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Go Further, Together.
Last month, we celebrated 40 years of NIBA. Whilst celebrating the past, we also looked to the future and held the first NIBA Summit which was followed by the Celebration Dinner.
In preparation for the event, I took the opportunity to look back at the history of NIBA and why NIBA was formed. It’s also interesting to note some of the circumstances of the time. Malcolm Fraser was the Prime Minister and John Howard his Deputy Prime Minister. Australia’s population was just over 15 million, while the cost of living was skyrocketing, with inflation running at 11.07% and mortgage interest rates at 17.5%. There were widespread droughts and bushfires, particularly in Queensland, and one of the century’s worst El Nina events was building.
There were two industry Associations, the Confederation of Insurance Brokers and the Insurance Brokers Association, merging into one to create one voice for all insurance brokers, as a largely unregulated industry became a focus of regulatory reform. Since its establishment back in 1982, NIBA has continued to act as the voice of insurance brokers, and brokers have been at the forefront of assisting clients with risk management and insurance needs.
Fittingly, at a recent meeting with the Assistant Treasurer and Financial Services Minister, the Hon. Stephen Jones MP, he was relieved when I informed him that NIBA is the only body representing brokers in Australia. Speaking at our Summit last month, the Minister was complimentary of the work that brokers do. He reassured us that he didn’t see any particular problems needing to be fixed, and that if there were any issues that needed to be addressed, he would let us know, rather than us having to look over our shoulders all the time.
The Summit certainly was a full house and a great opportunity to reconnect and learn, with the theme of ‘Trust, Professionalism and Community’. A big thank you to all of our presenters and sponsors, who helped to make the event a success.
The Celebration Dinner gave us the opportunity to unwind and celebrate excellence, through the Insurer and Underwriting Agency awards, as judged by brokers through the annual survey conducted by Neilsen IQ, and of course we saw the announcement of the Stephen Ball Broker of the Year and Warren Tickle Young Broker of the Year award winners. Congratulations to all the winners and finalists and thank you again to our sponsors for making the event a great success.
There have been many great moments at NIBA as well as loyal servants over the years – Directors, Presidents, Committee volunteers and even CEOs. We tried to capture some of these moments on the night through a brief video that you can access via the QR code in this issue of Insurance Adviser.
The 2022 Insurance Brokers Code of Practice is now live, and sets new standards in self-regulation. We continue to receive excellent feedback from brokers and have made some enhancements and have removed some ambiguity. Therefore, it is important to ensure you have the most upto-date versions of the Code and the Implementation Guide, dated 24 October 2022. If you do have questions, we will be only too happy to address them. It is important to remember that the Code is designed to ensure that when clients deal with brokers, they will receive consistent professional care, thus ensuring continued success for another 40 years.
On 31 October, Treasury released as part of the Quality of Advice Review the much anticipated proposals in relation to Conflicted Remuneration. The recommendation in the proposals paper is that the payment of a commission to a broker is allowable but must be disclosed and the client must give their consent. The design of this requirement is not yet known.
Noting that these are only proposals at this stage and not the final report, the paper acknowledges that the industry is changing voluntarily and in response to recent changes in law, and the overall theme is supportive of the retention of the current commission structures, which NIBA welcomes.
PHILIP KEWIN Chief Executive Officer, NIBA
Thank you NIBA and our valued broker partners for your ongoing support. We are truly humbled by this recognition which is testament to our efforts to build a better business. As we continue to strive forward in partnership with you, we’re committed to protecting and nurturing the ambition of you and your clients.
“Over the last 40 years, insurance brokers have been helping their clients manage life’s risks, through natural disasters, and life’s unforeseen circumstances. During those 40 years, NIBA has been the one voice for insurance brokers.
Through our membership, we strive to maintain the highest levels of integrity and professionalism.
Through ongoing professional development, education and the attainment of QPIB, mentoring and fostering the next generation of insurance brokers, and subscribing to a Code of Practice that sets a high bar of self-regulation that we should be proud of.”
– PHILIP KEWIN, NIBA CEOTo acknowledge and celebrate NIBA’s 40th anniversary, the team at NIBA have developed a video featuring messages from members and other industry stakeholders.
We hope you enjoy watching this video and if you would like to share your birthday message, please email editor@niba.com.au
NIBA is the one voice for insurance brokers in Australia, representing their interests and promoting high standards of professionalism and competence.
We represent the interests of members and their clients to governments, regulators, industry stakeholders, the media and the community in a manner that is respected and relevant. We have forged strong relationships at a state and national level to ensure that your interests are represented.
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.
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.
Whatever your age, or level ofexperience, NIBA has brokers’best interests at the core ofeverything we do. Find out whatwe can do to help benefit yourbusiness and your team at niba.com.au/membership
Welcome to QBE, where insurance isn’t just a one-o commercial transaction, it’s a dependable relationship that guides and protects us through life. It’s why businesses across Australia rely on our experience to cover what matters, before & after and every moment in between.
qbe.com/au/brokers
NIBA stages a variety of educational and social events across Australia for the whole intermediated insurance community.
WHERE: Wotton + Kearney, Level 15, 600 Bourke St, Melbourne VIC 3000
WHEN: Tuesday 8 November 2022
Hosted by the NIBA Vic Young Professionals Committee, join us for an informative seminar on Professional Indemnity insurance, presented by Kerryn Symes and Jessica Hutchinson. Understanding the core of Professional Indemnity insurance is key to being successful as a broker in placing and servicing for your clients.
WHERE: Crown Perth, Great Eastern Hwy, Burswood WA 6100
WHEN: Wednesday 9 November 2022
NIBA and UAC return to Crown Perth in November, offering local underwriters and insurers the chance to present to the local broker market.
WHERE: Electra House, 131 King William St, Adelaide SA 5000
WHEN: Friday 11 November 2022
The NIBA SA Divisional Committee’s final social event of 2022 is taking place on Friday 11 November from 6:00pm - 11:30pm at Electra House in Adelaide CBD. Electra House has recently been renovated to provide an establishment for Adelaide’s most diverse food and beverage destination and celebrates historic charm paired with elegant modern styling.
WHERE: Petersham Bowling Club, 77 Brighton St, Petersham NSW 2049
WHEN: Friday 18 November 2022
The NIBA NSW Divisional Committee’s final social event of 2022 is taking place on Friday 18 November from 12:00pm - 4:00pm at the Petersham Bowling Club. Join us and celebrate the end of the year with a friendly tournament of lawn bowls and grazing buffet lunch inclusive of drinks until 4:00pm.
WHERE: The Boo, 126 Breakfast Creek Rd, Newstead QLD 4006
WHEN: Thursday 24 November 2022
The NIBA Qld Christmas Bowls returns to The Boo for 2022! The Boo is the oldest bowls club in Queensland (est. 1888) with the most experience in providing fabulous contemporary food in a fun and friendly atmosphere. Come along to celebrate the end of the year with the intermediated insurance industry. Featuring a friendly tournament of lawn bowls and a set meal inclusive of drinks until 4:00pm, this event is not to be missed.
Check out what’shappening close to youand register via theevents calendar atniba.com.au/ events
The following is an overview of some of the things NIBA has been examining on behalf of members.
NIBA provided feedback to the State Insurance Regulatory Authority (SIRA) on proposals to expand access to commutations in the New South Wales Workers Compensation Scheme. The proposal would allow the Personal Injury Commission to approve commutations even if they do not meet the preconditions set out in s87EA of the Workers Compensation Act 1987 (NSW).
NIBA’s submission supported the proposals in theory, however, highlighted concerns that the current claims management system is not ready to support any increase in access to commutations. In particular, NIBA raised concerns about workers who may receive a commutation despite not receiving appropriate treatment and support to enable return to work.
NIBA’s submission also highlighted the role of employers in achieving positive return to work outcomes and stressed the importance of involving employers in any commutation decisions.
As part of their 2022/23 Core Strategic Priorities, the Australian Securities and Investments Commission (ASIC) has begun consulting on a range of issues and proposals to improve the operation and implementation of the reportable situations regime (formerly known as breach reporting).
ASIC consulted on 15 proposed changes
aimed to provide greater clarity to financial services providers and enable accurate data collection. ASIC also identified a further seven issues for further engagement as part of their broader plan of work around the reportable situations regime.
NIBA provided a submission to the consultation which provided feedback on ASIC’s proposals.
Earlier this year, the Assistant Treasurer announced that the Treasury will review the ASIC Industry Funding Model (IFM) to ensure the settings remain appropriate in the longer term.
As part of this review, a Discussion Paper was released seeking stakeholder feedback on options, examples of potential changes and questions that are designed to examine and address a range of issues set out in the Review’s Terms of Reference.
In addition to providing a submission to the review, NIBA also attended an Insurance Industry Roundtable to provide feedback on behalf of members.
