connections, and I have not looked back since.
What is the most important lesson that you have learnt in your career so far?
The importance of having personal values based upon honesty, transparency, authenticity, and having the modesty to acknowledge when being out of your depth and to seek out appropriate mentors.
Stick to your values and avoid stagnation. It is the hard work you dedicate and obstacles you overcome in silence, the essence of passion and consistent steadfast ‘improvement
mentality’ / mindset to constantly challenge the status quo; that ultimately results in defining your path to success. Surround yourself with people who will help you grow.
What does becoming a finalist for the WA 2022 Young Broker of the Year award mean to you?
If my present and past colleagues or industry connections were asked to describe me, they would note: my obsession with Allan Manning, being an ‘insurance nerd’ and lastly, attestation to my decade-long fixation of one day being considered worthy to be nominated for this award, let alone to have made it as a WA finalist.
This candidacy is an extremely rewarding acknowledgement, for all the hard work, devotion, determination, sacrifices, and late nights dedicated to ensuring I consistently provide my clients with the utmost highest levels of integrity and service. Not only my work, but also the prodigious work of my peers who have also been recognised as finalists. The Young Broker of the Year awards are proudly sponsored by Vero
Selena Piggott
Managing Principal, Marsh
How did you get started in the insurance broking industry?
Like many, I fell into the industry by chance. After being woefully stuck on university course selection, I took a deferment to seek some life experience before making my choice. I accepted an administration position at Sarre Insurance Brokers with the intention of recommencing studies the year after. The primary reason for my choice of the company at the time was that I could walk to the office! The role allowed me to meet clients and insurers and interact with my colleagues to understand what the broking world was about, and I quickly learnt to love the industry. When the team at Sarre offered the amazing opportunity to move into broking, I jumped at the chance and haven’t looked back.
What is the most important lesson that you have learnt in your career so far?
To be ready to learn, grow and change. Insurance is an ever-changing landscape with major disruptions like digitisation, ESG and working from home changing how we do business. We need to stay nimble and be informed to help our clients. Attending training sessions, reading articles and talking with your peers shows that there is always something new to be discovered. This is where NIBA’s Mentoring Program adds such value. Seeking out help and asking questions have traditionally provided the biggest learnings in my career. Sharing knowledge helps our industry by ensuring we are all better brokers than we were the day before. As a new manager, I am enjoying the opportunity to share my knowledge and in turn, learn from my colleagues.
What does becoming a finalist of the WA 2022 Young Broker of the Year award mean to you?
I am extremely proud to be a finalist for the WA 2022 Young Broker of the Year. The nomination in itself was very humbling and the process has been an extremely rewarding experience. Compiling the submission, it allowed reflection on my career to date. Speaking with insurers and clients on the nomination was daunting, but it was lovely to hear their feedback. The interview panel was extremely exciting, the questions asked triggered some great inflection and the experience has given me a push to review my goals. I hope to use the nomination to share all the great things that our industry does, and what incredibly dynamic and interesting careers are available.
Queensland Finalists
William Thompson
Account Manager, Thompson Insurance
What are the biggest challenges you have faced so far in the insurance broking profession? How did you overcome these challenges?
The biggest challenge I’ve faced is public perception around the insurance broking industry, which unfortunately isn’t always the warmest.
In the first few years of my career, I got involved in the Maroochydore Chamber of Commerce, which is a great avenue to help promote the good work achieved by the insurance industry. In 2018, I co-founded with a friend the Sunshine Coast Young Chamber of Commerce, which advocates for and empowers young people in professional industries. This group has been a great channel for me to share the good that our industry can do.
Insurance broking can be an amazing tool when tailored correctly and change someone’s life completely. As brokers, we can see the rewarding work we do and it’s important to share that with other people.
What do you think the insurance broking profession will look like in the future? Is there anything that young brokers need to look out for?
For the most part, insurance broking today isn’t very different to what was done in the 1980s or 1990s, which is quite mind-boggling when you think about the change that other industries have experienced.
We’re at an exciting time where technology is being introduced into our industry and there are some amazing data tools available to help improve brokers’ knowledge of their customers and in turn enhance the client’s overall experience.
