JULY 2021
STAYING AFLOAT IN A STORM Marine and cargo insurance
A TRICKY PROPOSITION
The PI conundrum
REIMAGINING CONNECTIONS
The 2021 NIBA Mentoring Program
#NIBA2021
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CONTENTS July 2021
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 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.
22
#NIBA2021
Where the industry comes together
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.
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THE NIBA MENTORING PROGRAM Supporting young professionals to scale great heights
NIBA.COM.AU / 3
CONTENTS July 2021
FEATURES 30 THE PI
CONUNDRUM Making sense of a volatile segment
38 STORM
CHASING
The challenges of the marine and cargo sector
IN EVERY ISSUE NIBA CEO Welcome ................................... 6 Representation ............................................ 8 Why be a NIBA member? ........................ 10 Insurance Journey: Mark O’Reilly .......58
NEWS
Industry bulletin ....................................... 12 Regulatory updates ................................... 16
PROFESSIONALISM
The 2021 NIBA Broker Awards .............. 18 AFCA Case Study ...................................... 19
EVENTS
Forthcoming events................................. 52 Event pictorials..........................................53 REFERENCE
Community hub.........................................45 Insurer strength ratings ..........................56
4 / INSURANCE ADVISER JULY 2021
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CEO / Welcome
TWO MAJOR REVIEWS UNDER WAY
A
s we go to print, NIBA is finalising responses to two major consultations of critical importance to the general insurance industry in Australia in 2021.
Insurance Council of Australia Consultation Paper
In May 2021 the Insurance Council of Australia (ICA) released a Consultation Paper on the Role of the Private Insurance Market – Independent Strategic Review: Commercial Insurance. The Consultation Paper was prepared by independent consultants John Trowbridge and Michael Blythe and was commissioned by the ICA – as part of its review of the insurance sector’s options for reforms to improve the industry’s contribution to national economic recovery and growth. Its primary emphasis is concern from insurers, other stakeholders and the community about the availability and affordability of some categories of insurance cover for certain groups of customers. Availability and affordability issues are certainly well known to insurance brokers at the present time. I have been discussing these matters with John Trowbridge for many months now, and I do have to give credit to the Insurance Council for commissioning the work, and to John Trowbridge for asking hard questions and listening carefully to often hard responses. The NIBA Board of Directors met with John to discuss these matters and to provide feedback on his draft recommendations. The Consultation Paper provides a brief overview of the economic importance of general insurance to the Australian economy. In his opening summary, Michael Blythe points out: There is a long running relationship between economic activity and insurance. At its essence is the management of risk that allows businesses, individuals and governments to take those risks. The result is higher than otherwise income, productivity and living standards. This framework is available to support the Australian economy over the medium term. As insurance brokers know only too well, very little commercial activity takes place in Australia without the support of risk transfer and insurance. Insurance is therefore critically important for the post-COVID-19 recovery of the Australian economy. Blythe goes on to note issues regarding affordability and availability in general, with particular problems being experienced with professional indemnity, public liability, business interruption, and directors & officers’ insurance. Again, insurance brokers are very familiar with these issues in the current market environment. The Consultation Paper develops a number of options for comment by interested stakeholders, including options around awareness, possible insurance industry initiatives, and possible government and government-related activity.
6 / INSURANCE ADVISER JULY 2021
These matters, and the ideas raised in the Consultation Paper, are important for domestic and commercial clients across Australia. By the time this edition is published, the time for providing responses to the ICA will have closed, however I urge all insurance brokers to continue to follow developments closely, and to continue to provide comments to the ICA on the issues raised in the paper.
Federal Government Consultation Paper: Reinsurance pool for cyclones and related flood damage
Also, in May 2021 the Federal Government published a Consultation Paper seeking feedback on the design and operation of a reinsurance pool to offer greater protection to residential, strata and small business property owners across Northern Australia. The cyclone reinsurance pool is intended to commence on 1 July 2022 and will be backed by a $10 billion government guarantee. It is expected over 500,000 property insurance policies will benefit from the pool’s coverage, and that insurance premiums across northern Australia reduce by over $1.5 billion over 10 years. Federal Treasury has formed a taskforce to develop the final design of the reinsurance pool in close consultation with the insurance industry. NIBA has met with the Treasury taskforce and has nominated two insurance brokers from northern Queensland to assist with the analysis and testing of options. We believe it is important that the government has access to technical expertise on these matters from brokers who are very familiar with the issues and challenges faced by clients across northern Australia every day. NIBA will continue to provide information to members as these two important projects progress.
DALLAS BOOTH Chief Executive Officer, NIBA
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the driver, the higher risk they ar 54.3% of the insurance services in NEWS / Representation external relation and internal and external relatio of an escalator. By focusing summed up in can minim degraded concrete. Re There is a lot happening at the present time. The following are a few key developments that insurance brokers need to be aware of. more likely to return to work saf killed on quad bikes in th ICA Trowbridge report Last month the NIBA Board of Directors or GIF can reli met with John Trowbridge to discuss the independent review currently being relying on words to understand undertaken into the commercial insurance market. The Board raised a number of issues, many of which had also been highlighted 7 time as part of the consultation process, including the need for greater engagement number of vehicle fatalitie between brokers and underwriters. Directors pointed to a number of industries where brokers routinely face difficulties A bold ad can h finding cover for their clients despite good claims history and risk management. A number of these industries are also required attract new customers, retain em to hold certain types of cover in order to continue to trade, which Directors said, were Queensland reinsurance pool. NIBA will reforms, including lack and stayCommission in touch with your injur almost impossible to obtain. continue to engage with both Treasury and of independence disclosure, add-on insurance
WE ARE YOUR VOICE!
NIBA also provided a submission to the review’s consultation paper on commercial insurance. NIBA’s submission highlighted these issues and called for insurers to work with these hard-to-place industries to find solutions to address both affordability and availability concerns.
Emergency Services Funding in NSW & TAS
NIBA continues to encourage all brokers with clients in New South Wales and Tasmania to visit the Emergency Services Funding Hub on the NIBA website (niba.com.au/insuranceaffordability). NIBA has prepared materials for both NSW and Tasmanian members to provide to clients, including a template letter that brokers and clients can send to their local MP, calling for the abolition of insurance-based taxes and a more equitable system for the funding of state fire and emergency services.
North Queensland Reinsurance Pool
Last month NIBA met with members of the Treasury’s taskforce to discuss the North
8 / INSURANCE ADVISER JULY 2021
the Australian Reinsurance Pool Corporation (ARPC) to ensure that the pool can provide real benefits to the North Queensland market. To support this NIBA also provided a response to the Treasury’s discussion paper on the proposed reinsurance pool. In the submission NIBA raised a number of concerns including that projected savings to homeowners would likely not be enough to address the significant disparity in premiums and would do little to increase affordability. NIBA also called for the design process to focus on increasing insurer activity in the region to promote competition and innovation.
Royal Commission Legislation
NIBA continues to engage with ASIC and Treasury on a number of Royal
exemptions, anti-hawking and Design and Distribution Obligations for brokers. NIBA has provided member guidance on a number of royal commission reforms scheduled to commence later this year, with more guidance expected to be released shortly, pending the outcome of these discussions.
The Role and Value of Insurance Brokers
NIBA continues to meet with State and Federal MPs, Ministers and business and consumer groups to promote the Deloitte report on the Economic Value of Insurance Broking and the Value of Brokers more broadly ahead of the 2022 review into the intermediated insurance industry.
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
re for motor accidents, which relates to higher excesses and premiums. ndustry. Sustainability practices build your business reputation and int nships. Look at people not just tasks for best results. The biggest impact onships. Installing musical keys on a staircase led to 66% more people us g on one task at a time you can increase efficiency. The definition of a p one sentence, it’s what people say and feel when we’ve left the room. Pa mize or prevent external fire spread. Fire ratings can be compromised b esearch shows that when you offer continued support and stay in touch k. Feedback with intent can help build healthy relationships. A success fety culture aligns people with systems and their environment. 230 Aus he last 20 years. You can learn from your mistakes with a growth mind ieve some tension in messages. So before you send that text, add a smil d your meaning. Research shows that when you offer continued suppo es more likely to return to work. Fitting rollover protections is key to red es on farms every year. When you give feedback, start with your intent. help your personal brand stand out on social media. Q Academy webin mployees and aligns values. Common workplace injuries include body s red workers, they are 7 times more likely to return to work. The recipien
Now imagine how many industry and leadership insights you’ll know after. qbe.com/au/qacademy
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NIBA / Member Benefits
WHY NIBA MATTERS TO ME Members share why NIBA is important to them and the broking industry.
“Insurance brokers play a critical role in helping their clients transfer risk using insurance, without which modern-day economies would struggle to function. Brokers need a strong body to represent their interests and the vital role they play; NIBA is that body.” ADAM SQUIRE NIBA Board Director and Head of Claims at Gallagher
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.
10 / INSURANCE ADVISER JULY 2021
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 / Insurance Advisernet
25 YEARS YOUNG! BY SHAUN STANDFIELD
Managing Director, Insurance Advisernet
I
nsurance Advisernet (IA) now has over 250 Practices in Australia and New Zealand. This year will see IA placing over $1B in invoiced premiums. The business was started by Ian Carr in 1996 in Australia and commenced in 2006 in New Zealand. As Ian regularly says, “IA has been an overnight success” – it just took 25 years of vision and hard work! What Ian has enjoyed immensely is watching people start their own business under our guidance, and in time they have built up a tangible asset along with all the benefits of being your own boss. We believe the future of broking in Australia is excellent. There is no doubt AR models allow professional insurance brokers to run their own businesses with the backing of an AR model that provides sound back offices systems. We also believe the continued investment in data, systems, marketing and compliance infrastructure is crucial for the continued growth of both the AR’s business and for the longevity of the AR licensee holder. You only have to look at the Australian Financial Complaints Authority (AFCA) sixmonthly statistics to 31 December 2020 to see what a great job Insurance Intermediaries do. During that period, there were 7,131 complaints lodged about General Insurance. Of those only 180 matters, only 2.5%, were against Insurance Intermediaries. This speaks volumes for the role insurance intermediaries play in providing risk management advice and claims advocacy service to clients. As a profession, we need to collectively improve our messaging about the role we play in providing personal risk management advice against direct insurance companies that offer only general advice. The AFCA statistics reinforce this. A recent decision by AFCA found that it’s “not the insurers’ job to advise on the sum insured” when the policyholder who lost their home in the bushfires last year found themselves underinsured to the tune of $600,000.
