CoverNote March/April 2014

DECISION DUE: IAG’S APPLICATION TO BUY OUT LUMLEY GENERAL INSURANCE…

March/April 2014

HARD YARDS

BROKERS PROVE WORTH

How Businesses Are Navigating Rising Premiums…

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Backing Business

Bad’s not going anywhere.

But thanks to all ourour brokers, ...But thanks to all brokers, good’s good’scome comeour ourway. way.

NZI, Most Valued Insurer 2013.

A massive thank you to all our brokers for their continuing support, and voting us the IBANZ Most Valued Insurer 2013.

2013 Insurer of the Year

WELCOME

Advertising/Editorial: Robert Johnson, Benefitz Telephone 09 477 4702, Mobile 027 4970 712, Email: robert@benefitz.co.nz Editorial: Susan Edmunds Email: susan@headlinepublishing.co.nz Design/Production: Jared Trice, Benefitz Imaging: CTP by Benefitz Produced for IBANZ by: Benefitz, Cnr Constellation Drive & Parkway Drive, Mairangi Bay, North Shore City.

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CoverNote is the official publication of IBANZ and is distributed FREE on a quarterly basis (March, June, September, December) to members throughout New Zealand and associated companies.

Additional copies are available at a cost of $7.50 per copy, or 12 month (4 issue) subscriptions at $30.00, inclusive of postage and packaging. The articles or opinions featured within this magazine are not necessarily the opinions of the Publishers or IBANZ, and they do not accept responsibility for the content of articles featured within the publication. No part of this publication may be reproduced without the written permission of the Publisher. The publishers do not accept responsibility for loss or damage to unsolicited photographs or manuscripts.

IBANZ Enquiries should be made to: Gary Young, Chief Executive, IBANZ. Email: gary@ibanz.co.nz IBANZ National Office located at: Level 1, 143 Nelson Street, Auckland.

(P.O. Box 7053, Wellesley Street) Telephone 09-306-1732.

Website: www.ibanz.co.nz

Gary Young CEO, IBANZ

W

ith the New Year I get a real sense that everyone sees 2014 as a fresh beginning. It is time to look forward, to build future success.

Those in the New Zealand insurance broking sector have endured two hectic years as a consequence of events in Christchurch and as regulation worked its way through the system. It would be nice to think 2014 will get back to being a “normal” year. Although it may be that these exceptional times have changed the definition of “normal”.

What stands out for me is how well everyone has coped given the challenges thrown up. Of course there will always be the exceptions to the rule, always things we “could do better”. However I believe we can be proud of what has been achieved.

The real motivation for the future is to look at where we can improve and implement solutions to ensure future success. Learning from our mistakes is the key.

As professionals, brokers understand that learning is important in all aspects of their career. A top priority for IBANZ is to help our members increase their knowledge and skills. Three years ago we set out to provide the means for our members to access relevant, cost effective quality education with the creation of IBANZ College.

It is very encouraging therefore to see how far the College has come in such a short time. Support from our members has grown significantly during the past year. The College has become accepted as a key player in the education of our members which has not gone unnoticed by many in related professions who are now keen to become involved.

To build on this success and to achieve our aspirations for the College we cannot rest on our laurels. There is much to do and our team at the College are working hard to meet the high expectations of their students.

They have exciting new initiatives to be launched this year.

The first step is a re-launch of the College as “Professional IQ”. Under this new brand the College has prepared a range of education options to enhance its offering to the wider financial services population.

With new Financial Services Certificates coming on stream this year Professional IQ is in an ideal position to deliver these qualifications as well as a full range of professional development courses to all sectors of financial services. For the college to have a sustainable business the ability to deliver to all financial services sectors is vital; Professional IQ has that ability.

As a result IBANZ is confident there is a viable future for the organisation tasked with delivering relevant professional development to members.

Gary Young, CEO, IBANZ www.covernotemag.co.nz

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CONTENTS: MARCH 2014

Features 12. Businesses Navigate Rising Premiums

here’s good news on the horizon for firms that T have struggled to keep up with their bills…

42. Record-Keeping Proves Job Was Done Technology can improve the way you communicate with clients.

22. Feature: Decision Due More on IAG’s application to buy out Lumley General Insurance.

26.

Premiums May Rise After D&O Decision

Ringfencing the solution to Supreme Court’s defence costs ruling.

34. Brokers prove worth

Advisers’ workloads are increasing as they help clients navigate big changes to residential insurance cover.

38. Broker Liable For Not Advising About A Policy Sub-Limit

Case is a warning to brokers about the standard of care required of them by law.

40. Ongoing Damage or One-Off

Whether to blame one flood or a slow leak was the key issue to resolve an apartment owner’s complaint.

WANT YOUR VERY OWN COPY OF

COVERNOTE?

March/April 2014

1. View from the CEO’s chair 3. News 7/19. Out & About 18. Forum 2014 24. Profile: Megan Walker 30. Ask an Expert

47. Profile: Sam Marett 48. Professional Development: Professional IQ College 52. IBANZ Contacts

See page 52 for details on how you can have your very own copy delivered directly to your door... HOT OFF THE PRESS!

IBANZ is pleased to announce it has engaged Benefitz as the publisher of Covernote. We are keen to ensure the magazine continues to remain relevant to our readers. As the only local publication dedicated to the general insurance sector, and in particular to professional insurance broking, Covernote

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Regulars

has a vital role to play. The readership of our magazine goes beyond IBANZ members to the wider insurance sector as well as the business community. The brief is to cover major issues of the day, giving background and context to ensure readers are kept fully informed. Benefitz have committed to

setting a high standard for the publication. They have assembled an experienced team for the task and look forward to engaging with all stakeholders to ensure their needs are met.

We are very pleased to welcome Benefitz as an important partner of IBANZ.

NEWS

People on the Move NZI’s General Manager Claims, Mick Miller, will be leaving NZI to take up the role of Senior Vice President Claims of State Bank of India General Insurance, a joint venture between IAG and State Bank of India.

Miller has been heading NZI Claims since July 2010 and prior to that was head of NZI’s Marine business (from 2007). His contribution has been significant, particularly in recent years leading through the challenges the Canterbury earthquakes have presented.

The new role creates an opportunity for Miller to utilise the skills he’s developed throughout his career (particularly in the past few years) and to experience the challenges and excitement another culture provides.

Miller’s wealth of experience, contribution, presence and sense of humour will be missed by all at NZI but we wish him the best in this exciting venture.

Naming rights deal A new deal will see North Harbour Stadium named QBE Stadium.

The deal will run for five years, starting this year.

QBE general manager of New Zealand operations Ross Chapman said: “We are delighted to sponsor the QBE Stadium and to further our support of the North Shore community and for this great venue.

The area is one of the fastest-growing areas within New Zealand and is widely used for sport and recreation by an increasing number of our younger citizens. We hope that our sponsorship will help develop the QBE Stadium facilities and support activities for all of the local community.”

The North Harbour Stadium Trust said QBE was a solid partner that had already demonstrated commitment to the region.

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NEWS

BRIEFLY

Green building award Auckland’s NZI Centre has been given a five-star rating for energy use under NABERSNZ, the office building energy rating scheme.

NABERSNZ provides ratings between one and six stars.The scheme was launched in this country

ARTvent Calendar At Christmas, QBE was involved in the Wynyard Christmas Quarter, contributing to the ARTvent Calendar display in Silo Park. Activities in Silo Park not only raised a significant amount of money for a great cause but also created substantial awareness for the Auckland City Mission and their “Become someone’s Angel campaign”.

Thanks to the generosity of supporters, the Auckland City Mission raised over $1.5 million, which helped to: • Provide 2,974 emergency food parcels, an increase of over 18% on last year, feeding over 12,000 people, • Distribute 9,000 Christmas presents to children who would otherwise have gone without, • Serve lunch to 2,000 people on Christmas Day at the Viaduct Events Centre.

The overall reception to the Wynyard Christmas Quarter has been outstanding, with over 94,000 visitors. QBE is proud to contribute to a project that encourages the spirit of Christmas, enhances the Christmas experience for Aucklanders, and assists in providing support for the valuable work the Auckland City Mission undertakes in our community. We look forward to being involved at Christmas time this year.

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March/April 2014

last year and NZI’s is the fifth certified rating released.

IAG chief executive Jacki Johnson said the result demonstrated that the building was performing in practice as well as in theory.

“The building has a great feeling. It’s pleasant to spend time in, our staff enjoy it - so we thought it was probably performing well. Now, NABERSNZ proves it is. The value of the NABERSNZ rating is that it is independent verification that our building uses energy efficiently.”

The NZI Centre’s sustainability features include a double-skin facade along most of its perimeter, with automatically controlled blinds to moderate glare and sunlight. It also has exposed concrete ceilings to help moderate temperature.

Triple liability 2013 second-most expensive year Last year was one of the most expensive on record for weather-related damage, with $174 million of insured costs arising from weatherrelated events.

Insurance Council of New Zealand chief executive Tim Grafton said his organisation had been tracking losses since 1968.

“This further reinforces the value of insurance in safeguarding New Zealand by being able to meet costs of this scale,” he said.

The only year that has been more expensive for weather events was 2004, when there was an inflation-adjusted $181 million of insured damage.

The most damaging storm in

2013 was in early September, causing $74.5 million in insured losses.

“The Insurance Council’s members’ losses for 2013 stands at $174 million, but we are still awaiting final figures for the October 14-16 storm, where losses provisionally stand at $10.2 million,” Grafton said.

“Climate change scenarios point to higher levels of rain in parts of the country already prone to flooding and for stronger winds from the west.

This underlines the need for New Zealand to focus on pre-disaster mitigation and adaptation strategies to minimise economic losses and social disruption,” he said.

A group of university students was left with the prospect of a $26,000 bill when a coat hanger on a fire sprinkler caused a major flood in an apartment building.

It was caused by one of three flatmates in a unit but all had signed the tenancy agreement so jointly faced liability.

If one of the students had not had insurance for up to $1 million of legal liability, the group would have had to pay the $26,700 repair bill.

Insurers say it highlights the value of tenants having the right insurance policies.

AA Insurance’s head of customer relations, Suzanne Wolton, told media that tertiary students could risk starting their careers in debt if they accidentally damaged another person’s property.

“Parents are often surprised when they discover their policy doesn’t cover the loss of their child’s property from a flat,” she said.

NEWS

AIG’s “Steigrad Solution” to Cover D&O and PI AIG has reviewed its Directors’ & Officers’ and Professional Indemnity cover in light of the recent Supreme Court decision on the application of Section 9 of the Law Reform Act. The Supreme Court decision reaffirmed an earlier High Court ruling that if an insurance policy is subject to a statutory charge, then the whole “insurance fund” must be preserved for civil claimants.

This means the limit of liability under the insurance policy can’t be used to meet the insured’s own defence costs.

In response to the initial High Court ruling, AIG has introduced a new D&O solution that ring-fenced legal costs and other expenses from third party damages that may be subject to a charge. This “Steigrad Solution” has been well received and is a now the preferred cover for many of New Zealand’s large companies.

Following the Supreme Court decision, this added protection has now also been extended to other AIG insurance such as professional indemnity insurance.

“With this approach, directors, officers and business professionals can continue to make business decisions within the work environment with confidence, knowing

that AIG’s policy can support their defence, where their existing limit is subject to a Section 9 charge,” said Ryan Clark, AIG New Zealand’s Financial Lines Manager. “We believe that our solution achieves the right balance between the interests of policyholders, brokers and underwriters in the event of any claims made against an insured.”

AIG Insurance New Zealand Limited CEO, Cris Knell said the Supreme Court decision means all businesses with an exposure to a third-party liability should review their current insurance to ensure they have adequate cover. “ As well as directors and officers and professional indemnity covers, this ruling has implications for general liability, marine liability and even accident and health policies. AIG is currently reviewing each one of our products to ensure that they respond appropriately to the current legal situation,” Mr Knell noted.

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NEWS

Crombie Lockwood’s Auckland move Crombie Lockwood is combining its central Auckland operations at a high-profile new site near Auckland’s waterfront.

It is taking over two-thirds of the top floor of the former ACP building on the corner of Beaumont and Fanshawe Sts. The lease deal gives the company naming rights on the western side of the building and 80 covered carparks.

