SEPTEMBER 2020
IT’S TECH TIME YET AGAIN
Smart solutions and the future of work
NIBA AWARDS
Shining a spotlight on our outstanding finalists
#NIBA2020: LIKE NOTHING YOU’VE SEEN BEFORE A redesigned experience for a brave new world
WE ARE YOUR VOICE
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CONTENTS
September 2020
ACN 006 093 849 ABN 94 006 093 849
FEATURES
Insurance Adviser magazine is the monthly magazine of the National Insurance Brokers Association (NIBA). Insurance Adviser magazine is published by NIBA
Publisher
Dallas Booth, CEO, NIBA T: (02) 9964 9400 E: dbooth@niba.com.au W: niba.com.au
Communications Manager Tiffany Eastland
NIBA Editor Tanaya Das
Editorial enquiries
E: editor@niba.com.au
National Sales Manager Tony May E: tmay@niba.com.au
Design
Citrus Media www.citrusmedia.com.au
20
THE 2020 NIBA BROKER AWARDS Because your work deserves to be celebrated
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. Cover image: David Broadway Photography
2020 NIBA VIRTUAL CONVENTION 26-30 OCTOBER 2020
BRAVE NEW WORLD
THANKS TO OUR PRINCIPAL PARTNERS
NAVIGATING THE WINDS OF CHANGE
www.nibavirtualconvention.com.au
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VirtualConvention2020_Print.indd 3
21/8/20 2:30 pm
#NIBA2020: A VIRTUAL BONANZA It’s like nothing you’ve seen before
NIBA.COM.AU / 3
CONTENTS
September 2020
FEATURES
30 SMART SOLUTIONS
IN EVERY ISSUE
38 CYBER SAFETY
NIBA CEO welcome.................................... 6 Why be a NIBA member?.......................... 8 Representation........................................... 10 Forthcoming events...................................55
That will define the future of work
This is the perfect time for criminals
NEWS
Industry bulletin........................................ 12
PROFESSIONALISM
Clients must review policy cover ........... 16 An effective performance management system ..................................... 18
REFERENCE Community hub .........................................49 Insurer strength ratings ..........................56
46 COVID-19 GOVERNMENT SUPPORT
An update on the federal initiatives supporting small- and medium-sized businesses during these uncertain times
4 / INSURANCE ADVISER SEPTEMBER 2020
45 LEGAL ANALYSIS 58 UNLOCKING POTENTIAL
NIBA Tasmania Committee Member, Leigh Stalker has not been afraid to embrace change and learn from trying times
CEO / Welcome
IS THIS THE ‘NEW NORMAL’?
I
n my last column for the July/August edition of Insurance Adviser, I started to discuss what the ‘new normal’ might look like, and what we might expect ‘on the other side’. Since that column was written, Victoria has experienced a serious second wave, with – sadly - very significant numbers of deaths and record numbers of COVID-19 cases being identified. Stage 4 restrictions have been introduced, causing serious personal and economic upheaval in the state. The closure of state borders is also having a dramatic impact, not just on communities bordering with Victoria. The good news is that as I am writing this column, Victoria is reporting reductions in the number of new cases being identified, but they are still in the hundreds. The real challenge is the extent to which – in Victoria and New South Wales at least – the virus continues to exist in the community, in areas not known to the health authorities. This is a major challenge for all concerned. While ever this continues to be the case, it now appears that what we are seeing could well be the ‘new normal’. It is widely accepted that the virus must be brought under control – with relatively few community transmissions – before the restrictions can be eased and we can get back to a more normal lifestyle. Insurance brokers have mostly been working from home since late March/early April. Some have been starting to return to the office. But for firms in NSW and Victoria, major challenges continue for their business operations. It is clear that all broking firms are needing to develop new systems and processes for: • Internal administrative processes and procedures; • Working with clients, and understanding their needs and arranging appropriate cover; • Working with underwriters and the placing of business; and • Assisting clients with claims when an insured event occurs. But where is all this heading? This is the precise question we are addressing at the NIBA Virtual Convention in October.
BRAVE NEW WORLD – NAVIGATING THE WINDS OF CHANGE
Before we cancelled the traditional NIBA Convention scheduled for Melbourne this year, we were developing a theme and program around the issues in the insurance markets, and the challenges brokers would continue to face as insurers and underwriters adjusted their risk appetite. Then COVID-19 hit. Clearly, we are now living in a Brave New World. We have therefore been developing a Convention program which is aimed to help brokers understand where we are, where we are going – even with all the associated uncertainty – and how best to cope with the challenges that we will continue to face.
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Gihan Perera is our opening plenary speaker and has been doing a lot of work recently on what the Brave New World looks like, and what we will need to understand in order to succeed in the short and medium term. This will be a great way to start the Convention.
“Clearly, we are now living in a Brave New World. We have therefore been developing a Convention program which is aimed to help brokers understand where we are, where we are going – even with all the associated uncertainty – and how best to cope with the challenges that we will continue to face.” Bernard Salt is very highly regarded for the way he analyses trends at the international, national and local levels, and will add some very strong wisdom to our understanding of the situation facing us all. Dr Kirstin Ferguson made a major impression at the 2019 NIBA Convention on the Gold Coast and we have asked her to speak again to help delegates understand and cope with the challenges we face. We will be concluding with Ben Crowe, who has achieved major successes in developing personal resilience leading to success. I have seen him present recently and was most impressed with what he has to say. In between, we will have our annual awards announcements, a focus on regulatory plus other reforms that are being prepared by the government and a number of technical presentations all of which will help brokers Navigate The Winds of Change. More information on the NIBA Virtual Convention is contained elsewhere in the magazine. I encourage you to register and enjoy the experience.
DALLAS BOOTH Chief Executive Officer, NIBA
Terms and conditions apply, visit
NTI.COM.AU/MNDAUCTION
for more information
National Transport Insurance is a joint venture of the insurers Insurance Australia Limited trading as CGU Insurance ABN 11 000 016 722 AFSL 227681 and AAI Limited trading as Vero Insurance ABN 48 005 297 807 AFSL 230859 each holding a 50% share. National Transport Insurance is administered on behalf of the insurers by its manager NTI Limited ABN 84 000 746 109 AFSL 237246.
NIBA / Member benefits
WHY NIBA MATTERS TO ME Members share why NIBA is important to them and the broking industry.
“NIBA matters to me as it provides the tools to be a better broker with up-to-date training, education and news. It is the Association that fights for the professionals it represents in this tough environment. With constant changes to regulation and legislation, it’s comforting knowing we have the most knowledgeable and experienced minds working in our best interest.” MEGAN SPINIELLO Account Executive at SSAA General Insurance Brokers
ABOUT NIBA OUR MISSION
NIBA is the one voice for insurance brokers in Australia, representing their interests and promoting high standards of professionalism and competence.
OUR OBJECTIVES Representation
We represent the interests of members and their clients to governments, regulators, industry stakeholders, the media and the community in a manner that is respected and relevant. We have forged strong relationships at state and national level to ensure that your interests are represented.
8 / INSURANCE ADVISER SEPTEMBER 2020
Professionalism
We set and promote high standards of professional practice for insurance brokers for the benefit of their clients and the community through the development of professional standards, QPIB, CPD accreditation and the Insurance Brokers Code of Practice.
Community
We provide members with opportunities to meet, share, grow and prosper and build professional networks with the wider intermediated insurance community that will last throughout whole careers.
GET IN TOUCH!
Whatever your age, or level of experience, NIBA ha s brokers’ best interests at the core of everything we do. Fin d out what we can do to help be nefit your business and your tea m at niba.com.au/membe rship
ADVERTORIAL / QBE
ACCIDENT & HEALTH: PROTECTING MODERN EMPLOYERS AND THEIR PEOPLE 24/7
W
orkplaces in Australia are changing. Employee health and wellbeing has become more important than ever as employers seek to better support and protect their most important assets in a changing and uncertain business landscape. And while this shift has been accelerated and validated for many employers in recent months, we know employee wellness has been at the top of the corporate agenda for some time. But how do employers lean into this shift to better protect their business and people? Accident & Health insurance has proven to be a powerful part of the answer. Protecting flexible, dynamic workforces around the clock Accident & Health insurance offers significant benefit to businesses because it protects people from sickness and accidents beyond the limits of physical workplaces, traditional working hours or statutory schemes like Workers Compensation. According to a 2019 Report from the Workplace Gender Equality Agency the proportion of Australian organisations in the private sector with flexible working strategies and policies was over 70 per cent1. And it’s more than likely this percentage has only grown in recent months. So as employees increasingly look for flexible working arrangements to fit around more balanced and dynamic
BY JADE GREENLAND Head of Accident & Health People Risk, Australia Pacific, QBE Insurance
lifestyles, and the line between work and home blurs, Accident & Health cover is becoming more valuable. We work with thousands of employers that choose Accident & Health in conjunction with Workers Compensation cover because they want to cover all their bases.
approximately 15,000 Accident & Health claims per year. Importantly, this includes best practice management of mental health and other complex injuries. By helping people to get their lives back on track quickly, workload and mental strain on teams and employers and related costs, are also reduced.
Supporting holistic wellbeing and health Recognition around the important role of health and wellbeing in fostering productive and engaged workforces is growing. Many employers are responding by embracing wellness solutions that go beyond the workplace and focusing on delivering an authentic culture of care. One recent study revealed employees with thriving holistic wellbeing are more than twice as likely to say they adapt well to change, 41 per cent less likely to miss work due to poor health and 81 per cent less likely to seek out a new employer in the next year2. Accident & Health can play a powerful role here. It not only supports holistic health and wellbeing of employees by providing the peace of mind 24/7 protection brings – it also sees them receive expert support and care when they experience injury or illness. People are financially, emotionally and physically cared for and supported through the return to work process, so they can get back to their normal activities as quickly as possible. And at QBE, our inhouse claims experts are specialists in this process, handling
Redefining what it means to be an employer of choice Many employers realise the value in helping their employees succeed inside and outside of work and Accident & Health provides a meaningful way to do this. Accident & Health benefits can address lost earnings, rehabilitation and other support costs, as well as provide lump sums for death and serious injuries. And importantly, because QBE cover is tailorable, a range of benefits can be added to address specific employee or customer needs. By offering Accident & Health as a benefit, these employers are sending a powerful message to their most valued asset, their employees, and building the trust and advocacy that helps today’s businesses thrive. Find out more at: qbe.com/au/ business-insurance/accident-health
Workplace Gender Equality Agency (2019). Flexible working is good for business. Accessible at: https://www.wgea.gov.au/sites/default/files/documents/Business%20Case%20Feburary%202019%20Final.pdf
1
Gallup (2020). What Wellbeing Means in the Coronavirus Era. Accessible at: https://www.gallup.com/workplace/30877/wellbeing-means-coronavirus-era.aspx
2
NIBA.COM.AU / 9
NEWS / Representation
WE ARE YOUR VOICE! Unprecedented! Uncertain! What next?
FEDERAL
Design and Distribution Legislation
As previously advised, legislation to implement new obligations on insurers and distributors of insurance products has been passed by the Federal Parliament. ASIC has indicated that commencement of the new rules has been put back to October 2021. This is welcome, but there is no room for complacency here: the new rules will apply to every product that currently has a PDS attached to it. NIBA is continuing to work with the Insurance Council of Australia to develop an understanding of how the legislation will work. This has been a slow process, but there has been some progress. The crucial thing for insurance brokers to consider at the present time relates to those firms who use “broker wordings”, or their own schemes - where the broker has been involved in the design of the policy and the development of the cover that is provided. In these cases, the broker will need to work closely with the insurer/underwriter to determine how the Design and Distribution obligations will operate in respect of those policies, who will be responsible for the preparation of the Target Market Determination, and how the product review obligations will be implemented. You will most likely need to get legal support for this process, in order to ensure you are meeting the legislative obligations. We urge all members with broker wordings to look closely into these matters now.