Instead, AFCA found the onus was on the policyholder to ensure they had adequate insurance. This is an excellent example of the messaging the broking industry needs to communicate more to explain why having a broker in your corner will assist you to have the right policies and have a claims advocate working with you if the need arises. Our model allows our ARs to concentrate on their clients with the support structures we provide them in terms of systems, compliance, professional development, finance, business management tools, insurance placement and claims advocacy services we provide. Our AR Practices mirror their clients in many ways and they have gone out on their own with our support and taken the risk to develop their own asset and business. In a way, this reflects many of our clients who also are small-medium businesses that have backed themselves to build a business for themselves. Our core values are Trust, Advice, Choice and Value. Although we don’t lead with a price-driven model, we believe advice is the key to ensuring our clients are insured correctly by a trusted professional with relevant industry qualifications, access to broad insurance options and value for money. The advent of technology has allowed brokers to spend more time with their clients. At IA, we see technology as an enabler and not a silver bullet. Technology
cannot replace the advice a person can give; good advice only comes from understanding what your clients want, needs and risk tolerances, using data to ensure your clients are aware of the natural hazard risks they face coupled with the risks associated with the industry they are in. Our AR model allows for succession to occur within our existing model, as many of our Practices are now merged businesses. As a Practice Principle plans for retirement, the collegiate nature of IA is that people form professional relationships across the group and, in time, discussions occur to allow seamless transitions of books of business across the network. Advice trumps price every time; simply, when a claim occurs, the price you pay isn’t considered. What’s crucial is that you have the right policies in place to ensure your livelihood and assets are protected. Our role is more and more to provide risk management advice to our clients and part of this is to craft a bespoke insurance program. Often this program will be crafted using a myriad of insurance partners. The next 25 years are going to as good as the last 25! Insurance Advisernet would like to congratulate Dallas Booth on his stellar career in insurance and his role in representing our Industry as the Chief Executive of NIBA.
We need to collectively improve our messaging about the role we play in providing personal risk management advice against direct insurance companies that only offer general advice NIBA.COM.AU / 11
NEWS / Industry Bulletin
NIBA SUBMISSION TO SIRA ON PERSONAL INJURY INSURANCE ARRANGEMENTS FOR FOOD DELIVERY RIDERS
T
he National Insurance Brokers Association (NIBA) has made a submission to the NSW State Insurance Regulatory Authority consultation (SIRA) on personal injury insurance arrangements for food delivery riders. The submission acknowledged that the meteoric rise of the gig-economy in Australia has had a significant impact on the Australian economy and workforce as well as how unprepared Australia’s regulatory environment is to handle these new ways of working. The Association cited the deaths of six food-delivery riders in 2020 and the subsequent lack of protections for injured riders and their families is just one example where employment law cannot keep pace with the gig-economy. The Association stated that it believes that food delivery riders meet the requirements of a deemed worker as they are engaged by the platform for the purposes of their trade and are directed by the platform regarding the work to be performed and the time in which it is to be performed (many platforms track their delivery partners and riders may be removed from the platform if they fail to complete deliveries in what the platform deems to be a timely manner).
NIBA’s preferred option is to extend the existing workers compensation scheme to include food delivery riders, “This could be done by amended existing workers
compensation regulation to provide that food delivery drivers are deemed workers for the purposes of accessing workers compensation benefits and protection.”
ICA HAS DECLARED A CATASTROPHE FOR REGIONS OF VICTORIA IMPACTED BY THE WILD WEATHER
T
he Insurance Council of Australia (ICA) has declared an insurance catastrophe for regions of Victoria impacted by the wild weather, significant storms and riverine flooding in June. ICA CEO Andrew Hall said, “It’s too early to understand the extent of damage to property in affected areas and to estimate the insurance damage bill, however insurers have received more than 6,500 claims in the past few days.”
“The insurance industry has made this Catastrophe Declaration to activate services and support for affected homeowners and businesses and reassure them that their insurer is there to help.” The Victorian Government has also announced emergency relief payments, via the Personal Hardship Assistance Program to help meet immediate needs, including emergency food, shelter,
clothing and personal items. Information on how to access the relief payments, along with other recovery information can be found on the Vic Emergency website: emergency.vic.gov.au/relief The impact of the flooding has been felt most significantly in Gippsland around Traralgon and in the Yarra Ranges, however the declaration covers all claims related to the event in the second week of June.
For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/
12 / INSURANCE ADVISER JULY 2021
NEWS / Industry Bulletin
APRA HAS RELEASED ITS GENERAL INSURANCE STATISTICS FOR MARCH 2021
T
he Australian Prudential Regulation Authority (APRA) has released its Quarterly General Insurance Performance Statistics and Quarterly General Insurance Institution-level Statistics publications for the March 2021 quarter. The general insurance industry reported a net profit after tax of $1.1 billion and return on net assets of 3.9 per cent during the year ended 31 March 2021. APRA stated that the result was driven by natural catastrophe claims costs, provisions for business interruption (BI) claims and falls in investment income. The industry reported a profit of $19m for the March quarter. Gross incurred claims fell significantly as the effects of the provisioning that was undertaken for BI claims in the December quarter was not repeated in the March quarter. However, this
was mostly offset by investment losses on interest bearing investments as a result of an increase in bond yields during the quarter.
Key performance statistics key ratios The recommendations of the and fast-tracked for the general insurance industry areState shown Insurance and Care NSW (icare) and in the tables below. Insurance and Care Governance Act 2015 Independent Review, have been handed
Key performance statistics for the general insurance industry in the year ended 31down March by retired Supreme Court Judge
Robert McDougall. CHANGE (ANNUAL) The review offers an independent assessment of the issues –and challenges 1.9% facing icare and the worker’s compensation scheme and McDougall examined issues +6.0%
MARCH 2020
MARCH 2021
$42.4bn
$41.5bn
Underwriting result
$1.5bn
$1.6bn
Investment income
$2.0bn
$1.6bn
–20.8%
Net profit after tax
$1.5bn
$1.1bn
–28.3%
Gross claims expense
Key performance statistics for the general insurance industry in the quarter ended 31 March DECEMBER 2020
MARCH 2021
CHANGE (QUARTERLY)
Gross claims expense
$14.7bn
$9.4bn
-36.0%
Underwriting result
–$1.1bn
$657m
Investment income
$504m
–$246m
Net profit after tax
–$622m
$19m
Key ratios for the general insurance industry MARCH 2020
MARCH 2021
CHANGE (ANNUAL)
CHANGE (QUARTERLY)
Net loss ratio
71%
71%
Unchanged
–17 percentage points
Return on net assets
5.6%
3.9%
–1.7 percentage points
+8.9 percentage points
Prescribed capital amount coverage ratio
1.66x
1.71x
+0.05x
+0.01x
Copies of the 31 March 2021 quarterly publications are available on APRA’s website: apra.gov.au/quarterly-general-insurance-statistics
NIBA.COM.AU / 13
NEWS / Industry Bulletin
NIBA SUBMISSION TO CONSULTATION PAPER ON CYCLONE REINSURANCE POOL
T
he National Insurance Brokers Association (NIBA) has made a submission in response to the consultation paper: Reinsurance pool for cyclones and related flood damage. The submission stated that the day-today experience of insurance brokers in northern Australia confirms the Australian Competition and Consumer Commission (ACCC) report findings that the insurance market in northern Australia is extremely unusual, in that insurance companies are often competing to lose business rather than competing to gain business. It stressed that insurance brokers are consistently reporting extreme difficulty in gaining quotes for property and related risks in northern Australia,
and when quotes are available, they are invariably extremely expensive. Author of the submission NIBA CEO, Dallas Booth added that in recent times, high premiums have also been accompanied by high levels of excesses or deductibles, and/or low levels of sub-limits within the policy. His recent discussions with insurance brokers operating in north Queensland and brokers in Western Australia with clients in the far north of the state confirmed that these extremely difficult market conditions are continuing. The submission also noted that the government has committed to a guarantee of the reinsurance pool but has not committed to funding the pool from revenue or other sources. Therefore it may well be a challenge to significantly reduce
premiums in northern Australia, or to make insurance more affordable for those not currently able to insure their property. NIBA submitted that before serious design, modelling and costing is undertaken, Treasury must meet privately with the leading insurance companies and ascertain (no doubt in a commercially confidential manner) the factors and design elements that would encourage the insurers to return to northern Australia and provide cover to the majority of properties on a more competitive basis. Unless and until this information is known, any model for a reinsurance pool may well fail to gain what insurance brokers and property owners seek most: greater choice of cover, from a competitive insurance market that meets the needs of most property owners.
NIBA VIC DIVISIONAL COMMITTEE LAUNCHES A D&I SUB-COMMITTEE
N
IBA Victoria Divisional Committee members; Camerson Shields from Lockton, Leigh Frost from Willis Towers Watson, Prudence Chang from NCI Trade Credit Solutions and Nese Akay from Community Broker Network have established a Diversity and Inclusion (D&I) sub-committee to develop initiatives to help promote an array of voices within the insurance broking profession. The primary goal is to be of service and to provide value to insurance intermediaries. Shields is a passionate advocate for recognising and eliminating unconscious bias, “Fostering relationships, opening doors and allowing the sharing of different perspectives will move the needle on D&I and promote insurance broking as a viable profession. Showing our commitment to D&I through our actions will allow us to be seen as a progressive profession that is attractive to diverse
talent, which will ultimately benefit employers, employees and clients alike.” Insurance historically has not been considered an exciting industry to work in and this group wants to change that. Chang added that it is time to shine a bright light on mental health, “Workplace acknowledgement and understanding of psychological diversity in all of its forms is more important than ever, especially after the year we have had globally. We need to be more aware of mental health to be able to offer support and legitimise structures within industries to help people thrive.” The sub-committee is currently in its infancy but the members believe the more we do as an industry to drive programs that bring about change, the better for the insurance broking profession. Frost believes that the risk advisory profession as well as the broader
insurance industry should reflect the makeup of the clients we serve, “Setting up employee resource groups and actively reaching out to alternative groups in the recruitment process can not only highlight the insurance broking industry but also demonstrate our commitment to the wider community.” Akay adds that the world around us is changing and we must acknowledge that we need to do more to help people bring all of themselves to work, “We need to actively demonstrate that we are a welcoming community of professionals who are eager to learn from different perspectives and are attuned to the different needs people may have.” The committee members would love to hear from you and have said that they would welcome feedback and ideas on D&I within the industry and how education can be provided to NIBA members.