With the 2022 Insurance Brokers Code of Practice now in effect, it is important that all members have implemented the necessary policies and procedures to comply with their new Code obligations. There are a number of resources on the NIBA website available to assist members in implementing the Code, including a Member Implementation Guide, Identifying and Supporting Vulnerable Clients Guide and a template terms of engagement document. Access these resources here:
NIBA will continue to develop resources and supporting materials to assist members to understand and implement the Code. If any members have questions about the Code or any of the materials provided, they should contact NIBA’s Policy Manager at ahextell@niba.com.au.
NIBA has updated the Insurance Brokers Code of Practice and Implementation Guide, which took e ect on Monday 24 October.
The following changes have been made to the Insurance Brokers Code of Practice:
2.3 (a) The Code applies to all services and activities a Code Subscriber engages in when arranging or advising on general insurance products or alternative risk transfer solutions on behalf of a client. This includes services and advice relating to claims handling, premium funding and risk management (Covered Services).
The Code applies to all services and activities a Code subscriber engages in when advising on or arranging general insurance and other related products on behalf of a client including services and products provided on a standalone basis (Covered Services). This includes but is not limited to; (i) alternative risk transfer solutions such as discretionary mutual funds; (ii) premium funding arrangements; (iii) claims handling services; and (iv) risk management.
5.3 (a) When a client engages us as their insurance brokers and/or risk advisers, we have a duty to act on their behalf and in their best interests.
When a client engages us as their insurance brokers and/or risk advisers, we have a duty to act on their behalf and in their best interests. This duty is the same as the best interest duty outlined in s961B of the Corporations Act 2001 (Cth).
5.3 (e) We will periodically review our procedures to ensure that they are effective in identifying and avoiding conflicts of interest and are not creating conflicts.
We will periodically review our policies and procedures to ensure that they are effective in identifying and managing conflicts of interest and are not creating unmanageable conflicts.
6.1 (c) This information will be provided at the same time and by the same means as our advice to our client.
5.3 (d) Where there may be a conflict of interest, we will contact the client in a timely manner and clearly inform them that there may be a conflict of interest. Where there is or is likely to be a conflict of interest, we will engage with the client regarding steps to manage the conflict of interest in their best interests and we may only continue to act on behalf of the client with their express written consent.
Where there may be a conflict of interest, we will contact the client in a timely manner and clearly inform them that there may be a conflict of interest. Where there is or is likely to be a conflict of interest, we will engage with the client regarding steps to manage the conflict of interest in their best interests and we may only continue to act on behalf of the client with their consent.
This information will be provided at the same time and by the same means as our advice to our client. Where no advice has been provided the information must be provided to the client prior to payment.
If the amount of commission is not known at the time of the provision of advice an estimate needs to be provided and the actual amount must be provided as soon as reasonably practicable.
For the latest Insurance Brokers Code of Practice and resources to assist in implementing the Code, please visit: www.niba.com.au/code
SECTION 6.1
We have also updated the wording of the Code and the Implementation Guide to reflect that the effective date for Section 6.1 of the Code is 1 November 2023.
6.2(a)Whenactingonaclient’s behalfwewillnotreceiveany contingentremunerationincluding volume-basedcommissionsorprofitsharingarrangementsorpreferential remuneration such as (overrider commissions) from an insurer.
When acting on a client’s behalf we will not receive any contingent remuneration including volumebased commissions or profit-sharing arrangements or preferential remuneration (such as overrider commissions from an insurer).
6.5 We will periodically review our remuneration arrangements to ensure they are not creating conflicts of interest.
REVISED WORDING
We will periodically review our remuneration arrangements to ensure they are not creating unmanageable conflicts of interest.
NIBA has released a Terms of Engagement template for the Insurance Brokers Code of Practice. This template is a guide only and is not a mandatory requirement.
The Terms of Engagement is a great opportunity to outline up front to your new clients the services you will provide, and how you will be remunerated for those services.
The Insurance Brokers Code of Practice came into e ect on 1 November 2022. As part of the new Code obligations, Subscribers are required to provide information to their clients setting out the terms of engagement, prior to undertaking any work on the client’s behalf. The information provided to clients must include:
• the scope of the agreed services required;
• whether we will provide advice based on personal circumstances or not;
For members who have any questions about these changes, please email info@niba.com.au .
• how the Subscriber intends to seek quotations from insurance companies; and • details about any remuneration the Subscriber may earn by arranging insurance policies and/or providing advice on insurance cover.
The requirement assists Subscribers in ensuring important information is provided upfront in an easily accessible document. This is consistent with the findings of a number of reports that state most clients do not read the Financial Services Guides that brokers are required to provide.
To assist Subscribers in meeting this obligation, NIBA has developed a Terms of Engagement template that Subscribers can customise to better reflect the services their businesses provide. This template has been included in an updated Letter of Appointment and as a stand-alone document.
Subscribers may continue to use the Letter of Appointment for all new clients however, where a Terms of Engagement is provided to an existing client, Subscribers should use the stand alone Terms of
Complaint:Anexpressionof dissatisfaction made to a Code Subscriberrelatedtoitsproducts, services, staff,orthehandlingof acomplaint,wherearesponseor resolutionisexplicitlyorimplicitly expectedorlegallyrequired.
The definition of complaint used in the current 2022 Code varies slightly from the definition used by ASIC in RG 271. To ensure consistency across the industry and assist members with reporting obligations, NIBA proposes to amend the definition in the Code to align with the ASIC definition.
A complaint is an expression of dissatisfaction made to or about an organisation, related to its products, services, staff or the handling of a complaint, where a response or resolution is explicitly or implicitly expected or legally required.
Engagement template. NIBA notes that although the Letter of Authority requires a client signature, the Terms of Engagement does not need to be signed by the client.
Subscribers who currently provide a Terms of Business Agreement or similar document to their clients may wish to include the areas covered by the Terms of Engagement in their existing documentation to limit the number of documents provided to their clients.
Please note, the Terms of Engagement does not need to be signed and is only required for new clients, though it would be good practice to deliver to existing clients.
We encourage any Subscribers who are yet to do so, to download the Letter of Appointment and Terms of Engagement templates and the Code Implementation Guide, which contains valuable information on how the Code can be implemented in your business. The Code and accompanying guide are living documents. As such, NIBA will continue to update both in response to member feedback, and changes in industry best practice and consumer expectations.
Motion
Nicky Dunkin, Regional Business Partner at Community Broker Network, shares her experience in advocating to MPs across her region on the issues that matter to the industry.
Advocating for brokers is something that has been playing in the back of my mind for a couple of years now.
I’ve attended industry events where the people on stage talk about how advocacy is something that brokers could all do. I would sit in these rooms and often, when asked for a show of hands if anyone had actually been doing it, no one would put their hand up.
It reached a point where I decided that someone needed to advocate, and maybe that was me.
My role as Regional Business Partner at CBN for South Australia, ACT and NT meant that I had the ability to advocate on a bigger scale. CBN’s presence in South Australia sees brokers spread across nearly every electorate. These are all brokers who could play a role in speaking to their MPs alongside me. Given this wide footprint, I knew I was in a position where we could make a real impact, so I started reaching out to brokers in the CBN network, getting their support and organising meetings with MPs.
I’ve been in the industry for 28 years, and I’m passionate about what we do. We have experienced so many changes in the past decade – from natural catastrophes to the Royal Commission into Misconduct, to the Quality of Advice Review. Given all of this, I have become passionate about being an advocate for the industry.
I make a phone call to the MP’s o ce first, saying I would like to arrange a meeting with the MP, and give a brief rundown of what I want to talk about.
Their o ce will generally give me an email of either the MP or the diary manager, so I send through my email to them and then wait for them to respond with either a phone call, an email or something in the diary.
I’ve been really lucky so far with speaking to MPs. The three MPs I have spoken to each gave me about 40 minutes of their time, which was really generous.
They’ve been really good conversations and just being able to sit there and talk a little bit more about what brokers actually do
has been really valuable. The role of brokers is often misunderstood, so it’s been fantastic to have what I think are fairly in depth, good conversations about our profession.
My first conversation was with Rebecca Sharkie. I was really lucky to have Dianne Phelan, the President of NIBA, attend with me, as she sits in my electorate. She knew what I was looking to do, so when I got a time in the diary, I reached out to her and asked if she was going to be around that day, and thankfully she was.
I’ve now emailed all of the electorates in South Australia and I’m slowly scheduling meetings as they come back to me, or after I follow them up. I look forward to commencing this approach across my other broker regions in ACT and NT very shortly.
At the end of the day, it’s the MPs and Senators that actually have to vote on key issues that will a ect our industry. I’m hoping that by getting out there and advocating with people on the ground, it will mean that when they’re voting on issues that concern our industry, they can make an informed decision.
Brokers are passionate about our industry and the value we provide in looking after members of our community. By having these conversations, hopefully some of this also rubs o on our MPs.
“At the end of the day, it’s the MPs and Senators that actually have to vote on key issues that will affect our industry.”
NICKY DUNKIN Regional Business Partner, Community Broker Network
NIBA has shared six tips for you to consider in the Member Advocacy Guide, located on NIBA’s website. Nicky Dunkin also weighs in on each tip with her own experience.