What does becoming a finalist of the Qld 2022 Young Broker of the Year award mean to you?
It’s a great feeling to become a finalist of the Qld 2022 Young Broker of the Year award. To be recognised across the industry for all of my hard work makes me feel so grateful, especially given that all of us brokers put in a lot of work and sometimes it can go unnoticed.
Being recognised by NIBA also motivates me to continually push further in my career. As a next step, I’m excited to pursue new opportunities to develop myself, our business and team, and invest in further education.
Alison Morrissey
Queensland Branch Manager, Collective Insurance Brokers
How did you get started in the insurance broking industry?
As an early school leaver from a country town, I didn’t know where my career would take me, only that I wanted to help people work with numbers, and join the workforce right away.
In 2008, I came across the perfect role as a face-to-face Sales Consultant at NRMA. I realised quickly insurance was more than a job and began to appreciate the opportunities available within our industry and completed my studies to become a qualified insurance broker in 2012.
What is the most important lesson that you have learnt in your career so far?
I think it’s easy for insurance brokers to take our expertise and experience for granted. I remind myself often that when I first started in the industry, simple insurance concepts such as deductibles took a moment to grasp, let alone average clauses, calculations of insurable gross profit, claims-made vs. occurrence, and the list goes on. The most important lesson I have learned in my career to date, particularly during the hardening market, where there are numerous
variables uncontrollable by the broker, is to ensure there are ‘no surprises’ for our clients. I believe this can be achieved by taking the time to develop an understanding of the clients’ operations, in order to explain the complexities of insurance coverage from the onset and throughout, not only at claim time.
As a further commitment to understanding my client’s needs and requirements, I am currently studying a master’s degree in Business Administration at Southern Cross University, which continues to improve my theoretical and practical knowledge of how organisations operate.
What does becoming a finalist for the Qld 2022 Young Broker of the Year award mean to you?
I constantly encounter professionals in insurance who I admire for their intellect, hard work, and leadership in the profession. It is truly an honour to be nominated and be named a finalist for this award as it acknowledges the very same qualities I have upheld throughout my insurance career. I plan to use this recognition to inspire and encourage other young professionals, particularly from rural communities, to consider a rewarding career in insurance broking.
Cormack Hankinson
Senior Account Manager, Allegiant IRS
What are the biggest challenges you have faced so far in the insurance broking profession? How did you overcome these challenges?
Around 2021, I was working on a program for an extremely large and complex property placement in a challenged industry sector.
The placement involved a significant asset and business interruption pool and the industry sector relied heavily on multiple markets in order to reach 100% capacity.
With such a complex risk, I worked with the client six months in advance to develop high quality, detailed and technical submissions to win over insurers, in a high hazard industry sector. Despite the size and market perception for the industry sector, I was able to place a program, incorporating approximately 35 insurers (including 25% of all of Lloyd’s of London) to secure 100% capacity and an exceptional rate result for the client.
This placement was challenging, as it involved a myriad of insurers with various rating structures, often with competing conditions and priorities.
It involved an incredible level of organisation to determine the optimal position for each individual market to capitalise on the ideal structure and pricing for the client.
What inspires you the most about the insurance broking profession?
The insurance broking profession is one where we are able to help our clients build something, which protects and benefits them in their darkest time.
It is not adversarial, and insurers and brokers alike all come together to develop the best risk transferral methods for our clients.
What does becoming a finalist of the Qld 2022 Young Broker of the Year award mean to you?
Becoming a finalist of the Qld 2022 Young Broker of the Year award is incredibly humbling.
A key value which I hold is lifelong learning and continued education, whereby I always strive to learn more and better myself.
Becoming a finalist serves to guide me in knowing that I am on the right path in applying that knowledge and education, and on where I want to be in the future.
New South Wales / Australian Capital Territory Finalists
Elliot Morris
Managing Director, Principle Insurance
What inspires you the most about the insurance broking profession?
I began my own Authorised Representative business with Insurance Advisernet a little over 18 months ago, and it would not have been possible without the ongoing support from many within our industry. To be able to take on this challenge was a dream of mine for many years and the continued support I receive each day is a true reflection of the comradery and support our industry offers each other.