Unfair Contracts Terms Legislation
Legislation which will apply existing unfair contracts terms legislation to insurance contracts has been approved by the Federal Parliament. These reforms were recommended by the Royal Commission
10 / INSURANCE ADVISER SEPTEMBER 2020
and by the ACCC Interim Report on Insurance Issues in Northern Australia. It is important to note that implementation of this legislation has NOT been deferred by the Federal Government. The reforms will take effect in early April 2021. By that time all retail policies will need to be reviewed to identify and remove any potential unfair terms. As noted above in relation to Design and Distribution obligations, where brokers have policies with their own wordings and cover, they will need to review the terms of cover and the wording of the policies to determine whether the policies might be caught by the Unfair Contract Terms legislation. These are technical legal questions, and we strongly urge brokers to get legal support for this purpose.
Claims Handling as a Financial Service
NIBA provided a submission to treasury earlier this year in response to draft legislation designed to implement the Royal Commission recommendation to make claims handling a financial service. The draft legislation will make those handling claims under insurance policies on behalf of insurance companies to operate under an Australian Financial Services Licence. NIBA is pleased that the legislation will not apply to insurance brokers acting for and on behalf of their clients in relation to claims and related matters. NIBA has spoken with treasury on this matter recently, and we expect the draft legislation to be introduced into the parliament in the next few months.
Add-on Insurance Reforms
The government has undertaken consultation on Royal Commission
proposals to ban virtually all forms of general insurance sold at the same time as a non-insurance product (for example, travel insurance sold when a customer purchases an air ticket or an overseas holiday). NIBA has provided a detailed submission to treasury indicating the proposed approach is far too wide. We have spoken with treasury on this recently, and have been given an assurance that the main concerns have been taken into account in the drafting of the legislation. NIBA will review the matter further when the bill is tabled in parliament.
Anti-hawking reforms
One of the Royal Commission recommendations was to prohibit the hawking of financial products. The government has released draft legislation to implement this proposal. NIBA is concerned that the recommendation as drafted is likely to seriously impair the ability of insurance brokers to properly advise their clients on their business or other risks, and their insurance needs and cover more broadly. This is because the proposed legislation restricts the broker to discussing the topic raised by the client, and only that topic. NIBA has made a strong submission to the government to urge further consideration of this matter. Our position is that the insurance broker must be able to discuss any risk or insurance needs of the client at any time, in order to properly perform their function as the trusted adviser on risk and insurance matters.
Proposals to restrict the use of the terms ‘insurance’ and ‘insurer’
The Royal Commission recommended clarification of the ability for ASIC to fully
NEWS / Representation
regulate funeral insurance, where serious misconduct had been identified. However, the government has taken a more broader approach to extend restrictions on the use of the words ‘insurance’ and ‘insurer’. NIBA has provided a submission to treasury to challenge the government’s proposals, as they are not consistent with the Royal Commission recommendation in this area.
Last Resort Compensation Scheme
The Federal Government has published a consultation paper on the Royal Commission recommendation to establish a last resort compensation scheme. This scheme is designed to respond to circumstances where AFCA makes an award against a financial services provider, but the provider has gone out of business and is unable to satisfy the award in favour of the client. The government is committed to proceeding with this reform, and the NIBA Board has discussed the matter at length. NIBA has provided a submission to the government indicating our preferred approach for the finding of the scheme. We will provide further information when it comes to hand.
ASIC
Product Intervention Powers
ASIC has released a consultation paper on the proposed exercise of its Product Intervention Powers in relation to add-on insurance products sold by motor dealers. At the time of writing, NIBA is carefully assessing the ASIC paper, and will respond if concerns are identified.
APRA
We again remind members that the person in every insurance broking firm responsible for providing data to APRA must review the new procedures set out on their website: apra.gov.au/apra-replacing-d2a Every insurance broking firm should by now have made arrangements for a key manager to have myGovID credentials and to appoint a Relationhship Authorisation Manager, in order to be able to continue to provide relevant reports to APRA. Information about myGovID is available at: ato.gov.au/General/Gen/myGovID/ Please note that the existing AUSkey arrangements were due to expire on 31 March 2020. New arrangements should have been in place prior to that date.
We again strongly urge all members to become familiar with the new requirements, and start to develop procedures to implement the new system.
NEW SOUTH WALES
The NSW Parliament is currently conducting an inquiry on the operation of the workers compensation scheme in July 2020. NIBA did not make a submission to the inquiry on this occasion. NIBA has been very active in recent weeks making submissions to a number of Federal and State inquiries into the summer bushfires. This included appearing before a Senate Committee looking into the bushfires, where we took the opportunity to stress the inequitable and unfair nature of the emergency services levy in NSW. More broadly, our goal has been to point out the unfair and inequitable impact of the emergency services levy on insurance premiums, and the resulting impact on underinsurance and non-insurance. It has been reported that 27 per cent of the houses totally destroyed by the summer fires did not have insurance cover. This constitutes a massive loss for the people involved, and for their communities. NIBA gave evidence to a Senate Inquiry into the handling of the bushfires in early July 2020.
General Insurance Code of Practice The Insurance Council of Australia has released the new 2020 General Insurance Code of Practice, which is available at: codeofpractice.com.au The new General Insurance Code was formally launched in February 2020. Code subscribers will need to implement a family violence policy by 1 July 2020, and the Insurance Council of Australia has announced that insurers will aim to implement vulnerable persons and distressed client provisions from 1 July 2020. The remainder of the new Code will formally take effect on 1 July 2021. Any insurance broker operating under a binder on behalf of insurers will need
to undertake training on the new Code of Practice and to implement procedures to adopt the General Insurance Code in respect of those operations. This is particularly important for the new Code provisions relating to vulnerable persons and clients in distress. NIBA also believes that any insurance broker acting on behalf of their clients should have a good general knowledge of the insurer Code of Practice, especially the provisions regarding family violence and vulnerable customers. The new General Insurance Code also contains new provisions dealing with insurance and mental health, disclosure of information and the sale of insurance products through motor dealers. A summary of key features of the new General Insurance Code of Practice is available at: insurancecouncil.com.au/ assets/media_release/2019/311019%20 Key%20features%20of%20the%20new%20 General%20Insurance%20Code%20of%20 Practice.pdf
Insurance Brokers Code of Practice
The review of the Insurance Brokers Code of Practice is continuing. The NIBA Board of Directors has had detailed discussions in relation to the content of a new Code of Practice for insurance brokers, and these discussions will continue in the near future. NIBA will then seek the views of members on the operation of the Code of Practice, and the future development of the Code, taking account of what is happening in other areas of financial services, the recommendations of the Royal Commission and the work done by the Insurance Council of Australia in its review of the General Insurance Code of Practice.
AFCA Datacube
AFCA is now publishing quite detailed information about the complaints and disputes it receives, including information regarding complaints to specific companies. The AFCA Datacube is available at: data.afca.org.au/at-a-glance
CONTACT NIBA
As always, brokers who have questions about these or any other government or regulatory matters should feel free to contact NIBA CEO Dallas Booth at: dbooth@niba.com.au
NIBA.COM.AU / 11
NEWS / Industry bulletin
NEW WORLD-CLASS DISASTER RESEARCH CENTRE ANNOUNCED
T
he Australian Government has announced $88.1 million of funding to extend and scale up funding for critical research into bushfires and natural hazards. The funding will support the transition of the current Bushfire and Natural Hazards Cooperative Research Centre (BNHCRC) to a new, world-class research centre for natural hazard resilience and disaster risk reduction. National Insurance Brokers Association (NIBA) CEO Dallas Booth welcomed the announcement and said, “Mitigation is the cornerstone of efficient disaster management. With the cost of extreme weather events getting higher and higher,
the cost of insurance is also increasing, and as we have seen, becoming unaffordable for many people in high risk areas.” “The industry has argued in many submissions to government that insurance is only one part of the response to a natural disaster.” Insurance Council of Australia (ICA) Head of Risk & Operations Karl Sullivan also welcomed the announcement and said, “Australians realise the importance of natural disaster research, as it is the research findings that arm our emergency services, planners, builders, developers and communities with the information they need to continue to improve resilience, response and recovery to future natural
disasters.” Minister for Emergency Management David Littleproud said the funding would build on the work of the BNHCRC, while strengthening ties with Australia’s emergency management sector. “This is where sustained, long-term funding for natural hazards research plays a pivotal role and why the Australian Government is committed to a new 10-year national research centre.” The centre will be co-funded by partners from across Australia, including state and territory governments and emergency service agencies, universities and industry partners, and represent a true collaborative effort on a national scale.
For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/
12 / INSURANCE ADVISER SEPTEMBER 2020
NEWS / Industry bulletin
INSURANCE COUNCIL LAUNCHES BUSINESS INTERRUPTION TEST CASE IN NSW SUPREME COURT
INQUIRY INTO INSURANCE PRACTICES AND AFFORDABILITY
T
he Australian Small Business and Family Enterprise Ombudsman Kate Carnell has expressed concern about small businesses being denied insurance cover and being priced out of the market, she has announced an inquiry into insurance affordability and availability. National Insurance Brokers Association (NIBA) CEO Dallas Booth has welcomed the inquiry, he said, “This will give brokers another opportunity to show the value they provide to their clients, and the efforts they go to in seeking the best available cover at prices their clients can afford.” “We note the inquiry is into the affordability and availability of insurance for small businesses. We know that the past six months has been an extremely difficult market in Australia, and brokers have
worked very hard during the June renewal season to get the best outcomes they could for their clients.” The Terms of Reference for the inquiry include reference to “The Role of Brokers in Getting the Right Coverage”. Booth has confirmed that the Association will gladly take this opportunity to explain the role of brokers. The inquiry will investigate the practices of the insurance industry that impact small businesses and consider whether small business insurance products are fit for purpose. “My office has heard a number of complaints from small businesses regarding poor behaviour by insurance companies,” Carnell said. A final report on the inquiry is expected to be released by December.
The Insurance Council of Australia (ICA) has commenced proceedings in the NSW Supreme Court to test the application of certain infectious diseases exclusions in business interruption policies. Rob Whelan, CEO, Insurance Council of Australia said, “The Insurance Council initiated this test case on behalf of insurers that sell commercial property policies with business interruption cover. “The ICA believes this test case is an important step towards providing greater clarity to insurers and small business customers in the treatment of pandemic-related claims. “Most insurers have never contemplated coverage for pandemics in their policies and did not price pandemic risks into premiums. They believe pandemic-related exclusions are appropriate but wish to provide greater clarity through engaging a superior court process.” Lawyers representing the ICA have submitted pleadings to the court for a combined test case. The test case consists of two separate small business claims that were lodged with the Australian Financial Complaints Authority (AFCA) as part of its dispute resolution process.
For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/
NIBA.COM.AU / 13
NEWS / Industry bulletin
AUSTRALIA’S FIRST PERSONAL CYBER INSURANCE PRODUCT
E
mergence has launched Australia’s first stand-alone personal cyber product which provides cover to families and individuals in the event of a cyber attack. According to a whitepaper titled: ‘Personal cyber insurance: the smart solution to countering cyber crime’, 88 per cent of the Australian population use the internet and 71 per cent use social media, providing fertile ground for criminal activity and anti-social behaviour to take place online. Troy Filipcevic, Founder and CEO of Emergence Insurance said: “Our
dependence on the internet, and exponential growth of web-enabled devices and social media has made us much more interconnected, which opens up vulnerability to cybercrime at an everincreasing, alarming rate. “The COVID-19 pandemic has also brought about a new wave of heightened criminal activity, with cyber criminals targeting people working and schooling from home. For many, this is the new norm and has opened the floodgates for greater exposure to data theft and cyberbullying.” Data from the Australian Competition and Consumer Commission shows Australians
lost $634 million in 2019 from online scams, and 353,000 scam reports were lodged. Filipcevic said, “Cyber criminals often use the internet to collect personal information and use this to harm the victim. By simply opening an email which may look like an email from your bank and clicking on a link, you may be putting your data and funds straight into the hands of cyber criminals causing detrimental financial loss and emotional stress. “In response to these emerging risks, Emergence is excited to now offer Australia’s first stand-alone personal cyber policy to combat the impact of cyber and identity fraud for Australian families and individuals.” Emergence’s personal cyber insurance offering is only available through the Australian broking market.
HAVE YOU REGISTERED FOR THE 2020 DIVE IN FESTIVAL YET?