For breaking news and updates curated specially for insurance brokers please visit: insuranceandrisk.com.au/category/news/
14 / INSURANCE ADVISER JULY 2021
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NEWS / Upcoming Regulatory Changes
UPCOMING REGULATORY CHANGES
October is fast approaching and with it a raft of sweeping regulatory changes that all brokers need to be aware of. These changes will affect almost every broker, so it is critical that NIBA members have a thorough understanding of the changes and the impact they will have on their business.
Reference checking and information sharing: The new provisions will require AFS licence holders to comply with new reference checking and information sharing protocols which will shortly be released by ASIC. These requirements will apply to authorised representatives of life risk brokers, and do not apply to representatives giving advice only in relation to general insurance products. The new rules take effect on 1 October. Hawking of financial products: Complex new provisions relating to the “hawking” of insurance products will take effect on 5 October. The provisions do not apply when an insurance broker is giving personal advice to a retail client, but they will apply to insurance brokers operating under a general advice model. The provisions will prevent the unsolicited marketing and sale of financial products to retail clients. The definitions and concepts are difficult and complex; NIBA is currently seeking clarity from Treasury and will provide further information to members in relation to these changes. Duty to take reasonable care not to make a misrepresentation: These reforms relate to a newly defined category of “consumer insurance contracts”. They apply to insurance obtained wholly or predominantly for the personal, domestic, or household purposes of the insured. Where the new definition applies, the insured only has a duty to take reasonable care not to make a misrepresentation to the insurer before entering the consumer insurance contract. The changes relate to insurance contracts entered into on or after 5 October.
16 / INSURANCE ADVISER JULY 2021
For non-consumer insurance contracts, the existing provisions in sections 21 and 22 of the Insurance Contracts Act (duty of disclosure obligations and misrepresentation provisions) apply. NIBA will provide more information on these reforms to members. Deferred sales model for add-on insurance products: These reforms implement an industry-wide deferred sales model for add-on insurance products. The legislation introduces a complex array of obligations which defer the insurance transaction for a period of four days. The legislation applies to any insurance product sold incidentally to a primary good or service e.g., insurance sold in conjunction with the rental of a motor vehicle, travel insurance purchased after the purchase of a travel product. The reforms do not apply to comprehensive motor insurance, or products recommended by financial advisers in a very limited personal advice situation. NIBA is currently liaising with Treasury to seek exemptions for a number of broker products where the immediate supply of cover provides genuine protection for consumers. The legislation is due to take effect on 5 October. ASIC Regulatory Guide 271 – Internal Dispute Resolution: It is a condition of every AFS licence that the licence holder have a system for managing and resolving complaints and disputes, preferably before they are elevated to AFCA. ASIC has issued a new regulatory guide, RG 271 Internal dispute resolution, setting out their dispute
resolution standards and requirements. A number of the standards and requirements set out in the RG are enforceable, so it is critical that members are aware of the new obligations. NIBA has previously provided information to its members on this issue, which can also be accessed via the Media Hub on the new NIBA website under “Members only content”. The requirements only apply to complaints received on or after 5 October. For complaints received by firms before 5 October 2021, Regulatory Guide 165 Licensing: Internal and external dispute resolution applies. New breach reporting obligations: These changes strengthen the breach reporting regime for financial services licensees, by replacing the current reporting obligations. Under the new licensees, licensees will be required to notify ASIC within 30 days after the AFS Licensee first knows, or is reckless with respect to whether, there are reasonable grounds to believe a reportable situation has arisen. A reportable situation arises when: • the licensee or its representative has breached/or is likely to have breached a core obligation and the breach is significant; • the licensee has commenced an investigation into whether the licensee or representative has breached a core obligation and the breach is significant and the investigation has continued for more than 30 days; or • in the course of providing a financial service, the AFS licensee or representative has engaged in conduct constituting gross negligence; or committed serious fraud.
NEWS / Upcoming Regulatory Changes
The test for significance has also changed. A breach of a core obligation is deemed to be significant if: 1. the provision breached is an offence that may involve imprisonment (3+ months for dishonesty offences, 12+ months for others); 2. the provision breached is a civil penalty provision, or s 1041H(1) of the Corporations Act or s12DA(1) of the ASIC Act (misleading or deceptive conduct in relation to a financial product or service); or 3. the breach results, or is likely to result, in material loss or damage to clients or members. The legislation also introduces new obligations on AFS Licensees to investigate reportable situations that may cause loss or damage to retail clients who received personal advice, to notify those potentially affected clients, and to pay compensation to affected clients within 30 days of completing the investigation. Members will need to assess their breach reporting practices in light of the new regime and, if necessary, seek advice on how to build practices into their business that comply with the new regimes. ASIC has released draft Regulatory Guide 78, to help members understand and comply with the new changes. The changes are scheduled to take effect on 1 October. New FSG content – Disclosure of lack of independence: AFSL holders and their Authorised Representatives (ARs) need to develop notice for inclusion in FSG/SFSG before 1 July 2021.
and applies the existing duty of disclosure and misrepresentation to other contracts. Insurers and agents need to identify what contracts are caught and amend procedures and documents. Insurance brokers need to identify how they will assist clients. of disclosure and misrepresentation to other contracts. Insurers and agents need to identify what contracts are caught and amend procedures and documents. Insurance brokers need to identify how they will assist clients. New Code of Practice Regime and enforceable General Insurance Code of Practice provisions under Corporations Act: Creates a new framework under which codes of conduct may be developed by industry and approved by ASIC or developed and mandated by Government through regulations. ASIC can also designate enforceable code provisions a breach of which can attract penalties etc. ASIC has not yet done so. Nothing until ASIC identifies relevant provisions. New add on insurance caps on commissions in ASIC Act: The changes apply to defined add-on risk products (e.g. tyre and rim insurance, mechanical breakdown insurance and consumer
credit insurance and non-insurance risk transfer products) provided to consumers (as defined) and allow ASIC to make determinations relevant to caps on commission that may be paid or supplied for the product in relation to the: sale; provision of credit connected with; or provision of a warranty, in connection with the sale or long term lease of a motor vehicle. Nothing to do until ASIC identifies relevant proposals. Australian Law Reform Commission review of the Legislative Framework for Corporations and Financial Services Regulation: Consolidated final report due 30 November 2023, and interim reports issued in stages. NIBA is currently consulting on this. Government review of measures to improve the quality of advice: The Government has proposed, by 30 June 2022 (but no later than 31 December 2022) to conduct a review in consultation with ASIC of the effectiveness of measures that have been implemented by the Government, regulators and financial services entities to improve the quality of financial advice and the current general insurance conflicted remuneration exemptions. NIBA is currently consulting on this.
“ASIC has issued a new regulatory guide, RG 271 Internal dispute resolution, setting out their dispute resolution standards and requirements. A number of the standards and requirements set out in the RG are enforceable, so it is critical that members are aware of the new obligations.”
New Corporations Act financial service of “claims handling and settling service”: Persons providing this new financial service need to determine if they require a licence and if so, apply for authorisation (well before 30 June 2021 if they want to access transition period) and implement procedures to comply with new requirements. Brokers won’t usually be caught if only acting on behalf of customer in providing these new services. Will be if acting for insurer, subject to certain exemptions. Change to Insurance Contracts Act pre contractual duty of disclosure and misrepresentation regimes: This creates new regime for “consumer insurance contracts”
NIBA.COM.AU / 17
YOU C N NOW REGISTA ATTENDAENR YOUR CE FOR YOU ON THRE SNTATE’S GALA IBA WEBSIT E: NSW: niba. co
PROFESSIONALISM / The 2021 NIBA Broker Awards
NIBA AWARDS CELEBRATE BROKING EXCELLENCE THROUGHOUT THE COUNTRY
m.au/ even t/ 2021-niba-ns w-gala-lunc h/ Qld: niba.co m.au/event / 2021- niba-q ld-gala-lunc h/ WA: niba.co m.au/event / 2021-niba-w a-gala-lunc h/ SA: niba.co m.au/event / 2021-niba-sa -gala-lunch/
The National Insurance Brokers Association (NIBA) has revealed the state/territory finalists for its two prestigious titles; the Broker of the Year and the Young Professional Broker of the Year.
N
IBA has announced the NSW/ ACT, Qld, WA and SA/NT Broker of the Year and Young Professional Broker of the Year Award finalists. NIBA CEO Dallas Booth congratulated this year’s finalists, adding: “We received a significant number of nominations this year, all of which were of an extremely high calibre. We’re thrilled to acknowledge the finalists across the country for their outstanding contribution to the broking profession.” The NSW/ACT finalists for the QBE-sponsored Broker of the Year are: Craig Claughton of Marsh, Leo Driessen of Driessen Insurance Brokers and Amanda Morris of Arma Insurance Brokers Hunter Valley. The NSW/ACT finalists for the Vero-sponsored Young Professional Broker of the Year are: Megan Farmer of Markey Insurance & Risk, Kayla Smith of Ian Jones Insurance Brokers Newcastle and Lindsay Turner of Warren Saunders Insurance Brokers. The Queensland finalists for the QBE-sponsored Broker of the Year are: David Kimber of Austbrokers Comsure, Tamar Trotman of Aon and Tony Venning of Crucial Insurance and Risk Advisors. The Queensland finalists for the Vero-sponsored Young Professional Broker of the Year are: Taela Bloemers of Austbrokers Coast to Coast, Lachlan Hastings of Aon, Scott Mitchell of Cornerstone Risk Group and Alishia Oliver of Crucial Insurance & Risk Advisor. The WA finalists for the QBE-sponsored Broker of the Year Award are: Jeff Booth of GSK Insurance Bokers, Sarsha Neal of Marsh and Sumit Sopori of Imperium Insurance & Financial Solutions. The WA finalists for the Vero-sponsored Young Professional Broker of the Year
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are: Luke Cameron of Albany District Insurance Brokers, Joel Middleton of Knightcorp Insurance Brokers and Robbie Gibbs of Risk Guidance Insurance. The SA/NT finalists for the QBE-sponsored Broker of the Year Award are: Kate Edgar of CBD Insurance Services and Karen Skinner of Skinner & Irvine Insurance. The SA/NT finalists for the Vero-sponsored Young Professional Broker Award are: Nikia Goers of Webber Insurance Services, Patrick McCole of Aon and Jasmine Miller of Gallagher. The Broker of the Year Award, sponsored by QBE, goes to an individual broker who is deemed an inspirational role model for the broking community. The Broker of the Year region winners will go on to compete for the Stephen Ball Memorial Award for Insurance Broker of the Year. The Young Professional Broker of the Year Award, sponsored by Vero, recognises the broking industry’s rising stars under the age of 35. The winner of each NIBA region (NSW/ACT, Qld, SA/NT, Vic/
Tas and WA) will join Vero’s prestigious Young Brokers Alumni Program and go on to compete for the national Warren Tickle Memorial Award for Young Professional Insurance Broker of the Year. A National Awards Ceremony will be held in Sydney, at which time, insurer performance will also be acknowledged, with the General Insurer of the Year and Underwriting Agency of the Year announced. The NSW/ACT winner for both the titles will be announced during the NIBA NSW Gala Lunch on 16 July at Doltone House Jones Bay Wharf. The Queensland winners will be announced during the NIBA Queensland Gala Lunch on 14 July at the Royal International Convention Centre. The Western Australian winners will be announced during the NIBA Western Australian Gala Lunch on 9 July at Crown Perth. The SA/NT winner will be announced at the NIBA South Australian Gala Lunch on Friday, 23 July at the Adelaide Convention Centre.