Crombie Lockwood communications manager Daryl Hughes said the first group of staff moved in to the offices just before Christmas. The IT team moved in mid-February and the rest of the staff will shift during March, including those who work in offshore markets placement, international student insurance and workplace risk.

“It’s been desirable to have more of us in fewer places. We were in three different locations in Mt Eden and it’s good to have more people in

one place,” he said.

He said the company had not been actively looking for new premises, but when the opportunity arose, it was too good to ignore.

The new premises include a 25-person disaster recovery suite. Should another event such as the Christchurch earthquakes occur, people would fly in from around the country and the

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March/April 2014

world to work from the fully-equipped desks.

“They can operate in a heartbeat,” Hughes said.

He said Crombie Lockwood’s governance standards required it to look at a prescribed number of options before choosing one when relocating. “We had to make sure this stacked up against every other viable option.”

First Travel Group Tournament On a stunning Auckland day in February, QBE Travel sponsored the First Travel Group Annual Golf Classic at the Royal Auckland Golf Club. The new Business Relationship Manager for Travel - Cushla Hanley positioned on “lucky” Hole number 13. Players were offered a quick refreshment before attempting a 189m ‘Hole in One’ to win $10,000! While no one managed to get a holein-one (phew!), a pleasant day out in the sun was enjoyed by everyone.

Classic Cover The team at Classic Cover Insurance, major sponsors of the Beach Hop, will be in Whangamata in force at the end of March talking to clients about their Special Vehicle insurance needs. Since January they have attended The Kumeu Hot Rod Festival, The Ferrari Festival at Hampton Downs, The Classic Car Show in Ellerslie, Americarna in New Plymouth, and sponsored the Corvette Nationals in New Plymouth, They attend a huge number of events every year supporting the sport and local Brokers alike. With the new Classic Cover website having an instant rater and mobile version, it is so easy to get terms for your clients, Check them out and see just how easy it is.

OUT & ABOUT

Brokers get festive Feathers, sparkles and festivities were on the cards when QBE hosted its Las Vegas-themed Christmas party on the deck of the Floating Pavilion in Auckland. Guests were treated to oysters bloody mary and entertained by a troupe of dancing girls. Elvis mingled with guests when they weren’t busy trying their luck on the gaming tables.

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NEWS

Don’t apologise for Christchurch,

Vero boss says P

rivate insurance companies do not need to be defensive about their handling of the aftermath of the Christchurch earthquake, the head of one of the country’s biggest insurers says.

Stories about residents upset at the length of time it is taking to settle claims are still making headlines more than three years after the fatal earthquakes.

But Vero chief executive Gary Dransfield told a group of 100 North Shore brokers at a meeting at the Spencer on Byron this month that the fact that it was still a political issue had more to do with the political dynamics of Canterbury than with the quality of the recovery effort.

He said most of the recent customer complaints had been directed at the EQC and Southern Response, not the wider insurance industry. And he said people needed to realise that much of the $40 billion that will be spent on the Canterbury rebuild will come from insurers.

“There is no doubt many people are still doing it hard in Christchurch and there are customer issues private insurers have to manage carefully and empathetically… [but we should not] stand idly by while others use criticism of private insurance companies as convenient diversions from inadequate public planning and administration.”

Vero had completed 70% of its personal and commercial claims and paid out more than $3 billion to Christchurch residents, he said.

“That includes a number of very large commercial claims for the Government and the general public. We are paying around $5 million a week for residential claims. We are in the final stages of our claims management effort and history tells us that is a demanding and challenging time.”

Dransfield said this year would be as challenging for insurers as any other. But he said brokers needed to shift customer attention from

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March/April 2014

the price of the product to the value it offered.

“We still have some work to do on better pricing for the risks we are writing and recovery of the extraordinary claims costs still being met from the earthquakes. While the market is competitive I expect premiums will still have moderate increases. I believe our industry focus needs to be on the promotion and delivery of

PEOPLE NEEDED TO REALISE THAT MUCH OF THE $40 BILLION THAT WILL BE SPENT ON THE CANTERBURY REBUILD WILL COME FROM INSURERS.

the value of insurance.”

Vero’s strategy would be to focus on delivering better insurance, not cheaper insurance, he said.

FEATURE: RISING PREMIUMS

S E S S E N I S BU IGATE V A N g n i s i r s m u i m e pr There’s good news on the horizon for firms that have struggled to keep up with their bills: Insurance cost increase may have finally started to level off.

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March/April 2014

N

orthland business owner Jaswant Singh Minhas has started to dread the arrival of his insurance policy renewal each year. The bill lands on his desk just before Christmas, and every December what he has to pay seems to have increased substantially. Minhas owns a chain of restaurants and buildings and says the cost of their cover has at least doubled over recent years.

His broker does his best to describe the reasons behind the changes, he says, but it doesn’t make it any easier to swallow.

But he has no choice but to fork out. “It’s one of those necessary evils, you have to have it, you can’t do without it.”

Minhas says he’ll seek advice if this year’s

increase in anything like those of 2012 and 2013.

It’s a story that will be familiar to many business owners around New Zealand.

Many have experienced dramatic increases in their insurance premiums over recent years. Doubling commercial premiums haven’t been uncommon and there have been much larger increases for owners of buildings in areas that are prone to earthquakes.

The changing market has presented a challenge for brokers, who have had to help their clients navigate the new premiums while maintaining a level of cover that does not leave their businesses vulnerable.

The biggest question asked by business owners is: Why such a large increase?

Industry experts say the bulk of the increase can be put down to the cost of reinsurance, which has soared over the past few years, largely out of the control of even the reinsurers themselves.

There have been a number of natural disasters around the world since 2011. Insurers have been hit globally with everything from the Christchurch earthquakes to the Japanese tsunami and several massive storms that have decimated parts of the United States.

Tim Grafton, of the Insurance Council of New Zealand, said the flurry of natural

disasters had proved extremely expensive for the industry. He says the damage costs experienced over recent years are the most expensive in decades. That quickly translated into higher costs for customers.

“Reinsurance costs rose strongly across the globe and that flowed through to big increases in insurance costs here.”

For the year ended 2011 the accumulated underwriting loss - the amount that claims exceeded insurance premiums - for all non-life insurance products was $1.37 billion, even after insurers recovered funds available from their reinsurers, who pitched in more than $22 billion for the Canterbury earthquakes.

Reinsurer Munich RE said it would take 100 years to recoup what it lost in Christchurch – and that is only if there are no more natural disasters.

New Zealand is a relatively small market, so it does not have the ability to absorb the shock in the way that others around the world might.

In Japan and the United States, insurers are able to recover their positions relatively quickly. But when we have more than our fair share of natural disasters in this part of the world, it’s much harder to come back from. Large-scale disasters in New Zealand and Australia have historically represented 5% of catastrophe losses worldwide, which is about the same as the premium pool collected.

But in 2011, New Zealand and Australia’s disasters represented 17% of the world’s losses.

Another big factor in the increases is that New Zealand wasn’t accurately pricing insurers’ risk in this country.

Catastrophe premiums collected throughout New Zealand in 2011 amounted to just $350 million. New Zealand’s market was too cheaply rated and that came back to hurt reinsurers.

Grafton said reinsurers, reeling from the quakes, quickly required that local insurers better price their risk and start to more accurately price catastrophe risk in this market. “That’s why we saw very steep increases in reinsurance costs.”

Commercial insurance seemed to bear the brunt.

www.covernotemag.co.nz

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FEATURE: RISING PREMIUMS

Businesses’ premium increases were steeper than those of domestic policies, he said, because they did not have the benefit of the Earthquake Commission covering the first portion of any natural disaster claim.

Unlike homeowners who have the EQC to cover the first $100,000, business owners are on their own from the start if an earthquake or flood hits. “That makes a significant difference to catastrophe cover.”

He said there was also more at stake in most commercial cover, even if it was only a single building. “There might be $20 million to $30 million in one building in downtown Wellington. That’s a significant amount of capital at risk.”

Increases vary a lot but the hardest hit have been those with properties built on earthquake-prone land or that fall short of modern building code standards.

A survey by the Wellington Employers’ Chamber of Commerce found that threequarters of businesses in that region had experienced an increase in their insurance premiums as a result of the Christchurch earthquakes. Just 17% said they had not.

Half said the increase had been substantial – two businesses reported that they were now paying 300% more than they had before the disasters struck, three were paying twice as much and one said the company’s insurance bill had increased ten times over. One business said earthquake insurance was no longer affordable.

Commercial buildings that are deemed higher fire and earthquake risks are even more expensive to ensure than others. Those built before 1935 were especially hard hit by the increases but anything constructed before 1960 also saw a large jump in premiums.

Insurance premiums on one $4 million 1910 building in Fanshawe St, Auckland, jumped from $7286 in 2010 to $11,148 in 2011 and

THE MARKET WOKE UP AND REALISED NEW ZEALAND HAD BEEN UNDERPRICED.

then to $45,657 plus GST. The owners of an Edwardian building in Wanganui had to give up their earthquake cover completely when their premiums tripled to $72,000 a year. Even without the earthquake protection, they are now paying $40,000 annually.

James McGhie, managing director of broker firm Apex General, said the increases had been nationwide but suburbs with older timber buildings - a higher fire risk - were hardest hit. Brick buildings on reclaimed land such as the Britomart area in Auckland and Lambton Quay in Wellington were also vulnerable.

But Gary Young, chief executive of the Insurance Brokers Association of New

THE ADVANTAGE FOR BROKERS WHEN IT HAPPENS AFTER AN EVENT SUCH AS CHRISTCHURCH IS THAT EVERYONE IS TALKING ABOUT IT AND CLIENTS ARE EXPECTING IT.

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March/April 2014

Zealand (IBANZ), said this round of increases had been easier to explain than some in the past, which made things a little simpler for brokers.

“If you compare it to the last round of increases we had in the market in 2001 after the Twin Towers, insurance prices went up then as well. The advantage for brokers when it happens after an event such as Christchurch is that everyone is talking about it and clients are expecting it,” he said.

“In 2001, they would say ‘what’s a terrorist attack in the US got to do with New Zealand?’ and you had to explain it’s a global market and reinsurance has a role in dictating prices around the world so a major event can impact locally. This time, Christchurch was in the media and it was easier for them to understand, it was in New Zealand.”

But he said brokers had still had their work cut out explaining other changes.

As well as premium increases, the commercial excess structure has changed.

Now, instead of paying a percentage of each claim amount as excess, people will pay a percentage of the total value of the

sum insured. There were also policy wording changes to contend with, he said.

“Each company is doing it slightly differently,” Young said. “There’s a lot of explaining and brokers have really had to earn their money when it comes to renewal.”

Stuart Barr, of Rothbury Insurance Brokers, said it had not always been easy for brokers over the past few years. It had not been unusual for him to deal with businesses facing 100 per cent increases in their premiums.

Sometimes it was tough to help them through.

“Negotiability has been very limited, insurers have been adamant about what they wanted.”

Other businesses had taken the same tack as the Wanganui couple who had given up earthquake cover, he said, which could leave them vulnerable. “Some [businesses] have cut back on some covers or not taken out natural disaster cover – that’s become the major component for many of them. I’m not sure how banks are handling that.”

But there is good news on the horizon.

A spokeswoman for QBE said the business insurance market now seemed to be softening a bit and there was more price competition keeping premiums stable.

“It’s very cyclical, with something like the earthquakes, everyone gets the jitters and prices go up, then the market starts to correct itself,” she said.

McGhie agreed. He said things were looking up for New Zealand businesses in general and the mood was very positive for his clients and his own business.

Those that had made it through the global financial crisis and dealt with increasing costs over the past three years were now in a good position, he said. No one was inquiring about premium funding or increasing their excess to offset the costs any more. “Gone are the days when clients were not paying their premiums or having to cancel their insurance.”

But he said there was still a need for more commercial property options in the market for clients.

Grafton said the influx of new capital into the reinsurance market was helping. After the global financial crisis, US pension funds were looking for investments that had sufficiently high returns without huge amounts of risk and a small proportion of those funds – but a significant amount in insurance industry terms – was flowing into the market.