What are the biggest challenges you have faced so far in the insurance broking profession? Is there anything that young brokers need to look out for?
With an ever-changing fiscal and regulatory market, we as brokers are becoming even more business critical to our clients. As we begin our exit from the COVID-19 environment, we are beginning to uncover the effects of the pandemic. Coupled with ongoing regulatory changes, the onus falls on us to be educated and abreast of every change concerning our clients from an insurance perspective. Being continually engaged with NIBA has ensured we get the information which directly corresponds to our industry and has assisted us in effectively performing our roles as insurance advisers.
Another key challenge is that while the world continues to move towards greater technologies, and our industry advances its quoting tools, direct marketing campaigns and direct market competition, we as young brokers mustn’t forget the importance of face-to-face client contact. Our roles are being simplified by fantastic advancements in technology, however these advancements are not designed to replace the role of an insurance adviser, and the importance of knowing our client has never been more important.
What does becoming a finalist of the NSW/ACT 2022 Young Broker of the Year award mean to you?
Being a finalist of the NSW/ACT 2022 Young Broker of the Year Award has greatly assisted in furthering my professional development. This award is the highest accolade a young broker can receive and a program such as this does a great deal to continue developing young brokers as we progress through our careers. It not only supports personal and professional development, but also provides us with a platform to the wider community in an effort to engage school leavers and the like to join our wonderful industry.
Brian Compay
Client Service Manager – Corporate & Commercial Division, Austbrokers ABS
What are the biggest challenges you have faced so far in the insurance broking profession? How did you overcome these challenges?
Like most of us, my biggest challenge has been working through the recent COVID-19 pandemic, due to the uncertainty of what this would mean for our industry, but also the impacts that this would have on our clients.
As the world continued to understand the virus, we had to adapt to constant change within our lives, especially at times when government lockdowns were required, curfews were introduced, and restricted travel also impacted businesses, families and even mental health.
It was important for me to create a routine to match the current environment. I was fortunate to have a home gym, where I was able to keep my mind and body refreshed, and a home office ready to service my clients during these uncertain times.
What is the most important lesson you have learnt so far in your career?
Every day is an opportunity to learn and grow as we are surrounded by endless supply of information within our disposal. There are free development training courses online that can be taken during lunch breaks or after hours. It’s doing the 1% every day that will equate to something big over time.
The onus is on you on how much you’re willing to work for it.
What does becoming a finalist of the NSW/ACT 2022 Young Broker of the Year award mean to you?
It has been a humbling experience to partake in this journey as my colleagues were the ones that initially nominated me for this award, which shows they see merit in the work that I do for my clients. To also have the support from my industry peers and clients really is the icing on the cake, as they too have taken time out of their own day to acknowledge my contribution to Austbrokers ABS.
Being a finalist is a great honour and I plan to continue to give back to the industry that gives me so much in return.
The Young Broker of the Year awards are proudly sponsored by Vero
Dean Bowen
Managing Director, DLB Insurance Risk What are the biggest challenges you have faced so far in the insurance broking profession? How did you overcome these challenges?
My first broking role was the Director of my own brokerage. I’d spent a decade working for an underwriter and was embarking on a new career with the added challenge of learning how to run a business at the same time. I had to figure out and learn a lot of things on my own. My very first clients were family and friends and without their support, I probably would have failed. I overcame this challenge by aligning myself with the right mentors who provided ongoing support in areas such as product and underwriter knowledge, compliance, and business development. I started out small, doing what I knew did well – mainly domestic and SME business with a focus on trades. As my knowledge, experience and confidence began to develop, I began working with larger businesses and more complex risks.
What do you think the insurance broking profession will look like in the future? Is there anything that young brokers need to look out for?
I’ve noticed a transition over the past five years of insurance brokers becoming more of a trusted advisor for their clients. There are a lot more conversations with clients on topics like risk management, business continuity planning, maintaining up-to-date property valuations, HR policies and practices, contractor management, contractual liability and cyber risk management, as opposed to sitting with a client, going through the renewal of their program and handing them a bill at the end. I truly believe brokers who take an interest in holding such conversations with their clients are not only setting their client up to succeed but setting themselves apart from others.