PROFESSIONALISM / AFCA Case Study
FULLY INFORMING A CLIENT ABOUT THEIR POLICY
AFCA noted that when considering if the broker arranged ‘adequate’ cover it is necessary to consider if the broker made the complainant aware of the level and scope of cover arranged, and if the complainant raised any issues, concerns or queries with the cover that were not appropriately addressed by the broker.
Facts
The complainant was a motor trades business owner who had arranged for two separate insurance policies with insurer A and insurer Q through the insurance broker. Cover was extended for “customers’ vehicles”. A customer’s vehicle suffered total loss damage while in the complainant’s care and the insurance broker lodged claims under both policies. Although both claims were accepted by the insurers, the policy with insurer A provided that the complainant was entitled to the sum insured less the salvage value of the payment, unless the insurer took ownership of the salvage. As the insurer did not retain salvage it paid the claim less the salvage value. The complainant had however settled with the customer to its own detriment by paying the market value of the vehicle, as well as allowing the customer to retain the salvage, which it could then sell. This meant the complainant was short the salvage value which it sought from the insurance broker.
The complainant’s case
The complainant alleged the broker breached their duty of care as it had: • not provided a copy of the policy documents. The complainant provided evidence that insurer A’s system showed the broker had never downloaded the PDS on the complainant’s policy and so, could never have sent it to the complainant; • not explained the salvage terms of the policy to the complainant and should have drawn its attention to the specific salvage provision in policy A; • failed to arrange adequate insurance cover, essentially because the value of the vehicle involved was higher than the sum selected for cover; • provided incorrect advice about the claim with insurer A, essentially because the
complainant settled with the customer on a full market value payment and gave them salvage, which in turn allowed the insurer to deduct the salvage value to the complainant’s detriment; and • provided incorrect advice regarding the claim with insurer Q. No reason was stated in support of this.
The broker’s case
The broker submitted that it had not failed to discharge its duty to the complainant as: • it had provided copies of both policy documents to the complainant. The policy documents for insurer A were sent with a letter to the complainant detailing the proposed cover along with clear instructions for the complainant to review the sums and enclosed PDS. The broker also explained it had not needed to download a copy of insurer A’s PDS as it already had a copy on file. The policy documents for insurer Q were provided in a later meeting between the broker and complainant where all proposals were completed, at the complainant’s request. Copies of the letter, attachments and contemporaneous notes were submitted as evidence; and • it had arranged adequate insurance cover for the complainant after careful consideration of alternative policy providers and had fully informed the complainant about the cover arranged. Copies of the ‘fact find’ results and evidence indicating the complainant had elected to take out a reduced sum to reduce the premiums were submitted to AFCA. Contemporaneous file notes were also submitted to show the complainant and broker completed the proposals together. It had not provided incorrect advice regarding either claim with insurer A or Q.
BY MARK RADFORD
Principal, Radford Lawyers
It provided as evidence a copy of a statutory declaration outlining a meeting between the broker and the complainant containing records of discussions regarding: o the relevant salvage terms; and o the appointment of an independent assessor to determine if the truck was repairable or not. The broker also submitted records of email correspondence setting out the steps the broker had taken on the claim.
The AFCA decision
ACFA found in favour of the broker because: • on balance of probabilities, it was satisfied that both policy documents were provided to the complainant based on the evidence provided by the insurance broker. In particular, AFCA considered the insurance broker’s contemporaneous notes from a meeting between it and the complainant that noted the complainant’s request for a copy of only the policy with Q and not A, suggested the complainant had already received a copy of A’s policy wording; • it was not reasonable or practical to expect the insurance broker to explain the salvage term of the policy to the complainant as the term was clear and not unusual for the type of policy in question. • on balance of probabilities, the insurance broker had arranged ‘adequate’ cover that was consistent with the complainant’s needs. The evidence showed it had completed a ‘fact find’ of the insurance needs of the complainant and had looked into alternative policy providers before proposing the cover with A. • it was not necessary to consider whether the broker provided incorrect information on lodging the claim with Q as the complainant had not suffered any loss in that regard.
NIBA.COM.AU / 19
PROFESSIONALISM / National Farmers’ Federation
MANAGING AGRICULTURAL RISK
The National Farmers’ Federation (NFF) has released a series of reports examining risk management solutions for the agriculture sector that will help farmers better understand and manage their risk.
T
he reports are the result of a twoyear long NSW government-funded project, exploring risk management tools available to Australian farmers. The project focused on six key areas: 1. Commercial and government subsidised insurance options 2. Forward contracts, options and swap markets 3. Mutuals and co-operatives 4. Awareness and education of financial risk management options 5. Off-farm income and assets 6. Government policy and risk management measures The reports are part of the NFF’s work to increase the use of risk management tools by Australian primary producers, with the NFF aiming to have 90 per cent of Australian farms employing these tools by 2030. The synthesis report, which provides an overview of the findings and recommendations of each of the six project sub-groups, made a number of recommendations, however noted that there was “unlikely to be one silver bullet to managing farm risk and the best results would be achieved by deploying a combination of tools and approaches.” The report put various agricultural risks into five categories, examining the ways farmers mitigate these risks and existing barriers to the adoption of further risk mitigation. Production risk: Risks arising from the planting, development and harvest, and equivalents for livestock of agricultural products. These risks include weather, disease and a variety of operational matters which affect both the quantity and quality of production; Price risk: The uncertainty primary producers face in regards to the prices they will receive for their products as well as the prices they might pay for production inputs;
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Financial risk: A farm’s ability to generate sufficient cash flow to remain sustainable over the long term, including meeting ongoing financial obligations. This also includes the ability of farms to access equity and debt financing required to support ongoing investment in and development of the business. Regulatory risk: Domestic and international laws and regulations that impact farm operations, import/export flows and associated supply chains. These risks include local and international taxes and tariffs, as well as other restrictions related to the international trade in agricultural products; and Operational risk: Various operational factors that impact profitability and inherent riskiness of the business, including farm location, product mix and diversification, position in the supply chain. The report found significant increases in land value and the ability for farmers to access equity within their property have shielded many farmers from needing tools to manage production and price risks. As a result, many farmers do not see a need for education on financial risk management products. A survey of farmers found most do not use insurance products to protect against losses incurred in the worst 10 per cent of years, with most preferring to take on debt, draw down on a loan facility or supplement their income with off-farm activities. Separately, farmers may either spend savings or borrow against the value of the farm in order to smooth earnings over a farming cycle – effectively self-insuring. However, the report noted if there were to be a correction in land values, many farmers could be exposed, and a knowledge of financial risk management would become critical. When asked the reasons for not obtaining insurance farmers provided a number of reasons including a lack of suitable insurance products, lack of trust in the insurance claims
BY ALLYSSA HEXTELL Policy and Research Manager, NIBA
process, complexity of purchasing suitable insurance and failure of insurance products to effectively mitigate risks. The most common reason farmers gave for not obtaining insurance was cost with 85 per cent of respondents indicating insurance was too expensive or less cost-effective when compared to other risk-financing mechanisms. The report also found the ability of farmers to utilise financial risk management products varied significantly by commodity type with some products being more accessible for some industries than others. In many cases, the report noted the adoption of financial risk management products has been driven by financial institution lending requirements rather than behavioural change among farmers. The report found lower base levels of financial literacy among primary producers, with those who manage smaller properties having materially lower levels of awareness of risk mitigation products. A lack of financial literacy was identified as one of the barriers to the use and understanding of risk management products. This finding highlights the need for advisers to combine expertise in risk management and relevant financial products with a solid understanding of the Australian agricultural sector. When asked how they purchased risk management products responses were almost evenly split between intermediaries and the direct market, demonstrating that brokers have an important role to play in providing risk management advice to the agricultural sector, especially smaller operations that may not have the capital to hire dedicated risk management resources. A copy of the synthesis report and full reports on the six sub-projects can be found on the NFF website: nff.org.au/programs/ financial-risk-management/
Local Presence, Global Strength www.brooklynunderwriting.com.au
COMMUNITY / 2021 NIBA Convention
GET SET FOR #NIBA2021
Save the dates! NIBA is coming to a city near you…
O
n behalf of the National Insurance Brokers Association (NIBA) and the NIBA Divisional Committees, it is my pleasure to invite you to the 2021 NIBA Convention. This year we hoped to bring the broking community together, but after much deliberation felt it unwise to pursue a national face-to-face Convention due to the continued uncertainty surrounding COVID-19 and border restrictions. Therefore, in 2021 NIBA will combine the virtual with faceto-face on a state-by-state basis. Here’s how it’ll work… NIBA will host a five-day hybrid convention over the course of five weeks. From Tuesday 28 September through to Thursday 28 October, NIBA will visit Perth, Adelaide, Melbourne, Brisbane, and Sydney. Delegates will have the opportunity to interact face-to-face and attend 22 / INSURANCE ADVISER JULY 2021
a marketplace in their home state, while also accessing the entire national program virtually. We know our members need to stay up to date on a wide range of issues, challenges and market developments, therefore we will offer sessions to: • benefit brokers and others across the industry; • give our business partners the opportunity to engage with delegates in a very effective and interactive manner; • give state delegates the ability to engage with each other, face-to-face at sessions and in the marketplace; and • offer social activity in the form of cocktails or dinner. This year the theme is Professionalism + Resilience = Opportunity, because brokers have a chance to reinforce their role as valued partners to both insurers and clients in this dynamic landscape.
