CHALLENGES THAT LIE AHEAD

The Australian Government has responded to the Quality of Advice Review, which will now give greater certainty for the broking profession. The ‘Delivering Better Financial Outcomes’ paper released in June, outlines those recommendations from the Quality of Advice Review that the government is accepting, while some measures have been deferred. The recommendations around transparency and consent, in relation to commissions, have been accepted. While there is no legislation yet to implement these measures, the 2022 Insurance Brokers Code of Practice will introduce similar measures for brokers from 1 November 2023. The focus of the Quality of Advice Review is on retail clients, and as such, the Code will be similarly aligned.

Self-regulation has been a cornerstone of the NIBA strategy – and while we acknowledge the government’s recommendations – as a profession, we have endeavoured to remain a step ahead, to ensure that brokers and their customers have a clear understanding of the value of the professional services provided and the costs to provide those services. The Code of Practice that all NIBA members adhere to, ensures that the highest standards of ethics and professionalism are always maintained.

In NSW, brokers have been having difficult conversations with their employer clients. The recent premium filing from the government agency icare, in relation to workers compensation, has presented some challenging increases. During the pandemic, premium increases were capped, but this year, icare has had to review premiums in light of increasing claims costs. The headline rate is an average of 8% increase across the board, but the reality is that some employers, depending on their size and claims experience, may experience increases up to 30%. These are massive increases that place an additional burden on small businesses already struggling with increasing running costs. Brokers who oversee approximately 50% of the workers compensation premiums are managing difficult conversations with their employer clients and assisting them to ensure their HR policies and management are recognised in the premium reviews.

From our perspective, there are two issues at play here. Firstly, the effective management of claims, and secondly, the fact that a significant component of the premiums contributes to government taxes and charges. The NSW Emergency Services Levy must be