What does becoming a finalist of the NSW/ACT 2022 Young Broker of the Year award mean to you?
The Young Broker of the Year award has given me the opportunity to reflect on what I am doing well as both a broker and a business owner and where the opportunities for improvement in both areas are. It’s allowed me to meet and spend some time with some well-respected leaders within our industry and learn something from them.
Sam Hunter
Managing Director, Ausure
What are the biggest challenges you have faced so far in the insurance broking profession? How did you overcome these challenges?
The biggest challenge I have faced is starting an insurance brokerage on my own. The first year was very daunting with a lot of unknowns. I didn’t know if or how many clients I would sign and what obstacles would arise. I was also having to complete every role from administration tasks, claim lodgement to renewals and new business.
To overcome this, whenever I had the opportunity to quote on a person’s insurance, I took the time to listen and get to know them, review their current insurance well and provide my professional opinion on their needs. I made sure I always picked up the phone or got back to the person as soon as I could. Over time, word of mouth spread, and I continued to grow.
I’ve learnt that it’s important to get to know people. Whether it be clients, underwriters, or the claim team, people like to deal with people they know and get along with, and this will never change. Don’t send only emails or text messages because they are easy. Pick up the phone have a discussion and see as many people face-to-face as you can.
What inspires you the most about the insurance broking profession?
We are there at a time when a client suffers an unfortunate event. It is my job to help people and put people back in the same position they were in prior to this event.
I believe when something like this happens, the client likes to hear a familiar voice and someone assuring them that everything will be okay and then making this happen. I like being this person.
What does becoming a finalist of the NSW/ACT 2022 Young Broker of the Year award mean to you?
The Young Broker of the Year award has played an important part in my career.
This process allowed me to look at previous winners and current nominations, see what they are doing well and how I can use this to improve on my own business and self. It is also a nice time for me to sit down and reflect on what I think I am doing well in and what I can improve on.
South Australia / Northern Territory Finalists
Shaun Thomas
Principal – NT, Marsh
How did you get started in the insurance broking industry?
Back in 2012, I had recently relocated from Tasmania to Western Australia and ‘fell’ into a role in a claim lodgement centre for a national insurer, where I quickly progressed to the sales and service team.
Then in 2014, I was offered the opportunity to join Marsh in the Oil and Gas team, a role that provided a fantastic development opportunity and introduction to insurance broking.
In 2018, I was then approached to join the Marsh team in Darwin – a move that I consider to be the best decision of my career, due to the vast geographical landscape and diverse risk profiles of our clients.
What is the most important lesson you have learnt so far in your career?
A lesson I learnt on my very first day in insurance: Never make assumptions.
A client’s business and their risk profile changes constantly, and therefore we need to make every endeavour to extract and understand this information, and to ensure that they understand the agreed strategy and what risks they are transferring versus those that they are retaining.
What inspires you the most about the insurance broking profession?
Nothing moves and nothing is built without insurance.
We assist clients in understanding and transferring their risks, thereby allowing business and the world to progress, into the future. What is really inspiring is that we are at the crux of facilitating that progression.
What does becoming a finalist of the SA/NT 2022 Young Broker of the Year award mean to you?
We all work very hard to assist our clients and adapt to the ever-changing risk landscape.
It is incredibly humbling to become a finalist for the Young Broker of the Year award and be recognised for my work and the results that we drive for our clients.
Ultimately, I enjoy and feel fortunate to be involved in this industry. We are afforded an opportunity to make a meaningful impact in our clients’ lives, their businesses and the wider community as a whole.
Candice Klau
Managing Director, Be Covered Insurance Brokers
What inspires you the most about the insurance broking profession?
Kindness – most of the time, you won’t see it unless you are forced into a situation where it becomes apparent, but the insurance industry is full of kindness.
It’s the colleagues we celebrate birthdays with, or the clients who we are there for when they have a claim. We are in an industry that helps people when they need it the most and I think that’s amazing.
What do you think the insurance broking profession will look like in the future? Is there anything that young brokers need to look out for?
I personally think the industry will see brokers increasingly move from being employees to having their own brokerages, especially after the pandemic. The next 10 plus years in broking will be amazing and I am so excited to be part of this journey.