Make sure you have a good understanding of the issues you want to raise and that you’re prepared to answer any questions your representative may have. Provide specific examples where you can, such as how much additional cost regulation has imposed on your business.
“Know your history,” says Nicky. “Make sure you’re really confident on the subject you’re speaking about. There have been some really intelligent questions asked, and if you don’t know the history, it could remove some of your credibility. “If you’re not comfortable, ask someone to come with you. I was very thankful to have Di there in the first conversation, as the depth and breadth of her knowledge is phenomenal. You can also reach out to people from NIBA’s Divisional Committees. There are a lot of experienced brokers in our industry you can depend on.”
Try asking your representative how much they know on the issue. This will provide a good starting point for the discussion and allow you to clear up any misconceptions they may have. You can also use knowledge of their views to help make your argument relevant to the way they understand the world.
“Do your research on your MP,” Nicky advises. “Ask questions about their background, their beliefs, their constituents, anything that you can do to create a rapport with them really early on.”
You have the opportunity to put a human face on issues that affect you and your industry. Explain how the issue affects you and/or your clients, rather than focusing on technical policy arguments.
Don’t bombard your representative with too much information. Try to focus on only one or two key issues. If you would like your representative to undertake an action on your behalf, make sure you are clear as to what this is, whether it’s for them to raise the issue with the relevant Minister or speak on the issue in Parliament.
“Focus on the big picture,” Nicky suggests. “The MP’s role is looking a er the Australian people. Their priority is the wider community they represent, so make sure to frame your points around what you see as the benefits to society, such as the affordability and availability of advice.”
Make sure to leave plenty of time for questions, especially if this is the first time the MP is hearing about the issue. Ideally, you should spend no more than 10 minutes covering your key points, leaving the remaining time for discussion and follow-up questions.
“Remember you can also share further information a er the meeting,” says Nicky. “I leave behind a flyer to provide more information on the affordability of advice, how our industry is really good at self-regulation, and the broker-client lifestyle.”
Don’t forget to follow up a er the meeting. Write to your MP to thank them for meeting you, restate your main points and confirm any agreed action. Don’t forget to send them any information promised during the meeting.
“A thank you email is another touchpoint from you,” Nicky says. “It’s an opportunity for you to build ongoing rapport once the meeting is over.”
“Offer them your help,” Nicky advises. “Local MPs o en hear from their constituents on various issues. These may include insurance-related challenges caused by recent natural catastrophes. To build rapport, offer your assistance if anything ever comes across on their desk. While we may not necessarily be able do much about it, we may be able to give them advice on what the impacted customer can do.” If any members would like to support NIBA’s broker advocacy campaign, please contact Allyssa Hextell, NIBA’s Policy Manager, at ahextell@niba.com.au for more information on how to get involved.
The Insurance Brokers Code Compliance Committee (IBCCC) has published their 2021-22 Annual Report, flagging the 2022 Insurance Brokers Code of Practice as the “perfect opportunity” for brokers to “improve their processes and develop culture that puts clients first”.
Echoing the ‘Culture is Key’ theme of its previous annual report, the latest IBCCC report stresses the critical role of company culture in encouraging compliance and best behaviour in the broking industry.
According to high-level data from the Annual Compliance Statement (ACS), there has been slight increases to Code subscribers reporting on breaches and complaints in 2021. Less than half of Code subscribers reported on breaches
(compared to 44 per cent in 2020) and 55 per cent reported on complaints (compared to 52 per cent in 2020).
Despite these figures, the IBCCC flagged concerns with the lack of self-reported breaches and complaints, finding that multiple Code subscribers reported no breaches or complaints in 2021.
In the report’s opening message, Oscar Shub, Chair of the IBCCC, states, “Simply not reporting does not mean you are doing well. We must overcome the misguided belief that not reporting avoids damage to your reputation. True compliance is the goal here and it is important to remember that a strong framework for reporting, recording and monitoring breaches and complaints is essential.”
Oscar Shub states that “The new Code provides Code subscribers with the perfect
opportunity to improve their processes and develop culture that puts clients first”, and encourages brokers to familiarise themselves with the new obligations that came into e ect on 1 November 2022.
NIBA CEO Philip Kewin commented that the report exemplifies the value of ongoing reporting and feedback from the IBCCC.
“Reporting breaches is not a bad thing,” he said. “In fact, it can improve internal operations and inbuild a culture of discipline within an organisation. The implementation of the new Insurance Brokers Code of Practice, provides a great opportunity for brokers to re-evaluate and refresh their processes while educating their sta on the provisions of the Code.”
A follow-up to the IBCCC’s Culture is Key report last year is scheduled for publication later this month.
The much-anticipated proposals in relation to Conflicted Remuneration have been released by Treasury as part of the Quality of Advice Review.
NIBA CEO Philip Kewin said, “Noting that these are only proposals at this stage and not the final report, the paper acknowledges that the industry is changing voluntarily and in response to recent changes in law, and the overall theme is supportive of the retention of the current commission structures, which we welcome.”
The proposal in relation to General Insurance is outlined as follows:
“Retain the existing exemptions for benefits given in relation to general insurance products and consumer credit insurance, but financial advisers (relevant providers), insurance brokers and other intermediaries who provide personal advice to retail clients in relation to general insurance products or consumer credit insurance to obtain their client’s informed consent, in writing, to receive a commission or other benefit in connection with the issue of the general insurance product or consumer credit insurance.
In order for the consumer to be able to make an informed decision, the relevant provider,
broker or intermediary must disclose to the consumer any commission and/or other benefits they would receive in connection with the issue of the general insurance product or consumer credit insurance.
This requirement would not apply to other distributors of general insurance or consumer credit insurance products (such as white label providers or retailers) that distribute these products on behalf of the insurer.
Where a general insurance product or consumer credit insurance can be renewed, consent could be sought prior to the initial issue of the insurance product and would not be required at each subsequent renewal, provided that the initial consent included the client’s agreement to the adviser, broker or intermediary accepting a commission and/or other benefits on renewals.’’
E ectively, the recommendation is that the payment of a commission to a broker is allowable but must be disclosed and the client must give their consent. As this is a proposal at the stage, the design of this requirement is not yet known.
In making the recommendation, independent reviewer Michelle Levy acknowledged “the general insurance industry
is changing, voluntarily and in response to recent changes to the law. We have been told that, as a result of these changes, many of the key contributors to the misalignment between industry incentives and consumer interests (such as volume bonuses and junk products) have ceased or will shortly cease.”
While accepting that the payment of commissions still presents the risk of a conflict, Ms Levy acknowledged the risk was diminished by a number of recent changes to the law, and would be further reduced by the proposals outlined in the initial proposals paper, including the removal of general advice and the requirement to provide “good” advice. She added, “a client should be put in a position to understand and consent (should they choose) to their adviser (broker) receiving a benefit from a product issuer.”
The proposals paper also addresses areas such as life insurance and time share. The full paper can be found at treasury.gov.au/review/quality-advicereview/conflicted-remuneration. NIBA will be formulating a response on the template provided by Treasury, to be submitted no later than 14 November 2022. If you have any questions, please email info@niba.com.au
The Albanese Government has released its first Federal Budget, announcing several measures on building resilience to natural disasters.
Themed around ‘building a better future’, the 2022-2023 Budget’s key objectives are to provide relief to Australian households facing costs of living pressures, and to invest in building a strong, more resilience economy for the future.
At a glance, the Budget addresses cost-of-living pressures by announcing investments into more a ordable childcare, extended paid parental leave and an initiative to increasing a ordable housing.
In its aim to drive economic resilience, the Budget announces investments into a range of future-first initiatives, including a renewed focus on climate change. A $42.6
million package has been announced to restore the Climate Change Authority, which aims to drive greater transparency and accountability on climate action.
Crucially for the insurance industry, the Budget include a $22.6 million reform package over four years, which aims to address the cost and availability of insurance in disaster-prone areas.
This package will go towards:
• Creating a Hazards Insurance Partnership, a forum enabling collaboration between insurers, government and other stakeholders designed to reduce extreme weather risk
• Creating a national dataset on issues around insurance a ordability,
underinsurance, as well as non-insurance issues, designed to assist with policy decision-making
• Creating a mitigation solutions repository housing proven and reliable risk mitigation measures, which can be deployed when necessary.
• Scoping out key opportunities public-private partnerships which reduce risk and put downward pressure on insurance premiums.
The Budget also o ciates the Government’s previously announced commitment to spending $200 million per year on disaster prevention and resilience initiatives through the Disaster Ready Fund.
NIBA supports the Federal Government’s Budget commitment to addressing the availability and a ordability of insurance and building resilience for future disasters.
The second Business Interruption test case has reached a conclusion, with the High Court of Australia denying special leave to appeal the earlier Federal Court judgment after hearing oral arguments on 14 October.
The High Court’s decision puts an end to the landmark case concerning the interpretation of policy wordings in business interruption policies in the context of COVID-19.
Earlier in February 2022, the Full Court of the Federal Court delivered its judgment
upholding the arguments of insurers in four out of five matters, finding that in those four matters, the insurers were not liable to indemnify the policyholders.
