8 minute read
NIBA CEO Welcome
A TIME OF CHANGE
Some rather big things are happening at the present time and will continue to develop over the coming months and years.
Royal Commission Reforms
Most insurance brokers are now working to understand the impact that the Royal Commission reforms will have on their business operations and processes. Design and Distribution Obligations, Anti-Hawking Reforms, Deferred Sales Model, Disclosure of Non-Independence, and many other reforms will need to be implemented within all broking firms, in addition to regulatory changes relating to internal dispute resolution and breach reporting.For a sector which was not mentionedin the Royal Commission into Misconduct in Banking and Financial Services, it is quite extraordinary that insurance brokers are having to cope with such an extensive change program.
Code of Practice
NIBA continues to work on the review of the Insurance Brokers Code of Practice. This is taking time, because it is important that we get it right. A Code of Practice is an industry’s commitment to its current and potential clients, and in the current post-Royal Commission climate, expectations of external parties are now very high. There are too many examples of poor client outcomes in other areas of the financial services industry, and it is crucial the new Insurance Brokers Code of Practice sets appropriately high standards of professionalism, ethics and integrity.
More importantly, high standards must not just be set out in the new Code of Practice – they must be actively embraced, adopted and applied in the ordinary and everyday operations of insurance broking firms. Most do this already, but we must make sure all brokers are working to the highest standards of professional conduct and behaviour.
The Insurance Market
I continue to receive comments about the state of the insurance market – from members, and from government agencies who are concerned about issues with availability and a ordability at the present time. In mid-July 2021, I am not seeing any signs of movement in the so-called insurance cycle, and I fear the very hard market might be something that will be with us for some time. This is the time for insurance brokers to shine – to show real value to their clients as to how best to assess, manage and finance their risks.
Northern Australia
The big change in northern Australia will be the Cyclone Reinsurance Pool, currently under development by a Treasury Taskforce. The challenges with this project are great, but the need for genuine relief is real. NIBA will do its best to make sure the Cyclone Reinsurance Pool provides genuine benefit to policyholders and property ownersacross northern Australia, and in Far North Queensland in particular.
NIBA Convention
While we had a largely (but not completely) successful virtual NIBA Convention in 2020, we do have to acknowledge that there is an overwhelming demand for a Convention experience to be provided on a face-to-face basis. But we also need be realistic about the current state of the COVID-19 pandemic in Australia, and the impact it is having on border crossings and community lockdowns.
We have decided to change the format to get the best of both worlds, with a Convention experience being o ered in five capital cities over five weeks. Brokers will not have to cross borders – they can attend the Convention in their own state and will be able to access the other four conference sessions virtually.
We will again provide over 10 hours of highly relevant content as part of the Convention program, with real opportunities to gain significant CPD points along the way. And we will also provide opportunities for brokers to meet face-to-face with sponsors and exhibitors, and with their industry colleagues to discuss the challenges and opportunities we all face.
NIBA
A significant change is about to take place within NIBA. As the President has previously announced, I will retire as Chief Executive on 31 October 2021, and Philip Kewin will take on the role from 1 November 2021.
Philip has tremendous experience as the former Chief Executive O cer of the Association of Financial Advisers. He is very well-trained in the challenging tasks of industry representation, government relations and lobby. He will be an excellentspokesperson for insurancebrokers andwill make a great contribution to the future of insurance broking in Australia. He will commence at NIBA in a transitional capacity on 16 August 2021, and I look forward to sharing my knowledge and experience with Philipin the coming months.
Insurance Broking 2025
On 2 August 2021 the President, VicePresident and I will present the outcome of the NIBA Board’sproject toconsider what insurance broking will look like in 2025. This is very exciting. I am looking forward to it. In the meantime, please stay safe, stay healthy, and get vaccinated as fast as you can.
DALLAS BOOTH
Chief Executive Officer, NIBA
RISKY BUSINESS: INSURING THE GIG ECONOMY
Whether it’s a spare-time side hustle or a way of working to which someone’s fully committed, the gig economy – otherwise known as the on-demand economy – essentially refers to any kind of casual, short-term work.