The Young Broker of the Year awards are proudly sponsored by Vero
To younger brokers, my advice is to learn every aspect of the business from reception up, because if you do take the plunge and start off as a one-man-band, you will be the Managing Director as well as the receptionist.
How has the Young Broker of the Year award played in your development as a broker?
I have a habit of always looking forward, but the Young Broker of the Year Award has made me pause for a moment and appreciate just how far I’ve come.
A lot has happened to me, professionally and personally. From the girl who landed a receptionist job at an insurance brokerage just two days out of high school, to now being the Managing Director of my own insurance brokerage, it was and still is a bit overwhelming.
I’ve come so far, and I still plan to go a lot further.
Joseph Cuzzocrea
Account Executive, Maxton
What is the most important lesson you have learnt so far in your career? When I was just 19 years old, my father, who founded Maxton 37 years ago, asked me to work for him. I started out in claims and learnt to love the industry.
Afterwards, I decided to branch out and expand my knowledge by working at Marsh before returning to Maxton. I was completely green in an unfamiliar corporate world, but did my best to learn the ropes from my peers. That experience has taught me to always learn and gain experience from the people around you to help your personal development.
If a client asks you a question and you don’t know the answer, don’t be afraid to say, “I don’t know this answer, but I’ll find out for you.”
Regulations, compliance and products are forever changing in our industry. Giving incorrect information can lose trust with your client. Whereas if you say you don’t know but come back to them with the correct advice in a timely fashion, you’ve earnt their respect.
What inspires you the most about the insurance broking profession?
People come to us to protect their business or assets they’ve built over their lifetime. We help them process and handle a claim that could essentially make or break the next stages of their life.
In their time of need, we need to be there to support them and get them back to where they were prior to their loss.
The reward you get out of someone sincerely saying that without you, this couldn’t have happened, is amazing. You’ve got to be grateful for those moments.
What does becoming a finalist of the SA/NT 2022 Young Broker of the Year award mean to you?
To be recognised by one of the most prestigious insurance associations throughout Australia, and to be named as a finalist for their award, gives me so much confidence in my abilities.
I feel recognised and appreciated in what I do every day, and I’m so grateful to be part of it all.
After all the hard work in the backend, to be chosen as a finalist and to sit with the leaders of the industry that I admire every day is such an honour. It motivates me to be the best broker I can possible be in this wonderful industry I am part of.
HELD TO RANSOM
Cybercrime continues to be one of the biggest risks facing businesses globally – but for all of the technology, it’s still people who are the weakest link.
BY MARTIN WANLESS
Cybercrime continues to grow, seemingly by the day. The past 12 months have seen a number of significant cyberattacks – in 2021 alone, ransomware attacks cost businesses more than $20 billion globally. Cyber security is now rightly recognised as one of the major global risks that businesses face.
“Over the past couple of years, we have seen some pandemic-specific scams, which were targeting people working from home and trying to exploit weaknesses there, and we’ve seen incidents in general increase,” says Jo Stewart-Rattray, Director of Information Technology Security Assurance at BRM Advisory.
“There has also been a rise in ‘vishing’ (voicemail phishing where, for example, a ‘broadband provider’ leaves a message on your phone to call them urgently or otherwise your broadband will be cut off) and ‘smishing’ (SMS phishing, where you receive a message from a company about, for example, a delivery being delayed).”
It’s a rapidly changing field – new methods of attack are being created, and the operations behind cybercrime are seriously professional. It’s not kids in dark cellar rooms; it’s strategic, planned big business. And your clients are all at risk.
To illustrate the sophistication, Robyn Adcock, Cyber/Tech Practice Leader at Gallagher, says, “The past year has seen the emergence of criminal ransomware as a service (RaaS), where experts in different areas of an attack have collaborated to package up and sell on the dark web the capabilities required to launch a ransomware attack.”
Of course, this rapidly changing environment creates an issue for insurers, brokers and clients, with claims outweighing premiums and cover being restricted.
CYBER POLICY IN ACTION
A director of a medical technology company inadvertently clicked on a link in a phishing email that appeared to have been sent by another employee. This gave the perpetrator access to the director’s email, and within minutes the perpetrator sent thousands of similar phishing emails to internal and external contacts, with the email subject title specifying a business-related proposal.