Special leave to appeal was subsequently filed by two policyholders in response to these four matters, who sought to have their matters heard in the High Court.
In the fifth matter, the Full Court upheld the earlier decision that found cover had been triggered, but flagged issues around
whether the policyholder could prove any relevant business interruption. Provided the policyholder can identify any loss covered by the policy, they are entitled to bring the matter back before the Federal Court for determination.
Notwithstanding the fifth matter, the High Court’s decision to deny special leave to appeal all four matters contested has provided finality and guidance to insurers around the interpretation of business interruption policies.
For breaking news and updates curated specially for insurance brokers please visit: niba.com.au/articles
from the 2022
On Wednesday 12 October, the broking industry gathered in Sydney to celebrate 40 years of NIBA, shining a spotlight on the principles defining the profession and the best in broking and insurance.
The NIBA Summit took place in the Establishment Ballroom, where brokers heard from a range of speakers who each spoke on the theme ‘Trust, Professionalism, Community’.
Dianne Phelan kicked o the afternoon with a welcome speech to the brokers in attendance.
Dianne acknowledged the anniversary of the Bali bombings, paying respect to the families with loved ones lost from the tragedies and trauma that followed.
With her time as NIBA President ending in February 2023, Dianne reflected on the various challenges she experienced throughout this time, including the damages caused by floods and market challenges.
She praised brokers for achieving an all-time low in complaints against a backdrop of unprecedented natural disasters, and acknowledged the importance of brokers.
She also shared on insights from the BAC, which showed brokers were remaining at the forefront of assisting clients by placing greater importance on risk management, technology and specialty skills.
She spoke on the Quality of Advice Review, emphasising the important role of brokers in bringing value to clients and to the broader society.
Dianne spoke on the critical role of the Insurance Brokers Code of Practice in continuing brokers’ commitment to professionalism and self-regulation, and reminded members to share their feedback and ensure the Code stays a relevant, living document.
The Hon. Stephen Jones MP, Assistant Treasurer and Financial Services Minister, delivered his first address to the insurance broking industry.
The Minister acknowledged up front that while brokers are eager to hear where he stands on commissions, he stated that he would not be running a commentary on the Quality of Advice Review, and would await the report from Michelle Levy and the Treasury team.
Speaking ahead of the Government’s 2022-2023 Federal Budget, which was delivered a fortnight later, the Minister foreshadowed the focus it would place on building economic resilience.
He acknowledged the current economic challenges facing Australian households, including rising inflation and energy shortages driven by the war in Ukraine war.
He also spoke on the need to reform energy and climate change policies, pointing to the rising cost of electricity and insurance premiums experienced by households as an indication that “we have stalled as a nation” on both policies.
In response, he advocated for the need to find long-term solutions based on resilience and risk mitigation which address the underlying risk, rather than masking the increasing cost for short-term relief.
The Minister closed his speech by acknowledging the important role of brokers in assisting clients during challenging times and serving as an important driver in a feedback loop that sets the standards of the insurance market.
He encouraged brokers to continue their good work, stating that brokers don’t need to be “looking over your shoulders” for upcoming regulatory changes, and that any changes would be communicated to the industry well in advance.
Holly Ransom, founder and CEO of Emergent, shared her ideas on leadership and sustaining success in an ever-changing world.
Holly stressed the importance for leadership to continue to adapt to the changing forces in the world in order to maintain relevance. One example is the global shift towards belief-driven consumers, who increasingly place expectations on companies to advance social causes and build trust with their customers.
Holly acknowledged the uncertainties around the world driven by supply challenges, geo-political tensions and the energy crisis. While things may have once worked in a slower-paced, uninterrupted world, she stated plainly that these challenges have created a new game that we need to prepare for.
Holly urged for brokers to think about what’s next when they’ve reached the top of their game. She flagged the importance of looking for gaps and opportunities to further improve and encouraged brokers to challenge the habit loops that shape their routines in work.
Distance from the field
Holly encouraged brokers to embrace diversity in hiring people who are “distant from the field”. She referenced one study that found that in 30 per cent of cases, problems were solved by non-experts rather than experts.
Holly advocated for brokers to consider the comfort zone (consisting of the tasks we’re used to doing) versus the courage zone (consisting of tasks that we do as a beginner). While most of us will spend our time at work in the comfort zone, she advised for brokers to extend and stretch beyond the comfort zone in order to learn new skills and enrich our time in the workplace.
Chris Mackinnon, Regional Head of Australia and New Zealand at Lloyd’s, spoke on innovation, modernisation and solving problems in an uncertain world.
Chris began by reflecting on the relevance of the Summit’s theme ‘Trust, Professionalism and Community’ to brokers. Unlike other sales transactions, insurance provides the customer with nothing more than a promise at the time of transaction, and as such, the broker’s reputation is always on the line, with its perception shaped by client expectations, the media and the promises they make.
Chris touched on the various challenges facing the industry, as well as how brokers have found new opportunities to support clients amidst these challenges.
From the pandemic and geo-political tensions causing food, energy security and global supply issues, the increasing natural disasters, growing risk of cyberattacks, to the global recession and hyper-inflation, he urged for brokers to stay resilient in the face of these challenges, and also to view them as presenting new opportunities to support clients.
In order to foster resilience, he suggested for the industry to develop a more future-first purpose which focuses on long-term, sustainable businesses that “create solutions to problems people don’t know they have yet”.
Chris also spoke on the various globally systemic risks that are simply too great for the industry to address on its own, such as the pandemic, climate change and cybersecurity. In order to solve these systemic risks, he advised for brokers to take their seat at the political table, and work in partnership with governments.
A panel of industry experts shared their thoughts on a range of topical issues a ecting the industry:
“Let’s start with perception. People get into insurance by referral – it’s people referring other people through their personal experiences.
There are 60,000 people in our industry. If these people can make a di erence to anyone they come in contact with that results in another person joining the industry, then that is a significant di erence that we can make. It’s about taking on a conscious position - we’ve got to be conscious of what we promote and when we promote it.”
– Je Murdoch, Director, Emjoy Insurance Brokers
“If we want to promote ourselves as a professional industry, having a Code of Practice is a must. Not only for ourselves, but also for how we’re perceived by regulators.
The current Code of Practice is a living document for the first time that NIBA has been operating. I encourage you all to read it and give feedback to NIBA about what your sticking points are when you go to implement it operationally within your business. Also, talk to your peers within the network. People are incredibly creative and intelligent, so you might actually find some e ciencies by working with each other within your network.”
– Ximena Smith, Director, Austbrokers AEI Broking“My general observation is that we’re competing hard to retain talent and to attract new talent.
In my past experience, increases in employee attrition rates have signalled a bit of a talent war, but this wave of attrition is a little bit di erent. It’s not just focused on salary and benefits, which are a starting point. I think there’s greater focus on what else? What else can the employer o er? There’s a lot of cultural alignment discussions around di erent benefits that may not have been as prevalent in the last couple of years, namely longer annual leave, or working remotely. ”
– Stuart McKellar, Head of Commercial & A nity, Howden Insurance Brokers
“One of the things that I knew, but didn’t really know how important it was when I first came into broking, is the relationship between the broker and the client, and the passion that brokers have for their clients. They have a very symbiotic relationship and I think as an underwriter, we missed that a lot. Every broker cares so deeply about every client they have, and there’s a reason that I’ve come to realise as well - most new business opportunities come from your existing client base. It’s not because you’re pretending to like your client, you actually genuinely do have a passion for helping the clients out.”
– Shaun Standfield, Managing Director, Insurance Advisernet
Thank you to panel speakers Ximena Smith, Stuart McKellar, Shaun Standfield, Jeff Murdoch, and panel host Rebecca Wilson. Special thanks to ATC for sponsoring the session.
Philip Kewin closed the NIBA Summit by thanking the speakers and brokers in attendance.
He touched on NIBA’s involvement across a range of industry initiatives and reiterated the importance of the new Insurance Brokers Code of Practice as a vehicle for continuous improvement in professionalism across the industry.
Philip also announced the winner of the Community Excellence Award, shining a spotlight on brokers who supported their clients through challenging times.
The award was presented to Vanessa Hilton, who shared a virtual acceptance message with the room. Read more on Vanessa’s award on page 34.
Following the Summit, brokers moved to a bustling Happy Hour spent networking with industry colleagues.
After Happy Hour, brokers made their way to a glittering Ivy Ballroom for an evening of celebrations.
The Celebration Dinner marked an important occasion as the celebration of NIBA’s 40 years representing the insurance broking profession.
Angela Carter, Director Consumer Insights from Nielsen, shared insights from the 2022 NIBA Broker Market Survey, which had over 700 members respond. Angela congratulated NIBA on the record survey response rate, ensuring brokers all had a say on the insurance industry.
The insurer awards were based on two main components of the survey: most trusted insurer and best broker experience.