“The steep rise is tapering off and it’s possible that there could be a softening of the market or even a bit of a decrease. But we’ll never return to the levels of catastrophe cover costs that we enjoyed prior to the Canterbury earthquakes. The market woke up and realised New Zealand had been underpriced.”

Suncorp, the company that owns Vero, last year reported a 211% increase in profit for its New Zealand operations for the year ended June 30.

It said policy rate increases in response to higher reinsurance costs and growth in new business in personal lines of product contributed to a 13.6% increase in gross written premiums in New Zealand.

“Following the consolidation of the general insurance industry as a result of the Canterbury earthquakes and new prudential regulation, the outlook is positive for remaining insurers,” the company said.

“The New Zealand economy continues to recover.”

THOSE THAT HAD MADE IT THROUGH THE GLOBAL FINANCIAL CRISIS AND DEALT WITH INCREASING COSTS OVER THE PAST THREE YEARS WERE NOW IN A GOOD POSITION. www.covernotemag.co.nz

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FEATURE: RISING PREMIUMS

BUSINESSES SHOULD ALSO LOOK TO UPGRADE THEIR BUILDINGS BEYOND THE MINIMUM REQUIREMENTS WHERE THEY COULD, WHICH WOULD REDUCE THEIR INSURANCE COSTS. But NZI’s chief executive Karl Armstrong said the increases were not necessarily over for everyone. High risk buildings, areas or occupations could still face rising bills, he said. “It does depend on the risk, the occupation, location and exposure, a whole lot of things.”

Armstrong said businesses could help to manage their premiums by proactively engaging with their risk management strategies, understanding in detail the risks that insurers perceived they faced or by taking some of the risk themselves with increased excesses.

He said his firm had not seen any change in behaviour or people cutting back on insurance. If people were suffering, brokers were discussing strategies with them, he said. “Most people are insuring correctly, for the correct cover. There are small areas where they might forego something for affordability reasons, such as not having business interruption insurance, but that’s not common.”

Grafton said some businesses would look at their budgets and realise that for the money they had allocated, they were now getting less cover.

He said good broker advice would help them meet the changing conditions.

He said there would be a move to more granular pricing, particularly for commercial property.

“Insurers do look, when they’re looking at a

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March/April 2014

commercial building, at the location, the soil type, the construction that it is and the age. All those factors come in now in terms of assessing cover for commercial buildings.The appetite for taking on exposure in areas where they’re prone to earthquakes has seen a change in the type of cover provided.”

He said businesses should also look to upgrade their buildings beyond the minimum requirements where they could, which would reduce their insurance costs.

The Government is proposing seismic assessment of all commercial and highrise, multi-unit buildings - believed to be 193,000 properties. The focus will be on buildings built before 1976.

Those not upgraded to withstand a moderate-sized earthquake within 15 years of assessment would have to be demolished.

It is estimated between 15,000 and 25,000 buildings will have to be strengthened or demolished, and this number could rise.

“There’s a certain number where they’re of an age where they need to be upgraded or reinforced. Where that hasn’t occurred, the premiums have shot up sharply. That’s the role of insurance, partly to identify the risk and price signal that. The premium shows a higher risk.”

Grafton said while the Government moves were laudable, the building standards related to the life risk of the building and not the structural integrity.

Upgrading to meet the minimum requirements in itself might not reduce a building’s earthquake risk very much. “If people are looking for premium reductions they should be looking at how to strengthen the structural integrity.

Get an engineer to have a look, especially for older buildings.”

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FORUM 2014

Get ready

for IBANZ 2014 Forum

L

ike many industries, the insurance and insurance broking sector puts on a plethora of conferences, seminars and other events each year for different parts of the industry. But it is the IBANZ annual conference which brings the whole industry together and one that many do not want to miss.

For the past seven years the much-anticipated IBANZ annual conference has been run by Auckland based Conference Innovators under the careful stewardship of Conference Innovators’ directors and owners, Tracey Thomas and Rachel Cook.

It’s been an enduring relationship between the two organisations and can certainly be seen as testament to the confidence that IBANZ has in Conference Innovators (CI). Each year Tracey and Rachel’s team work to ensure the conference delivers inspiring and thought-provoking content to the 500 (plus) members of IBANZ who attend, many of them with their wives and partners.

Last year in Christchurch the format for the annual IBANZ event changed to a one and a half day forum as opposed to earlier conferences which were held over two and a half days. The content also changed to focus specifically on one topic. “The Challenge” forum attracted

conference.co.nz

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March/April 2014

THE CONFERENCE DELIVERS INSPIRING AND THOUGHTPROVOKING CONTENT TO THE 500 (PLUS) MEMBERS OF IBANZ WHO ATTEND… many members keen to learn how natural disasters have impacted on the insurance industry. The line up of key note speakers provided an excellent insight into the issues facing brokers and their clients looking to manage future risk.

She says Conference Innovators relationship with IBANZ has been a very good one. Thomas and Cook’s company organises a number of conferences each year for various organisations and she notes that Conference Innovators is one of New Zealand’s leading professional conference organisers and are considered the best in their field when it comes to bringing people together successfully.

With nearly 20 years of proven experience producing memorable, rewarding, enjoyable events, CI not only does everything a PCO should do, they do it with style, a sense of fun, and most importantly, innovation!

They aim to provide a service that helps create an event IBANZ can be proud of.

OUT & ABOUT

Sticking their necks out for a good cause About 100 clients, insurers and colleagues attended Marsh’s 25th annual golf day in Wellington. More than $800 was raised for the Life Education Trust.

The Trust’s mascot, Harold the giraffe, was on hand to thank Wellington branch manager Robin Armstrong. Marsh would like to acknowledge the sponsorship of its insurer partners.

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OUT & ABOUT

Insurance pros flex golfing muscle QBE’s annual Auckland golf tournament was a success again.

Everyone played a great round of golf, which included a first hole challenge where all the players had to hit off a tee floating on a kickboard in a paddling pool.

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March/April 2014

NEWS

Banks’ own insurance ‘unlikely’ at present Banks’ hurdles to offering their own general insurance products in-house are too high to make it a viable proposition at the moment, industry players say.

T

he prospect of bank-underwritten house, contents and vehicle insurance products in the New Zealand market has been under scrutiny since IAG applied for Commerce Commission clearance to buy Lumley.

It said the fact the deal would give it more than 50% of the overall insurance market and 66% of home and contents and vehicle insurance was not a problem for competition in the sector, because there were no significant barriers to entry in the New Zealand market and banks were expected to be able to easily expand their own insurance underwriting.

It said retailers such as The Warehouse were already delving into more financial products and it would be a small step for them to get into personal lines insurance.

Customers liked the convenience of being able to deal with insurance and banking at once, it said, which would drive banks to consider expanding their insurance offerings and ensure they were a competitive force.

“There are no regulatory obstacles to prevent banks vertically integrating in this way.

Insurance services are a natural complement to the financial services currently provided by banks,” it said.

It pointed to Australia, where Westpac, Commonwealth Bank of Australia (CBA) and Woolworths already offer products they underwrite.

But Suncorp, in its submission to the Commerce Commission on the deal, disagreed: “Banks have not entered the domestic lines market to date in an underwriting capacity, and for similar reasons as other potential entrants, are unlikely to do so. The New Zealand market is much smaller than the Australia market and would not justify the significant investment in claims handling, systems, pricing, risk data, and re-insurance.”

It said the underwriting products offered by Australian banks had a very small share of the market on the other side of the Tasman and did not act as a competitive constraint there.

Only CBA and Westpac offer such products.

“It seems even less likely that if ANZ and NAB

CUSTOMERS LIKED THE CONVENIENCE OF BEING ABLE TO DEAL WITH INSURANCE AND BANKING AT ONCE, WHICH WOULD DRIVE BANKS TO CONSIDER EXPANDING THEIR INSURANCE OFFERINGS AND ENSURE THEY WERE A COMPETITIVE FORCE. do not underwrite in Australia they would start to do so in New Zealand, where there is a much smaller market, a higher catastrophe risk profile and specific reinsurance issues to overcome,” Suncorp said.

A Kiwibank spokesman said it was not a straightforward proposition.

Kiwibank provides life and home loan insurance underwritten by its sister company, Kiwi Insurance.

The spokesman said: “It is fair to assume all the major banks consider insuring retail

house, contents and motor vehicle themselves via associated insurance entities from within the parent group from time to time. At this point no-one has done that. Even in Australia the involvement is minimal. There are various reasons for that including the scale potentially required, the expertise and infrastructure required and the volatility of earnings.”

BNZ said it too had no plans at present to offer its own general insurance products at this stage. ASB and Westpac did not respond to requests for comment. www.covernotemag.co.nz

21

FEATURE: DECISION DUE

Brokers concerned at lack of competition if merger goes ahead.

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March/April 2014

A Commerce Commission decision is due at the end of March on IAG’s application to buy out Lumley General Insurance.

I

AG owns NZI, AMI and State Insurance. If the deal goes ahead, it would give IAG 50.5% of the overall New Zealand insurance market, and 66% of the home, contents and vehicle insurance market.

It would also have 40% of the intermediated insurance market.

The Commerce Commission is concerned about whether the deal would limit customers’ ability to move to another insurer if IAG were to put its prices up.

IBANZ chief executive Gary Young said there would be substantially less competition if the merger were to go ahead. He said it would leave New Zealand with just two players – IAG and Vero – controlling more than 75% of the insurance market.

He said the level of response from brokers to the proposal had been unprecedented.

IAG said it would still continue to face strong competition from established competitors and retail banks and it would be relatively straightforward for another provider to expand into new insurance markets.

It said Westpac and the Commonwealth Bank of Australia had moved to underwrite their own personal insurance products in Australia and it expected that could also happen in New Zealand over time.

NZI executive general manager Karl Armstrong said the merger would result in the combined business having greater capability to meet the needs of its customers, and providing them with broader product and service offerings. “We will be developing a detailed integration plan and our integration principles will be focused on maintaining business momentum, minimising customer impact and ensuring we leverage the best of both businesses.”

Insurers would continue to face competition from banks, IAG said, because customers found it convenient to deal with their banking and insurance needs in one transaction.

But Young said there did not seem to be appetite among the banks to get into the market by underwriting their own products and other insurers were not likely to want to significantly increase their presence. “There is little incentive for new players to enter the market, where the risk of largescale natural disaster losses is high and the financial returns are very limited due to a small premium pool.”

It was not just an issue of the number of insurers in the market, he said, but about what they could or would do in providing insurance cover to consumers.

Only IAG,Vero and Lumley have offerings in the intermediated market across most insurance lines. “All others have restricted offerings either in

the types of insurance they offer, the type of client they service or the geographic regions where they will provide capacity.”

The lack of competition would be most keenly felt in the personal lines and motor sectors of the insurance market, he said, and outside Auckland, where brokers already found it harder to obtain alternatives. Zurich does not offer earthquake cover south of Waikato.

Young said the potential for a significant reduction in available capacity was a concern for brokers.

IF THE DEAL GOES AHEAD, IT WOULD GIVE AIG 50.5% OF THE OVERALL NEW ZEALAND INSURANCE MARKET, AND 66% OF THE HOME, CONTENTS AND VEHICLE INSURANCE MARKET. IT WOULD ALSO HAVE 40% OF THE INTERMEDIATED INSURANCE MARKET. “There is already difficulty, for example, in obtaining full cover for large risks in earthquake areas, which is much of the country south of Auckland.

Hard to place risks require capacity from most of the existing market and the loss of Lumley will considerably worsen this situation. Additionally the lack of capacity in the market will mean obtaining any alternative quotation to a client’s current arrangement may well become impossible.”

The merger would leave a number of small, niche players in the market but there would be no significant competition for the big insurers. Young said: “Our members believe that this proposed merger will detrimentally affect the ability of New Zealanders to obtain competitive, full insurance cover.” www.covernotemag.co.nz

23

PROFILE: MEGAN WALKER

Making her mark in the Bay Bay Insurance Brokers adviser Megan Walker started with the company as a receptionist before working her way up the ranks.

B

eing able to build a good relationship with clients and deliver solutions that exceed their expectations are the things Megan Walker loves most about her job at Bay Insurance Brokers.