That afternoon, the director called Brooklyn Underwriting’s cyber hotline, which is managed by a designated cyber incident manager, and the following steps were immediately taken: 1. An IT forensic firm was engaged from Brooklyn’s panel.
A scoping call took place with the insured to gather more details on the breach, eradicate it and restore the system, which was shut down when the breach was first discovered. 2. With the assistance of the IT forensic expert, the insured’s IT manager discovered that the perpetrator had set up a mail forwarding rule in the director’s mailbox. This was promptly removed, credentials were reset and staff were directed to urgently change their passwords. 3. The cyber incident manager also engaged a law firm from Brooklyn’s panel to assist the insured in complying with its mandatory reporting requirements in Australia and in all foreign jurisdictions. 4. Over the course of the Easter long weekend, the forensic expert continued the investigations to determine the cause and extent of the breach and the extent that the employer’s mailboxes were compromised. The findings were then presented to the insured, who was assured that all risks had been mitigated and that they could resume operating as normal the next business day.
Rob Collyer, Lead Cyber Underwriter at Nova Underwriting, says, “In terms of ransomware and phishing attacks, clients and insurers are certainly feeling the pain in these areas, and we are seeing more restrictive covers around ransomware and social engineering.
“Attackers are less willing to negotiate and have become increasingly professional in their set-up. They will send an email under the veil of a known client or business partner, tricking the recipient into opening a link that contains malware. Once this malware is downloaded, the attacker has full access to the system and all data contained within it.
“Whereas the attackers used to just freeze the system and demand a ransom to provide a key to unlock it, the attackers have found value in the data and personal information contained in the system, and are selling this on. As a result, the client has both a business interruption and data breach exposure.”
Adcock says in some cases, rates have increased significantly.
“With insurers now having to prioritise renewal business over new business, companies without a track record of having previously purchased cyber insurance – or that can’t demonstrate best practice cyber risk management – are finding that insurance cover can be very hard to find. In some cases, rates have increased by more than 200 per cent.”
Matthew Davis, Claims Specialist at AXA XL, says new legislation proposed earlier this year by the government could mean a stricter reporting regime. “As part of its Ransomware Action Plan, the Federal Government has proposed to introduce new legislation that would require companies with an annual turnover of $10 million or more to report cyber extortion attacks to the Australian Cyber Security Centre, irrespective of whether they have paid a ransom,” he says.
COVERAGE
Brooklyn confirmed indemnity under the cyber insurance policy for the costs of the IT forensic firm and the law firm engaged in the incident response, which delivered certainty to the insured. Fees charged by the cyber incident manager were paid directly by Brooklyn, and the amounts did not erode the policy limit of liability or any retention.
CASE STUDY PROVIDED BY: RAYMOND LOH
(PRODUCT LEADER OF CYBER, AUSTRALIA, INTERNATIONAL FINANCIAL LINES, AXA XL)
SMES ARE VULNERABLE – AND HUMANS ARE THE WEAK LINK
According to the Cyber Security and Australian Small Businesses 2021 report:
of businesses have experienced a cyber security incident;
of businesses have below-average cyber security practices;
of businesses don’t know what phishing is; and
of cyberattacks are due to human error.
When 90 per cent of attacks are still successful due to human error, whatever your cyber-savviness, it’s smart to recognise that there’s still a huge educational piece to do for your clients.
“Cybercriminals don’t necessarily target you – mostly, you become an accidental victim of a large, broad-scale phishing attack,” says Davis.
“All it takes is one employee to make a mistake, and it triggers an interest in your business.”
Education is key, says Stewart-Rattray, who is only half-joking when she says her five top tips for everyone are ‘don’t click on the link’, repeated five times.
“It’s about making cyber security education something that benefits people at home as well as at work,” she says.
“Linking that message about being cautious with every online interaction to people’s personal habits online can help them avoid becoming victims to things like identity theft in their own lives. They may then have more incentive to really pay attention to the education in their workplace.”