DATES FOR THE DIARY Perth, Western Australia 28 September 2021 Adelaide, South Australia 5 October 2021 Melbourne, Victoria 12 October 2021 Brisbane, Queensland 19 October 2021 Sydney, New South Wales 28 October 2021
2021 NIBA Convention
PROFESSIONALISM + RESILIENCE = OPPORTUNITY
28 September Perth 5 October Adelaide
12 October Melbourne 19 October Brisbane 28 October Sydney THANKS TO OUR PRINCIPAL PARTNERS
COMMUNITY / 2021 NIBA Convention
As with all our Conventions, the 2021 Convention will offer attendees a clear and unbiased view of the important topics of the day. Whether you’re a principal member, senior broker or young professional, the 2021 NIBA Convention promises to equip delegates with the tools to overcome challenges and leverage opportunities. Brokers can expect to hear from thought leaders within and beyond the insurance industry, attend practical workshops that will challenge and inspire, receive regulatory updates, and access a marketplace inclusive of insurers, underwriters, and industry partners. In the marketplace, as per your feedback, we welcome the return of afternoon networking to provide brokers with a great opportunity to catch up with old friends and make new connections to benefit their business. The NIBA Convention is the only event on the insurance industry calendar that welcomes the entire insurance community, regardless of cluster group allegiances, brokerage size and reach, and age of delegates. We meet to celebrate, to learn, to build relationships and to have a good time. We do hope you’ll join us.
DALLAS BOOTH
Chief Executive Officer, NIBA
SPONSOR OR EXHIBIT AT #NIBA2021 To discuss sponsorship and exhibition opportunities, please contact us:
Helen McGowan Waldron Smith Management T: 03 9645 6311 E: helen@wsm.com.au
Tony May NIBA National Advertising Sales Manager T: 02 9459 4320 M: 0401 485 188 E: tmay@niba.com.au
PROGRAM HIGHLIGHTS
#NIBA2021 is set to deliver yet another jam-packed program that will equip brokers with the skills and knowledge to thrive during a critical time for the insurance broking profession. The regulators – AFCA, ASIC and the IBCCC – will return to the Convention stage for the ever popular “Meet the Regulators” session, while NIBA CEO Dallas Booth and the Association’s legal adviser, Mark Radford, will explain five major areas of Royal Commission reform. Delegates can also expect a “State of the Industry” panel, a discussion on the 2022 General Insurance Remuneration Review, and much much more.
THANKS TO OUR PRINCIPAL PARTNERS
24 / INSURANCE ADVISER JULY 2021
A CELEBRATION OF EXCELLENCE
The 2021 NIBA Convention is also set to celebrate the best in broking with the QBE-sponsored Stephen Ball Memorial Award for Insurance Broker of the Year, the Vero-sponsored Warren Tickle Memorial Award for Young Professional Broker of the Year, and the Lex McKeown Trophy for outstanding contribution to the industry. A National Awards Ceremony will be held in Sydney, at which time, insurer performance will also be acknowledged, with the General Insurer of the Year and Underwriting Agency of the Year announced.
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FEATURE / NIBA Mentoring Program
26 / INSURANCE ADVISER JULY 2021
The age of emotionally intelligent mentorship The participants of the 2021 NIBA Mentoring Program have listed selfawareness, empathy and highly tuned listening skills alongside technical knowledge as a must for getting the best out of a mentorship experience as well as the broking profession. BY TANAYA DAS
T
he insurance broking profession in Australia is facing challenges on several fronts, from the multitude of regulatory reforms to the hard market and the many natural catastrophes to the pandemic – it has been an eventful year and intermediaries have been in the thick of things. During these tumultuous times a group of mentors and mentees came together as a part of the 2021 NIBA Mentoring Program to empower young professionals in the industry.
KNOW YOUR PRIORITIES AND NEEDS – AND KEEP AN OPEN MIND
Vanessa Hilton from Aon, who mentored Bianca Johns from Austcover, believes that to get the most out of a mentoring experience it is really important to have a plan. She says, “Set your schedule from the start and commit fully. We had agreed to meet weekly and sometimes we had to be flexible because work or life got in the way – but there was a commitment from us both to make the mentoring journey a priority.”
NIBA.COM.AU / 27
FEATURE / NIBA Mentoring Program
Johns is in complete agreement, “As a mentee, I wanted to make sure that I was using my mentor’s time in the best manner. This required me to open up so that Vanessa could provide the best advice to me.” Creating a successful mentoring relationship does not have a one-sizefits-all formula. Each of the participants had a clear idea of what worked for them, and they found partners whose values aligned with theirs. Adrian Lyons from One Underwriting, who was mentored by Cameron Sheild from Lockton, says being open to all topics and acknowledging any feedback that one receives is key to harnessing the power of a mentoring arrangement, “No one is perfect or knows everything but keeping an open mind has proven to be a successful tool throughout history.” Sheild acknowledges that the learning opportunities for him as a mentor have been surprising and great as well, “You learn a lot about yourself and from the younger generation on items that you would not typically be exposed to. I have truly enjoyed this aspect of the program.” Each of our interviewees agree that mentoring requires effort to be truly effective – it is essentially an exercise in honesty and sharing plus opening oneself up to feedback that will eventually lead to professional growth. Jeff Booth from GSK Insurance Brokers, who mentored Laura Morris from Attvest Finance, says, “You need to be open about your experiences – both successes and failures – in providing alternative approaches for situations.” Morris echoes the sentiment saying, “It is important to be honest
NIBA MENTORING PROGRAM The NIBA Mentoring program is offered in Sydney, Melbourne, Adelaide, Brisbane and Perth. With sufficient demand, the program will also be offered in Hobart and Darwin. If you wish to participate as a mentor or mentee, contact NIBA via email: mentoring@niba.com.au or phone: (02) 9964 9400 to express your interest.
28 / INSURANCE ADVISER JULY 2021
and aware about your mid-and longterm career or personal goals.” She adds that having a mentor that you can find some common ground with is also crucial, “I also found that giving feedback to communicate what worked for me or what I found difficult helped the conversation and we both knew we were on the right path.”
NAVIGATING THE HARD MARKET
The participants of the 2021 NIBA Mentoring Program had their work cut out for them with the current hard market plus the concurrent natural disasters and the pandemic. But each of them agreed that their mentorship experience was augmented, not hindered, by the existing situation in the industry. Hilton’s outlook is very simple, “I think that it helps us to be around others in the industry to understand we are not alone – from the mentor point of view I think it helps us convey safety and comfort to the mentees.”
For Johns there could not have been a better time to undertake this journey. She says, “For a mentee to be able to have close contact with an experienced mentor that has more than likely seen situations like these is priceless.” Lyons believes that mentorship in harder times is absolutely crucial, especially in the property insurance segment he operates in, “I was having some difficulties with certain accounts so being able to bounce ideas and methods on how to tackle them with Cameron was nothing short of invaluable.” For more senior executives in the industry this is not the first hard market they have seen and they have the wisdom
“EMPATHY IS CRUCIAL FOR AN INSURANCE BROKER TO UNDERSTAND WHAT THEIR CLIENT AND IN THIS CASE THE MENTEE IS GOING THROUGH AND DEALING WITH.” JEFF BOOTH, GSK INSURANCE BROKERS
FEATURE / NIBA Mentoring Program
from their previous experience to share. But Sheild stresses that being able to share his knowledge from the last hard market with Lyons was incredibly valuable for him too. He says, “Working in London as a broker in the hard market post 9/11, the learning curve went vertical overnight. Being able to share that and work through practical examples with Adrian also allowed me the opportunity to revisit and remind myself of those experiences.”
IT IS ALL ABOUT THE RELATIONSHIPS ONE BUILDS
As the world around us advances further into the virtual realm, human connection has
become more vital. Booth is keenly aware that even though many of the processes in the insurance broking profession have been automated, when the market hardens success relies more on relationships than ever before. He says, “Talking about ways to build those relationships is often a key part of mentoring in both a soft and hard market but it can be even more valuable in a harder market.” A lot of what risk professionals need to know is perfected on the job, which is why Morris believes mentorship is one of the best ways to build resilience in uncertain times. She says, “You are meeting with someone who has experience and knowledge and a skill set that you can’t get from a textbook.” “While they might not have worked through a pandemic, they would have faced several challenges throughout their career and are able to use those lessons to evolve and adapt. We the next generation can pick their brains and improve upon their learnings for the next crisis.”
“ONE MUST BE ABLE TO PUT ONE’S EGO ASIDE, ACCEPT FEEDBACK AND DIFFERENCES OF OPINIONS IN THE WORKPLACE AND THEIR DAY TO DAY.” LAURA MORRIS, ATTVEST
EMOTIONALLY INTELLIGENT MENTORING IS THE WAY FORWARD
As financial services entities look closely at the culture in their organisations, it is the age of self-aware professionals with the ability to reflect constructively on feedback, who operate with empathy alongside a high standard of ethics. Hilton says she is constantly amazed that there are still professionals who lack the ability to reflect on themselves and learn from others, “If you cannot accept feedback you will never go far.” Johns adds, “High emotional intelligence is key to effectively put one’s skills to practice and to be able to use constructive feedback to grow both personally and professionally.” As a part of their early interactions Sheild had Lyons undertake personality tests which Lyons believes has helped him improve from a self-awareness perspective. He says, “It is my belief that a mentor must be emotionally intelligent for the mentee to get something positive out of the relationship.” Unconscious bias manifests in workplaces across every industry, the key is to identify and then correct it. It is not easy, but it is absolutely essential and that is exactly what Sheild helped Lyons pinpoint. He says, “Adrian and I spent a little time and undertook a personality test where examples of style, blind spots and strengths were evident.” He adds, “Knowing yourself, playing to your strengths and acknowledging weaknesses is vital for growth, both personal and professional, hence why I think emotional intelligence is hugely important within the mentoring relationship.” “Emotional intelligence plays a critical role in the insurance broking profession and its importance in being a trusted adviser cannot be overstated,” he adds. Alongside tackling unconscious bias it is very important that risk professionals act with utmost care and empathy especially when dealing with vulnerable people, believes Booth. He says, “Empathy is crucial for insurance brokers to understand what their client and in this case the mentee is going through and dealing with. Putting oneself in their place and balancing empathy with action is key to finding effective solutions to professional conundrums.” Morris adds, “One must be able to put one’s ego aside, accept feedback and differences of opinions in the workplace and their day to day.” NIBA.COM.AU / 29
FEATURE / Professional Indemnity
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The PI crossroads Professional indemnity has been a tricky proposition for some professions – and unless it can become more profitable for insurers, it may be a bumpy road ahead. BY MARTIN WANLESS
W
hen it comes to insurance ‘problem children’, professional indemnity (PI) insurance is right up there at the moment. Sat just next to business interruption. Combine a hard market with the increasingly apparent risks involved in all things related to construction and architecture, add in some class actions, throw a sprinkling of financial services on top, and you have got the recipe for a rather challenging environment. “There are two elements that are making this a particularly tough market,” says Jun Acance, Managing Director of underwriting agency Pacific Indemnity. “First is the performance review that was undertaken by Lloyd’s in 2018 which showed that non-US PI, in which Australia, Canada and UK are the biggest players, is the second worst performing class at Lloyd’s. Second is the lack of profitability of class for the local insurers which according to reports the estimated combined operating ratio of PI in 2019 was 103 percent.” And that’s had a major impact on the availability of insurance and increase in premiums too.