I
nsurance industry’s well-established festival for Diversity and Inclusion, Dive In, is a global movement to support the development of inclusive workplace cultures. Since its birth in 2015, Dive In has grown exponentially, reaching global heights with events taking place across 32 countries worldwide, attracting more than 10,000 people. Its new virtual format for 2020 ensures that participants globally will now be able to attend any one of over 90 virtual events taking place in over 30 countries from the 22-24 September. Each event in the three-day virtual festival has a capacity of up to 600, making it the most accessible festival for diversity and inclusion in the world. Dive In promotes year-round best practice in diversity and inclusion with tools and advice that culminate in an annual three-day festival in September. You can register for sessions in Australia on the following link: web.cvent.com/event/2c2fd720-6c434e5e-80f1-21a05b8eeee3/summary? rp=00000000-0000-0000-0000000000000000
For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/
14 / INSURANCE ADVISER SEPTEMBER 2020
“QPIB has never been more relevant than right now.”
ING IS
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QPIB
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Apply online at niba.com.au or email NIBA Memberships Manager Audi Witsen – awitsen@niba.com.au
D PRAC IE T F I
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QPIB – A STATEMENT OF PROFESSIONALISM
• QUA L
– JORDYN GILBERT, 2019 WA YOUNG PROFESSIONAL BROKER OF THE YEAR
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PROFESSIONALISM / AFCA case study
CLIENTS MUST REVIEW POLICY COVER
An insurance broker has a duty to arrange appropriate cover for their clients, but there is an expectation that the clients should review the policy documents to ensure the level of cover is appropriate and notify the broker.
I
n this Determination AFCA reinforces the importance of insurance brokers taking contemporaneous file notes of discussions with the client, and careful notation of the client’s instructions regarding cover to be arranged on their behalf and any limitations.
Facts
The complainant was a business that engaged the services of the broker to arrange cover for a truck. The broker arranged a Comprehensive Commercial Motor Vehicle policy. The complainant’s truck and contents were destroyed by fire and the insurer cash settled the complainant for the truck on a total loss basis but the settlement did not cover hire vehicle expenses and loss of equipment.
The Complainant’s Case
The complainant submitted that when it sought the services of the broker, it specifically request-ed cover for the truck, the tools and equipment, and the hire vehicle cost and the broker confirmed that the cover was in effect. As a result, the complainant alleged that the broker was liable for the following losses: • the loss of equipment, tools and stock in the truck which were not covered, valued at $26,000; • the cost associated with the hire of a like for like vehicle for two months; and • $5,000 for non-financial loss compensation (which is the maximum amount AFCA can award for nonfinancial loss) due to stress and collateral effects from judgment and credit file listing on the business and the business owner.
16 / INSURANCE ADVISER SEPTEMBER 2020
The Broker’s Case
The broker submitted that the complainant was not interested in the content cover and importantly was able to provide a copy of its contemporaneous “fact finder” sheet which recorded the information as the policy was being arranged. In the sections relating to transit cover and goods in transit owned by you or another company, the document stated “N/I” i.e. not interested. The complainant had no evidence of the call in which the broker allegedly said they had the cover and neither did the broker.
The AFCA decision
Broker’s duties AFCA noted the following standard core principles it applies: • Under applicable law, an insurance broker owes a duty to the complainant to take reasonable care in procuring suitable policies of insurance to protect the complainant against relevant risks. The standard of care in exercising this duty is that of an ordinary broker exercising the special skill of that profession. • If a broker provides services to its clients under an Australian Financial Services licence, it is also required to do all things necessary to ensure that its services are provided efficiently, honestly and fairly. • A broker’s duty to the complainant includes arranging appropriate cover. • In addition to the duties which apply to brokers, there is an expectation
BY MARK RADFORD
Principal, Radford Lawyers
that clients will take reasonable action to protect their interests and ensure that the cover they have sought is adequate for their business needs. • This expectation is higher in the case of a commercial policy held by a business which would reasonably be expected to have systems in place to ensure that its key insurance arrangements were adequate and met their needs. The broker did not breach its duty to the complainant Based on the above evidence from the broker, AFCA was persuaded, on balance, that the complainant did not ask for the additional covers. AFCA was satisfied that the broker did not breach its duty to the complainant. AFCA noted that it takes a conservative approach in determining whether to award compensation for non-financial loss. And that it may decide that a broker should compensate a complainant only where there has been an unusual amount of physical inconvenience, time taken to resolve a situation, or interference with the complainant’s expectation of enjoyment or peace of mind. In this case, AFCA was satisfied that the complainant was not entitled to nonfinancial compensation because: • the broker provided the complainant with appropriate advice based on its instructions; and • the delay resulting from AFCA providing a Determination for this complaint five years after the initial loss was caused by the complainant opening complaints and failing to respond resulting in closures and the delay.
PROFESSIONALISM / Objectives Review
MOVING ON FROM TRADITIONAL APPRAISALS TO A NEW OBJECTIVES ACHIEVEMENT SYSTEM
BY SHEILA BAKER
Managing Director, Gold Seal
An effective performance management system goes a long way to ensuring you deliver on your business objectives, and your team embodies the professionalism businesses desire.
W
ith businesses adopting a variety of different working arrangements a performance management system that is flexible, easy to use and caters for different circumstances, is helpful for both managers and their team. The outmoded approach of a rating system, review of past performance and summary of future development is dated, especially with large numbers of employees working from home and more flexibility in the workforce. Time for something different? An alternative may be the ‘Objectives Review’ process (terminology optional) as a more contemporary solution. This approach recommends starting with a look at what works and does not work in your business. You may need to consider whether your current approach: • accompanies, reflects and implements your Business Plan; • is favoured by your team; • contains past performance assessment; • includes a lot of talk of the future, helps you to plan your workforce and develop individual skills for what the future holds • uses positive language; • introduces a switch to more regular ‘coaching’ type sessions rather than formal reviews; and • allows for work to be reviewed based on objectives and so applies to any form of flexible working arrangement. This process provides greater job clarity, makes prioritisation of tasks easier for team members and facilitates the implementation of the Business Plan. So, if some of your key strategic questions have been: • How do I implement my business plan? • How can I find a performance management system that doesn’t
18 / INSURANCE ADVISER SEPTEMBER 2020
affect morale like appraisals do? • How do I get my team aligned with my business objectives? …the following process may offer some solutions for you.
The “Objectives Review” 9-step program: Before you start, make or revise your position descriptions 1. For the system to work, you will need complete, accurate and current position descriptions complete with behaviours. Prepare your business plan 2. Prepare your business plan and quantify the areas of business performance you want to improve. Set company-wide Goals and SMART Objectives. 3. Chunk the tasks and action plan into groups and/or teams Allocate objectives 4. Have your first Objectives Review meeting with your team members (or delegate to your line managers) 5. Allocate the tasks to individuals and/or groups, including measures. Ensure at this stage you have their buy-in. Figure out and agree what is achievable between you Conduct coaching sessions 6. Set dates for your ‘coaching’ sessions, typically on a quarterly basis 7. When you conduct your session (we call them Objective Discussions) make it a targeted discussion about objectives rather than a random chat about how they are feeling, or what they’re doing
8. If they are having trouble reaching their objectives, find out what they need and where possible identify and remove obstructions to employee achievement 9. Set the date for the next discussion Repeat until it is time to programme your next major Objectives Review after your next business planning day.
What to keep separate from your Objectives Review
• This system purposely does not address performance counselling. If you need to address poor performance or behavioural issues, don’t wait until the objective review discussions. • It also doesn’t address those meetings that may be required from time to time, when you do a health check to find out what makes people tick.
Benefits
Your employees will have a system of review that clearly shows gaps in performance that are not based on hours spent at the office desk. Underperformance against objectives will be revealed in a kinder fashion than previously. It will result in an interactive process where agreement is reached on goals and objectives and progress is discussed regularly - with no surprises. Timely addressing of issues that impede performance will minimise people feeling ‘hopeless’ when reaching for their objectives. The attention of management is drawn regularly to factors outside of the team’s (or individuals’) control, and can lessen their impact, making success more likely. When you do not see people in person as much as the traditional work structure, having more frequent, timely interactions is helpful for everyone.
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COMMUNITY / NIBA Awards
NIBA Awards: A spotlight on our outstanding nominees The full line-up of state finalists from across the country for NIBA’s prestigious national broker awards have been confirmed. BY TANAYA DAS
I
n a year rife with uncertainty and disruptions, there has been one constant; insurance brokers who have put their client’s needs at the forefront of their priorities as we all grappled with a
new normal. NIBA’s Board as well as our award sponsors therefore unanimously decided that the achievements of Australia’s insurance intermediaries must be celebrated.
Broker of the Year regional finalists Every year NIBA, in association with QBE, recognises high performing broking professionals via five individual regional awards culminating in the national Stephen Ball Memorial Award for Insurance Broker of the Year. Stephen Ball was a former JLT Australia Chairman and a much-admired industry stalwart who passed in 2016. As their prize, the winner of the Stephen Ball Memorial Award for Broker of the Year receives an all-expenses-paid professional development experience of their choice. Jason Clarke, Chief Customer Officer, Commercial Lines at QBE Australia Pacific says, “On behalf of QBE, I’d like to congratulate this year’s Broker of the Year Award state/territory finalists - there’s no shortage of talented brokers across the region, so earning a place as a finalist, among so many high calibre entrants, is a truly impressive accomplishment, especially in this current environment.”
20 / INSURANCE ADVISER SEPTEMBER 2020
NSW/ACT Mary-Catherine Thomas Aon
Mary-Catherine is a driven insurance professional with 18 years’ experience. She has university degrees in international finance as well as business, and manages a team of 11.
In the second quarter of the year NIBA’s annual search for the best and brightest in the insurance broking intensified and here is the final selection of the finest minds in insurance broking.
NSW/ACT Connie Yang
Austbrokers ABS Strata
Having spent two decades in the industry and 16 years in corporate broking, Connie is a purpose-driven leader with a postgraduate degree in applied finance.
QLD
QLD Robert Cooper
Lana Mawer
After three decades of working in the industry, Robert started his own business in 2010 and has been going from strength to strength since.
The NIBA QLD Young Professional Broker of the Year 2009 is a highly skilled insurance professional with a commitment to exceptional client service.
CPR Insurance Services
Austcover
COMMUNITY / NIBA Awards
SA/NT
QLD Jennifer Steger
Max Cuzzocrea
Trade Risk
A creative problem solver with a career spanning 15 years in insurance broking, Jennifer works at finding a collective sense of purpose to bring out the best in her team.
VIC/TAS Steve Coltman -
Robert Fraser
Maxton Insurance Brokers
Max manages his own brokerage and specialises in commercial property and liability, making him an authority on complex commercial development risks.
VIC/TAS James Skiadas
Adroit Insurance & Risk
After a successful career as an SME business owner, Steve transitioned into insurance and now uses his wealth of unique skills to benefit his clients.
Michael Davis
Westside Insurance Specialists
A people focussed business manager operating in the industry for close to two decades, Michael places a high level of importance on creating long-term relationships of value and trust.
Gallagher Alice Springs
From banking to underwriting and then on to broking, Robert has had an interesting career that deserves celebrating.
VIC/TAS Michael Stewart
IMC Insurance Brokers
James is a respected industry veteran with extensive executive level experience in Australia, as well as overseas.
WA
SA/NT
Stewart Insurance Group
Owner and Director of his own company, Michael is passionate about providing insurance solutions underpinned by exceptional customer service.
WA Shelley Hymas
Phoenix Insurance Brokers
With qualifications in travel and tourism, and international experience under her belt, this NIBA mentor is the kind of professional who represents the best in insurance broking.
WA Brian Martinovich
MBA Insurance Services
With a university degree in commerce and insurance experience spanning across different sectors, Brian is a resilient professional who readily embraces change. NIBA.COM.AU / 21
COMMUNITY / NIBA Awards
Young Professional Broker of the Year regional finalists For the past three decades NIBA, in association with Vero, has been honouring young broking professionals via five regional awards culminating in the national Warren Tickle Memorial Award for Young Professional Broker of the Year. This award began in 1990 in honour of Warren Tickle the Insurance Commissioner responsible for the implementation of the Insurance (Agents & Brokers) Act 1984. The award recognises a young insurance broker who exhibits an outstanding level of professionalism and integrity and is the pinnacle of achievement for Australian’s young broker community. National Manager Strategic Relationships at Vero, Sarah Moltzen says, “Vero is proud to support the next generation of industry leading insurance brokers and its longstanding association with NIBA’s Young Professionals and the Warren Tickle Memorial Award.”