Angela revealed that results for all three award categories were incredibly close. The survey found that amongst agencies, there was a strong improvement on brand trust and broker experience. The winners, in particular, had performed strongly in claims and underwriting.
The insurer awards were announced by Philip Kewin, NIBA CEO and presented by Gary Okely, NIBA Vice-President.
The 2022 NIBA Underwriting Agency of the Year award was awarded to NTI.
“Our people are relentless in their pursuit to do whatever it takes to support Australian businesses to operate at full capacity,” said NTI CEO Tony Clark.
“We continue to innovate, even on the things that we do well, and seek to understand and address the ever-changing needs of our specialist industries.”
Mike Edmonds, NTI’s Executive General Manager – Commercial, also added, “Our combination of specialist products, in-house expertise in insurance, repairs, parts, our accredited repair and recovery networks, and industry advocacy enables us to deliver above-and beyond within competitive turnaround times.”
“Among the agencies we have seen some strong improvements in Brand Trust for several providers, while others improved their broker experience, so well done to those agencies.
“However, this year’s results were decided based on the winners continued strong performance in delivering an exceptional broker experience, in particular in claims and underwriting performance,” Angela Carter said.
FINALISTS FOR THE
AGENCY OF THE YEAR
The 2022 Specialty Insurer of the Year award was won by Liberty Specialty Markets.
“I couldn’t be more proud of our entire team to receive this independent recognition for the second year in a row,” said Michael Abdallah, President and Managing Director Liberty Specialty Markets Asia Pacific.
“We have significantly grown our business over the past few years, and we are very pleased that our broker partners continue to recognise our consistent and long-term commitment, along with the quality of service and product capability. We have always strived to be a dependable partner for our brokers and clients and for Liberty to achieve this vote of confidence in successive years while in the midst of a tough and uncertain market environment, makes it that much more special.”
“As one of the world’s largest mutual insurers, we will always take a long-term view with the aim of sustaining partnerships that deliver mutual advantage. We are grateful to receive this recognition from our Australian broking community,
The 2022 Large General Insurer of the Year award was won by CGU.
Over a year ago, we redesigned our operating model to achieve the ambitious goal of becoming the insurer partner of choice, focused on delivering sustainable value to our brokers and customers.
We reinvigorated our strategy to make it easier to do business with us, simplifying processes and driving e ciencies. Our team remains committed to delivering underwriting excellence, with renewed clarity on our appetite, pricing, and product o erings.
We also continue to invest in uplifting our data and analytics capability, connecting to major broker trading platforms and optimising our referral processes to grow sustainably with brokers and help customers proactively manage their risks.
Being recognised by the broking community for our e orts to build a better and stronger business around them is truly humbling, and it’s pleasing
and also congratulate the other award winners this year.”
“Among the Specialty Insurers, again the performances were close among the top three.
“All three do very well in terms of brand
trust, and all three insurers have also improved their RSI scores this year, with overall satisfaction, performance vs. other insurers, trust, and loyalty the key di erence between the winning insurer and others in this category,” Angela Carter said.
to see our partners noticing these improvements. We know we still have a long way to go but being awarded Large General Insurer for 2022 rea rms we are on the right path.
“Among the large insurers, again we had a very tight contest for the award with brand trust and the higher-level RSI model factors of trust and lower propensity to shift based on price being the di erence,” Angela Carter said.
THE FINALISTS FOR THE SPECIALTY INSURER OF THE YEAR AWARD ARE:
FINALISTS
OF
The 2022 Warren Tickle Young Broker of the Year Award was awarded to William Thompson, Thompson Insurance.
The award was presented by Anthony Pagano, Vero’s Head of Distribution, Commercial Insurance.
“I’m so grateful to have been part of this awards program run by Vero alongside NIBA. As a state finalist, I took part in Vero’s professional development program and got to work on a project to support a cyclone-a ected community, both of which reflect the incredible investment Vero has put into developing young brokers. I’m excited to take back the learnings I’ve gained from this experience and apply them into our business, and in time benefit my own professional development, our clients and our company.
“This process is about so much more than the award itself – it’s about bettering our industry. We all know that we have an amazing industry and that we play a powerful role in protecting somebody’s business or livelihood. Coming out of the NIBA Summit, to see that brokers are now responsible for 51 per cent of all insurance that’s written in Australia is an amazing figure that we can all be proud of. By being more professional, and by being trusted advisers and working with our community, I hope that we can see that number increase in years to come.”
The Warren Tickle Young Broker of the Year Award, sponsored by Vero, recognises rising stars in the insurance broking industry who are under the age of 35.
William first joined Thompson Insurance in 2018 and was promoted to the role of Director in July 2022. Prior to this, William worked as an Underwriting Consultant for a large general insurer.
★ Qld: William Thompson, Thompson Insurance (winner)
★ NSW/ACT: Dean Bowen, DLB Insurance Risk
★ SA/NT: Joseph Cuzzocrea, Maxton
★ WA: Selena Piggott, Marsh
★ Vic/Tas: Greg Shallard, Aon/Affinity Insurance Brokers
NIBA congratulates all state finalists, who have each demonstrated professional excellence and leadership.
In congratulating William on his win, Anthony Pagano said: “Will’s dedication to learning, his drive and tireless work on the Vero Community Grant project truly shone through the program.
“He represents the very best of the insurance broking profession and
has a genuine passion for giving back to the community.
“Will has shown he is a strong advocate for the insurance industry, and we’re excited to provide ongoing support to him and other young brokers across the country.”
Special thanks to Vero for sponsoring the Young Broker of the Year award.
★ Qld: Sally Coulton, WTW (winner)
★ NSW/ACT: Nicholas Bedggood, Citadel Insurance Services Pty Ltd
★ SA/NT: Heather Blanco, SUREWiSE
★ WA: Derek Ford, FordSure Pty Ltd
★ Vic/Tas: Daniel Quintin, Gallagher
NIBA congratulates all state finalists for demonstrating the highest standards of broking excellence and leadership across the industry.
The 2022 Stephen Ball Broker of the Year Award was awarded to Sally Coulton, WTW
The award was announced by Lorelle Hillman, QBE Australia Pacific General Manager, Partnerships, and presented by Stephen Ball’s daughter Katie.
“I am honoured to have been awarded the 2022 Stephen Ball Broker of the Year award. I would like to thank NIBA and QBE for this opportunity, it has been a wonderful experience.
“I have been provided many opportunities throughout my career for which I am very grateful, thank you to WTW and
my colleagues for the support and teamwork they provide to deliver to our clients. For me, the most important part of our job is supporting and advocating for clients. We must provide a high level of service and advice always acting with integrity and professionalism and I am very appreciative of the recognition for my role in this.
We work in a wonderful industry, and we need to do a better job of communicating that the insurance industry is full of opportunities to attract, retain and develop young talent.”
The Stephen Ball Broker of the Year Award, sponsored by QBE, goes to an individual broker who is deemed an inspirational role model for the broking community,
Special thanks to QBE for sponsoring the Broker of the Year award.
who has demonstrated excellence in broking practice and client advocacy.
Sally is the Account Director, Property and Casualty and has been with WTW since 2009. Prior to this, Sally held several roles at Glencairn MacDermott from 2001 until 2009 including Senior Account Executive and Account Director.
In congratulating Sally on her win, Lorelle Hillman said, “To stand out in such a high calibre pool of finalists is not easy.
“It was Sally’s tailored customer service approach, her development and use of exceptional relationships across the industry, and dedication to the mentoring and improvement of her colleagues that shone through.”
The 2022 Lex McKeown Trophy was awarded to Ian Carr, Founder and Chairman of Insurance Advisernet.
The award was presented by Dianne Phelan, NIBA President.
“I am deeply honoured to accept this award and have my name on the trophy, beside so many great legends of our industry,” says Ian.
“The Authorised Representative model has developed and improved over time and is a great way for insurance brokers to control their own destiny and provide professional insurance advice to their clients. I believe the Authorised Representative model will continuing to expand and be a major distribution method for general insurance advice in the future.”
The Lex McKeown Trophy is awarded to a long-standing NIBA member who has provided outstanding service to NIBA and made a significant contribution to the broking profession.
“Ian has been a long-standing NIBA member who has provided outstanding service to the Association and has made a significant contribution to the broking profession,” Dianne Phelan, NIBA President said.
Ian Carr’s career spans more than 40 years. In 1996, he founded Insurance Advisernet, the only
Vanessa Hilton from Aon was announced as the winner of this year’s Community Excellence award.
With the support of Liberty Specialty Markets, NIBA introduced the Community Excellence award this year to recognise and celebrate an individual or company’s significant impact in helping their clients and community.
Earlier this year, NIBA put out a call to brokers to assist flood victims on a pro bono basis in northern NSW and Queensland.
Within a short amount of time, over 50 brokers registered their interest in the initiative.
We didn’t have many flood victims accessing the service, but that may be
Authorised Representative insurance broking business at that time. In many ways, he was ahead of his time, as in 1996 there were no other dedicated AFSLs set up to cater purely for Authorised Representatives (ARs).