NIBA.COM.AU / 31
FEATURE / Professional Indemnity
PROPERTY MANAGEMENT IN FOCUS
“Insurers that have underpriced the risks have pulled back or pulled out entirely, and those that remain are seeing a lot more submissions.”
While the ‘vanilla’ professions have tended to be more straightforward than the higher risk sectors when it comes to PI, one that is beginning to cause brokers problems is real estate property management. “The emerging risk is all around condition reports,” says Anthony Ciancio, Director, ADC Insurance Brokers, Melbourne. “If a tenant ends up being injured due to damaged unsafe stairs or unrepaired property, for example, a professional indemnity claim could be likely, as a failure of the property manager to spot that risk during the property inspection.”
– Todd Woodard, Liberty Specialty Markets
“There are 440-plus professions in PI, and I’d estimate around 10 per cent of them have seen double-digit increases,” says Acance. This has not been helped, of course, by insurers pulling out of the market in part or completely. Understandable to some extent, but merely serving to compound the problem. “The market is stressed,” says Todd Woodard, PI Portfolio Manager, Liberty Specialty Markets. “We’ve had 15 years of year-on-year rate reductions. Insurers that have underpriced the risks have pulled back or pulled out entirely, and those that remain are seeing a lot more submissions – we’re seeing probably three times the number than we would have seen just a couple of years ago.”
MIND THE (CYBER) GAP?
One of the emerging risks in PI is directly related to another area of insurance that’s almost changing by the hour – cyber. “It’s very late into the piece with the hardening, but all of a sudden it’s gone bang on the Richter Scale, so now everyone’s looking at what the flow-on impact will be, what the cross-over is, what the cover is that can come from a cyber issue into a PI policy,” says MaryCatherine Thomas, National Financial Lines Placement Leader at Aon. “In London, they have two different cyber exclusions that they’re applying to PI
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policies – an absolute exclusion and one that does bridge that gap somewhat, but when you drill down into it there are still elements that won’t be picked up by a cyber policy that a PI policy won’t cover, either.” And that creates another challenge for brokers to consider when putting together coverage for clients. “I know some insurers are desperate to exclude cyber,” says Acance. “But for claims arising from the breach of professional duty, cover should still be available under the policy – it gives us something to work with on behalf of our broker clients.”
DOES IT FIT IN THE BOX? IF NOT, THERE’S TROUBLE AHEAD
Professional indemnity is an absolute essential for clients, and that places a bit of pressure on brokers to be able to help. “Unless you’ve got a risk that fits into a nice clean box it’s very hard to get an insurer to even open the front page of a proposal
COMMUNITY HUB
BE PART OF NIBA Advertise with the most influential and trusted voice in the Australian intermediated insurance industry ·Insurance Adviser
· Insurance and Risk website · Broker Buzz · Need a Broker website · Targeted eDMs · NIBA events (Annual Convention)
WE ARE YOUR VOICE Contact Tony May National Advertising Sales Manager E: tmay@niba.com.au NIBA.COM.AU / 51
FEATURE / Professional Indemnity
at the moment,” says Thomas. “The minute they see anything high-risk – if there is a bridge, it’s out, if there’s manufacturing, it’s out, if it’s too high a COVID-risk, it’s out. “It’s a tough marketplace to get a deal done at the moment. “In the schemes and affinity space there’s a portfolio play and you tend to be able to sweep up a little bit of higher risk with the nice-to-haves, but when you get into the pure open market and you are trying to break through an individual account, it’s at a point now where there are some clients you just can’t buy insurance for.” The long and the short of it for brokers, however, is that if a solution is out there, they need to find it. “Your submissions need to be more detailed, and any particular area that will draw the attention of the insurer or underwriter needs to be addressed by the broker,” says Anthony Ciancio, Director, ADC Insurance Brokers, Melbourne. “Some of the renewal declarations coming through from insurers are a bit light on information, and it doesn’t help when sending on to other insurers to get a comparative quote. “I’m having to use last year’s application form, send it to other insurers, and say, ‘This is what we’ve got coming up, what can you do?’”
34 / INSURANCE ADVISER JULY 2021
“Your submissions need to be more detailed, and any particular area that will draw the attention of the insurer or underwriter needs to be addressed by the broker.”
– Anthony Ciancio, ADC Insurance Brokers, Melbourne
As ever, working closely with underwriters and brokers is critically important. Woodard says its important brokers have a deep understanding of their clients’ businesses, and are happy to work hand in hand. “We need to sit down, foster these long-term relationships and talk to our clients to identify the best solution going forward. Sometimes it might mean the price is going up, sometimes there might be an exclusion, sometimes it’s offering more coverage that another company just isn’t willing to offer.”
CELEBRATING 25 YEARS
FEATURE / Professional Indemnity
“It’s our view that PI is probably about 18 months behind the D&O and property markets from a life cycle perspective.”
– Mary-Catherine Thomas, Aon
FIVE THINGS BROKERS SHOULD BE AWARE OF
1
PI is still a problem area of insurance, with a lack of profitability a cause of increased premiums.
CRYSTAL BALL GAZING
The professional indemnity space is undoubtedly a difficult one right now, but what does the future hold? We all know insurance is cyclical in its nature (although, says Ciancio, “this seems to be a longer cycle than usual.”), and Thomas says some shoots of recovery are there – albeit a while off. “It’s our view that PI is probably about 18 months behind the D&O and property markets from a life cycle perspective,” she says. “We’re likely to see another tough year ahead of us – while we’re seeing signs of recovery in terms of additional capacity
36 / INSURANCE ADVISER JULY 2021
from Lloyd’s at present in D&O, we’re not seeing that in PI – we’re still right in the middle of the hard market.” The future, says Acance, depends on three things, with the onus falling on the shoulders of underwriters. “I think about this a lot,” he says. “It relies on the underwriting profitability of insurers, Lloyd’s capacity for Australian business, and the appetite of insurers to write this class of business. “It is a capital-intensive line of business and unless we as underwriters can show the insurers that we can write this line of business more sustainably, there will be less and less capacity.”
2
Many professions have seen double-figure premium increases.
3
While D&O may be seeing shoots of recovery, it is estimated PI is around 18 months behind.
4
A cyber gap is emerging between PI and cyberspecific policies.
5
More detailed submissions are needed and brokers, insurers, underwriters and clients must work closely together.
FEATURE / Marine and Cargo Insurance
Weathering the storm
Moving goods can be one of the most treacherous tasks in the world; the process of transporting products by sea, road, rail and air is not for the faint-hearted. The companies underwriting the risk admit it is fraught with challenges. BY NINA HENDY
NIBA.COM.AU / 39
FEATURE / Marine and Cargo Insurance
A
s if dealing with a global pandemic and subsequent shortages on everything from toilet paper to building supplies is not enough, around 2,000 shipping containers were lost by sea late last year. The news made global headlines and made 2020 even more costly – particularly for the businesses that did not have insurance cover over the items on board. One of the ships to make headlines was ONE Apus, a cargo vessel that lost around 1,900 shipping containers at sea before arriving in a Japanese port. It is proof that marine and cargo is risky business for underwriters. Hastily
completed paperwork and constant changes in routes, cargo and clients make the industry difficult to insure. RedSky Insurance Partner, Jill Murphy says the biggest issue facing underwriters is the ability to obtain full and detailed information from clients, making it challenging to correctly assess the risks being covered. “It all comes down to full and open communication so that risks can be assessed, and clients get the best pricing,” Murphy adds. Due to the global nature of the sector, RedSky coverage is based on the internationally accepted Institute Clauses,
and generally provides cover on all risks, or accidental damage, she explains. “It is important for us to understand the clients’ overall operations, their trade relationships and experience, and their overall understanding of their trade terms and obligations,” Murphy says. “Fundamentally, clients want a product that pays a claim in the event of a loss, which could be anywhere in the world. Having a claims team and global network who understand the technicalities of cargo and trade is important to our customers,” she says. It is not always easy for insurers to explain to clients that their policy doesn’t cover delays, Murphy says.
“IT IS IMPORTANT FOR US TO UNDERSTAND THE CLIENTS’ OVERALL OPERATIONS, THEIR TRADE RELATIONSHIPS AND EXPERIENCE, AND THEIR OVERALL UNDERSTANDING OF THEIR TRADE TERMS AND OBLIGATIONS.” – JILL MURPHY, REDSKY INSURANCE 40 / INSURANCE ADVISER JULY 2021
FEATURE / Marine and Cargo Insurance
FIVE KEY INSIGHTS
Pricing: Steady increases, but fewer large fluctuations or rate corrections. Corrections: Accounts with good loss experience are seeing increases of up to 10 per cent.
Surging interest: Growth in interest and appetite to underwrite marine cargo in Australia is increasing free capacity. Delays: Mounting pressure to move cargo is seeing major delays in shipping caused by heavy weather. Scrutiny: Underwriters are applying more scrutiny to the underwriting information, with a focus on procuring accurate data for assessment. Source: Aon Marine Cargo Insights 2021
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FEATURE / Marine and Cargo Insurance
This means loss, damage or economic loss, loss of market etc following delays due to COVID-19restrictions or following incidents such as the recent blockage of the Suez Canal may not be covered by their policies, she says. National Marine Director and Practice Group Leader at Aon, Lindsay Metcalf also weighed in, adding that the problems that arise in this sector are many and varied. “Not long ago we witnessed the decimation of multiple insurers, syndicates and hundreds of millions in cargo capacity as a result of years of a soft market mentality. Our role as brokers is not only to support our clients, but also the health of
the market machine. Being cognisant of its state and keeping our clients informed is key to setting expectations and stabilising the industry,” Metcalf says. As with so many industry sectors these days, cyber is a huge risk too, he adds. And while cyber attacks have to date been more commonly linked with delay in delivery, evidence is suggesting a more malicious trend is evolving, he says. “The sheer logistics to move cargo from our current and future needs requires countless systems, methods and locations across the globe. From freight forwarders, ports, shippers, customs, warehouses, keepers and carriers, all are
inter-dependent and play a role in the safe delivery of cargo.”