NSW/ACT
NSW/ACT David Harry
Sam Hunter
Aon
Ausure Insurance Broking Services
With a background in business administration and project management, David is on his way to having an outstanding career in insurance broking.
Sam is a qualified financial planner and insurance broker, as well a young business owner. This young gun is going places.
NSW/ACT
QLD
Emily-Rose Srbinovska
Melita How
With an introduction to the industry via underwriting, this insurance all-rounder is poised to achieve big in broking.
A broker with qualifications in business administration, as well as building and construction, Melita is a driven individual who believes in being agile and adaptable.
Austbrokers Canberra
BMS Group
QLD Gerald Lodewick
Kate Martin
Gerald’s qualifications in business and marketing, as well as security and insurance broking helps this finalist take ownership of a large, diversified portfolio.
Thanks to a bachelors degree in social science and claims management experience, Kate is equipped with the tools to provide extraordinary client service.
Tony Bemrose Insurance Brokers (TBIB)
22 / INSURANCE ADVISER SEPTEMBER 2020
QLD Marsh
COMMUNITY / NIBA Awards
SA/NT
SA/NT
Luke Ferguson
Kelly Qualmann
Armed with a business and economics degree, Luke began his career with Allianz Insurance before making the transition to broking, and believes exceeding customer expectations is key to standing out in a competitive market.
A bachelors degree in business management, along with other qualifications in tourism, retail operations and financial management, has equipped Kelly with the tools required to provide excellent customer service.
VIC/TAS
VIC/TAS
Austbrokers Terrace Insurance Brokers
Jasmin Gabrielli
Adrian Vizzari
Gallagher
Adam Korth
Fitzpatrick & Company
This cricket and golf coach found his passion for broking early in life and believes in genuinely making a difference in the community with the work he does.
WA
WA
Tryan Christos
With a keen interest in fitness and sports, Tryan brings his exceptional level of focus and commitment to negotiate the best deals for his clients.
Dynamic Insurance Brokers
With a decade in broking under his belt, Adrian believes constant learning and development leads to his customers benefitting from his insight.
VIC/TAS Patrick Selle
Tresidder Insurance Group
A bachelors degree in business (insurance) along with broking qualifications and a strong background in claims, makes Jasmin an asset to her organisation as well the intermediary profession.
Interlink Insurance Brokers
SA/NT
Nathan Miller Assent Financial Services Initially working on the underwriting side, Nathan has extensive experience in a broad range of industries. He relishes complex placements and can navigate complicated segments with ease.
Arcuri & Associates
This award-winning AR who has toured the London broking market as part of his professional development, is focussed on commitment and loyalty to clients.
WA Kristy Teh
Unicorn Risk Solutions
Kristy’s educational background in teaching special needs children makes her a remarkable broker with exceptional people skills. NIBA.COM.AU / 23
COMMUNITY / NIBA Virtual Convention
#NIBA2020: IT’S LIKE NOTHING YOU’VE EXPERIENCED BEFORE
The 2020 NIBA Convention is shaping up to be the virtual event for a reimagined world, featuring exclusive insights, inspirational speakers and a brand-new take on networking. AN INVITATION FROM ERIC HARRIS On behalf of the National Insurance Brokers Association (NIBA) and the Convention Committee, it is my pleasure to invite you to the 2020 NIBA Virtual Convention, which is to be held from 26-30 October. As you know, earlier this year we decided to defer our physical Convention in Melbourne as we were not sure what travel and other restrictions would be in place in October 2020. In the meantime, we have noted the need for our members to stay up to date on a wide range of issues, challenges and market developments. We are therefore thrilled to finally reveal the behind-the-scenes work of our Convention Committee… NIBA has engaged a dedicated team of designers, developers, technologists and producers to deliver an unparalleled delegate experience using a customised virtual convention platform.
Delegates of the 2020 NIBA Virtual Convention will not only have access to a range of presentations, discussions and information sessions, over five days, but be able to engage with insurers, underwriters and other exhibitors in a virtual marketplace. Furthermore, delegates will have the ability to engage with each other, as they normally would at a physical convention. This year the theme is, Brave New World - Navigating the Winds of Change. The Committee has been hard at work designing a program that will inspire, challenge and prepare brokers for the uncharted waters ahead. Futurist Gihan Perera will help delegates become fit for the future and thrive in our fast-changing world, while Dr Kirstin Ferguson, back by popular demand, will share her experience of ethically leading
GET READY FOR THE VIRTUAL MARKETPLACE
REGISTRATION FEES
An experience unlike any other, #NIBA2020 will take the Convention Expo Hall into a whole new dimension. It’s a great opportunity to learn about the latest cutting edge products and services that will take your business forward.
ERIC HARRIS NIBA President
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24 / INSURANCE ADVISER SEPTEMBER 2020
through crises. Bernard Salt will discuss the future of the economy, and Ben Crowe, mindset coach and mentor of tennis world no. 1 Ash Barty, will deliver a thoughtprovoking closing plenary. Whether you’re an account manager, principal or young professional, you’ll be able to maximise your CPD points and gain new skills and practical tools, relevant to the current landscape. We’ve kept pricing highly competitive, with an all-access early bird pass starting at $330 for members. Early bird registrations are now open, but for a limited time, so don’t delay. To register, or for further information, please visit www.nibavirtualconvention.com.au. Wherever you are in Australia, we do hope you’ll join us.
COMMUNITY / NIBA Virtual Convention
A SCINTILLATING ARRAY OF SPEAKERS
The current assortment of industry challenges will be addressed by a tremendous line up of speakers including:
GIHAN PERERA, a futurist, author and consultant who will give you a glimpse into what’s ahead – and show you how to become fit for the future.
DR KIRSTIN FERGUSON, an author, company director, board advisor and award-winning leadership expert, will share her insights into leading ethically through crises.
BERNARD SALT, a leading social commentator and advisor to corporate Australia on consumer, cultural and demographic trends, will share his predictions for the future of the economy.
BEN CROWE, a professional mentor and leadership coach, will deliver the closing plenary.
A TÊTE-À-TÊTE WITH #NIBA2020 OPENING KEYNOTE SPEAKER; GIHAN PERERA Insurance Adviser: What are the key learnings from these unprecedented times that will serve us in the future? Gihan Perera: It is important that we learn from the uncertainty we are collectively experiencing and manifest growth from it. It is essential that we keep the following in mind: 1. Don’t assume everybody is going through the same thing: That is always a bad assumption, but especially now in a crisis. You might hear people say, “We’re all in the same boat”, but that’s not true. We’re all in the same storm, but we’re each navigating our own boat through that storm. 2. People have new priorities: The pandemic has forced many people to re-evaluate their priorities and focus on what really matters to them - for example: personal safety, working from home, the health of older family members, supporting local businesses, and discretionary spending. Even with insurance, which many people assume they will never need; clients are now more discerning about their choice. 3. We are looking for real leaders: A crisis amplifies values - both good and bad. The real leaders are not necessarily those with the higher salary, the corner office, or the word ‘leader’ on their business card. Rather, they are the people who listen with empathy, share transparently, and act despite uncertainty.
IA: What do you think ‘fit for the future’ means for professionals such as insurance brokers? GP: For the past 10 years, I’ve been saying to professionals in many industries, “Disrupt yourself - otherwise somebody else will disrupt you”. This message is more relevant now than ever before. That does not mean you need to anticipate the next global disruptor. But being fit for the future means constantly assessing and evaluating everything you do, and being willing to discard it if it no longer gives value. The most successful people do these three things to be fit for the future: 1. Take the lead: Take responsibility for your own learning, growth, and mindset. 2 Involve your clients: Focus on knowing what problems you solve for clients (and then solving them). 3. Engaging more deeply with your team: Recognising the unique skills and talents of everybody in your team and including them in building a stronger future. IA: With COVID-19 changing the way we interact, what can insurance brokers do to engage better with their clients even during isolation? GP: The most important thing you can do is engage more deeply with clients, so you can truly understand their individual situations and tailor the right solution. During good times, people feel safe and secure, so they don’t have to be as careful
with their decisions. But when times are tough, they question everything, watch every dollar in and out, and focus on the core things they need. They will quickly drop everything and everybody that is not delivering real value. Even your most loyal clients might now question the value of the service you provide, because it might make a significant difference to their lives. So, be proactive, communicate more, and look for ways to give real value. IA: How can broking leaders create effective strategic plans for the future in such an uncertain world? GP: The biggest mistake you can make as a leader is to think small just because the future is uncertain. Unfortunately, that is tempting because it seems like you can only plan as far ahead as you can see. That is not true. The best leaders still create strategic plans - despite the uncertainty - but they do three important things in their planning: 1. Anticipate potential obstacles along the way, and plan workarounds in advance for those obstacles. 2. Create backup plans (plan b and plan c) if external circumstances change, and - crucially - know it will be necessary to switch to those backup plans. 3. Involve their teams in the planning process, and stay transparent along the way so everybody knows what is happening. NIBA.COM.AU / 25
2020 NIBA VIRTUAL CONVENTION
26-30 OCTOBER 2020
BRAVE NEW WORLD
NAVIGATING THE WINDS OF CHANGE
www.nibavirtualconvention.com.au
THANKS TO OUR PRINCIPAL PARTNERS
PRESENTS
DIGITAL TRANSFORMATION: WHAT TO WATCH OUT FOR WHEN ADOPTING NEW TECHNOLOGY
TECHNOLOGY / Foreword
COVID-19: A HARBINGER OF CHANGE RITA YATES
CEO & Co-Founder, Insurtech Australia
M
any people would have come across the meme: “Who led your digital transformation in 2020 - a) CEO b) CTO or c) COVID-19?” The pandemic has affected the business practices of most industries like no other single event in recent history and the insurance sector has certainly not been immune. As an industry, it’s provided us with a timely reminder of the importance of technology and digital capabilities. Over the last few months, I have had discussions with many insurers and brokers and the general consensus is that there has been a renewed focus on digital strategies in the wake of the pandemic. There are a few main reasons for this: • The remote working environment has highlighted inefficiencies more starkly and areas where existing operational infrastructure struggles have become more obvious. This has made the potential value of creating a more digitally-enabled business increasingly apparent. • Organisations have realised that, when faced with disruption, their workforces are more flexible and open to change than perhaps once thought. • Customer expectations continue to evolve as their needs become more instant, flexible, self-managed and digital, in line with their experience of how other industries are serving them during this time of social distancing. • It has become apparent that we will not be going back to business as usual any time soon and most organisations will likely not revert to the way they operated pre COVID-19. Businesses that succeed in the long term are likely to be those that are most digitally able. Insurtech Australia and EY recently worked together to deliver the 3rd annual Australian Insurtech Ecosystem report1 and some of the findings will have significant relevance to the broking industry now and in the future:
PARTNERSHIP IS THE WAY FORWARD
Partnerships between insurtechs and incumbents are becoming increasingly common and this is likely to become even more mainstream in the future. However, to ensure partnerships are successful and to maximise their benefits, there are a number of critical ‘get-rights’ across finance and strategy, execution, people and systems.
LOOKING TO THE FUTURE
Seventy per cent of the Australian insurance industry agrees insurtechs will play a major role in helping incumbent organisations become more digital in the future and, as more tangible and successful partnerships continue to develop, the importance of the insurtech sector is becoming increasingly evident. But there is more to be done to realise the benefits at scale, across the entire insurance value chain. For insurance brokers, areas that remain ripe for further digital innovation include improving back end efficiencies and automating processes, value add and risk management service for customers, and providing self-service options for customers, as well as online tools to increase customer base. The disruption created by COVID-19 might just be the burning platform needed to see our whole industry digitally transform, for the benefit of customers and the wider insurance sector. There are huge opportunities for innovative brokers to explore how working with insurtechs can assist this transformation process and help them come out of this pandemic as more digitally-able and successful organisations.