During his career, Ian has completed qualifications including an Advanced Diploma of Financial Services (Broking) and is a Fellow member of NIBA and is
because in many situations, communities banded together and brokers assisted not only their own clients but other people referred to them in the impacted community.
We heard stories of brokers going above and beyond to help people in flood-a ected communities, and we invited brokers to share their stories through the Community Excellence award.
Vanessa shared her experience of assisting not only her own clients but many others in the Cobargo community on the south coast of NSW, which was impacted by bushfires in 2019.
While Vanessa was unable to attend the Celebration Dinner, she recorded an acceptance speech, which was played to the brokers in attendance.
“On behalf of the NIBA Board, I would like to congratulate Ian on being the Lex McKeown Trophy winner for 2022 and thank him for his ongoing commitment to the industry,” added Dianne.
To read more on Ian Carr’s career, go to page 38.
Special thanks to Liberty Specialty Markets for sponsoring the Community Excellence award.
NIBA CEO Philip Kewin and NIBA President Dianne Phelan closed the evening formalities by recounting the past 40 years of NIBA’s history.
A short video was then played, with various members and industry representatives celebrating NIBA’s birthday and reflecting on NIBA’s achievements over the years.
NIBA has shared the video for all members to view on page 8.
Join us in saying Happy 40th Birthday to NIBA.
On 26 October 1982, during the Insurance Brokers Association Convention, it was announced that the Confederation of Insurance Brokers of Australia and the Insurance Brokers Association would merge to form one representative body – the National Insurance Brokers Association.
Prior to the announcement, varying leadership groups had acted on behalf of insurance brokers but lacked cohesion in their advocacy. The creation of a new association meant that for the first time, there was one single, unified voice representing brokers to all stakeholders.
The first major win for NIBA came in the passing of the Insurance (Agents and Brokers) Bill in 1984, which crucially created a legal definition for the word “broker”. This important first principle helped to officialise the industry’s identity and set the foundation for all that was to come.
The introduction of QPIB in 1991 and the first NIBA Code of Conduct in 1992 put in place the mechanisms to enable selfregulation among members.
Twenty years later, a change in Federal Government would also welcome the Financial Services Reform Bill, which aimed to streamline regulation of the insurance and financial services industries.
In a curious parallel to the Quality of Advice Review currently underway, NIBA played a significant role in the law’s development, successfully securing the appropriate exemptions for insurance brokers a er a long five-year process.
NIBA once more successfully argued for exemptions for insurance brokers, including an exemption from the ban on conflicted remuneration – an exemption once more in focus in the Quality of Advice Review.
The introduction of the Insurance Brokers Code of Practice remains one of NIBA’s major strengths to forging a path for the future. This year, NIBA updated the Code of Practice, once again setting the benchmark for self-regulation against the backdrop of regulatory review.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was established on 14 December 2017, and found no examples of poor consumer outcomes or systemic issues relating to insurance brokers.
The NIBA Board and Directors have been instrumental in setting the strategic direction for the industry. Throughout NIBA’s history, there have only been 22 NIBA Presidents and six NIBA CEOs, each of whom have played a pivotal role in guiding NIBA forward. As we look to the future, NIBA’s success turns to brokers becoming trusted advisers and embarking on an ongoing journey of proactive self-regulation.
Philip and Dianne closed the evening by thanking the current NIBA Board and acknowledging the contributions made by the entire NIBA community over the years.
“All NIBA Members are the heart and soul of our community –always engaged, always giving feedback good and bad, so that we can always improve,” said Dianne.
For more photos from the dinner, see the Summit and Celebration Dinner recap on the NIBA website here:
Ian Carr, Founder and Chairman of Insurance Advisernet and the newly crowned winner of the 2022 Lex McKeown Trophy, is often referred to as a visionary in the insurance industry – a man who pioneered the Authorised Representative model in Australia and set the course for brokers to start their own businesses.
He shares his story on how he came to found Australia’s first Authorised Representative network, the impact it made on the industry, and where he sees the future in broking.
In 1996, as the General Manager of AIBA Group, Ian was facing redundancy when the company entered into a merger. Facing an uncertain future ahead, Ian found the impetus to start his own business.
“Looking down the barrel of being made redundant, I decided that now was the time to work for myself,” he says.
“At the time, the market was dominated by international brokers, who were using the
size of their premium volumes to obtain a premium price advantage over others in the markets. A lot of regional suburban brokers struggled to compete against them – but there was one thing they didn’t have, and that was the local relationship.
“I have long believed that business is a personal thing, and personal relationships are the starting point of trust – not price. Those relationships exist from knowing people in the community – it’s playing the same sports, sharing the same interests, or having your kids go to the same school or play on the
same sports team. When you have similar interests, you network in that area and that is the basis of the people relationship.”
So, with a fervent belief in the power of relationships and the backing of his wife, Ian launched the Authorised Representative model in Australia, founding Insurance Advisernet together with business partner Sherryn Fletcher on 15 February 1996.
“In the start-up phase, we received great guidance, encouragement and support from Frank O’Halloran, the then CEO of QBE,” says Ian.
“We came up with a business concept to support insurance brokers – they would set up their own business and we would provide the central infrastructure for that to happen, including the systems, the training and the access to insurers.”
Modelled on the financial planning industry, where a dealer group was the licensee, and distribution and sales were made through Authorised Representatives who owned their clients, Insurance Advisernet pioneered the first model of this kind in the general insurance broking industry. The business launched with a team of 12 Authorised Representatives who took the gamble to start their own business under this model.
“From day one, each person on our internal team was doing four or five di erent jobs. As we started to scale, we recruited people who specialised in various fields. They built up the services we provided to our Authorised Representatives, which in turn also helped them to grow their businesses.”
26 years later, Insurance Advisernet is widely regarded as the leading Authorised Representatives network in Australia, with over 260 practices and $1.2 billion in premiums, supported by a team of 40.
“We focused on getting good, solid people who did the insurance for their network of friends and associates. The strong bond these brokers have with their clients beats price every time. It’s often said to us that we have a very high client retention rate, and that’s a clear reflection of the value we’ve placed in those relationships.”
As the man who built Insurance Advisernet from scratch, Ian shares the same beginnings as many others in their network, who all took a chance to run their own business. These roots have enabled him to deeply appreciate the path his model has paved for Authorised Representatives today.
“Today, it’s so much easier for the good brokers to start out on their own. When Insurance Advisernet first launched, it was less like the well-oiled machine it is today. Our Managing Director Shaun Standfield and his team have established the very best services for our Authorised Representatives, which we didn’t have initially.
“There’s a much higher calibre of Authorised Representatives coming through
now – we’re seeing high quality brokers coming from the internationals who want to run their own business. We also have a very young average age for principals at just 41 years old. Among the young talent coming through, we’re very proud to see William Thompson from Thompson Insurance, an Authorised Representative in Insurance Advisernet’s network, win this year’s Warren Tickle Young Broker of the Year award. These brokers are showing that the Authorised Representative model works – that with the right person and right attitude, if you’re hardworking and know your stu , you can use your network to run your own business.”
When reflecting on the impact he has made, Ian is proudest to see that the Authorised Representatives model has enabled brokers to take control over their own destiny.
“By outsourcing the AFSL management and compliance to us, we’ve given brokers more time to grow their business and focus on delivering the best client risk advice and
who started up with us years ago. These are people who started their business from scratch and relied on us to take a punt and back them. It’s so rewarding to see them come up to us many years later, now so successful.”
When it comes to what lies ahead for insurance broking, Ian is emphatic about the need for brokers to re-think advice.
“The 2022 NIBA Insurance Brokers Code of Practice and various regulatory authorities have stressed that brokers must give their clients advice in writing,” he says. “The next step is to think about what that advice should look like.
“I believe that the future of this industry is not about insurance – it is about risk. We’re living in an information age, where we now have so much data available to help us inform clients and assist them in managing their
service. There are brokers who have found enormous success in balancing their lifestyle with their career and family. Working for their own business has enabled people to work from home, in hours that fit around their family life. So many of these brokers are very, very successful. With the support of networks like Insurance Advisernet, people from all backgrounds can work on their own terms.
“And because the insurance business is so personal and it involves knowing everything about a person, if you can help your client get a claim and ensure they’re well looked after, they’re not going anywhere. This is how our profession works – it empowers the good people with good skills to be very successful, and I say good luck to them, it’s awesome.
“The absolute highlight of my career is being able to support someone with starting their own dream, just as I was supported, and watch their journey to become successful in business, family and life in general. As of this interview, the Insurance Advisernet Conference is coming up shortly, and I’m looking forward to connecting with brokers
risks. We are in a better position than ever before to help our clients properly protect their assets and liabilities.
“Just looking at the increasing natural disasters we’re now experiencing – brokers can access flood maps and start telling their clients well in advance if their home and/or business is in a flood-risk zone. That’s giving the client good advice. This is so much more important than entering client information into a computer and emailing across quotes to them.
“There are tools and technologies out there now for brokers to find out where the flood zones are, and to get accurate valuations on replacement value. It’s important for brokers to embed these into the advice they give, because that’s how they can demonstrate their value as trusted advisers.