RANSOMWARE – THE LOWDOWN
Ransomware is big business, with the number of attacks recorded in 2021 almost doubling from that in 2020. Ransomware is a particularly dangerous type of malware, which can seriously impact businesses by effectively holding your systems and your data hostage and demanding money for it to be released.
As well as stealing time and money, ransomware can seriously harm a business’s reputation. Businesses need to have preventative measures in place to avoid falling victim to ransomware and other cyber attacks, and education is vital because attacks generally rely on human error to get into a system. This is usually from visiting unsafe or suspicious websites, opening emails and files from an unknown source, or clicking on malicious links in an email or on social media.
Cyber.gov.au, the government website dedicated to helping Australians fight cybercrime, recommends looking out for the following signs:
Pop-up messages requesting funds or payment to unlock files You cannot access your devices, or your login doesn’t work for unknown reasons Files request a password or a code to open or access them Files have moved or are not in their usual folders or locations Files have unusual file extensions, or their names or icons have changed to something strange.
– MATTHEW DAVIS, CLAIMS SPECIALIST, AXA AL
THE SME CHALLENGE: Regaining ground lost According to research, SME businesses have had to change and evolve over the past few years and brokers have had to rethink how to best service their clients.
BY MARTIN WANLESS
This article is sponsored by Vero
This article is sponsored by Vero
To say Australian small-medium enterprise (SME) businesses have had it tough over recent years is something of an understatement.
From natural disasters and a global pandemic to supply chain issues and staff shortages, the past couple of years have been the most testing of testing times.
Throw in escalating fuel prices, interest rate rises and the general increase in the cost of living, and it’s no surprise that businesses are feeling the pinch. According to recent figures released by the Australian Bureau of Statistics (ABS), 57 per cent of Australian businesses have experienced an increase in business costs in the most recent three-month reporting period.
Of course, when things are tough, businesses assess every facet of their expenditure.
“The shift towards accessing information online – which has been accelerated during the pandemic – has impacted the way many customers purchase insurance,” says Damien Gallagher, Executive General Manager, CGU.
“Often people purchase insurance based on price alone after doing their own online research, without considering their specific needs and seeking expert advice.”
This is confirmed by Vero’s 2022 SME Insurance Index Report, which reports that SMEs are increasingly moving to buy insurance directly.
Anthony Pagano, Head of Commercial Intermediaries, Vero, says, “There is a decline in the number of SMEs heavily using brokers, which can be attributed to them choosing to purchase their insurance via a combination of broker and direct channels. This group has grown 10% over the past 12 months – now accounting for more than half of SMEs.
Be the broker who’s confident at claims time
Vero delivers an award-winning claims service, so you can be confident your clients will be well looked after when it’s time to claim. We offer dedicated claims managers and aim to settle claims quickly with OneTouch*. We’re also able to scale rapidly in response to natural disaster events, so you can rest assured your clients are in safe hands with Vero. So be that broker who offers a claims service that’s genuinely award-winning.
Speak to your local Vero representative today.
vero.com.au/broker
*The OneTouch claims process applies only to Vero Small to Medium Business claims up to $10,000 (excludes Commercial Motor and Fleet Motor). Timeframes quoted are based on the assumption that all supporting information and payment details are provided at the initial claim lodgement. Insurance issued by AAI Limited ABN 48 005 297 807 trading as Vero Insurance. Read the Product Disclosure Statement before buying this insurance. Go to vero.com.au for a copy. Target Market Determination also available. This advice has been prepared without taking into account your particular objectives, nancial situations or needs, so you should consider whether it is appropriate for you before acting on it.
“Our research shows that these figures are not reflecting broker dissatisfaction. The Index revealed that SMEs are buying more straightforward cover direct because they believe that they can do it easily themselves, for less.
“However, there is a clear opportunity for brokers to ensure buyers of direct products understand the complexity of insurance they are buying and don’t leave themselves underinsured. This is where the intangible value of the broker’s expertise comes into play,” he says.
In 2020, 25 per cent of SMEs surveyed were ‘heavy users’ of insurance brokers, and 24 per cent were non-users.
Fast forward two years and those figures make concerning reading – only 14 per cent of SMEs declare themselves as ‘heavy users’ while 32 per cent ‘non-users’.
