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Industry bulletin
The 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.”
The 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/
APRA HAS RELEASED ITS GENERAL INSURANCE STATISTICS FOR MARCH 2021
The 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 and key ratios for the general insurance industry are shown in the tables below.
The recommendations of the fast-tracked Insurance and Care NSW (icare) and State Insurance and Care Governance Act 2015 Independent Review, have been handed down by retired Supreme Court Judge Key performance statistics for the general insurance industry in the year ended 31 March Robert McDougall. MARCH 2020 MARCH 2021 The review offers an independent CHANGE (ANNUAL)
Gross claims expense $42.4bn $41.5bn assessment of the issues and challenges facing icare and the worker’s compensation –1.9%
Underwriting result $1.5bn $1.6bn scheme and McDougall examined issues +6.0%
Investment income $2.0bn $1.6bn –20.8%
Net profit after tax $1.5bn $1.1bn –28.3%
Gross claims expense
Underwriting result
Investment income
Net profit after tax
DECEMBER 2020
$14.7bn
–$1.1bn
$504m
–$622m
MARCH 2021
$9.4bn
$657m
–$246m
$19m
CHANGE (QUARTERLY)
-36.0%
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 SUBMISSION TO CONSULTATION PAPER ON CYCLONE REINSURANCE POOL
The 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 NIBA VIC DIVISIONAL COMMITTEE LAUNCHES A D&I SUB-COMMITTEE LAUNCHES A D&I SUB-COMMITTEE
NIBA 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/