“The role of brokers will fundamentally shift in the coming years, and those who spend their time in front of laptops emailing the cheapest quotes to their clients, without ever talking to them about their risks, will soon find themselves stuck in the old world.”
“I believe that the future of the industry is not about insurance – it is about risk. We’re living in an information age, where we now have so much data available to help us inform clients and assist them in managing their risks.”
From political instability to pandemics, the business world has been seriously impacted over recent years. But what e ect has that had on M&A activity and, more to the point, the strategies that dealmakers are now employing?
BY MARTIN WANLESS
Mergers and acquisitions activity is always influenced by a range of macroeconomic factors – and over recent years, those factors have had a considerable impact on the number of deals taking place. And the risks associated with them.
From pandemics to economic growth and instability, geopolitical tensions to supply chain issues, these factors all impact both the number of deals getting done and how they’re structured.
“The number of M&A deals for the first half of 2022 compared to the second half of 2021 has decreased,” says Rory Moriarty, National Practice Group Leader of Corporate, M&A and Capital Markets at Clayton Utz.
“Dealmakers were riding high from the record number of deals in 2021. Since then, we have seen deal values drop significantly across the board – almost 20 per cent in some sectors.”
Sam Thomas, Head of Aon M&A and Transaction Solutions, says the market is currently experiencing normalised conditions, with pricing down considerably in the last quarter and going into the final quarter of the year.
“Capacity among insurers is broadly back to nearly pre-pandemic levels,” he says.
“Deals are taking longer to sign and complete due to a range of factors but mainly around price expectations of sellers and buyers.
“We are also seeing delays due to regulatory approvals across the Foreign Investment Review Board (FIRB) in
Environmental, social and governance (ESG) is becoming increasingly important for everyone involved in a business – directly or indirectly. An ESG breach can severely affect customer sentiment and market reputation, as well as share values – so it’s no surprise that ESG is increasingly high up on the agenda where M&A is concerned.
“Both Australian and international bidders need to consider ESG trends and regulations when looking at investments,” says Rory Moriarty, National Practice Group Leader of Corporate, M&A and Capital Markets at Clayton Utz. “ESG features heavily in the due diligence phase of a transaction, covering issues from climate change to modern slavery and gender equality.
“There has been an increased focus on a target company’s ESG credentials as they have become key drivers in M&A transactions. A target’s ESG performance can increase the long-term valuation of the acquisition and send positive signals to shareholders. Conversely, a target’s ESG performance can also create reputational and financial risks for the acquirer.”
And ESG considerations are impacting the types of businesses that are attractive from an M&A perspective, with some sectors seeing declining interest due to their environmental impact.
“ESG is an important aspect of picking asset classes, and we are seeing increased activity in the renewables
space,” says Sam Thomas, Head of Aon M&A and Transaction Solutions.
“We are also seeing some insurance markets walk away from certain sectors due to their own ESG commitments.”
As well as making smart business sense, considering ESG obligations is just the right thing to do, as William Lewis, Head of Asia Pacific, Liberty GTS, explains.
“Considering ESG as part of an acquisition is the right thing to do in today’s environment.
“It’s pleasing to see these factors have an increased profile within an acquisition decision, and the continued emergence of advisers who can assist companies in these areas is welcome.”
“SINCE 2021, WE HAVE SEEN DEAL VALUES DROP SIGNIFICANTLY ACROSS THE BOARD – ALMOST 20 PER CENT IN SOME SECTORS.”
SAM THOMAS , HEAD OF AON M&A TRANSACTION SOLUTIONS
Australia and the Overseas Investment O ce (OIO) in New Zealand.
“Other challenges include the rising interest rates and inflationary environment, which is resulting in a larger focus on price.”
It’ll come as no surprise that the geopolitical risks associated with Russia, Ukraine and China are having an impact on buyer appetite and consumer confidence and sentiment on deal activity.
But while there is some trepidation on deal volumes reducing in 2023, particularly in Europe and the US, Thomas says Australia is expected to be quite stable.
“There is reduced deal flow in the US and UK markets which has led to more
interest in Pacific deals,” he says. “Australian M&A flow is down on the same time last year, but 2021 was a record year in terms of deal activity. There is more availability of insurance capital, with several new insurers in the market now in our region who are keen to underwrite more deals.”
Aside from economic headwinds and a high inflationary, high interest rate environment, William Lewis, Head of Asia Pacific at Liberty GTS, says another factor that’s creating an issue in the M&A market, is people.
“The global demand for talent and the ability to recruit the right people with legal expertise and commerciality is a significant issue at present,” he says.
“The M&A insurance market is being a ected by a number of external factors,
Having the right insurance and advice during an M&A process is invaluable, as this case study from Aon illustrates.
ASSET Development Business. Development Business has identified, developed and sold ~3 GW of wind and solar development projects, and ~3.8 GW of wind projects have been contracted with high-quality counterparties through joint development agreements.
Off-Grid Solar Business. In addition, another ~3.5 GW of development projects have land options or exclusivity secured, and a further ~5.5 GW is in the advanced investigation stage. Off-Grid Solar Business owns and operates ~7 MW of off-grid solar PV assets in the Northern Territory under long-term PPAs.
• An infrastructure fund was selling a renewable asset through a competitive auction process for approximately $450 million.
• The seller sought a clean exit to distribute proceeds and avoid any long-tail liabilities.
• The buyer wanted to facilitate the efficient completion of the deal and offer the seller a clean exit to distinguish their bid offer.
• The seller required the buyer take out W&I insurance. Aon was engaged to provide guidance around the W&I process and pricing to all bidders.
• The preferred bidder then engaged with Aon to structure a W&I solution that suited its requirements.
• The buyer-side W&I policy facilitated a clean exit for the seller and allowed the buyer to obtain the amount and duration of protection it was looking for.
“THE GLOBAL DEMAND FOR TALENT AND THE ABILITY TO RECRUIT THE RIGHT PEOPLE WITH LEGAL EXPERTISE AND COMMERCIALITY IS A SIGNIFICANT ISSUE AT PRESENT.”
WILLIAM LEWIS , HEAD OF ASIA PACIFIC , LIBERTY GTS
and they can all have a significant impact on our collective ability to service the market – via talent – and can impact demand for transactional liability products.”
Given all of the external factors impacting M&A activity, it’s no surprise that dealmakers are trying new approaches to get deals over the line to mutual satisfaction.
“Dealmakers are arguably facing some of the most uncertain and complex market conditions,” says Moriarty.
“As such, some strategies used by dealmakers will include an increasing acceptance for scrip instead of cash consideration, as debt will be less attractive, and a greater reliance on schemes of arrangements due to their flexibility if the terms of a deal require a
change in the face of growing uncertain market conditions.”
Lewis has also seen strategies change, and says, “These are very much deal-bydeal focused, but we are seeing strength in particular industries, such as the medical sector, infrastructure, renewables, agriculture and technology – there are deals with lots of activity. We have also seen a consolidation of companies in the financial services sector.”
In a telling insight into M&A activity – and business strategies generally –post-COVID-19, Thomas shares, “One strategy we have seen is larger corporates acquiring their suppliers to manage supply chain issues post-pandemic. We have also seen corporates refocus back on their core business assets and divest businesses that they would not consider core to their business.”
“DEALMAKERS ARE ARGUABLY FACING SOME OF THE MOST UNCERTAIN AND COMPLEX MARKET CONDITIONS.”
RORY MORIARTY, NATIONAL PRACTICE GROUP LEADER OF CORPORATE , M&A AND CAPITAL MARKETS , CLAYTON UTZ
For brokers, this is another ever-evolving, complex area – and Lewis says it’s vital to understand the landscape.
“Brokers need to fully understand the economic and insurance environment that deals in 2022 and 2023 are happening in,” he says.
“They need to have the skills to spot issues and potential roadblocks to deals getting done in the M&A space and be able to engage with the insurance market to help solve these issues for their clients in a timely way. They can’t sit back and watch deals get done – they need to actively engage with the process and recommend great solutions.”
And from there, brokers can be that incredibly valuable guide through the risky and complex world of M&A.
“Any type of M&A activity involves transactional risks, no matter how extensive and accurate the due diligence process is,” says Moriarty. “Given the current uncertainties in the economy, it is more important than ever for both buyers and sellers to ensure they have the right insurance in place.”
“[BROKERS] NEED TO HAVE THE SKILLS TO SPOT ISSUES AND POTENTIAL ROADBLOCKS TO DEALS GETTING DONE IN THE M&A SPACE AND BE ABLE TO ENGAGE WITH THE INSURANCE MARKET TO HELP SOLVE THESE ISSUES FOR THEIR CLIENTS IN A TIMELY WAY.”