In the medium-sized business category (businesses that have between 20 and 199 employees), the drop off is even more pronounced.
While in 2020, 32 per cent of this category were ‘heavy users’ of brokers, in 2022, only eight per cent were.
Pagano says that brokers know how integral their role is in delivering successful claims outcomes for clients – and maybe this needs to be communicated more strongly.
“Now more than ever, there is a real need to articulate to SMEs who haven’t experienced that ‘moment of truth’ what components are involved in delivering positive outcomes for businesses,” he says.
“To this end, brokers can initiate conversations with SMEs about value, cost-effective insurance, how they can make the process easier, and help them feel more supported end-to-end.”
IN 2020: 25%
24%
32%
IN 2022: 14%
32%
8%
2020
INSURANCE BUSINESS AWARDS 2021
INSURANCE BUSINESS AWARDS
ACCOUNT.” – THEO PITSIKAS, HEAD OF SME, ZURICH
Theo Pitsikas, Head of SME at Zurich agrees and adds that businesses leave themselves exposed by going direct due to the lack of advice.
“For new businesses requiring simple cover, they might purchase insurance directly. As they grow and/or get involved in larger projects, their exposures grow. Sometimes a direct offering will not be able to cater for these changing exposures, which could see the business owner without the appropriate cover, especially as the direct channel is a no-to-low advice model, which will not take individual circumstances into account.”
RETHINKING HOW TO ENGAGE SMEs
While this may not be overly positive news for brokers, it does create a platform for a rethink on the way in which SMEs are engaged – and how best to serve them in the coming months and years. And brokers are still invaluable for SMEs.
Many of those SME businesses have changed and evolved over the past couple of years. ‘Pivot’ became something of a cringe-inducing buzzword for months on end, but the reality is that many businesses have changed what they were doing and how they were doing it.
“COVID-19 has fundamentally changed the insurance landscape over the past few years,” says Pitsikas.
“Businesses have changed the way they go a bout their business and have shifted to meet the changing demands of consumers.”
Pagano says, “Clients are focused on driving revenue, managing costs, and their business. In an already competitive market where cheaper direct insurance options are available, brokers need to demonstrate their value throughout the insurance lifecycle to secure and retain clients.
“So, it is vital that brokers invest time to get to know their clients and gain a strong understanding
SME BUSINESS CONCERNS
The Vero SME Insurance Index identified four main gaps between SME business concerns and the specific covers they hold:
47%
of SMEs who are concerned about loss or damage to goods in transit do not have goods-in-transit/ marine cover.
41%
of SMEs who are concerned about being unable to trade do not have business interruption cover.
37%
32%
of SMEs who are concerned about equipment failure/breakdown do not have machinery/equipment breakdown cover.
– ANTHONY PAGANO, HEAD OF COMMERCIAL INTERMEDIARIES, VERO
of how their business operates. They should also assess how it functions within its specific industry segment and the wider external landscape – where the elongated impacts of COVID-19 continue to create a range of complexities that all clients will be grappling with.
“The pandemic has presented SMEs with many challenges, be it through the simple survival of ongoing trade, or for those in segments that have thrived, through understanding the implications that a changing business model can have on their insurance exposures.”
The SME world is changing, and it’s important to invest time in having conversations with those clients who may have dropped off the radar and ensuring those conversations, your social media and content messaging are all completely in tune with the realities of the SME business today.
THE LAND OF THE TALL POPPY
Is Australia’s ‘tall poppy syndrome’ a thing of the past, or does it still hold businesses – and people – back? A CGU survey back in 2018 revealed that 68 per cent of Australians believe we have a culture of negativity towards ambition.
When business owners were asked, this increased to 75 per cent.
Fast forward four years, and is this still the case? Yes, says Damien Gallagher, Executive General Manager, CGU.
“Our research shows that more than a third of Australians believe ambition is often regarded as a dirty word, so CGU Insurance has set out to change this perception.
“The same research revealed that almost 60 per cent of people believe Australians like to cut down ambitious people, despite the positive role ambition can play in our lives. However, the seeds for change are evident, with 77 per cent of Australians acknowledging that ambition is important to drive progress and innovative thinking.