The Bay of Plenty insurance adviser has been awarded the 2013 Kerry Wilson Trust Scholarship to study for a Level Four National Certificate in Financial Services at IBANZ College.

She has been with the company since 2008, after a brief stint in hospitality when ill-health forced her to leave school in Year 11. “When I first started with Bay it was my ‘big break’ after leaving school with a solid but basic education. While I was just a receptionist, I quickly learned how the business worked and used every opportunity possible to take on more responsibility,” she said.

She said that “ground-up” approach had set her up well with a thorough knowledge of the workings of the industry.

She has been working as an adviser for the past three-and-a-half years and also provides support to one of the company’s directors through her the other side of her role, as a personal assistant.

Walker mostly deals with private clients and local small businesses. She

to detail and knowledge. She was responsible for the office’s move from Multipac to the new eGlobal database, which meant project managing the testing and training stages of the shift.

Walker said she was extremely ambitious. It was not always easy being young and a woman in the insurance industry, she said. The certificate would help her get her foot more firmly through the door. “The decision to gain the Level Four National Certificate in Financial Services qualification will demonstrate my commitment to an ongoing education both personally and professionally.”

The certificate would also provide a good grounding for her future in the industry, she said. Her plan is to stick with insurance advice for the

I QUICKLY LEARNED HOW THE BUSINESS WORKED AND USED EVERY OPPORTUNITY POSSIBLE TO TAKE ON MORE RESPONSIBILITY… focuses on fire and general insurance. “No two days are the same and we get to build a good rapport with clients. It’s challenging but good. I like getting a good result for a client and having them recognise that. Any time you can save them money or have a claim paid, that’s good,” she said.

She said other people in the industry had acknowledged her attention

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March/April 2014

foreseeable future. “It’s where you need to start, with a lot of focus on the administration.”

She was grateful to have chosen for the scholarship. “The KWT Scholarship will allow me to take this next step in my career, which financially I could not achieve on my own.”

Photo: thinkstockphotos.com

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FEATURE: D&O DECISION

PREMIUMS MAY RISE AFTER D&O DECISION Ringfencing the solution to Supreme Court’s defence costs ruling.

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March/April 2014

N

ew Zealand business will have to apply fresh scrutiny to their directors and officers (D&O) insurance as a result of a controversial Supreme Court decision on the way the policies operate.

The decision was the final chapter in a long-running dispute over Bridgecorp and Feltex Carpets directors’ right to reimbursement for their defence costs from their D&O policies, which offered combined cover for liability and defence costs.

Supreme Court judges ruled in a majority decision that directors could not have their insurance paid out in advance to cover their legal costs when that cover might need to be used to pay a claim.

It means that investors in failed finance companies with claims against their directors can now claim the full amount of any available insurance money. None needs to be left aside to cover lawyers’ bills.

Bridgecorp had a D&O policy with a $20 million limit and a statutory liability policy with a $2 million limit, intended for legal fees.

By 2011, all but one of the directors had exhausted their entitlements under the statutory limit policy and estimated they would incur another $3 million in costs to defend their trial. They tried to claim those costs from their D&O policies.

The directors also wanted to use the D&O insurance money to defend Bridgecorp’s civil claim against them. There was a clear risk that there would be no insurance money remaining under the policy to go to Bridgecorp’s investors if the claim against the directors succeeded.

Bridgecorp said it had a claim to the insurance money ahead of the directors but the directors disagreed and the case went to the High Court.

The High Court ruled that because all of the $20 million of insurance money could become payable to Bridgecorp, it had a charge over that entire sum, and the directors could not access it to pay their defence costs.

AIG took the case to the Court of Appeal because it said it believed the decision could prevent directors and officers adequately defending themselves against the financial impact of any claims brought against them. It was successful.

But the case was then taken to the Supreme Court, where the appeal was overturned.

The Supreme Court left open whether insurance must also pay defence costs in addition to the claim cover, even if it meant the insurer was liable for more than the indemnity limit under the policy.

Overseas commentators have called the decision surprising.

AIG chief executive Cris Knell said the company had a

SUPREME COURT JUDGES RULED IN A MAJORITY DECISION THAT DIRECTORS COULD NOT HAVE THEIR INSURANCE PAID OUT IN ADVANCE TO COVER THEIR LEGAL COSTS WHEN THAT COVER MIGHT NEED TO BE USED TO PAY A CLAIM. contingency plan to deal with a decision either way from the Supreme Court.

Many insurance companies have already moved to separate policies for defence costs and third-party liability, or towards separate indemnities within a single policy.

Knell said AIG was now ring-fencing legal costs from thirdparty damages. “That means that directors could be defended if a claim is made but the liability limit is still intact if the claim went against them.”

Those with cover will be moved on to the new structure as policies come up for renewal. All will be covered by the new policies by the end of June.

Knell said the company had taken the case right to the Supreme Court because it wanted clarity.

“We fought this to get certainty because there was doubt as to how policies would respond. There have been lots of actions against directors since the global financial crisis. This puts a stake in the ground so everyone knows where it stands.”

But he said if the industry was moving towards two separate policy limits, eventually it would feed through to higher premiums.

“It’s probably not an ideal solution but it’s the solution for the landscape we find ourselves in.”

Continues overleaf…

www.covernotemag.co.nz

27

FEATURE: D&O DECISION

…Continued

He said if companies did not opt for separation of the policy limits, when it looked like a claim might go over the limit of liability, insurers would have to decide at the beginning of the case whether to defend their insureds.

But QBE, the insurer for Bridgecorp, said it was not a foregone conclusion that premiums would increase, unless more cover was needed.

“What the decision does is bring the focus of brokers and their clients to think about the limits of cover purchased overall and then in respect of defence costs and the third-party liability risk. In many ways this is a good discussion to have, as it promotes thinking on the various risks that a company is exposed to, and the result will be a more considered calculation of the exposure.”

A spokeswoman said some policies had already been amended to have the limits split but QBE expected that brokers would use renewal time as an opportunity to ensure appropriate limits were in place and split any that were not already separated into defence costs and third-party liability.

Chapman Tripp, which acted for AIG, said all companies would need to examine their cover as a result of the court case.

“The decision overturns well-established industry practice, deprives the insureds of a critical benefit for which they contracted and makes New Zealand something of an outlier in the international liability market.”

It said it was unreasonable to expect directors to fund their defence costs out of their own pockets. “That’s why they have the insurance in the first place.”

The firm said it was not just D&O cover that would be affected. It would alter the approach to all professional indemnity policies, prospectus liability, employers’ liability, statutory liability and general or public liability, and could extend to prevent advancement of defence costs in any prosecutions that could result in a reparations award for the victim, such as in cases of a workplace accident.

Directors who had low insurance limits or tiered arrangements were most at risk, it said.“Businesses should consult their brokers or insurance company and seek expert advice to ensure that their liability insurance will still provide the protection required of it.”

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March/April 2014

EVERY NEW ZEALANDER SHOULD BE CONCERNED ABOUT ANYTHING THAT MADE THE SYSTEM LESS EFFECTIVE, BECAUSE WITHOUT GOOD COVER IT WOULD BE HARD TO ATTRACT THE WORLD’S BEST AND BRIGHTEST. QBE agreed the implications could be wide-ranging. “We have looked at other policies in our product range where there may be no separation of defence costs and have provided endorsements to split the policy limit and safely ringfence an agreed portion for defence costs only. We have also now extended our bank of ‘defence costs’ endorsements to include statutory liability, employers’ liability, defamation and marine liability policies. Endorsements are also being finalised for all QBE’s liability package wordings. “ Knell said New Zealand companies generally did not have enough D&O cover and more needed to be done to promote it. “Small companies think of D&O as a big company expense.”

He said if New Zealand was to attract the most innovative and entrepreneurial directors and officers, they needed adequate cover so that they could go about their business without fear of spurious claims being made against them by “serial litigants”.

D&O insurance was invaluable in that it gave directors assurance that they would have the ability to defend themselves should a case be brought, he said.

Every New Zealander should be concerned about anything that made the system less effective, he said, because without good cover it would be hard to attract the world’s best and brightest.

“It has a knock-on effect. It’s in everyone’s best interests to find a solution… When directors are operating properly and taking appropriate risks, it benefits everyone.”

Birdcage Hotel.

It took a lot of planning to move Auckland’s the old pub, ng QBE Insurance was instrumental in savi imetre to cent by insuring the slow journey centimetre oria Park Vict new make way for the construction of the the new, for way Tunnel. It was a case of the old making d old gran e tonn and on the tunnel’s completion the 740 her to es metr lady made her return journey back 44 previous place of residence, intact.

a QBE’s involvement was important in saving of ns piece of architectural heritage for generatio er bett a Aucklanders to enjoy, as well as enabling transport system for the city.

Job done.

It’s called killing two birds with one stone.

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ASK AN EXPERT

Annual Marine Cargo for Freight Forwarding Company QUESTION… Our client is a freight forwarder.

• They arrange shipping for vehicles from various destinations to NZ. • At this stage we are arranging one-off marine cargo policies for each vehicle (minimum premium often applies).

• The client is about to expand and the number of shipments per month will increase.

• At the moment we arrange the policy in the name: Our Client - The Vehicle Owner.

• We are looking to arrange an annual open marine cargo policy to cover all shipments that meet certain criteria.

• We would look to have the policy in the name of our client however we would stipulate to an endorsement which clearly defines the insured as the owner of the vehicle.

• We envisage our client paying a deposit premium at the outset and at renewal (or perhaps quarterly) our client will declare sendings and pay an adjustment premium (if necessary).

• I have been able to obtain a cover meeting the above specifications offshore however it is not quite right (for unrelated reasons).

• All of the NZ-based insurers I have approached stumble at the insurable interest hurdle.

• I have had a look at the relevant legislation - firstly the Insurance Law Reform Act 1985, Section 7 - Need for insurable interest - which in turn pointed me to the Marine Act 1908, Section 5 - Avoidance of wagering or gaming contracts and Section 6 - Insurable interest defined. Such old fashioned terminology had me Googling the definition of wagering and gaming in the context of insurance. I discovered that the essence of an insurable interest in marine insurance is that property in which the insured has some legal or equitable interest is at risk from marine perils.

If the insured has no such interest in the subject matter, an no reasonable expectation of acquiring one, any insurance effected on the subject matter will be void as gaming or wagering.

• Accordingly I understand the objections of the insurers in arranging the insurance in the name of the freight forwarder however if we clearly define the insured as the owner of the property being shipped will that satisfy the requirement that the insurance is in fact in the name of the party with the insurable interest?

REPLY… Pauline Barratt I don’t understand why the issue you have described is causing a problem. It sounds as though your client wants to do exactly what it is already doing, but on an annual rather than a one-off basis. There is nothing unusual about the proposal. It is common for freight forwarders to insure customer goods under an open policy. As you have said, “the insured” needs to be described as the freight forwarder plus the customer and others interested in the insured cargo, where the freight forwarder has instructions to insure (or words to that effect). Open policies like this often also contain a clause which authorises the forwarder to issue the insurer’s certificates of insurance to the customer. In the event of a claim the insurer then deals with the party who has the insurable interest in the property at the time of the loss. Am I missing something?

REPLY… Andrew Scrivens I would strongly advised against the open policy scenario. The contract of cargo insurance should always be between the cargo owner and the insurer. Freight forwarders can have a facility whereby they offer insurance to their customers but the contract of insurance (i.e. cert) should always be in the cargo owner’s name.The reason for this is if the freight forwarder is arranging cargo insurance on behalf of customer’s under an open policy the insurer has no evidence that the full terms and conditions of the open policy are passed onto the cargo owner which can be an issue come claim time. At least where a facility is providing that issue a cert even time (with full policy wording) there is a procedure in place to ensure full disclosure of terms and conditions is provided to the client.

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March/April 2014

REPLY… Darren Pattle I agree with Andrew’s comments. To add to this, there are also Reserve Bank requirements around the discloser of an insurer’s financial strength rating that need to be passed on to the cargo owner at the time of arranging insurance, hence the need for a facility type arrangement, rather than just a open cargo policy.