VALUE CREATION
Insurtechs are operating to solve real problems for the insurance industry and the value is becoming evident. Incumbents identified several key areas where insurtech has provided value to date including value add propositions for customers that wouldn’t otherwise be available, innovative ways to secure new customers and distribute insurance, and the ability to remove inefficiencies from the value chain.
1 https://www.ey.com/en_au/insurance/insurtech-partnering-to-deliver-value-at-scale
28 / INSURANCE ADVISER SEPTEMBER 2020
insurtechs are operating to solve real problems for the insurance industry and the value is becoming evident
TECHNOLOGY / Smart solutions
THE FUTURE OF WORK A 30 / INSURANCE ADVISER SEPTEMBER 2020
The future of work has been tipped on its head, prompting a major rethink about smart solutions brokers need to get the job done. BY NINA HENDY
I
t’s fair to say that some brokers had dabbled in flexible working arrangements pre-pandemic. But the entire industry was caught offguard by the mandatory shift to full-time working from home in recent months, prompting some of the smartest and brightest in our industry to urgently rethink what the future of work might look like. The fact is that COVID-19 has revealed that a large percentage of businesses were only in the early stages of planning arrangements for flexible working and servicing clients remotely. Others have been exposed as extremely ill-prepared for the future of work on many fronts. Kate Heydon is the Senior Account Director of Arthur J. Gallagher & Co. She’s happy to admit that remote working has provided rich learning for many. “Flexible work arrangements require an appropriate level of trust and enablement to explore new ways of working and then evolve with the times,” she says.
AND SMART SOLUTIONS NIBA.COM.AU / 31
TECHNOLOGY / Smart solutions
And regardless of whether it’s liked or loathed, it’s here to stay, she adds. “I believe that post-Covid, many businesses will continue to have some or even all staff working remotely, which places an increased level of importance on retaining connection by regularly checking in with teams and employees.”
NUTS AND BOLTS
Brokers will need to arm teams with the right technology and ensure they can use it effectively, Heydon adds. “By talking to our clients and deepening our relationships with them, brokers have a somewhat unique opportunity to communicate in a way that best suits them and use technology to enable and simplify the way we do business,” she says.
CUSTOMER EXPERIENCE Willis Towers Watson has maintained a keen focus on enhancing customer experience.
we’ve found companies increasingly keen to look at remote options for collecting data PAUL MAYLES, RADD ENGINEERING ANALYTICS
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TECHNOLOGY / Smart solutions
having a robust compliance framework is even more important in the virtual world SHEILA BAKER, GOLD SEAL
The company’s General Manager of Affinity and Commercial, Brent Lehmann says measures such as providing clients with online risk assessment tools so they can address the changing nature of risk has been a small but important step in managing client relationships this year. “Everyone is seeking reassurance at this time, and committing to communicate with customers, particularly through video means such as Microsoft Teams, Zoom, Google Meet, Skype or another medium we have all become familiar with extends the personal touch,” Lehmann says. “For those brokers with a large portfolio of customers, they can embrace the opportunity of creating a marketplace for their customers. Offer to showcase the goods or services provided by their customers with the balance of their customer portfolio, essentially taking on a marketing role for their customers’ businesses,” Lehman adds.
INSURTECH
The spotlight is also shining brightly over insurtech this year, the Technical Director for RADD Engineering Analytics, Paul Mayles says. “As a business that specialises in the collection, aggregation and analysis of risk
34 / INSURANCE ADVISER SEPTEMBER 2020
engineering and underwriting data for the insurance industry, we’ve found companies increasingly keen to look at remote options for collecting data,” Mayles says. Brokers should clearly identify the problem they’re trying to solve before financially committing to a solution. This includes the resources and data inputs they will have available, and what a successful outcome will look like for them and their clients, he says. “Insurtech is revolutionising the way business is transacted in the industry, however there are very few ‘one stop shop’ solutions that meet all needs and the testing and implementation of new systems can be challenging if all stakeholders are working remotely,” Mayles says.
SOFTWARE
BA Insurance Systems also reports an uptick in new enquiries as companies scramble to develop or improve their online solutions such as quote, bind and pay websites and client portals, Director Jim Armstrong confirms. “With social distancing the norm, the value of face-to-face communications increases further. Whether those communications are in person, via video link or the good old fashioned phone,
clients don’t want to spend the time on purely transactional conversations,” he says. “The smart options are often the simple ones. Doing what you can to make sure all your company data is in a safe, secure place that can be accessed across the company is crucial,” Armstrong says. This is best achieved by adding data and client records onto central systems that employees can access at any time, from anywhere and on any device. Of course, if people save information on personal devices, data leakage risks emerge, Armstrong says.
HUMAN RESOURCES
The human resources function across remote workers has also emerged as a key consideration. Sheila Baker, Managing Director of audit and compliance providers Gold Seal says that a compliance framework is even more important in the virtual world. A temptation with working from home is not to follow your compliance obligations as rigorously, but brokers need to make sure their activity and client records are accurately recorded, Baker says. “We’ve had a lot of brokers call our helplines to discuss HR requirements
TECHNOLOGY / Smart solutions
and management processes needed to support effective work from home arrangements. The fact is that having a robust compliance framework is even more important in the virtual world,” she says.
SECURITY
Shifting to remote teams has also heightened the risks associated with data security, cyber threats and fraud, points out Irene Kendall, director of Technosoft Solutions. Lax device and security management from home offices increases the potential for cyber-attacks, Kendall says. Companies need to plan for the new normal and roll out technology that protects their data, workforce and their clients – regardless of where they work from, she says. “As we see more methods of clients contact be utilised, such as texting to clients, businesses need to understand their exposure and deploy the tools that
5 THINGS THAT SHOULD BE TOP OF MIND FOR BROKERS 36 / INSURANCE ADVISER SEPTEMBER 2020
facilitate the communication method, but protect both the client and the business from breaches and claims,” Kendall adds.
COMPLIANCE
consumer protections enshrined in the Code and help share the guidance the Committee offers to subscribers about meeting those obligations. No doubt, brokers will be navigating the future of work into next year, as the pandemic drags out and mandatory lockdowns continue. The good news is that in some respects, remote working has brought teams and clients closer, Heydon adds. Colleagues are connecting socially and taking a moment to ensure others are tracking well, she says. “It’s easy to walk past someone in the hall with barely a nod. With virtual face-to-face meeting, the importance of communication has been lifted, and in my personal view, that can only be a good thing,” Heydon says.
1. Check your processes and procedures to ensure compliance 2. Consider ongoing education and training for employees 3. Set up regular communication processes with your team and clients
4. Address the risk for cyber-attacks, lost data and fraud risks 5. Consider insurtech applications for online transactional solutions
Ensuring that the prescribed world of regulatory compliance isn’t impacted when working virtually will also continue to feature heavily into the future as work is redefined. In fact, the Insurance Brokers Code Compliance Committee launched a new website designed to empower consumers and help insurance brokers improve their service standards on 1 July. The website provides access to information about the Code, the obligations built into it, the Committee, and its work and publications. It will also make it easy to flag a concern about the industry concerning a breach of the obligations under the Code. It’s hoped the online presence will raise community awareness about the important
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TECHNOLOGY / Cybercrime
THE CYBERCRIME WINDOW OF OPPORTUNITY Working from home has become increasingly prevalent in 2020, but as flexibility increases, so too does the opportunity for cybercrime. And if it can happen to Twitter and Telstra, it can happen to you and your clients. BY MARTIN WANLESS
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NIBA.COM.AU / 39
TECHNOLOGY / Cybercrime
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s COVID-19 descended, businesses hurriedly made arrangements to enable remote work. Cloud-based technology was employed, remote access granted. And while many businesses across the country have been encouraging flexible working arrangements for years now, that’s not always included off-site access to sensitive data. Now, out of necessity, it does. And as a result, the opportunity for cybercriminals just got a whole lot bigger. “The threats to cybersecurity haven’t changed over the past few months, but it’s certainly ramped up,” says Jo StewartRattray of ISACA (Information Systems Audit and Control Association). “We’re seeing phishing scams, whaling scams [see breakout], all of the same types of scams, but the issue is humans – we’re the weakest link in the chain – so we need to educate people to recognise a scam, and what to do internally if they see a scam.” Edward Osborne, Special Counsel at Sparke Helmore Lawyers, agrees. “COVID-19 has spun off a whole lot of phishing campaigns targeting employees and senior executives, whether that’s stealing credentials straight up or installing ransomware-type malware on remote machines, it’s definitely something that’s significantly increased. “These criminals are playing on an individual’s anxiety around the pandemic, and it’s not a complete surprise that tactic is working.” “Businesses that experience cyber attacks are increasingly open to financial loss or business interruption,” says Ben Di Marco, Cyber Specialist at Willis Towers Watson. “And if data sharing or file storage goes down, the business has an immediate problem.”
CONVERSATIONS WITH CLIENTS – AND YOURSELF As insurance brokers, there’s a significant opportunity to help not only educate clients on the risks they’re potentially more greatly exposed to, but also ensure their insurance coverage is adequate. After all, the goalposts have moved. “We’re seeing a real hunger from
40 / INSURANCE ADVISER SEPTEMBER 2020
clients to understand cyber risk and insurance response,” says Di Marco. “There’s a need for brokers to be able to give confidence that, particularly from a cyber insurance perspective, the products on offer are fit for purpose, and are going to match the needs of clients.” “The Australian cyber insurance market is still developing,” says Osborne. There are a number of different policies out there that offer excellent coverage for a broker’s client. “Obviously, making sure that
“Sometimes, in the case of ransomware, the bad actors will ask for a lot, other times they’ll ask for smaller, very specific sums, such as $238, which people will be more likely to pay – if they do that to a few hundred businesses, it becomes a very significant amount of money.” Stewart-Rattray advises that staff should be encouraged to report everything that may be slightly suspicious. “In the case of phishing scams, if you report 20 emails and 16 are fine, you’ve still helped stop four potential attacks.”
“THE ISSUE IS HUMANS – WE’RE THE WEAKEST LINK IN THE CHAIN – SO WE NEED TO EDUCATE PEOPLE TO RECOGNISE A SCAM, AND WHAT TO DO INTERNALLY IF THEY SEE A SCAM” the insurance meets their needs is a given, but also their risk profile. “To do that you need to fully understand what their technology stack looks like, the processes for remote working environments, understanding what the data flows now look like compared to what they were previously. “Without that insight, it’s virtually impossible to build a scalable and effective risk management program to deal with the type of risks COVID-19 is bringing. “Brokers will have a great understanding of the policies out there, and there’s no harm in bringing in a cyber expert to work with them to assess the risks their clients are facing.”
As scams are developing, the potential losses are developing too. Di Marco says, “Toll Holdings, the logistics company, recently experienced a ransomware attack that significantly impacted its supply chain – in terms of meeting delivery orders and complying with customer requests. It caused catastrophic business interruption to the organisation, and the financial impacts have now caused the company’s owners to decide to sell the business. This is a very different type of exposure to what we would have talked about three or four years ago.”
UNDERSTANDING THE RISKS
While the enormity of the task to ensure clients are minimising the cyber risks they face may seem significant, Osborne says it’s important to recognise the goal isn’t perfection. “For your own business and your clients’ businesses, it’s important to recognise these things are manageable. You’re looking to put reasonable and appropriate safeguards in place that are commensurate with the risk that the business faces.” And, after those systems are checked and up-to-date, the next step is ensuring your people have the knowledge and technology available to minimise the significantly increased risks they’re now facing.
As well as auditing the systems and processes in place, education of staff is critical to reducing cybercrime. After all, cyber threats may not have an immediate impact. Some threats, says Stewart-Rattray, can sit in your system for months, just waiting to pounce. “They’re particularly nasty ones,” she says. “They’ll sit in wait and then take some research, some data, some copyrighted information or something else of value, and you may have to pay to release it, or you have lost information that can be monetised by the criminals.
IT’S NOT ABOUT PERFECTION
CYBER INSURANCE
Know your risk. Know our response.