CURRENT RISKS
Seasonal risks are also common, adds Underwriter Ben Morgan of AM&T. Right now, major renewable energy builders that are shovel ready on local soil remain a challenge. “They lead into large exposures to delayed start-up and some expensive replacements when critical items are damaged,” Morgan says. “We are also seeing environmentally sensitive and reputational issues around items such as thermal coal and live export and these currently make up a
“THESE CLAIMS CAN BE REALLY DYNAMIC AND INVOLVE VARIOUS INTERESTING PARTIES AND THIRD PARTIES, NUMEROUS INSURERS AND COMPLEX CHAINS OF TRANSIT AND RESPONSIBILITY.” – BEN MORGAN, AM&T
42 / INSURANCE ADVISER JULY 2021
Your local marine experts. Australia’s leading marine insurance specialist. With the largest team of experts in marine insurance claims, underwriting and sales in Australia, we’re responsive whenever you need us. The marine industries never stop, and neither do we.
To get to know your local experts, visit
marineprotect.com Insurance products are provided by National Transport Insurance, 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.
FEATURE / Marine and Cargo Insurance
significant component of Australia’s export throughput,” he says. In the local market, the unique component of the cargo market that impacts almost every broker is really still in carriers or logistics covers, where the company carrying or storing the goods takes on the responsibility for losses almost as if they were first party losses, Morgan says. “These claims can be really dynamic and involve various interesting parties and third parties, numerous insurers and complex chains of transit and responsibility. “It’s really becoming a truckies’ financial loss cover and local legislation allows that
44 / INSURANCE ADVISER JULY 2021
to proliferate so a lot of risk is transferred back to the road transport operators and their underwriters. Also, many owners of the goods choose not to insure them. If there is a poor loss history, it can potentially affect the ongoing visibility of an entire operation,” Morgan explains. And while COVID-19 has complicated matters and slowed cargo movement around the world, it hasn’t changed the sector quite as much as expected, Morgan says. “Our industry is always in flux,” he points out. There have been some real issues testing the time-honoured exclusion of delay, which are more frustration issues
for customers who can’t get products to market but don’t actually have a loss or any damaged items, he adds. “Sendings are down overall for import/export but up on inland, our books and local prices are increasing as demand intensifies. Since COVID-19 emerged, the quasi-trade war with China has escalated and presented some really unique challenges for producers and exporters across seafood, meat, coal, wool, ore, sugar, timber, wine, barley and grains. The search for alternative markets and supply chains have become a real priority,” Morgan adds.
COMMUNITY HUB JULY 2021
The COMMUNITY HUB is your space to showcase your products and services to a specialist audience.
INDEX AB Phillips .................................................... 45 ASR Underwriting ..................................... 46 MGA Insurance Brokers ......................... 47 Moran Insurance Brokers ...................... 47
Newline Group ........................................... 48 Affinity Insurance Brokers ..................... 48 Wellington Underwriting ........................49 AIBI ...................................................................49
Tudor Insurance ......................................... 49 Marsh & McLennan Agency ................. 50 NIBA advertising.........................................50
WANT TO ADVERTISE IN THE INSURANCE ADVISER? If you’re a NIBA member with a product or scheme you’d like to promote to a broker audience in our Community Hub section, please contact Tony May E: tmay@niba.com.au
Exclusive timber and sawmill insurance facility AB Phillips has been insuring the Timber and Sawmilling industry for more than 25 years. We have an exclusive underwriting facility which is available to select brokers. Our insurance facility is for clients in the following sectors: • • • • •
Timber yards Timber storage Timber processors Sawmills Roof truss and wall frame manufacturers
Commission is paid on placements.
For more information please contact Rose Dee on:
Phone: 1800 819 394 | Direct: 03 8586 9316 | Email: rose@abphillips.com.au AB Phillips Pty Ltd. Australian Financial Services Licence No. 234457. ABN: 91 007 075 934. PO Box 832 Moorabbin VIC 3189. 445 Warrigal Rd Moorabin VIC 3189. e: info@abphillips.com.au t: 03 8586 9333 f: 03 8586 9394 w: www.abphillips.com.au
COMMUNITY HUB
NIBA.COM.AU / 47
COMMUNITY HUB Key Liability Industries:
Key PI Occupations:
Key FI Occupations:
• Alternate & Complementary medicines • Automotive • Biotechnology • Clinical Trials / Research • Defence – machinery, weaponry & protective equipment • Life Science / Pharmaceuticals • Medical & Surgical Devices (including invasive implants) • Medical Cannabis • Medical Equipment / Products • Mining • Rail, Products, Maintenance, Locomotive Engineering, operators, Rolling Stocks & Engine Manufacturers • Tyres – new, re-threading, lugging, repair & sales • Universities • Veterinary Medicines
• Accountants • Architects • Engineers • Environmental Consultants • Insurance Brokers / Underwriting Agencies • Law Firms • Management Consultants • Miscellaneous Risks • Real Estate Agents • Valuers
• Fund Managers/Investment Managers • Insurance Companies • Managed Investment Schemes • Excess lines for Financial Planners
Chief Executive Officer / Underwriting Manager – Liability
Underwriting Manager - PI
Key D&O • Insured firms can be not-for-profit, privately held or publicly traded • Side A/DIC placements • Medical Cannabis risks • All industry sectors, both commercial and financial, are underwritten
Key Crime Commercial Crime Insurance is also offered alongside other Financial Lines products
Linda Sepala Underwriting Manager – D&O & FI
PH: 03 9998 1900
Newline Australia Insurance Pty Ltd ABN 81 118 089 651 PO Box 16208 Collins St West VIC 8007 PH: 03 9999 1901 FAX: 03 9670 0045 newlinegroup.com.au info@newlinegroup.com.au
AFFINITY EQUINE, ADVENTURE & LEISURE LIABILITY
Untitled-2 1 NIBA_Newline_Sep20.indd 1
Abseiling Accommodation Agistment Animal & Petting Zoo Archery Bush Walking Camping Campsites Canyoning Caving Team Building
Equine Associations Equine Events Equine Therapists Farriers & Dentists Fishing & Boat Cruises Four Wheel Driving Flying Fox Horse Carriage Driving Horse Trainers Horse Riding Schools Initiatives
48 / INSURANCE ADVISER JUNE 2021
Kayaking Mountain Biking Orienteering/Rogaining Paddle Boarding Pony Rides Paintball & Skirmish Riding Schools River Rafting Rock Climbing Ropes Course Rowing
17/5/21 15/9/2012:40 3:54pm pm
Sailing Sea Kayaking Snorkelling Snow Skiing Surfing Swimming Trail Running
1300 130 535 www.affinityib.com.au AFS License No. 214 185
COMMUNITY HUB Wellington Underwriting Agencies specialise in labour hire/recruitment, complex liability risks and niche property solutions. Labour Force includes Broadform Liability, Professional Indemnity and Management Liability and has been developed for: • labour hire companies • recruitment companies • group training and registered training organisations
�aibi
Adult Industry Business Insurance
Our Combined General Liability wording has been tailored for complex risks including: • construction • manufacturing • rail • resource sector; and • other hard to underwrite risks Wellington’s Property capabilities are focussed on niche exposures including: • catastrophe-exposed properties • mining sector
Contact our Underwriters today or visit our website at
www.wellingtonu.com.au
AIBI is a registered trading name of Capital Mutual Insurance Brokers Pty Ltd. Capital Mutual Insurance Brokers Pty Ltd is a Corporate Authorised Representative of McLardy McShane Partners Pty Ltd, Australian Financial Services Licence No 232987 ABN 14 064 465 309. McLardy McShane Partners Pty Ltd is a member of The Steadfast Group.
Benefits of dealing with LSM:
Demolition and Asbestos Removal Liability Insurance Contact us for a confidential review of your clients insurance needs.
$20M Asbestos Liability now available Security of dealing with local office of a major insurer Local claims and underwriting service working closely with you to meet your clients business needs Automatic addition of Errors & Omissions coverage when Asbestos Liability is purchased
service@tudorinsurance.com.au
You can also apply for enhancements when you purchase this policy - coverage for Statutory Fines & Penalties, coverage for Shoring & Underpinning and coverage for transportation of asbestos (clean-up-costs)
(03) 9707 3033
15% commission of all placements
Tudor Insurance Australia Cameron McKerchar tudorinsurance.com.au
NIBA.COM.AU / 49
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 enquiries@marshmc.com
Advertise with the most influential and trusted voice in the Australian intermediated insurance industry · Insurance Adviser · Insurance and Risk website · Broker Buzz · Need a Broker website · Targeted eDMs · NIBA events (Annual Convention)
Marsh and McLennan Agency Pty Ltd ABN 33 000 668 584 / AFSL 238984
517-3776
50 / INSURANCE ADVISER JULY 2021
Contact Tony May National Advertising Sales Manager T: 02 9459 4303 E: tmay@niba.com.au
“My QPIB designation gives my clients peace of mind that I’m a trusted professional.”
ING IS
U
RA
K
ER
QPIB
S
Apply online at niba.com.au or email NIBA Memberships Manager Audi Witsen – awitsen@niba.com.au
P ED RACT I IF
IN
QPIB – A STATEMENT OF PROFESSIONALISM
• QUA L
– CRAIG ANDERSON, 2018 YOUNG PROFESSIONAL BROKER OF THE YEAR
NCE BR
O
NIBA / Forthcoming Events
STAY UPDATED!
NIBA EVENTS
NIBA stages a variety of educational and social events across Australia for the whole intermediated insurance community. EVENTS UPDATE Mark your calendars to meet, share, learn and grow with your industry peers at NIBA events across the country.
Check out what’s happening close to yo u and registe r via the events cale ndar at niba.com.a u/ events
Please note in light of COVID-19, NIBA will continue to follow and implement national and state health authorities’ recommendations.