REPLY… Pauline Barratt Interesting comments Andrew and Darren but sorry, I’m still struggling to see the issue. There is at least one insurer in the market who is doing this already (I act for a forwarder who uses an open policy to insure customer goods) - the forwarder simply issues a certificate in the cargo owner’s name in the same way as they would if it were a declaration policy, and the identity / financial rating of the insurer is disclosed when the cost of the insurance is quoted to the client.

REPLY… Neil Beadle This arrangement goes beyond what is traditionally understood as an open policy.

Ordinarily the insured’s own goods are covered for the transit. By this arrangement, the freight forwarder is effectively acting as the insurer’s underwriting agent to issue policies on its behalf to the freight forwarder’s customer to insure that customer’s goods.

This is not dissimilar to a travel agent selling a holiday and arranging the insurance for the customer as an incidental service.

It would be appropriate for the facility to be on underwriting agency terms which specify the scope of the agency, although that will not necessarily protect the insurer from acts of the agent carried out under its ostensible authority – so there is risk in the arrangement.

We have advised on similar arrangements, and will be happy to help underwriters considering this option.

Constructive total loss QUESTION… Insured’s truck and trailer are damaged in an accident. The trailer was insured for $80,000 and can be safely repaired. The cost to repair the trailer was quoted at $74,000. The insurer obtained two pre-accident valuations (PAV), the average being $72,000. The insurer authorised the repairs, then later realised that the repair costs ($74,000) did not include GST. The repairer agreed to reduce the repair cost by $2000 to match the PAV. The insurer declined this offer, saying it was now a constructive total loss.

The repairer had already started work, as they had been authorised to. The broker asked if the insured could cash settle on the value of the repairs and retain the trailer.

The insurer agreed to a cash settlement however they advised that they would deduct $9000, the value of the trailer. - The repairer is prepared to further reduce the repair cost by something like another $3000.

But another PAV obtained by the insured has brought the PAV up to $73,000. The ratio of repair costs to PAV is now 94%. The trailer can safely be repaired at less than the PAV - the wording states: “The insurer may at its option, repair, reinstate or replace the insured vehicle or may pay the amount of the loss or damage. The payment will not exceed the reasonable market value.”

The insurer is sticking to its guns and said it would only cash settle on the full PAV less the wreck value.

The insurer does not want to proceed down the insurer-managed repair path because of the nature of the damage. They want to absolve themselves of responsibility if anything goes wrong down the track. The insured is happy to take their chances and is prepared to sign a discharge to that effect. I think the insurer should cash settle on the value of the repairs and let the client keep the trailer and go their own way.

REPLY… Crossley Gates, DLA Phillips Fox The insurer has the option under the policy to repair, replace or pay in cash the cost of the repairs. It appears to have exercised that option and elected to go ahead with the repairs.

Once it makes this election, the law says it cannot resile from it.

Therefore, the legal principle of election means the insured is probably committed to the original repairs and cannot go back on this.

This principle of election is being applied in many of the earthquake disputes over house repair/replacement/cash settlement options.

REPLY… Dion Herdson, NZI As we all know the insurer has the final say on how they settle a claim, and so I can only offer an opinion on the decision.

The first point is that the economics of a claim do not in any way dictate how an insurer must settle a claim, so long as the customer is fully indemnified at the end.

There is nothing legally stopping an insurer writing a vehicle off for any type of repair if they chose.

All I can do is offer an opinion as to why an insurer would take this route to settle, and I must confess I can understand their decision and support it.

The damage is obviously substantial, and while the client may be prepared to sign a waiver, the insurer has a moral obligation to be mindful of public safety when deciding on how to settle these major repairs. Generally speaking, repairs of this nature will never see the trailer 100% restored.

In the event that the trailer is repaired, and later involved in a serious injury (or fatality) of a third party and there is any link to a mechanical fault, not only would it be a tragedy but at corporate level the potential brand damage to the insurer from media reports is just not worth the risk.

The reality is that the waiver provides little or no protection for the insurer, and, costs aside, they appear to have made the right decision overall, albeit not the customer’s preferred one.

Do you have a question for our experts?

If so, visit iNavigator, www.inavigator.co.nz, or the IBANZ website, www.ibanz.co.nz - and let us know.

www.covernotemag.co.nz

31

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TO PHONE TECHNOLOGY Businesses around the world are moving to IP telephony.

WHAT IS IP TELEPHONY? In its broadest sense, the terms encompasses phone communication, mobile communication, faxing, and cloud-based business PBX phone systems.

PBX systems offer desktop sharing and the ability to instantly determine the availability of others within your company. They also mean reduced travel costs thanks to online conferencing, easy-to-use video calls, and other collaboration tools.

ADVANTAGES OF IP TELEPHONY IP telephony is something every business will consider at some time in the future.

Doing so sooner is better, so that you can benefit immediately from the huge cost savings it offers.

You will also notice dramatic increases in functionality and therefore productivity and profitability.

IP telephony offers endless scalability, flexibility and portability, adding new office locations and creating a multi-location system.

This means that adding a phone for an employee working from home is no more difficult to adding one in the office.

It combines voice, data, and video into a single, easy-to-manage service, an IP-based unified communications system. It can be done anywhere there is a high-speed internet connection.

In Christchurch, after the earthquakes, those businesses that were using IP telephony were able to quickly set up elsewhere with full telecommunications, even if they were not allowed back into their offices to get anything.

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March/April 2014

New handsets and an internet connection were all they needed to be back in business receiving an making calls on their normal numbers.

IP TELEPHONY VOICE RELIABILITY IP telephony technology has matured to the point where the call quality and reliability is comparable to a traditional phone service.

The service is delivered over SIP trunks (SIP) Session Initiation Protocol and this method has now been established as the industry standard for delivering phone lines via a data connection.

SIP trunks are high-quality phone lines comparable in quality to business grade ISDN lines.

Typically, a SIP trunk provider delivers both the data link as well as the voice over that data link to the business premises; therefore they control the quality of service end to end.

The voice stays within the provider’s network. Even though SIP trunks use the same internet protocol as other VOIP calls, SIP trunks differ from VOIP because they don’t typically go over the internet.

WHY CHOOSE IP TELEPHONY NOW? IP telephony can be delivered over an ADSL2,VDSL, UFB and HSNS BB connection.

ADSL2 can only take up to six phone lines but all other connection types are suitable for medium to large businesses.

We all know the Government has seen the light and is rolling out of ultra-fast broadband (UFB) so businesses can utilise services like highdefinition video conferencing and world-class telecommunications.

But you do not need to wait for fibre to take advantage of IP telephony.

There are New Zealand-owned companies leading the way in the delivery of IP telephony services, not only breaking the old Telco mould in regards to the types of services they offer but also in other areas.

There is no contractual period to be locked into. If you wish to move your services to another provider before the contract period is up, there is no penalty charged.

A New Zealand company recently undertook an assessment on two brokerages to see how much these two companies could save.

Both of the companies are going to save over 70% by moving over to IP telephony, within the normal range of cost saving.

One company will save more than $9400 per year and the other will end up $34,380 per year better off.

There are set up that vary depending on requirements but are minimal compared to the savings over time.

You need: 1. A fast broadband connection and router to suit if upgrading to VDSL, UFB or Dedicated HSNS circuit 2. IP phones. Good quality handsets start from $150 3. Possible upgrade or replacement of a PBX if you currently use one or a switch to using a cloud PBX which is provided free by at least one provider.

Assessments of what the savings and set up costs will be for your business to switch over to IP telephony are normally free.

These are done by local technicians in your area, all you have to do is call.

www.covernotemag.co.nz

33

COVER STORY

Brokers prove worth Advisers’ workloads are increasing as they help clients navigate big changes to residential insurance cover.

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March/April 2014

New Zealand homeowners who use a broker to organise their residential insurance cover are much less likely to have let their new sum insured values go unquestioned.

A

lmost all of the country’s insurance companies have switched from offering their residential customers full replacement policies – where the insurer pays out the full cost of rebuilding a property in the event of a total loss, whatever that amount might be – to sum insured policies, where only a set amount, agreed at each renewal, is paid.

The change was made as the policies came up for renewal and most New Zealand homeowners will find their policies have changed to the new format by this July.

Most insurance companies calculated a basic sum insured value for properties, based on a default sum. This was designed to give customers a buffer until they could decide what their individual cover needed to be.

Insurers’ defaults are based on the size of the house and do not take into account any special features that would need to be covered. Things such as expensive retaining walls, swimming pools or garden sheds do not enter the equation.

The default settings range from about $2000 a square metre to $2300 – meaning a 150 square metre house would have a difference in value of almost $50,000 depending on which insurer it was covered by.

For homeowners, getting their sum insured value right is critical if they are to be adequately covered in the event of a claim. Without a high enough sum, many could find that they are unable to rebuild a home that is up to the standard of the one lost.

But up to about 90% of homeowners have accepted the default values placed on their homes by their insurance companies when their house insurance policies have come up for renewal, without questioning whether it was the right figure for them.

Westpac said 88% of customers took the default cover of $2000 per square metre. ANZ and Kiwibank said about 90% had. At ASB, the figure was slightly lower, at 85%, and at BNZ it was more than 90%.

Quantity surveying company Construction Cost Consultants estimates more than 90% of homeowners could be under-insured. The company says most homeowners will be at least 25% short if they need to fully rebuild.

Already there have been reports of people who have accepted default values and then found they were not enough – such as Dunedin school principal David Grant, who found that the $368,000 default value he had agreed to would not have been enough to rebuild his home after it was gutted by fire, had the garage not survived intact.

But customers whose insurance is organised by a broker are more likely to have paid some attention to the value assigned to their properties, either by using an online calculator, or calling in a valuer or quantity surveyor.

Karl Armstrong, chief executive of NZI, said only 40% of his firm’s customers who dealt with a broker had left their sum insured untouched.

The number in the direct business was substantially higher.

“Some are in the position whether they know exactly what it would cost to build their homes because they’ve done it recently. Others are going to builders, others are getting valuations. Some are relying primarily on online calculations and some are just burying their heads in the sand.”

But the change in the insurance approach was an opportunity for brokers to add value for clients, he said.While most are not allowed to give direct advice on a value under the terms of their professional indemnity cover, they can direct people to those that can help, and point out where customers might be exposed.

He said the roughly $2000 per square metre default being used by Aon and Crombie Lockwood on NZI policies was not a bad start but it was never intended to be the complete solution. “What most brokers have said is that they want to make sure that at the minimum clients have a figure that’s at least reasonable.”

But he said a default value could not be a substitute for a proper analysis of a property. “My own home would be double that figure, it depends on the slope of the land and the additional features.”

Armstrong tells brokers that they should approach the change as a multi-year operation. The first year would be when customers got off on the right foot and the second would be a chance to hone the value figure a bit more.

But while they have been helping ensure their clients aren’t left vulnerable, brokers say the change in their workloads over the past year has been noticeable.

90%

ABOUT OF HOMEOWNERS HAVE ACCEPTED THE DEFAULT VALUES PLACED ON THEIR HOMES BY THEIR INSURANCE COMPANIES WHEN THEIR HOUSE INSURANCE POLICIES HAVE COME UP FOR RENEWAL, WITHOUT QUESTIONING WHETHER IT WAS THE RIGHT FIGURE FOR THEM. They have had to help their clients come to grips with what the changes mean, what their policies need to cover, the potential hidden costs of rebuilding after a disaster and how their premiums may be affected – all while sticking clearly to the boundaries of their advice limitations.

Chris Ingerson, of Ingerson Insurance Brokers (IIB), said his firm decided early on that it was important to be proactive about the change and guide clients through it. A deal was done with a local valuer who offered a good rate to IIB clients who wanted a valuation to determine Continues overleaf…

www.covernotemag.co.nz

35

COVER STORY

…Continued

what sum insured would be appropriate.

Ingerson said the response from customers to the WE HAVE TO BE CAREFUL WHAT WE SAY valuation deal was very good, although there were some who still did not want to spend the money.

BECAUSE WE’RE NOT BUILDERS, WE CAN’T Customers were also given a lot of warning about the ADVISE SOMEONE ON WHAT THEIR HOUSE impending change, he said. “We also asked Vero to send a box of pamphlets and [clients are] all getting one two IS WORTH. WE’RE NOT QUALIFIED TO DO months before renewal with a message saying ‘if you need THAT – IT WOULD BE LIKE GOING TO A help, give us a call’.”