Louise Soutter Underwriter, Professional Risks
Thomas Miller Underwriter, Professional Risks
Jack Saunders Underwriter, Professional Risks
Direct: +61 7 3222 9104 Mobile: +61 484 621 418 Louise.Soutter@brooklynunderwriting.com.au
Direct: +61 2 8270 1741 Mobile: + 61 402 511 494 Thomas.Miller@brooklynunderwriting.com.au
Direct: +61 2 8270 1778 Mobile: +61 402 868 241 Jack.Saunders@brooklynunderwriting.com.au
TECH ISSUE / Cybercrime TECHNOLOGY / Cybercrime
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42 / INSURANCE ADVISER SEPTEMBER 2020
TECHNOLOGY / Technology and insurance broking
ACCELERATING THE DIGITAL AGENDA FOR BROKERS The current pandemic is accelerating disruption and encouraging almost instantaneous technology adoption, but there is still a very human need for connection.
BY EOGHAN TREHY
National Head of Insurance, Macquarie Business Banking
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cross Australia, a sense of COVID-fuelled urgency is driving rapid technology adoption. Businesses have been remarkably creative in finding new ways to stay connected to their customers. And in a time of physical distancing, this has been largely a digital shift – including the use of virtual meeting tools, workflow tools, cloud-based document storage and electronic signatures. In many cases, businesses had limited choice regarding adoption of technology, if they wanted to continue trading. Insurance brokers are fortunate to be operating recurring revenue businesses at a time where risk awareness amongst clients is heightened. This, however, does not mean insurance brokers can afford to be complacent when it comes to investing in new technology, or maintaining close ties with clients. In times of crisis and concern, clear, careful communication is key.
GET READY FOR REAL-TIME
The insurance industry is increasingly turning to insurtechs as partners – according to a recent EY and Insurtech Australia survey, 80 per cent of insurers are now collaborating with an insurtech. One of the most common triggers is to better support distribution.1 What’s more, the survey respondents agreed there are some areas of opportunity with potential for innovation. These include more efficient administration – such as smart online forms and digital self-service – and more responsive pricing and underwriting. Real-time underwriting (and subsequently, real-time broker commissions) will require brokers and insurers to integrate systems. These ideas have never been more relevant to customers, who have been unable to meet
brokers face to face to discuss policy documents due to physical distancing requirements or preference. And they also meet increased expectations for a seamless and intuitive digital experience – selfpopulating forms, not more paperwork. So now is the ideal time for brokers to get ready for this next wave of insurance transformation. Although we know some still depend on their cluster group or network for direction, many brokers are taking this opportunity to test new tools and systems themselves.
SHIFT TO VIRTUAL
Our 2019 Insurance industry pulse check found higher performing brokers were already using technology to increase productivity. They were experimenting with automation and streamlining back office and client service processes. This freed up more time, which they may spend with clients to better understand their individual risks or support successful claims.2 These more progressive brokers undoubtedly had an advantage since March 2020, when we were all asked to quickly transition entire workforces to work from home. For brokers who already had secure online access to systems, the only major change was adapting to remote meeting and working.
THE VALUE OF CONNECTION
This rapid transformation has also been supported by regulatory changes that may have previously seemed years away in adjacent sectors. For example, strata managers can now accept electronic signatures and convene virtual committee meetings with online voting.3
Shaking up the status quo starts with re-thinking legacy systems and protocols like this – and it provides food for thought for insurers who still depend on manual processes and paper-based forms. It’s fantastic to see brokers feeling empowered by new workflow tools and back office automation. Investment in customer self-service portals and centralised contact centres is also providing greater choice and convenience for their clients. But we have also learned one other valuable lesson through this experience: technology can’t replace our very human need for connection. Whether they Zoomed into their client’s premises, or simply picked up the phone and asked how they could help, brokers who focused on sustaining their established and trusted client relationships are best placed to benefit in the future.
HOW MACQUARIE CAN HELP
The Macquarie Insurance team is here to help you with personalised support, delivered by industry specialists. To find out more, visit macquarie.com.au/ business-banking/insurance-industry The information on this page has been prepared by Macquarie Business Banking, a division of Macquarie Bank Limited AFSL & Australian Credit Licence 237502 (“Macquarie”) for general information purposes only, without taking into account your personal objectives, financial situation or needs. Before acting on this general information, you must consider its appropriateness having regard to your own objectives, financial situation and needs. The information provided is not intended to replace or serve as a substitute for any accounting, tax or other professional advice, consultation or service.
1 Insurtech: partnering to deliver value at scale, Third annual report assessing the Australian insurtech ecosystem, EY and Insurtech Australia, 2020. Survey conducted April-July 2020. 2 Thriving through change: 2019 Insurance industry pulse check, Macquarie Bank 3 A catalyst for positive change, How businesses are adapting with COVID-19, Macquarie Bank 5 June 2020
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ANALYSIS / Legal
‘TESTING’ FOR COVID-19
As businesses seek clarity regarding the extent to which their losses are covered under insurance, a question has arisen as to how such clarity can be attained most efficiently. BY CLANCY O’DONOVAN
Senior Associate, DLA Piper Australia
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OVID-19 has inflicted the most significant damage to the global economy in decades. The restrictions imposed and voluntary restraint exercised in order to minimise health impacts have plunged the global economy into a deep recession – the first recession to have been caused solely by a pandemic in the past 150 years and, based on current forecasts, the most severe global recession since the end of World War II. In June, the UK financial services regulator commenced proceedings against eight insurers in the High Court of Justice in London, pursuant to the Financial Markets Test Case Scheme, which allows claims raising issues of general importance and requiring immediate legal guidance to be determined on an expedited basis. The Financial Conduct Authority (FCA), on behalf of policyholders, has sought declarations that certain policies underwritten by the defendant insurers provide cover for business interruption losses resulting from COVID-19 and associated government actions. Whilst the test case will not resolve all disputes which might conceivably arise between policyholders and insurers, it is intended to resolve certain threshold uncertainties relating to non-damage business interruption cover. The issues in contest are myriad and complex, as are the arguments being advanced by the FCA and each respective insurer. Such issues include, amongst others: • whether the pandemic can properly be described as an “incident”, “event” or “occurrence” – terminology used in certain policies; • whether the phrase “restrictions imposed” (a trigger for cover under certain policies) is
capable of being satisfied by government advice and guidance, or whether an order of legal effect is required; • whether the concept of “prevention of access” requires complete closure of premises, or whether partial closure is sufficient – this is potentially significant in the context of businesses able to continue trading on a limited or conditional basis (e.g. cafes and restaurants able to continue serving takeaway food and drinks); • what the proper meaning of the word “vicinity” is in the context of policies covering loss resulting from government action in response to a danger in the “vicinity” of insured premises – including whether cover is available when action is taken at a national level to reduce the spread of a pandemic existing on a much larger scale than the relevant “vicinity”; • the application of causation principles as between an insured peril and the relevant loss; and • in the event business interruption cover is available, what the proper method of calculating indemnifiable loss is – including whether it must be reduced to account for interruption and loss which would have occurred as a result of COVID-19 in any event, even if the relevant government restrictions had not been imposed. The hearing ran from 20 July to 30 July and the Court has indicated that it
intends to publish its draft judgment by mid-September. Barring any appeal(s), the decision will be final and insurers will be required to apply it to the facts of individual claims they handle. The Court’s findings may only have limited direct application in Australia, given claims for losses sustained by Australian businesses will be made in the context of different policy wordings and government action. Nevertheless, as a general proposition, UK decisions are often persuasive authority in Australia and the Court’s reasoning may potentially provide useful guidance as to the approach which Australian courts may ultimately take. In any event, it appears Australia may be following in the footsteps of the UK, with the Insurance Council of Australia and the Australian Financial Complaints Authority recently announcing that a test case has been filed in the Supreme Court of NSW. Whilst details of the proposed scope and terms of the test case are not yet available, it appears a key focus will be exclusions for loss resulting from diseases declared to be a “quarantinable disease” under the repealed Quarantine Act 1908 (Cth) and whether such exclusions capture diseases (including COVID-19) listed under the Biosecurity Act 2015 (Cth), being the current legislation used to manage national biosecurity risks. These test cases will undoubtedly be a source of continued interest to insurers and policyholders alike.
The issues in contest are myriad and complex, as are the arguments being advanced by the FCA and each respective insurer. NIBA.COM.AU / 45
COVID-19 / Government Support
GOVERNMENT SUPPORT FOR BUSINESSES AMID COVID-19
NIBA Policy Analyst, Allyssa Hextell, provides and update on the federal initiatives supporting small- and medium-sized businesses during these uncertain times.
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IBA is committed to supporting our members through the coronavirus outbreak and the uncharted territory that lies on the other side. To help navigate the various stimulus packages, NIBA has compiled a guide to the federal initiatives supporting smalland medium-sized businesses around Australia.
FEDERAL
SME Guarantee Scheme
The Government has established the Coronavirus SME Guarantee Scheme which supports small and medium enterprises (SMEs) to gain access to working capital to help them get through the impact of the coronavirus. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs. The Government’s support will enhance lenders’ willingness and ability to provide
JobKeeper and Workers Compensation
The introduction of JobKeeper has created uncertainty amongst businesses as to whether or not these payments need to be declared to the insurer as wages and whether these payments will affect the premiums paid by employers. The treatment of JobKeeper payments for the purposes of wages calculation differs across each state and territory. Aon has provided some useful information for business owners that details each states approach. The information can be found at aoninsights. com.au/covid-19-impact-workers-comp
46 / INSURANCE ADVISER SEPTEMBER 2020
credit to SMEs with the Scheme able to support $40 billion of lending to SMEs. Phase 1 of the scheme will be available for new loans made by participating lenders until 30 September 2020. Phase 2 will begin on 1 October 2020 and be available for loans made until 30 June 2021. The Scheme complements the announcement made by Australian banks to support SMEs by deferring loan repayments of affected small business for six months. This scheme will also complement measures taken by the Reserve Bank to increase the banking sectors appetite to provide loans to SMEs. For more information visit treasury.gov. au/coronavirus/sme-guarantee-scheme
Boosting Cashflow for Employers
The Federal Government is providing up to $100,000 to eligible small- and mediumsized businesses, and not-for-profits (including charities) that employ people. Eligible employers will receive a payment equal to 100 per cent of their salary and wages withheld up to a maximum of $50,000 with a minimum payment of $10,000. Small and medium business entities with aggregated annual turnover under $50 million that employ workers are eligible. NFPs entities, including charities, with aggregated annual turnover under $50 million and that employ workers will also be eligible. The payments are tax free and will flow automatically through the ATO until the end of the June-September quarter. For more information visit ato.gov.au/Business/Business-activitystatements-(BAS)/In-detail/Boosting-cashflow-for-employers/
Increased Instant Asset Write-off
The threshold for instant asset write off for businesses with an annual aggregated turnover of less than $500 million has been increased from $30,000 to $150,000. The threshold will apply to assets that are either installed or ready for first use by 31st December 2020. Businesses with a turnover of $500 million or more are not eligible to use instant asset write-off. For more information visit ato.gov.au/Business/Depreciation-andcapital-expenses-and-allowances/Simplerdepreciation-for-small-business/Instantasset-write-off/
Backing Business Investment (BBI)
Measures introduced in March 2020 will provide an incentive to businesses with an aggregated turnover of less than $500 million for the 2019–20 and 2020–21 income years, to deduct the cost of depreciating assets at an accelerated rate. For each new asset, the accelerated depreciation deduction applies in the income year that the asset is first used or installed ready for use for a taxable purpose. The usual depreciating asset arrangements apply in the subsequent income years that the asset is held. To be eligible to apply the accelerated rate of deduction, the depreciating asset must: • not be an asset to which an entity has applied depreciation deductions or the instant asset write-off rules; • be first held on or after 12 March 2020; and • first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021.