REGISTER FOR YOUR STATE’S UPCOMING GALA LUNCH:
2021 NIBA WA GALA LUNCH
WHEN: Friday 9 July 2021 WHERE: Crown Perth Chrissy Morrisey returns to host the NIBA WA Gala Lunch, bringing together the WA insurance community to celebrate and unwind after the end of financial year. The fire-andice-themed event will see the announcement of the region’s QBE-sponsored Broker of the Year and Vero-sponsored Young Professional Broker of the Year Award winners. REGISTER NOW: niba.com.au/ event/2021-niba-wa-gala-lunch/
2021 NIBA QLD GALA LUNCH
WHEN: Wednesday 14 July 2021 WHERE: Royal International Convention Centre This year’s gala lunch returns to RICC, and
we are excited to recognise Queensland’s best in broking for the Qld Young Broker of the Year and Broker of the Year for 2021 sponsored by Vero & QBE. Prior to the lunch, NIBA will be hosting the Underwriting Expo in conjunction with UAC which is free for brokers to attend. However, due to COVID-19 restrictions, brokers will need to register for a place on one of the two exhibition hall walk through sessions. REGISTER NOW: niba.com.au/ event/2021-niba-qld-gala-lunch/
ACT Broker of the Year and Young Broker of the Year will also be announced, proudly sponsored by QBE & Vero. REGISTER NOW: niba.com.au/ event/2021-niba-nsw-gala-lunch/
2021 NIBA NSW GALA LUNCH
WHEN: Friday 23 July 2021 WHERE: Adelaide Convention Centre To round off the month, the NIBA SA Gala Lunch will play host to a winter wonderland themed event. The winner of SA/NT Broker of the Year and Young Professional Broker of the Year will also be announced, sponsored by QBE & Vero. REGISTER NOW: niba.com.au/ event/2021-niba-sa-gala-lunch/
WHEN: Friday 16 July 2021 WHERE: Doltone House Jones Bay Wharf Join us at Doltone House Jones Bay Wharf for a magical afternoon celebrating the industry’s best in broking. Nine-time Paralympic gold medallist Louise Sauvage OAM will be speaking at the luncheon which is being held in conjunction with Wheelchair Sports NSW. The NSW/
2021 NIBA SA GALA LUNCH
DISPLAY ADVERTISING INDEX – JULY 2021 Berkley.............................................IFC Vero........................................................5 CGU....................................................... 7 QBE........................................................9 Allianz...................................................15 Brooklyn..............................................21
2021 NIBA Convention.................23 Focusnet.............................................25 Insurance Advisernet....................35 Ebix......................................................37 Agile..................................................... 41 NTI....................................................... 43
QPIB.....................................................51 NIBA Mentoring..............................55 Technosoft..................................... IBC CHU...............................................OBC
If you’d like to advertise your products and services through NIBA, please contact Tony May today on (02) 9459 4303.
52 / INSURANCE ADVISER JULY 2021
IA0721 p52-55 Events Pictorial.indd 52
28/6/21 10:53 am
NIBA / Events
NIBA VIC EXPO AND GALA The Victorian insurance broking community came together in a big way for the annual expo and gala lunch in Melbourne.
NIBA.COM.AU / 53
NIBA / Events
CAREERS IN INSURANCE IN FOCUS The insurance broking fraternity in Sydney took time out to promote the value of careers in insurance at the Knox Grammar and Loreto Normanhurst career expo.
NIBA MENTORING PROGRAMS The final workshops for the recent intakes were held in New South Wales, Victoria, Queensland and Western Australia. Visit the NIBA website for more details on the program: niba.com.au/niba-mentoring-program
54 / INSURANCE ADVISER JULY 2021
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
INSURER STRENGTH RATINGS
S&P GLOBAL
AUSTRALIA
INSURER FINANCIAL STRENGTH RATINGS
The following is a list of S&P Global Ratings insurer financial strength ratings assigned to insurance companies in Australia and New Zealand. Ratings at 1 June 2021. Contact: Craig Bennett, S&P Global Ratings Telephone: 03 9631 2197
RATING
NON-LIFE INSURERS AAI Ltd.
A+/POSITIVE
AIG Australia Limited
A/CreditWatch Negative
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
Hallmark General Insurance Co. Ltd. (NZ Branch) BBB+/STABLE
Zurich Australian Insurance Ltd.
AA-/STABLE
IAG New Zealand Ltd.
AA-/STABLE
LENDERS MORTGAGE INSURERS
Society of Lloyd's
A+/STABLE
Genworth Financial Mortgage Insurance Pty Ltd.
A/NEGATIVE
Medical Insurance Society Ltd.
A-/POSITIVE
QBE Lenders' Mortgage Insurance Ltd.
A/STABLE
Southern Cross Benefits Ltd.
A/STABLE
Southern Cross Pet Insurance Ltd.
A/STABLE
Westpac Lenders Mortgage Insurance Ltd.
A/CreditWatch Negative
Teleco Insurance (NZ) Ltd.
BBB+/STABLE
LIFE INSURERS
Vero Insurance New Zealand Ltd.
A+/POSITIVE
AIA Australia Ltd.
A+/STABLE
Vero Liability Insurance Ltd.
A+/POSITIVE
AMP Life Ltd.
A-/NEGATIVE
Challenger Life Company Ltd.
A/STABLE
Hallmark Life Insurance Co. Ltd.
BBB+/STABLE
MetLife Insurance Ltd.
A+/STABLE
Westpac Life Insurance Services Ltd.
A+/STABLE
NEW ZEALAND
RATING
NON-LIFE INSURERS AA Insurance Ltd.
A+/POSITIVE
AIG Insurance New Zealand Ltd.
A/CreditWatch Negative
Chubb Insurance New Zealand Ltd.
AA-/STABLE
QBE Insurance (Australia) Ltd. (New Zealand Branch) 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)
REINSURERS A/NEGATIVE
General Reinsurance Australia Ltd.
AA+/STABLE
LIFE INSURERS
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
Resolution Life New Zealand Ltd.
A-/NEGATIVE
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 © 2021 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 JULY 2021
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
NEW ZEALAND
BEST’S
FINANCIAL STRENGTH RATINGS
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 u/NEGATIVE
CIGNA Life Insurance New Zealand Limited
A/STABLE
Co-operative Life Limited
B++/STABLE
DPL Insurance Limited
B++/STABLE
Fidelity Life Assurance Company Limited
A-/STABLE
Foundation Life (NZ) Limited
A-/STABLE
General Reinsurance Life Australia Limited (New Zealand Branch)
A++/STABLE
LIFE, ANNUITY AND ACCIDENT
Kiwi Insurance Limited
A-/STABLE
General Reinsurance Life Australia Ltd.
Lifetime Income Limited
B- u/NEGATIVE
Momentum Life Limited
B++/STABLE
Partners Life Limited
A- u/DEVELOPING
Pinnacle Life Limited
B/STABLE
The following is a list of AM Best Financial Strength Ratings (FSRs) assigned to insurance companies in Australia and New Zealand. Ratings as at 7 June 2021. Contact: Mr. Scott Ryrie Managing Director & Co-CEO A. M. Best Asia-Pacific (Singapore) Pte Ltd. Tel: +65 9636 3678 Email: scott.ryrie@ambest.com
AUSTRALIA
RATING A++/STABLE
PROPERTY/CASUALTY 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-/NEGATIVE
Aioi Nissay Dowa Insurance Company, Limited (New Zealand Branch)
A+/STABLE
Pacific International Insurance Pty Limited
B++/NEGATIVE
Beneficial Insurance Limited
B++/STABLE
The Hollard Insurance Company Pty Ltd
A-/STABLE
Brightsideco Insurance Limited
B/STABLE
The New India Assurance Company Limited (Australia Branch)
B++/STABLE
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
Health Services Welfare Society Limited
B+/STABLE
Mitsui Sumitomo Insurance Company Limited (New Zealand Branch)
A+/STABLE
New Zealand Medical Professionals 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 Insurance Limited
A-/STABLE
Union Medical Benefits Society Limited
A/STABLE
Virginia Surety Company, Inc. (New Zealand Branch)
A/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.
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NIBA.COM.AU / 57
INSURANCE JOURNEY / Mark O’Reilly
A DEDICATED CLIENT EVANGELIST AND STORYTELLER
The 2021 NIBA Vic/Tas finalist for the QBE-sponsored Insurance Broker of the Year, Mark O’Reilly of Austbrokers Countrywide, is a passionate advocate for the insurance broking profession.
“L
ike many others, the insurance industry chose me. I got a start at AMP because I got lucky and knew someone. I had no idea what insurance was, but simply loved the learning opportunities and a chance to interact with people. As with most new starters, I made plenty of mistakes, and I am very grateful for being pushed very early to go on and do some further insurance studies. I will openly admit that I was pretty useless for a while and found my feet because of the people around me and the support provided within the industry. After working at an insurance company for nine years I took the plunge and joined a large broking firm. I thought broking would be more fun, and I’d learn more, which turned out to be the best career move I could have ever made, as it shaped the next 20 years of my life. I worked in claims and then put my hand up to transition to working in a broking assistant role. The learning was fast-paced, as I did not have strong insurer relationships and needed to learn multiple insurance products very fast. The broadness of the broking function was quite daunting to start with, and over the years I’ve sought to mentor younger staff to make their journey a little easier than mine was. I worked in the building industry before I joined insurance, which back then was tough work with little collaboration. The level of communication for the broader purpose was not evident; the work often was flawed as the end game was not understood. I felt a lot of the rework could have been avoided had there been better channels of communication. And what I do now is exactly the opposite; insurance is always a collaboration. The more we talk through the issues with clients and
PROUDLY SUPPORTING
58 / INSURANCE ADVISER JULY 2021
insurers the better the end result. The best part for me is I get to talk to people all day to try and educate myself to solve a problem. The fact you learn something every day is what makes insurance interesting. It remains one of the very few industries where you can really get to know people and help shape key decisions. The sharing of knowledge is key, and (unfortunately for those around me) I generally seek to tell stories to help teach others, and learn along the way. The biggest lesson I’ve learnt in my career so far is to read something – anything – about insurance every day. A simple blog post or news article forces you to think and learn so you’re better placed to offer help. Insurance supports everything, and you can pick up a newspaper and there will be a risk and insurance consideration all the time – if the person involved had done that then I bet they would not be in this position. I’ve encouraged many people to explore a career in insurance – it’s the broadest industry
I know, so you can focus on so much and carve out a very rewarding career. You can specialise in almost anything, and there is always a little fun along the way. When I tell people what I really do and how flexible the industry is they often think I am talking rubbish, but it’s the best industry to learn anything you want, and you get paid for it. I would probably change very little about my career, as the industry has been very good to me. Having ticked over 30+ years, I still learn from the younger industry participants, as they force you to think differently. Even though we are at times an undervalued industry, the level of consistent professionalism and service provided to clients is a wonderful achievement – this is evident every time a large CAT loss occurs. Because of the industry’s professionalism we do a remarkable job at providing protection when a client needs it most. Without skilled broking professionals, many clients would lose everything.
SIX QUICK QUESTIONS Tell us something most people don’t know about you? I love animals – I have two dogs, two cats and two birds. Secret ambition? Always wanted to be a pilot, so one day. Favourite film? Lord of the Rings. Favourite tipple? Drop of red – Cab Merlot. Favourite pastime? Having fun with the family and watching cricket (way too old to play). Favourite food? Pasta – rich and filling.
Share your insurance journey. Email editor@niba.com.au
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