He said some customers had been confused about the BUILDER AND ASKING ABOUT INSURANCE. difference between what the property might be worth on the market and what it would cost to rebuild.

Often, he would hear from customers who had based their estimates on what a similar property down the road had sold for.

“The sale price is different,” Ingerson said. “That’s just what people would pay if they were going to purchase it. You need to know, what would it cost if it was destroyed and you had to rebuild?”

But it was never an exact science, he said.

The cost of rebuilding would vary across different events.

If a house was damaged by fire, a homeowner might have building firms competing for the work and offering competitive brokers’ time had gone in to helping clients understand the changes, quotes. But if there was an earthquake that damaged a lot of homes at particularly when they had houses on sections that were difficult to access once, the squeeze would go on construction and it could become a lot or unusual. He said many insurers’ default values seemed too low. more expensive to build.

But that meant each client required at least a 10 or 15-minute phone call when the time came to decide on a sum insured value. “We can’t give the value and even if they use a valuer, if it has a difficult foundation, you probably really need a quantity surveyor. Does anyone want to spend an extra $500 to find out the valuation? It’s a huge exercise going through the 12-month cycle.”

Nicholl expected that by July most renewals would have been processed and after that it would just be a matter of keeping on top of it and adjusting values for inflation. “Provided you’ve got the basics right.”

Mark O’Connor, of Bay Insurance, said his firm stayed well clear of telling customers what they should insure for. But they would talk through the options and give general guidance on how the value should “We’ve been getting lots of and lots of phone calls but we have to be be determined. “Generally we try and establish the nature of the home, careful what we say because we’re not builders, we can’t advise someone whether it’s a standard build on a flat site. If it’s standard, we might suggest on what their house is worth. We’re not qualified to do that – it would be they base the value on an online calculator’s recommendation, or maybe like going to a builder and asking about insurance.” be a bit conservative and go a bit higher.”

Tony Nicholl, of Auckland’s Primesure Brokers, agreed that a lot of He said the cost of that additional cover on top of the online estimate

BROKERS HAVE HAD TO NAVIGATE A FINE BALANCE, HELPING ENSURE THAT CUSTOMERS HAVE ENOUGH COVER, BUT THAT THEIR PREMIUMS REMAIN MANAGEABLE.

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March/April 2014

could be less than a valuation if the property was something that was fairly standard. “It’s only once you’re getting into things on the sides of hills or with lots of retaining that we’re encouraging them to get a valuation.”

A reasonable percentage of O’Connor’s clients had made changes to the default amounts decided on by the insurer.

“There has been a bit of extra work but not as bad as we had been led to believe. It’s been quite a positive experience, we’ve spent time sending additional information out and making them aware of the changes, and there’s been a little bit of an increase in calls from clients wanting to discuss it and get our thoughts.”

Brokers have had to navigate a fine balance, helping ensure that customers have enough cover, but that their premiums remain manageable.

One Whangarei Crombie Lockwood broker dealt with a property that would only have been insured for roughly half the insurer’s $660,000 default value if the premiums were kept the same as the year before.

Ingerson said some clients had seen big premium increases, particularly if theirs was a property that had added extras. “If it has all the bells and whistles, you have to insure accordingly. You can’t say it’s $1000 a square metre or $2000. Some don’t mind that but some say ‘my house is a bit more upmarket than that’.”

He said people who were worried about the cost of their house cover could look at taking a bigger excess to share some of the risk and reduce their premiums. “A $400 excess on a half-a-million-dollar asset is just a

drop in the bucket. But some don’t have a lot.The excess structure is a way to adjust the premium.”

Nicholl said there was a general acceptance that prices would go up and that the change to sum insured policies had to happen. “Without it, there’d be no insurance market left or prices would be so high that you couldn’t afford to insure.”

It might be cold comfort to clients facing a bigger bill, but IAG spokesman Craig Dowling said if people found their premiums went up under a sum insured policy, it meant they had likely been under-paying for their insurance to begin with.

“It’s not an easy conversation to have but if your premium goes up as a consequence of deciding that the amount needs to be raised to a level that you are comfortable with, higher than was behind your previous policy, you’re now getting what you pay for more accurately.”

Bad’s not going anywhere.

Neither are we.

NZ6028/1 03/14

www.covernotemag.co.nz

37

CASE STUDY

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March/April 2014

BROKER LIABLE FOR NOT ADVISING ABOUT A POLICY SUB-LIMIT Case is a warning to brokers about the standard of care required of them by law.

Crossley Gates, DLA Phillips Fox

A

2012 decision of the New South Wales Supreme Court is a warning to insurance brokers about sub-limits in a policy.

An insurance broker must advise the client about sub-limits, particularly ones that could have a significant impact on the business.

The insured owned buildings that constituted the Australian Defence Academy in the Australian Capital Territory.

The insurance broker appointed by the insured arranged property insurance with Suncorp for A$22 million ($23.8 million).

The policy had an unusually low sub-limit of A$200,000 for accidental damage. The court case does not make it clear why this is so, but it may have been because the standard Australian Industrial Special Risks Policy (the Australian equivalent of our MD Policy) is usually a named-perils policy.

The roof of the building collapsed in 2004 and was repaired.

In January 2005, it collapsed again, causing significant damage. The roof collapse was caused by inadequate design and construction of the roof trusses. The Suncorp policy excluded: Physical loss, destruction or damage occasioned by or happening through… (c) error or omission in design, plan or specification or failure of design… (f) faulty materials or faulty workmanship

But the policy covered loss consequential on the excluded damage.

Suncorp took the view that the cost of replacing the roof trusses and adjoining supports was excluded, but the claim for resultant damage to the roof was covered, albeit only up to the sub-limit of A$200,000.

Litigation ensued, and Suncorp’s position was ultimately accepted by the Supreme Court as correct in Strategic Property Holdings No 3 Pty Ltd v. Suncorp Metway Insurance Ltd [2009] ACTSC 8.

In this proceeding, the insured sought to recover damages from the insurance broker alleging the broker was in breach of its retainer and its duty of care in obtaining a policy with an inadequate sub-limit and failing to warn its client of that fact.

The parties did not dispute that the broker’s retainer contained an implied term that the broker would exercise all reasonable care and

diligence in following the client’s instructions and arranging insurance accordingly.

The Court said it was also an implied term of the retainer to advise the insured about the availability of different types of insurance, the nature of any exclusions and limitations and the material risks associated with the level of cover proposed by the broker having regard to the declared values of the property to be insured. The Court held the broker had a duty: …to gain an in-depth knowledge of the client’s business and its exposures, to draw to the client’s attention areas in which it might be exposed, and to identify the proposed sub-limits in a policy to a client, This is consistent with English case law.

THE ROOF OF THE BUILDING COLLAPSED IN 2004 AND WAS REPAIRED. IN JANUARY 2005, IT COLLAPSED AGAIN, CAUSING SIGNIFICANT DAMAGE. The Court was satisfied from expert evidence that the sub-limit was low and that the broker had not given it any real consideration. The expert evidence showed that higher sub-limits for accidental damage were available for a higher premium, so the risk was not uninsurable. Therefore, the broker was held liable for breach of its duty of care.

This is a sober reminder to insurance brokers of the standard of care the law requires of them when they are arranging insurance on behalf of their clients. Standard sub-limits should be considered in the light of the nature of the insured’s business and the value of the property at stake.You fail to do so at your peril. www.covernotemag.co.nz

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CASE SUMMARY: FSCL

Whether to blame one flood or a slow leak was the key issue to resolve an apartment owner’s complaint.

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March/April 2014

THE FLOOD Margaret and Peter are building managers in an apartment block. They live in one of the apartments and own several others, which are rented out. One of the rented apartments suffered water damage during the tenant’s temporary absence. When Peter noticed water outside the apartment door and accessed the apartment, he discovered the kitchen tap was leaking. Water had damaged the benchtop and cabinets and the tiled floor was wet. Peter immediately turned off the water and decided to replace the damaged tap, which he did within 24 hours. Peter then arranged for removal of excess water from the carpets and dried out the apartment with dehumidifiers.

THE CLAIM Margaret and Peter made a claim to the property’s insurance company, Make It Right, for the cost of replacing the tap and the benchtop and cabinet that had suffered water damage.

The insurance assessor’s report confirmed the damage to the benchtop and cabinet was consistent with water damage but suggested the damage was caused by a combination of the kitchen tap leaking over a period of time and the sudden flood when the tap failed. Because the faulty tap had been replaced, there was no way to establish why or how it had failed but there was no mould, mildew or rot to suggest there was ongoing gradual water damage. Make

THE DAMAGE WAS MORE CONSISTENT WITH WATER SPLASHING OR LEAKING AROUND THE TAP AND TRICKLING DOWN THE CABINET OVER TIME. It Right declined Margaret and Peter’s claim.

Margaret and Peter did not accept Make It Right’s decision, and pointed out that they had made a full inspection of the apartment only a month earlier when the previous tenant had left shortly before that. A week into a new tenancy, Peter had replaced a lightbulb in the rangehood and there was no sign of a leak then.

Peter managed to retrieve the old tap and gave it to the insurance assessor who arranged for a plumber to inspect it. The plumber’s report said tests showed that the cold water braided flexi hose within the cabinet had sprung a leak due to the way it had been installed - there was

nothing to suggest the tap itself was the cause of the water leak. The assessor submitted a second report to Make It Right. The report concluded that the leaking flexi hose could not have caused the damage to the benchtop, although water from the hose could have sprayed on to the base of the bench top. The benchtop damage was more consistent with normal wear and tear.The claim was again declined.

MAKE IT RIGHT’S POSITION Make It Right said that the actual damage claimed for was in conflict with the type of damage that would have been caused by the tap fitting failure that occurred. The damage was more consistent with water splashing or leaking around the tap and trickling down the cabinet over time. Gradual wear and tear was excluded under the terms of the policy and for this reason the claim was declined.

FSCL’S VIEW AND RESOLUTION This was a difficult complaint to assess. There was no dispute that the failure of the flexi hose would have flooded the cabinet. Water could have sprayed up under the bench top but it would have required considerable pressure for

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water to have penetrated to the top bench surface. However Margaret and Peter confirmed that water was spraying upwards and all over the kitchen bench. Because Peter had removed the original tap fitting it was impossible to confirm how the water was spraying. The damage to the bench top was in a specific area and we would have expected to see significant damage to the area of particle board directly beneath the affected area. However the damage to the cabinet was at floor level. Without the tap fitting in place, we could not determine how the damage was caused. Taking into account the age of the tap and bench top, approximately 10 years, it was simply not possible to conclude that the damage was caused by the failure of the braided flexi hose rather than the result of gradual wear and tear.

We approached Make It Right and explained the difficulty we faced in making a decision based on the available facts. We suggested that an equitable way to resolve matters would be for the cost of repairs to be split equally between the parties. Make It Right agreed to meet half the cost of the claim and Margaret and Peter agreed to pay the other half. The complaint was resolved.

Yeah right.

Making insurance w ork for you .

www.covernotemag.co.nz

41

CASE SUMMARY: ISO

RECORD-KEEPING PROVES JOB WAS

DONE

Complaint highlights the importance of keeping notes and copies of all communication with clients.

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March/April 2014

Technology can improve the way you communicate with clients.

This case study is a reminder of the importance of record keeping, both manual and electronic, for your business.

WHAT HAPPENED? In April 2011, the client (C) emailed her broker, notifying him that she was collecting a new leased vehicle (the vehicle) and arranged for insurance cover to be put in place (the policy). The application gave the broker’s address for the insurer to send notices for the policy.

A direct debit payment was put in place for the policy but, on many occasions, there were insufficient funds available and premium payments were in default.

The insurer notified C in writing when policy premiums were in arrears and warned that the policy would be cancelled if the premiums were not paid.

Each of the premium payments between January and August 2012 defaulted. C paid some manually through direct credit payments. However, the policy remained in arrears and the insurer cancelled the policy in September 2012, effective from July 2012.

C made further payment of policy premiums in October 2012, but the insurer was not able to apply it to the policy.