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Under the measures, different rules apply depending on whether or not an entity is using the simplified rules for capital allowances for small businesses. For more information visit ato.gov.au/Business/Depreciationand-capital-expenses-and-allowances/ Backing-business-investment---accelerateddepreciation/
Assistance to help retain apprentices and trainees
Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid from 1 January 2020 to March 2021. In addition to the existing support for small businesses, mediumsized businesses will now be eligible for the subsidy for wages paid until 31 March
2021. Subsidies will also be available to any new employer who re-engages an eligible apprentice that was displaced by an eligible small- or medium-sized business. Claims from small businesses are now open, while claims from medium-sized business will open on 1 October 2020. Final claims for payment must be lodged by 30 June 2021. For more information and to check the eligibility criteria, visit business. gov.au/Risk-management/Emergencymanagement/Coronavirus-informationand-support-for-business/Supportingapprentices-and-trainees
JobKeeper
The Federal Government has extended JobKeeper payments for eligible businesses until 28 March 2021. Businesses that are currently receiving JobKeeper payments will remain eligible until 27 September 2020. From 28 September 2020, businesses and not-for-profits seeking to claim the JobKeeper Payment will be required to re-assess their eligibility for the JobKeeper extension with reference to their actual turnover. Payments rates will be reduced from 28 September 2020, with employers receiving $1200/fortnight for each eligible full-time employee and $750/fortnight for part-time employees. Payment rates will decrease again from 4 January 2021 with employers receiving $1000/fortnight for each eligible full-time employee and $650/fortnight for part-time employees. For more information visit treasury.gov. au/coronavirus/jobkeeper/extension
VID-19
Restrictions
As restrictions and entry requirements for each state are subject to change, the most reliable source of information is the websites of the respective state governments. Information for current restrictions in each state and territory can be found at each of the following websites: Australian Capital Territory covid19.act.gov.au/what-you-cando/faqs-changes-to-restrictions New South Wales nsw.gov.au/covid-19/what-you-canand-cant-do-under-rules Northern Territory coronavirus.nt.gov.au/roadmapnew-normal# Queensland covid19.qld.gov.au/governmentactions/roadmap-to-easingqueenslands-restrictions South Australia covid-19.sa.gov.au/restrictionsand-responsibilities Tasmania coronavirus.tas.gov.au/facts/ important-community-updates Victoria vic.gov.au/coronavirus-covid-19restrictions-victoria Western Australia wa.gov.au/organisation/ department-of-the-premier-andcabinet/covid-19-coronavirus-waroadmap
NIBA.COM.AU / 47
COVID-19 / Government Support
Rent Relief Code of Conduct
The National Cabinet has agreed that all state and federal governments will implement a set of good faith leasing principles for application to commercial tenancies (including retail, office and industrial) between owners/operators/other landlords and tenants, in circumstances where the tenant is a small- to mediumsized business (annual turnover of up to $50 million) and is an eligible business for the purpose of the Commonwealth Government’s JobKeeper programme. These principles will apply to negotiating amendments in good faith to existing leasing arrangements – to aid the management of cashflow for SME tenants and landlords on a proportionate basis – as a result of the impact and commercial disruption caused by the economic impacts of industry and government responses to the declared Coronavirus (“COVID-19”) pandemic. National Cabinet has agreed that there would be a proportionality to rent reductions based on the tenant’s decline in turnover to ensure that the burden is shared between landlords and tenants. The Code provides a proportionate and measured burden share between the two parties while still allowing tenants and landlords to agree to tailored, bespoke and appropriate temporary arrangements that take account of their particular circumstances. The Rent Relief Policy will include a mutual obligation requirement on the small- and medium-sized enterprises and not-for-profit tenants to continue to engage their employees through the JobKeeper initiative where eligible, and if applicable, provide rent relief to their subtenants. How this code is regulated will be determined by the state.
48 / INSURANCE ADVISER SEPTEMBER 2020
C
VID-19
Returning to Work
When employees are able to return to their offices will be decided on a state by state basis. The National Cabinet has agreed to a set of Covid-19 safe workplace principles while Safe Work Australia is currently providing industry specific information for employers and employees on their website. The Safe Work Australia website contains a variety of resources for businesses including advice on social distancing, hygiene practices and coronavirus-related workplace compensation. Businesses are being encouraged to prepare for re-opening by having a covid-safe work plan in place to protect employees and customers. Recommended measures include; staggering start and finish times to avoid crowding on public transport, frequent cleaning of all workspaces, avoiding face-to-face meetings, wearing masks when dealing with clients and undertaking a risk assessment before recommencing operations. The Safe Work Australia website should be businesses’ main source of information when developing these plans. safeworkaustralia.gov.au You can find out how to access this assistance through your relevant state and territory. • ACT Government covid19.act.gov.au/business-and-work/ commercial-tenancies • NSW Government service.nsw.gov.au/campaign/covid-19help-small-businesses/commercial-leasesupport • NT Government nt.gov.au/industry/support-for-business/ programs-and-initiatives • QLD Government treasury.qld.gov.au/programs-andpolicies/covid19-package/support-forlandlords-and-tenants/ • Small Business Commissioner South Australia sasbc.sa.gov.au/article/view/348
• TAS Government cbos.tas.gov.au/newsroom/covid-19novel-coronavirus/commercial-tenantsaffected-by-covid-19-emergency • Business Victoria business.vic.gov.au/disputes-disastersand-succession-planning/coronaviruscovid-19/commercial-tenancy-reliefscheme • Government of Western Australia commerce.wa.gov.au/consumerprotection/commercial-tenancies-covid19-response To learn more about the Code and the 14 commercial leasing principals during COVID-19, visit pm.gov.au/media/updatecoronavirus-measures-070420
COMMUNITY HUB
COMMUNITY HUB SEPTEMBER 2020
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NIBA.COM.AU / 53
COMMUNITY HUB
MARSH& MCLENNAN A G E N C Y OUR INSURANCE PRODUCTS INCLUDE:
■ ■ ■ ■ ■ ■ ■
Demolition & Asbestos Liability - demolition, asbestos removal and transport, asbestos and environmental consultancies and similar occupations Kidnap, Ransom & Extortion Personal Accident & Illness Income Protection Motor Trades - public and products liability Tyre Retailers - property Window Cleaners - public and products liability
PLEASE VISIT OUR WEBSITE, AND CLICK ON "PRODUCTS AND SERVICES" FOR MORE DETAILS www.marshmc.com.au
CONTACT Michael Beveridge
08 8385 3630 or
Tara Nadge
08 8385 3583 newbusiness@marshmc.com Marsh and McLennan Agency Pty Ltd ABN 33 000 668 584 / AFSL 238984
517-3776
54 / INSURANCE ADVISER SEPTEMBER 2020
NIBA / Events
STAY UPDATED!
NIBA EVENTS
NIBA stages a variety of educational and social events across Australia for the whole intermediated insurance community. EVENTS UPDATE WELCOME TO OUR SPRING EVENTS WITH THE ‘SEPTEMBER ISSUE’
The countdown is on for NIBA’s Virtual Convention, which is to be held from Monday, 26 October to Friday, 30 October. This is the first time that the NIBA Convention is going online and like the face-to-face experience, delegates can expect to hear from industry leaders, regulators and thought-provoking presenters on a range of highly relevant topics. We hope you can join us for a scintillating program that will prepare you to Navigate the Winds of Change in the Brave New World we find ourselves living in. Be sure to take advantage of the Early Bird rates that are available until mid-September. To find out more and register, please visit – www.nibavirtualconvention.com.au For the latest information on NIBA events – please visit our website, niba.com.au/events
DISPLAY ADVERTISING INDEX – SEPTEMBER 2020 Zurich...................................................... IFC Vero................................................................5 NTI..................................................................7 QBE advertorial....................................... 9 QPIB............................................................ 15 UAC.............................................................. 17 Advanced Buildings...............................19 BAIS............................................................29 Blue Zebra Insurance...........................34 JAVLN........................................................ 35 Technosoft Solutions............................ 37 Focusnet Technology...........................39 Brooklyn Underwriting........................43 Ebix.............................................................45 NIBA Mentoring..................................IBC Liberty Specialty Markets............ OBC
NATIONAL WEBINARS ON DEMAND - TO BE WATCHED AT YOUR LEISURE! New topics now available
2020 CGU NIBA WEBINAR SERIES | TEMPORARY WORKING FROM HOME GUIDANCE
Stay safe and well when required to work from home due to unforeseen circumstances. CGU and NIBA want to remind you to take a break with this two-minute video of the simple things you can do to keep your mind, body and work space healthy and safe.
Check out what’s happening close to yo u and registe r via the events cale ndar at niba.com.a u/ events
SAVE THE DATE In light of COVID -19, NIBA will continue to follow and implement national and state health authorities’ recommendations. As we progress into the second half of 2020 a program of virtual, and where possible, physical networking event opportunities will be held.
2020 NIBA/UAC PERTH UNDERWRITING EXPO
WHEN: Thursday, 12 November 2020 WHERE: Crown Complex, Great Eastern Highway Burswood
2020 CGU NIBA WEBINAR SERIES | VIRTUAL RISK ASSESSMENT
Preparations are underway to host the insurance industry coming together in Perth. This is a popular annual event which kicks off with a breakfast and then flows into the marketplace, where insurance brokers and national underwriters can come together under one roof. This event is subject to travel and gathering restrictions being lifted. NIBA will continue to provide further updates as we move closer to the date.
2020 CGU NIBA WEBINAR SERIES | THE TRUSTED RISK ADVISER COVID-19 EDITION
2020 NIBA QLD CHRISTMAS BOWLS
In the current environment where safety is paramount, many are changing business practices so more of our usual activities can be undertaken in a virtual world, including property assessments and surveys. This course will increase your understanding of ‘Virtual Risk Assessment’ and how it can help you, your customers and underwriters stay safe.
As economies and markets continue to be impacted by COVID-19, this webinar will deliver key insights into the possible impacts on the insurance market and what this could mean for small to large businesses. It aims to help you prepare your clients for possible impacts, whilst managing expectations of both clients and the underwriting market.
WHEN: Thursday, 26 November 2020 WHERE: To be confirmed Now becoming a happy tradition – 2020 will mark our third year of holding this enjoyable relaxed event. You are invited to join us once again for an afternoon of barefoot bowls and a delicious BBQ lunch in the fresh air. Stay tuned for more information on this event.
If you’d like to advertise your products and services through NIBA, please contact Tony May today on (02) 9459 4303.
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INSURER STRENGTH RATINGS
S&P GLOBAL
INSURER FINANCIAL STRENGTH RATINGS
The following list of S&P Global Ratings insurer financial strength ratings assigned to insurance companies in Australia and New Zealand. Ratings at 1 August, 2020. Contact: Craig Bennett, S&P Global Ratings Telephone: 03 9631 2197
NEW ZEALAND
RATING
NON-LIFE INSURERS
AUSTRALIA
RATING
NON-LIFE INSURERS AAI Ltd.
A+/POSITIVE
AIG Australia Limited
A/STABLE
Allianz Australia Insurance Ltd.
AA-/STABLE
BHP Billiton Marine & General Insurances Pty Ltd. A/STABLE Chubb Insurance Australia Ltd.
AA-/STABLE
Great Lakes Insurance S.E (Australia Branch)
AA-/STABLE
Hallmark General Insurance Co. Ltd.
BBB+/STABLE
Insurance Australia Ltd.
AA-/STABLE
Society of Lloyd's
A+/STABLE
Medical Insurance Australia Pty Ltd.
A-/STABLE
QBE Insurance (Australia) Ltd.
A+/STABLE
QBE Insurance (International) Ltd.
A+/STABLE
Zurich Australian Insurance Ltd.
A+/POSITIVE
AA Insurance Ltd.
A+/POSITIVE
AIG Insurance New Zealand Ltd.
A/STABLE
Chubb Insurance New Zealand Ltd.
AA-/STABLE
Hallmark General Insurance Co. Ltd. (NZ Branch)
BBB+/STABLE
IAG New Zealand Ltd.
AA-/STABLE
Society of Lloyd's
A+/STABLE
Medical Insurance Society Ltd.
A-/POSITIVE
Southern Cross Benefits Ltd.
A/STABLE
Southern Cross Pet Insurance Ltd.
A/STABLE
LIFE INSURERS
Teleco Insurance (NZ) Ltd.
BBB+/STABLE
AIA Australia Ltd.
A+/STABLE
Vero Insurance New Zealand Ltd.
A+/POSITIVE
AMP Life Ltd.
A-/NEGATIVE
Vero Liability Insurance Ltd.
A+/POSITIVE
Challenger Life Company Ltd.
A/STABLE
Colonial Mutual Life Assurance Society Ltd. (The)
A+/STABLE
Hallmark Life Insurance Co. Ltd.
BBB+/STABLE
MetLife Insurance Ltd.