It’s a term used to capture people working in a non-traditional way, maybe via digital platforms such as Airtasker or working on a freelance basis, engaging with businesses job by job. From delivery drivers to doctors, exercise professionals to Etsy store owners, professional services to IT contractors, there is a wealth of Australian professional people working in this way – 3.3 million of them, in fact.
For many, it’s a choice that facilitates the lifestyle they desire. For others, it’s a means to an end. One thing’s for sure, though: it’s serious business. Data shows that between 2015 and 2019, the value of the gig economy grew ninefold to $6.3bn, and at last count 62.8 per cent of businesses in Australia were sole traders.
Add to that the impact of the pandemic – which saw an actual unemployment rate of 7.4 per cent in June 2020 (a 21-year high) and an effective unemployment rate of 15 per cent in April 2020 – and those figures are likely to be higher as people seek alternative ways of working in the future.
“With the pandemic we’ve seen a rapid shi in what work looks like,” says Janette O’Neill, QBE’s Head of Sustainability. “There are clearly lots of benefits for gig workers around how they utilise their time, where they choose to work and how they make their money. It also provides flexibility for employers as they’re not locked into long-term contracts.
“But then there are also a lot of risks.”
The risks of working in the gig economy
While the freedom of working in the gig economy is understandably attractive, it comes at some cost. Of course, the certainty of employment simply isn’t there. And as well as the regular salary and superannuation contributions, the other benefits of employment are foregone – annual leave, accident insurance scheme for gig-economy workers in that profession.
“You could take similar cover out as an individual, but it’s going to be much more beneficial to be part of a group-purchasing arrangement because you’ll get the economies of scale around pricing and the level of cover you’ll receive,” says Sykes.
And if the relevant membership groups or associations don’t have this type of arrangement, just ask. A er all, it’s just another aspect of the ever-changing world of work in which we belong.
Income protection insurance is another important consideration for those working in the gig economy – a er all, their ability to earn relies completely on their physical and mental ability to do the work.
personal and sick leave, long-service leave, parental leave and carer’s leave, for example.
And then there are insurances. Employees would usually be covered by their employer’s professional indemnity and public liability policies, for example. And then there’s workers’ compensation, which gig-economy workers in Australia currently fall outside of.
“Many people going out on their own and working in this way probably aren’t too aware of the insurance side of things,” says Sharron Sykes, QBE’s National Underwriting Manager – Australia. “But navigating the insurance needs – particularly when it comes to workers’ compensation – is very challenging.”
Sole traders cannot cover themselves as an employee for workers’ compensation, and contractors need to check with each individual employer about whether they’re covered under the employer’s scheme.
Of course, one of the ways gig-economy workers can protect themselves is by taking out their own insurance – and Group Personal Accident and Sickness insurance, part of the QBE Accident and Health suite, can provide the required cover.
Group Personal Accident and Sickness insurance can provide group cover to companies or common interest groups. By identifying groups of workers via membership groups or associations, tailored coverage can be created.
“One of the benefits with accident and health products is it can be much more flexible than workers’ compensation,” says Sykes. “Workers’ compensation is quite fixed around the benefits that can be provided, as determined by the relevant state legislation, whereas with accident and health we can actually ask people what’s keeping them up at night – we want people to understand that we’re insuring one of their most important assets, which is their income.”
For people working in the gig economy, the profession’s membership body or industry association is a good first port of call to enquire whether there’s a group personal
Creating a sustainable future for the gig economy
The world of work has changed significantly, and new challenges – such as ensuring gigeconomy workers have the requisite level of insurance cover – will emerge along the way.
“A few years ago, if people talked about the future of work, they usually referred to the building and the way employees worked together within that building,” says O’Neill. “Now it’s far broader than that.”
The gig economy is an important way of working and can help businesses and the individual – and potentially help society as a whole. “By supporting ways of work that have low barriers to entry, we create more opportunity and support social and economic wellbeing.” says Sykes.
And for those who are grabbing those opportunities, it’s vital they have an insurance safety net to protect them – because the one that’s there in traditional employment simply isn’t on offer when you’re going it alone.