In December 2012, the insurer refunded the premium to C. C telephoned her broker and asked him to arrange to have the policy reinstated. The broker organised “hold” cover with the insurer for the vehicle over the Christmas period. But on December 27, 2012, the insurer emailed the broker indicating that it was withdrawing the “hold” cover and it required C to complete a new proposal and pay the full premium amount.

The broker forwarded the insurer’s email to C and asked her to complete an application form and provide the premium. As the broker could not access his email over the Christmas break, he sent C a series of text messages to check if she had completed the application and paid the premium. C confirmed by text that she had not and would consider it in the New Year. C confirmed by text to the broker that she understood she currently had no insurance in place.

On January 3, 2013, the vehicle was written-off in an accident.

C complained that the broker had failed to provide the insurer’s notices of premium arrears and cancellation to her, with the result that the policy was cancelled in 2012.

WAS THE BROKER RESPONSIBLE FOR FORWARDING THE INSURER’S NOTICES TO HIS CLIENT? The broker was a Registered Financial Adviser under the Financial Advisers Act 2008 (FAA). The FAA requires financial advisers to meet a set of statutory conduct obligations when they provide a

“financial adviser service”. However, as the arrangement for the provision of notices from the insurer to C did not fall within the definition of “financial adviser service” under the FAA, the FAA statutory obligations did not apply to the notice arrangement.

The case manager believed the notice arrangement constituted a service arising out of the provision by the broker of a “Financial Service” to C in terms of paragraph 3.1(a) of the ISO Scheme’s Terms of Reference. As the FAA statutory obligations did not apply, she considered whether any general statutory obligation applied in the circumstances.

The Consumer Guarantees Act 1993 (CGA) establishes a set of statutory obligations relating to the provision of services. In particular, section 28 of the CGA requires services supplied to consumers to be carried out with reasonable care. The case manager believed the broker owed C a duty under section 28 of the CGA to forward notices from the insurer to C with reasonable care.

...the broker did forward that mail to her, at the correct address. On that basis, the case manager believed the evidence showed the broker met the statutory standard required by section 28 of the CGA.

Continues overleaf…

www.covernotemag.co.nz

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CASE SUMMARY: ISO

…Continued

DID THE ADVISER MEET HIS DUTY OF CARE? The broker provided evidence that he had a system whereby on receipt of mail from the insurer, the mail was checked, scanned to C’s file, a record kept of the receipt and forwarding of it and then the mail was forwarded to C by either email or post. The broker’s manual mail record showed a number of notices from the insurer were forwarded to C between 2011-12 and the content of those notices. The broker’s file for C contained a copy of all the notices.

Even though C stated she did not receive the notices of unpaid premium from the insurer, the case manager believed the documentary evidence supported the conclusion that the broker did forward that mail to her, at the correct address. On that basis, the case manager believed the evidence showed the broker met the statutory standard required by section 28 of the CGA. C also indicated she considered that the broker should have contacted her again if she did not pay premiums and the cover lapsed. The case manager did not agree. She believed the statutory obligation under the CGA was for the broker to take “reasonable care” and that did not require him to take steps to ensure C made the payments owing.

Further, the evidence showed that C was aware of the fact that at least some of the direct debit payments for the policy had not been successful in 2012. Also, as demonstrated by her text messages, C was aware she no longer had cover for the vehicle and she deliberately decided not to put cover in place in January 2013.

Result Complaint not upheld WHAT CAN WE LEARN FROM THIS? In this case the broker’s records clearly demonstrated that he had a robust system in place for forwarding mail and his client records contained copies of all emails and texts to C. These records assisted the broker to prove that he had exercised reasonable care. Without these records it may have been more difficult for the adviser to demonstrate this.

This case demonstrates how important robust, documented processes and client records are to support your business and mitigate risk.

Documenting all contact with clients and storing these on the client’s file is good business practice and can assist in resolving complaints.

Enhanced Directors Liability Policy QBE’s new Directors Liability policy contains expanded definitions of both ‘Director’ and ‘Claim’ and includes many new automatic features:

Following the Supreme Court’s “Steigrad” decision, QBE has released its greatly enhanced Directors Liability Policy - complete with an accompanying Directors Liability Defence Costs wording.

QBE’s Professional Liability Product Manager, Lance Beard, explains: “We’re hitting the market with a product that’s highly competitive and flexible enough to cater for companies both large and small. We’ve been actively listening to our broker feedback and have incorporated most of the enhancements being asked of us.

The result is two companion wordings that truly put us ahead of the pack.”

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March/April 2014

• worldwide cover; • prospectus cover for directors (other than for IPOs); • emergency defence costs; • public relations expenses; • bail bonds; • extradition cover; • corporate manslaughter defence costs; • pollution (defence costs and damages); • fines and penalties (excluding USA).

Run-off cover for retiring directors is available (84 months) as an optional extension.

Directors Liability is also the first of QBE’s product lines to benefit from a new suite of documentation. All forms can now be completed online and simply printed for signature.

We are

insured.

Our business is insured

by ACE.

Insurance for businesses, families and individuals | acegroup.com/nz

What does it mean to be ACE insured?

My broker and I have access to local experts who truly understand my risks and go the extra mile. We work together with the people at ACE on everything from loss prevention advice to paying my claims. I can get on with growing my business, knowing I’m protected by ACE Group, one of the largest and strongest multiline Property and Casualty insurers in the world.

©2014 ACE Group. Coverages underwritten by one or more companies of the ACE Group. Not all coverages available in all jurisdictions. ACE®, ACE logo®, and ACE insured are trademarks of ACE Limited.

NEW PRODUCTS

QBE first to commercial market with ‘Zip™’ fast underwriting technology QBE is delighted to announce the birth of Zip™, the premier method to get quotes and write your new business.

Zip™ heralds a fundamental shift in the way brokers can conduct business with QBE. It provides direct access from eGlobal to QBE’s underwriting system, enabling you to quote, bind, document and invoice business from within your own eGlobal systems.

ZIP™ PROVIDES: • easy access - a familiar system with no additional log-ins; • low cost administration - only input data once; • contract certainty - by inputting risk data into eGlobal, and having that information pulled through in real-time into QBE’s back office, brokers and clients are assured of consistent information throughout the quotation, acceptance, documentation and billing process.

Why go through the drama of submissions, when you can save time and write the business end-to-end in less than 10 minutes?

HOW TO GET ZIP™ For brokers on eGlobal (v7.03), you are able to connect to Zip. To discuss your eligibility, speak to your local underwriter, or call Jason Thomas on 09 980 3476.

New Cargo Single Sendings Policy from QBE To sit alongside our two acclaimed annual cargo policies (Cargo Plus® and Cold Cargo®) QBE has developed two ‘single transit’ alternatives: • Single Transit General Cargo (STG 0114); • Single Transit Temperature Sensitive Cargo (STT 0114).

WRITTEN TO BE UNDERSTOOD Both wordings are written in a single policy form and are written to be understood. Their simple style avoids marine jargon and negates the need to cross-refer to traditional Institute Cargo Clauses. In short, QBE has ensured your clients get the cover they need, without the headache they don’t.

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March/April 2014

WHO NEEDS IT? Any clients who: • import or export only occasionally and have no need for an annual open cargo policy; • have unusual cargo or cargo that doesn’t fit within the description of ‘regular shipments’ in their annual open cargo policy; • have goods being shipped to or from destinations outside their normal trading patterns.

Available now through Zip and QBE’s Broker Xchange.

PROFILE: SAM MARETT

PROVING HIS WORTH

Professional

College

Adviser says completing qualification will provide another level of reassurance for clients.

G

etting properly qualified is the natural next career step for Sam Marett, of Christchurch’s Runacres and Associates.

He has worked in broker support for the firm for the past two-and-a-half years and is this year’s winner of the QBE scholarship for the IBANZ College Level Five Certificate in Financial Services.

He said the qualification was virtually a requirement in the industry and it made sense to get one that was NZQA-accredited. “It’s one of the big things that are required to get a good job, or you’ll get an offer on the proviso that you get the qualification. It proves to clients that you are qualified to carry out their insurance needs for them.”

Marett started his insurance career at NZI, processing claims. “I had a friend who was an insurance broker and one of his friends worked at NZI and said ‘would you like a job here?’”

It was a good way to get into the industry, he said, and a path that a lot of young people had started to follow. “You get a head start, you learn about the industry and it gets you noticed.

Then being in the industry, you hear about opportunities.”

He said he enjoyed the people in the insurance industry, who tended to be quite down-to-earth. “It’s different every day, with broking you get out and visit clients and there’s office time as well.

You’re always learning, endlessly.”

The region’s earthquakes had presented a lot of challenges that even experienced brokers had to get their heads around, Marett said. “Even senior brokers are finding out new things they never knew.”

In the essay that formed part of his application for the scholarship, Marett said direct insurance sales were a challenge for theindustry, especially as premiums rose as a result of the earthquakes.

“As a broker who only uses commercial insurers, we do not have access to the [direct] market and will generally find the domestic products we can provide are 20% higher in premium cost than direct insurers. We must therefore find alternative sales techniques around the products we provide to keep our clients satisfied and most importantly retain the business,” he wrote.

He suggested that could be done by reinforcing the superior products and services provided by a broker.

But despite the challenges, Marett said the need to work hard to

IT’S DIFFERENT EVERY DAY, WITH BROKING YOU GET OUT AND VISIT CLIENTS AND THERE’S OFFICE TIME AS WELL. YOU’RE ALWAYS LEARNING, ENDLESSLY. gain and keep new clients added another dimension to his role. “It’s exciting, it’s good to get results.”

Marett said he planned to have a long career in insurance. The level five qualification would reiterate to clients that he knew what he was doing, he said.

The scholarship would be a big help, not only for the kudos of being chosen, he said. Being able to do it under his own steam rather than having it paid for by an employer would offer more flexibility.

“The scholarship means it’s sorted. It will give me a headstart into gaining professional qualifications which are becoming so important in the insurance industry, which in turn will help progress my career.”

www.covernotemag.co.nz

47

Professional

PROFESSIONAL DEVELOPMENT: PROFESSIONAL IQ COLLEGE

College

New kid on the block

Professional

College

48

March/April 2014

Welcome to Professional IQ College

Professional

College

Professional IQ College | Brand Guidelines Brand applications | Clear space guide

IBANZ is excited to introduce you to Professional IQ College, & Positioning the innovative new brand for IBANZ College.Applications The logo and graphic elements have been designed to provide

O

ur new principal, Lesley Southwick, found herself at the centre of a lot of activity when she took on the position back in September 2013. Since then she’s been the energy behind the project, responsible for the successful launch of Professional IQ College.

We’ve been talking to Lesley about Professional IQ.

flexibility and ease of use. Here are some examples of the branding in various applications. These examples are intended as visuals only.

Professional

professionalIQ.co.nz

College

CoverNote:Why was it important for IBANZ College to rebrand?

Lesley: Whilst IBANZ College is delivering to the insurance broker sector, we needed a more robust, long-term plan to be more sustainable, so we could invest in courses the insurance sector was asking for. It became clear the College needed to move into wider service sectors.

The name IBANZ College was just too associated with brokers; we need to provide a wider range of courses to a wider audience across all financial sectors.

5

New Zealand Certifi cate in fi nacial services

Professional

College

Professional IQ College

Level 5, 280 Queen St, Auckland 1010, New Zealand PO Box 7053 Wellesley St, Auckland 1141, New Zealand Tel +64 9 306 1732 | info@professionaliq.co.nz

Your pathway to professional development

CoverNote:What is the vision for the new Professional IQ College?

Lesley: Easy! To be the leading provider of professional development and education to the insurance and financial services industries.

CoverNote:What are the core values of the new college?

Lesley: We’re talking quality all the way here. Quality courses designed and delivered by industry experts in workshops, webinar or online. We don’t believe you can cut corners on this, we’re here for our students and we’re here for the long haul.

We will be introducing in the next few weeks new presenters who have an incredible knowledge of the insurance sector and have agreed to deliver the technical workshops for us. This will help ensure you get the best most current knowledge available in the industry.

CoverNote: So what will change for students?

Lesley: A lot of changes have already happened. For brokers, we’ve been working on our three-tiered, structured programme, the only one in NZ. It gives tailored training to different roles, broker support, commercial broker and senior brokers. These new PIQ certificates will support you in the technical and product knowledge. It is designed by NZ brokers for NZ brokers.