A+/STABLE
Westpac Life Insurance Services Ltd.
A+/STABLE
HEALTH INSURERS Southern Cross Medical Care Society
A+/STABLE
NIB NZ Ltd.
A-/STABLE
LENDERS MORTGAGE INSURERS Genworth Financial Mortgage Insurance Pty Ltd. (NZ Branch)
A/NEGATIVE
LIFE INSURERS
LENDERS MORTGAGE INSURERS Genworth Financial Mortgage Insurance Pty Ltd.
A/NEGATIVE
QBE Lenders' Mortgage Insurance Ltd.
A/STABLE
Westpac Lenders Mortgage Insurance Ltd.
AA-/NEGATIVE
REINSURERS General Reinsurance Australia Ltd.
AA+/STABLE
General Reinsurance Life Australia Ltd.
AA+/STABLE
Asteron Life Ltd.
A+/POSITIVE
Hannover Life Re of Australasia Ltd.
AA-/STABLE
Hallmark Life Insurance Co. Ltd. (NZ Branch)
BBB+/STABLE
Munich Reinsurance Co. of Australasia Ltd.
AA-/STABLE
Medical Life Assurance Society Ltd.
A-/POSITIVE
RGA Reinsurance Co. of Australia Ltd.
AA-/STABLE
Westpac Life-NZ-Ltd.
A+/NEGATIVE
SCOR Global Life Australia Pty Ltd.
AA-/STABLE
Swiss Re Life & Health Australia Ltd.
AA-/NEGATIVE
*For the S&P Global Insurer Financial Strength Ratings Definitions visit: https://www.niba.com.au/resource/standardandpoors.pdf Copyright © 2020 S&P. This material is reproduced with the permission of S&P. Reproduction of this the S&P Information in any form is prohibited without S&P’s prior written permission. Neither S&P, its affiliates nor any of their thirdparty licensors: (a) guarantee the accuracy, completeness or availability of the S&P information, or (b) make any warranty, express or implied, as to the results to be obtained by Insurer Financial Strength Ratings or any other person from the use of the S&P information or any other data or information included therein or derived therefrom, or (c) make any express or implied warranties, including any warranty of merchantability or fitness for a particular purpose or use, or (d) shall in any way be liable to Insurer Financial Strength Ratings or any recipient of the S&P information for any inaccuracies, errors, or omissions, regardless of
56 / INSURANCE ADVISER SEPTEMBER 2020
cause, in the S&P information or for any damages, whether direct or indirect or consequential, punitive or exemplary resulting therefrom. Ratings are statements of opinion, not statements of fact or recommendations to buy, hold, or sell any securities. S&P Global (Australia) Pty. Ltd. holds Australian financial services licence number 337565 under the Corporations Act 2001. S&P Global credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act). Ratings are based on information received by Ratings Services. Other divisions of S&P Global may have information that is not available to Ratings Services.
INSURER STRENGTH RATINGS
BEST’S
NEW ZEALAND
FINANCIAL STRENGTH RATINGS
The following list of AM Best Financial Strength Ratings (FSRs) assigned to insurance companies in Australia and New Zealand. Ratings as at 6 August, 2020. Contact: Scott Ryrie, Co-CEO A. M. Best Asia-Pacific (Singapore) Pte Ltd. Board Member and Commercial Director for Asia Pacific Tel: +65 6303 5007 Email: scott.ryrie@ambest.com
AUSTRALIA
RATING
LIFE, ANNUITY AND ACCIDENT General Reinsurance Life Australia Ltd.
A++/STABLE
PROPERTY/CASUALTY
RATING
COMPOSITE Quest Insurance Group Limited
B/STABLE
LIFE, ANNUITY AND ACCIDENT American Income Life Insurance Company (New Zealand Branch)
A/ STABLE
BNZ Life Insurance Limited
A/STABLE
CIGNA Life Insurance New Zealand Limited
A/STABLE
Co-operative Life Limited
B++/STABLE
DPL Insurance Limited
B+/POSITIVE
Fidelity Life Assurance Company Limited
A-/STABLE
Foundation Life (NZ) Limited
A-/STABLE
General Reinsurance Life Australia Limited (New Zealand Branch)
A++/STABLE
Kiwi Insurance Limited
A-/STABLE
Lifetime Income Limited
B/STABLE
Momentum Life Limited
B++/STABLE
Partners Life Limited
A-/STABLE
Pinnacle Life Limited
B/STABLE
Ansvar Insurance Limited
A-/NEGATIVE
First American Title Insurance Company of Australia Pty Limited
A/STABLE
General Reinsurance Australia Ltd
A++/STABLE
Guild Insurance Limited
A-/STABLE
Aioi Nissay Dowa Insurance Company, Limited (New Zealand Branch)
A+/STABLE
The Hollard Insurance Company Pty Ltd
A-/STABLE
Beneficial Insurance Limited
B++/STABLE
The New India Assurance Company Limited (Australia Branch)
B++/STABLE
Brightsideco Insurance Limited
B/STABLE
Pacific International Insurance Pty Limited
B++/STABLE
Consumer Insurance Services Limited
B+/STABLE
Rating Disclosure: Use and Limitations: A Best’s Credit Rating (BCR) is a forward-looking independent and objective opinion regarding an insurer’s, issuer’s, or financial obligation’s relative creditworthiness. The opinion represents a comprehensive analysis consisting of a quantitative and qualitative evaluation of balance sheet strength, operating performance and business profile or, where appropriate, the specific nature and details of a security. Because a BCR is a forward-looking opinion as of the date it is released, it cannot be considered as a fact or guarantee of future credit quality and therefore cannot be described as accurate or inaccurate. A BCR is a relative measure of risk that implies credit quality and is assigned using a scale with a defined population of categories and notches. Entities or obligations assigned the same BCR symbol developed using the same scale, should not be viewed as completely identical in terms of credit quality. Alternatively, they are alike in category (or notches within a category), but given there is a prescribed progression of categories (and notches) used in assigning the ratings of a much larger population of entities or obligations, the categories (notches) cannot mirror the precise subtleties of risk that are inherent within similarly rated entities or obligations. While a BCR reflects the opinion of A.M. Best Rating Services, Inc. (AMBRS) of relative creditworthiness, it is not an indicator or predictor of defined impairment or default probability with respect to any specific insurer, issuer, or financial obligation. A BCR is not investment advice, nor should it be construed as a consulting or advisory service, as such; it is not intended to be utilised as a recommendation to purchase, hold or terminate any insurance policy, contract, security, or any other financial obligation, nor does it address the suitability of any particular policy or contract for a specific purpose or purchaser. Users of a BCR should not rely on it in making any investment decision; however, if used, the BCR must be considered as only one factor. Users must make their own evaluation of each investment decision. A BCR opinion is provided on an “as is” basis without any expressed or implied warranty. In addition, a BCR may be changed, suspended, or withdrawn at any time for any reason at the sole discretion of AMBRS.
PROPERTY/CASUALTY
First American Title Insurance Company of Australia A/STABLE Pty Limited (New Zealand Branch) FMG Insurance Limited
A/STABLE
General Reinsurance Australia Ltd (New Zealand Branch)
A++/STABLE
Health Services Welfare Society Limited
B+/STABLE
The Hollard Insurance Company Pty Ltd (New Zealand Branch)
A-/STABLE
Mitsui Sumitomo Insurance Company Limited (New Zealand Branch)
A+/STABLE
The New India Assurance Company Limited (New Zealand Branch)
B++/STABLE
New Zealand Medical Professionals Limited
B+/STABLE
Pacific International Insurance Pty Ltd (New Zealand Branch)
B++/STABLE
Police Health Plan Limited
A-/STABLE
Provident Insurance Corporation Limited
B /STABLE
Tokio Marine & Nichido Fire Insurance Company Limited (New Zealand Branch)
A++/STABLE
Tower Insurance Limited
A-/STABLE
Union Medical Benefits Society Limited
A/STABLE
Virginia Surety Company, Inc. (New Zealand Branch)
A/STABLE
NIBA.COM.AU / 57
INSURANCE JOURNEY / Leigh Stalker
UNLOCKING POTENTIAL VIA LEARNING AND DEVELOPMENT With a career in insurance that spans almost four decades, NIBA Victoria and Tasmania Committee Member, Leigh Stalker has gone from strength to strength because he has not been afraid to embrace change and learn from trying times.
“B
orn and raised in Hobart, it was always my intention post college to be part of the financial services sector. But general insurance specifically is something I fell into; I was fortunate that my employers had a defined learning path for me and encouraged all aspects of my education. My employers sponsored both time and money on various academic and professional qualifications – FAII, (ANZIIF), Graduate Diploma of Insurance, (Deakin University) and Master of Business Administration, (Deakin University). The ongoing encouragement, and support by my employers kept me engaged as well as stimulated in my job and in the industry, which has resulted in a productive 37 years. I spent the initial three decades in the industry with Mercantile Mutual and QBE in key distribution and leadership roles throughout Tasmania, New South Wales and Queensland. In 2018 I was presented with an opportunity to join a successful brokerage and I now feel that I have embarked on another exciting journey of growth - it looks like I will end up becoming an industry veteran with 50 plus years of experience. I love that this is an industry subject to constant change, great people, intense learning and fantastic opportunities. We can impact communities, businesses as well as people and have the influence to bring about change. The insurance industry has presented my family and I with opportunities to live and explore different parts of Australia. I have travelled extensively throughout the country as well as globally, which have been fantastic both from a professional and personal growth perspective. I attribute my success to some of the
PROUDLY SUPPORTING
58 / INSURANCE ADVISER SEPTEMBER 2020
biggest life lessons that I have learnt in my career like the importance of surrounding myself with the best people possible, to be accountable every step of the way and to grab every opportunity that turns up. Working alongside some great professionals has inculcated a deep-seated honesty and need to act with integrity at all times. What makes my work enjoyable is being a part of an industry that is critical to all aspects of the community and economy. We do great work, we protect and help people and we deeply value relationships – both professional as well as personal. Mentorship has played a major role in my career, people I admire in the industry have had a profound impact and influence over me, and I truly consider mentoring to be one of the ways we can take our profession to the next level. I believe it is imperative that we encourage brilliant individuals to join the insurance industry by promoting
what we do as a valued profession – we should be on par with other occupations like legal and accounting. We must ensure career pathways for new starters are clearly defined, effectively communicated and above all create a stimulating environment for diverse talent. Perhaps the industry should introduce minimum education or qualification standards. Jobs in insurance should be something people actively seek out rather than fall into by accident. I believe that in a long-term career disruption can be beneficial if we have our priorities right. This current period of uncertainty so far has also been a tremendous learning experience. COVID-19 certainly has thrown us headfirst into chaos which has forced change and transformation upon all of us. We have had to ensure that the fundamentals of insurance and customer expectations continue to be satisfied in absolutely crazy times, which has been very satisfying.”
SEVEN QUICK QUESTIONS Tell us something most people don’t know about you? I’ve walked Kokoda and abseiled down a Brisbane office tower – both were fundraising events.
Favourite book? I enjoy anything by James Patterson or Lee Child.
Secret ambition? To be an elite sportsperson – tennis or golf.
Favourite past-time? Trying to stay fit and healthy – it gets harder as you age.
Favourite tipple? Tasmanian Pinot Noir.
Favourite film? Grease – when it first hit the screens I Favourite food? saw it five or six times. Anything sweet.
Share your insurance journey. Email editor@niba.com.au
MENTORING
NIBA Mentoring – Promoting Professional Development for 10 Years
WHAT WILL THE PROGRAM DO FOR YOU? For more information and to express interest visit www.niba.com.au/mentoring
WE’VE SEEN YOU THROUGH BEFORE, WE’LL SEE YOU THROUGH AGAIN.
Our structure and strength enable us to step up and face challenges head on. We’ve shown up for our Australian clients and partners for more than 20 years. Staying connected, responsive and accountable. As a mutual we are wholly devoted to our policy-holders and partners: providing continuity and assurance in an unpredictable world.
For Mutual Advantage libertyspecialtymarkets.com.au
Liberty Specialty Markets is a trading name of Liberty Mutual Insurance Company, Australia Branch (ABN 61 086 083 605) incorporated in Massachusetts, USA (the liability of members is limited).