WILLIAM LEWIS , HEAD OF ASIA PACIFIC , LIBERTY GTS
The following is a list of S&P Global Ratings insurer financial strength ratings assigned to insurance companies in Australia and New Zealand. Ratings as at 19 October 2022
Contact: Craig Bennett, S&P Global Ratings, 03 9631 2197
AA Insurance Ltd. AA-/STABLE
AIG Insurance New Zealand Ltd. A/NEGATIVE
Aioi Nissay Dowa Insurance Co., Ltd A+/STABLE
Allianz Australia Insurance Limited AA-/STABLE
Berkshire Hathaway Specialty Insurance Company AA+/STABLE
Chubb Insurance New Zealand Ltd. AA-/STABLE
Factory Mutual Insurance Company A+/STABLE
Great Lakes Insurance SE AA-/STABLE
Hallmark General Insurance Co. Ltd. BBB+/CreditWatch Negative
Hannover Life Re of Australasia Ltd. AA-/STABLE
IAG New Zealand Ltd. AA-/STABLE
Medical Insurance Society Ltd. A/STABLE
Mitsui Sumitomo Insurance Co. Ltd (New Zealand Branch) A+/STABLE
QBE Insurance (Australia) Ltd. A+/STABLE
Society of Lloyd’s A+/STABLE
Southern Cross Benefits Ltd. A/STABLE
Southern Cross Pet Insurance Ltd. A/STABLE
Teleco Insurance (NZ) Ltd. BBB+/STABLE
The North of England Protecting and Indemnity Association Ltd. A/NEGATIVE
Tokio Marine & Nichido Fire Insurance Co. Ltd. (New Zealand Branch) A+/STABLE
Vero Insurance New Zealand Ltd. AA-/STABLE
Vero Liability Insurance Ltd. AA-/STABLE
Zurich Australian Insurance Ltd. AA-/STABLE
NIB NZ Ltd. A-/STABLE
Southern Cross Medical Care Society A+/STABLE
LENDERS MORTGAGE INSURERS
Genworth Financial Mortgage Insurance Pty Ltd. (NZ Branch) A/STABLE
QBE Lenders’ Mortgage Insurance Ltd. A/STABLE
Asteron Life Ltd.
AA-/STABLE
Hallmark Life Insurance Co. Ltd. BBB+/CreditWatch Negative
Medical Life Assurance Society Ltd. A/STABLE
Resolution Life New Zealand Ltd. A-/STABLE
Resolution Life Australasia Ltd. (New Zealand Branch) A-/STABLE
REINSURERS
HDI Global Specialty SE
A+/STABLE
AAI Ltd.
AA-/STABLE
Achmea Schadeverzekeringen N.V. A/STABLE
AIG Australia Limited A/NEGATIVE
Allianz Australia Insurance Ltd. AA-/STABLE
Allied World Assurance Co. Ltd. A/STABLE
Berkshire Hathaway Specialty Insurance Company AA+/STABLE
BHP Marine & General Insurances Pty Ltd. A-/STABLE
Chubb Insurance Australia Ltd. AA-/STABLE
Factory Mutual Insurance Company A+/STABLE
Great Lakes Insurance S.E (Australia Branch) AA-/STABLE
Hallmark General Insurance Co. Ltd. BBB+/CreditWatch Negative
Insurance Australia Ltd. AA-/STABLE
Liberty Mutual Insurance Company Limited A/STABLE
Medical Insurance Australia Pty Ltd. A-/STABLE
Mitsui Sumitomo Insurance Company Limited A+/STABLE
QBE Insurance (Australia) Ltd. A+/STABLE
QBE Insurance (International) Ltd. A+/STABLE
Society of Lloyd’s A+/STABLE
Sompo Japan Insurance Inc. A+/STABLE
Southern Cross Benefits Limited A/STABLE
The North of England Protecting and Indemnity Association Ltd. A/NEGATIVE
Tokio Marine & Nichido Fire Insurance Co., Ltd. A+/STABLE
XL Insurance Company SE AA-/STABLE
Zurich Australian Insurance Ltd. AA-/STABLE
Arch Lenders Mortgage Indemnity Ltd. A/STABLE
Genworth Financial Mortgage Insurance Pty Ltd. A/STABLE
QBE Lenders' Mortgage Insurance Ltd. A/STABLE
AIA Australia Ltd.
A+/STABLE
Challenger Life Company Ltd. A/STABLE
Hallmark Life Insurance Co. Ltd. BBB+/CreditWatch Negative
MetLife Insurance Ltd. A+/STABLE
Resolution Life Australasia Ltd. A-/STABLE
Westpac Life Insurance Services Ltd. A+/STABLE
Aspen Insurance UK Ltd. A-/STABLE
Berkley Insurance Company A+/STABLE
General Reinsurance Australia Ltd. AA+/STABLE
General Reinsurance Life Australia Ltd. AA+/STABLE
Hannover Life Re of Australasia Ltd. AA-/STABLE
Hannover Rück SE AA-/STABLE
HDI Global SE A+/STABLE
HDI Global Specialty SE A+/STABLE
Munchener Ruckversicherungs-Gesellschaft (Munich Reinsurance Co) AA-/STABLE
Munich Reinsurance Co. of Australasia Ltd. AA-/STABLE
Pacific Life Re (Australia) Pty Ltd AA-/STABLE
QBE Blue Ocean Re Ltd. A+/STABLE
RenaissanceRe Europe AG A+/STABLE
RGA Reinsurance Co. of Australia Ltd. AA-/STABLE
SCOR Global Life Australia Pty Ltd. AA-/NEGATIVE
SCOR Reinsurance Asia Pacific Pte Ltd. AA-/NEGATIVE
Swiss Re Asia Pte. Ltd., (Australia Branch) AA-/NEGATIVE
Swiss Re International SE AA-/NEGATIVE
Swiss Re Life & Health Australia Ltd. AA-/NEGATIVE
Transatlantic Reinsurance Company AA+/STABLE
* See page 59 for S&P Global disclaimers and
information
The following is a list of AM Best Financial Strength Ratings (FSRs) assigned to insurance companies in Australia and New Zealand. Ratings as at 26 October 2022
Contact: Mr. Rob Curtis Co-CEO & Managing Director
A. M. Best Asia-Pacific (Singapore) Pte Ltd.
Tel: +65 9633 6118
Email: rob.curtis@ambest.com
General Reinsurance Life Australia Ltd. A++/STABLE
Ansvar Insurance Limited A-/STABLE
First American Title Insurance Company of Australia Pty Limited A/STABLE
General Reinsurance Australia Ltd A++/STABLE
Guild Insurance Limited A-/STABLE
Pacific International Insurance Pty Limited B++/NEGATIVE
The Hollard Insurance Company Pty Ltd A-/STABLE
The New India Assurance Company Limited (Australia Branch) 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.
Quest Insurance Group Limited B/STABLE
American Income Life Insurance Company (New Zealand Branch) A/STABLE
BNZ Life Insurance Limited A u/NEGATIVE
CIGNA Life Insurance New Zealand Limited A/STABLE Co-operative Life Limited B++/STABLE DPL Insurance Limited B++/STABLE
Fidelity Insurance Limited A-/STABLE
Fidelity Life Assurance Company Limited A-/STABLE
Foundation Life (NZ) Limited A-/STABLE
General Reinsurance Life Australia Limited (New Zealand Branch) A++/STABLE
Momentum Life Limited B++/STABLE
Partners Life Limited A- u/POSITIVE
Pinnacle Life Limited B/POSITIVE
PROPERTY/CASUALTY
Accuro Health Insurance Society Limited B+/NEGATIVE
Aioi Nissay Dowa Insurance Company, Limited (New Zealand Branch) A+/STABLE
Beneficial Insurance Limited B++/STABLE Brightsideco Insurance Limited B u/NEGATIVE
Consumer Insurance Services Limited B+/STABLE
First American Title Insurance Company of Australia Pty Limited (New Zealand Branch) A/STABLE
FMG Insurance Limited A/STABLE
General Reinsurance Australia Ltd (New Zealand Branch) A++/STABLE
Mitsui Sumitomo Insurance Company Limited (New Zealand Branch) A+/STABLE
New Zealand Medical Indemnity Insurance Limited B+/STABLE
Pacific International Insurance Pty Ltd (New Zealand Branch) B++/NEGATIVE
Police Health Plan Limited A-/STABLE
Provident Insurance Corporation Limited B /STABLE
The Hollard Insurance Company Pty Ltd (New Zealand Branch) A-/STABLE
The New India Assurance Company Limited (New Zealand Branch) B++/STABLE
Tokio Marine & Nichido Fire Insurance Company Limited (New Zealand Branch) A++/STABLE
Tower Limited A-/STABLE
Union Medical Benefits Society Limited A/STABLE
Veterinary Professional Insurance Society Incorporated B/STABLE Virginia Surety Company, Inc. (New Zealand Branch) A/STABLE
Victorian brokers attended an intimate panel discussion, which featured two prominent loss adjusters from the Australian Institute of Chartered Loss Adjusters (AICLA) and two NIBA insurance brokers. This was followed by an hour of networking drinks.
Brokers gathered in UQ Brisbane City for an insightful seminar on the cyber threat landscape, presented by specialist Darren Hopkins.
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