We’ve also got a whole range of online courses planned in addition to our short courses and DVDs. Changes are coming in terms of qualifications. As everyone knows, the Level 4 and 5 National Certificates have been under review and we’re developing the new Level 4 and 5 qualifications, these will be available later in 2014.

We have a new, easy-to-navigate website, with member login and a personalised dashboard where you can develop and tailor your professional development plan.

CoverNote:When can we expect all this to happen?

Lesley: Implementation will happen over the next six weeks. So watch out for our new Professional IQ newsletter and training calendar coming to an inbox near you.

14

QUALITY COURSES DESIGNED AND DELIVERED BY INDUSTRY EXPERTS IN WORKSHOPS, WEBINAR OR ONLINE. WE DON’T BELIEVE YOU CAN CUT CORNERS ON THIS, WE’RE HERE FOR OUR STUDENTS AND WE’RE HERE FOR THE LONG HAUL.

CoverNote:What was the most daunting part of the job?

Lesley: Reputation. Mine and the college’s. IBANZ College has been delivering valuable training for around five years now. It’s become a recognised and respected provider of both national qualifications and CPD (continuing professional development) for members and non-members. We needed to make sure we build on that reputation to give even more choice in more quality courses.

Contact Lesley on: 09 3061731 or 0274599804 lesley@professionaliq.co.nz www.covernotemag.co.nz

49

Professional

PROFESSIONAL DEVELOPMENT: PROFESSIONAL IQ COLLEGE

College

New Zealand Insurance Broking Certificates

T Crash Management sponsors IBANZ College

C

rash Management supports the broker sector by providing a best practice accident management service that co-ordinates all logistics and maximises efficiency for brokers and clients when a MV accident happens.

The service launched in 2004, has grown considerably, and won the Insurance Industry Award 2009 for innovation of the year.

Crash Management has sponsored a 12-month package with IBANZ College valued at $4000 and provides a chance every month for any employee of an IBANZ member company to win an IBANZ College short-course or seminar of their choice.

Entry is simple - just click on the Wordpress blog icon on the home page at www.crashmanagement.co.nz, scroll down to the most recent post titled Insurance Brokers - this is for you, and add your question, comment, or suggestion.

Crash Management managing director Karen Knight says: “IBANZ College can deliver the knowledge, insights and tools to ensure your future success. So enter now - a winner with IBANZ College is a winner for life.”

LUCKY WINNERS so far this year are…

June - Paul Kang, Allied Financial Services July - Sam Whata, Marsh Dunedin August - Richelle Everson, Rothbury Wellington September - Roger McKinley, Seneca Brokers October - Celeste Gerber, Alan Jecks Insurance Brokers November - Ryan Calder, Mike Henry Insurance Brokers December - Laura Smith, Rothbury Tauranga February - Karen Lawrence, BWRS January - Mark Hurran, Meridian General Insurance Brokers Ltd One lucky winner will be drawn and announced on the first of every month over the next six months for the duration of the sponsorship. Take a step forward now and be in to win!

he New Zealand Insurance broking profession has been waiting for a NZ programme of study that enhances product knowledge no matter what your role in the broking industry is. Professional IQ College have specifically researched and developed 3 technical certificates for NZ brokers and NZ broker support staff.

The certificates are professional certificates for professional working in a brokerage. They have NZ policy and product specific knowledge.

While not recognised as a NZ or National certificate they have the product knowledge you have been asking for in a qualification.

There is very little compliance as the focus is on product knowledge.

The regulatory and legislative courses can be cross credited from the National certificates.

Delivery is via a blend of on line courses and workshops. Professional IQ College delivers all it’s programmes across the country either in workshops or via webinar.We can tailor the program to suit your needs and style of learning. Contact Lesley Southwick to discuss the best delivery option for your organisation. lesley@professionaliq.co.nz BROKER SUPPORT ROLE Whether you are new to the role or an experienced broker support administrator this certificate will recognise your knowledge and skills or provide you with the knowledge and skills to enhance your professionalism.

Gain technical knowledge and NZ policy know how to provide effective and professional support to brokers and clients. The focus is on NZ domestic and personal lines; private motor; rural; professional practice and regulation, legislation.

COMMERCIAL BROKER CERTIFICATE As a commercial broker in the NZ market you need a range of skills. This specialist certificate supports the broker who has been in the NZ broking industry for a couple of years at least. We can recognise your comprehensive skills and knowledge and enhance your product knowledge to be a credible NZ broker.

Gain knowledge in commercial risk; claims principles; material damage policy; liability insurance; commercial motor vehicle; business interruption; travel and marine cargo transit.

PROFESSIONAL IQ DIPLOMA IN INSURANCE BROKING For experienced brokers this diploma builds on your knowledge and skills at a high technical level so you can continue to perform at the top of your profession.

This industry recognised diploma covers: Risk management; professional practice; reinsurance and coinsurance; finance for nonfinancial managers; advance business interruption; Directors and officers liability; professional indemnity; contract works. www.professionaliq.co.nz | lesley@professionaliq.co.nz | 09 3061731

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March/April 2014

REPLACEMENT SPECIALISTS JB Hi-Fi Insurance Division is designed to replace consumer electronics. Our process has been built around years of experience in the retail and insurance industry. We’ve got a well experienced, professional team ready to help you with your insurance related queries.

WE CAN OFFER...

• Crazy low prices • Incredible service • Quotes back in quick time • Like for like products • Accurate invoices

OUR SERVICE TO YOU...

• Every query will be answered • Find replacement products • Call and discuss replacements • Collect excess

• Problem solving • Deliveries/Courier/Installations • Staff benefits

TAKING CARE OF WHAT’S IMPORTANT! WINNER 2013

For more information please contact the JB Hi-Fi Insurance Team Phone: 09 815 4630 Fax: 09 845 2316 Email: claims@jbhifi.co.nz Web: www.jbhifi.co.nz WINNER 2013

WINNER 2013

CONTACTS: IBANZ CORPORATE COMPANY LIST

COLLEGE BOARD 2013/2014

IBANZ BOARD 2013/ 2014

Richard Russell (Chair) Branch Director Crombie Lockwood NZ Ltd PO Box 34 Invercargill 9840 Tel: 03 218 8994 Fax: 03 218 8996 Mob: 027 258 8433 richard.russell@crombie. co.nz

Tony Butson Rothbury Group Limited PO Box 1120 Queenstown 9348 Mob: 021 332 605 tony@butson.co.nz

Triton Plaza North Shore City 0757 Tel: 09 477 0277 Fax: 09 478 0277 Mob: 021 707 025 nick.cressey@ibi.co.nz

Tony Bridgman (Vice President) Executive Director Marsh Ltd PO Box 2221 Auckland 1140 Tel: 09 928 3015 Fax: 09 309 9891 Mob: 021 873 399 tony.j.bridgman@marsh.com

Allan Daly Managing Director Avon Insurance Brokers PO Box 3923 Christchurch Mail Centre Christchurch 8140 Tel: 03 3710301 Fax: 03 3666589 Mob: 0275 358128 allan@avoninsurance.co.nz

David Crawford Chief Executive Officer Insurance Advisernet NZ Ltd PO Box 74557 Market Road Auckland 1051 Tel: 09 926 2062 Fax: 09 524 2226 Mob: 021 905 537 davidc@insuranceadvisernet. co.nz

Duane Duggan (President) Head of Insurance Legal Crombie Lockwood (NZ) Ltd PO Box 91747 Victoria Street West Auckland Tel: 09 3574805 Fax: 09 623 9901 Mob: 021 833 286 duane.duggan@crombielock wood.co.nz

Ruth Steele (Vice President) Brokerage Manager Seneca Group Ltd PO Box 305415 Triton Plaza Auckland 0757 Tel: 09 476 1670 Fax: 09 4761679 Mob: 021 590 698 ruth@senecagroup.co.nz Gary Young CEO IBANZ PO Box 7053 Wellesley Street Auckland 1141 DDI: 09 306 1734 Fax: 09 307 0960 Mob: 027 543 0650 gary@ibanz.co.nz

Nick Cressey (Immediate Past President) Director Insurance Brokers (International) Ltd PO Box 305019

WANT YOUR VERY OWN COPY OF

COVERNOTE? Each issue of CoverNote is packed with vital information, news, commentry and advise for the insurance industry from experts within the industry. To keep abreast with all the issues affecting New Zealand’s insurance broking industry just email robyn@ibanz.co.nz TO ADVERTISE...

Contact Robert Johnson on: e-Mail: robert@benefitz.co.nz Phone: 09-477 4702 Mobile: 0274-970-712 CoverNote is published quarterly

by IBANZ, the Insurance Brokers Association of New Zealand.

All correspondence should be addressed to: CoverNote, PO Box 33-1630 Takapuna, North Shore City, Auckland.

Next issue is due out: JUNE 2014 52

March/April 2014

Peter Lowe General Manager NZ Willis New Zealand Ltd PO Box 369 Auckland 1140

Tel: 09 356 9368 Fax: 03 358 3343 Mob: 021 909 148 lowepj@willis.com Stuart Speirs Director Abbott Group PO Box 3086 Christchurch 8011 Tel: 03 366 7536 Fax: 03 379 5395 Mob: 021 358341 Jason Smith Managing Director Property & Commercial Insurance Brokers PO Box 4 Feilding 4740 Tel: 06 323 8820 Fax: 06 323 8872 Mob: 027 293 8724 jase@pcinsurance.co.nz Ruth Steele (Vice President) Brokerage Manager Seneca Group Ltd PO Box 305415 Triton Plaza Auckland 0757 Tel: 09 476 1670 Fax: 09 4761679 Mob: 021 590 698 ruth@senecagroup.co.nz

IBANZ STAFF 2013/2014 Robyn Gosden Finance & Office Manager DDI: 09 306 1733 Mob: 027 275 2477 robyn@ibanz.co.nz Sophie Kowalewski Academic Co-Ordinator DDI: 09 306 1737 Fax: 09 307 0960 Email: sophie@ibanz.co.nz Karen Scard Membership & Secretarial Support DDI: 09 306 1738 Fax: 09 307 0960 karen@ibanz.co.nz

Lesley Southwick Principal IBANZ College DDI: 09 306 1735 Fax: 09 307 0960 Mob: 027 459 9804 Email: lesley@ibanz.co.nz Steve Wardley Technical Support DDI: 09 306 1736 Fax: 09 307 0960 Email: steve@ibanz.co.nz Gary Young CEO DDI: 09 306 1734 Fax: 09 307 0960 Mob: 027 543 0650 gary@ibanz.co.nz

IBANZ 2013/2014 Physical address: Level Five, 280 Queen Street, Auckland 1010 Mailing address: PO Box 7053, Wellesley Street, Auckland 1141 Toll free: 0800 306 173 Website: www.ibanz.co.nz

CONTACTS: IBANZ CORPORATE COMPANY LIST

IBANZ CORPORATE COMPANY LIST Abbott Group Adams Trimmer Insurance 1992 Ltd Adams Trimmer Nauman Insurance Ltd Addex Ltd Advice First Limited Affiliated Insurance Brokers Ltd AJIB Insurance Brokers Ltd Albany Insurance Services Ltd Allfinanz Risk Andrew Scragg & Associates AMP Services (NZ) Ltd Aon New Zealand Apex General Ltd API Insurance Ascot Insurance Brokers Ltd Atlas Insurance Brokers Ltd. Austinsure Ltd Avon Insurance Brokers Baileys Insurance Brokers Ltd Barley Insurances Limited Bay Insurance Brokers Ltd Benson Insurance Brokers Ltd Benton & Power Ltd Bill Boyd & Associates Ltd Boston Marks Group Ltd Bridges Insurance Services Limited Broker Direct Services Ltd BrokerWeb Risk Services (Auckland) Ltd BrokerWeb Risk Services (Bay of Plenty) Ltd BrokerWeb Risk Services (Hawkes Bay) Ltd BrokerWeb Risk Services (Manawatu) Ltd BrokerWeb Risk Services (Northland) Ltd BrokerWeb Risk Services (Southern) Ltd BrokerWeb Risk Services Limited Card Marketing International Ltd Cartwright General Insurance Limited CBA Insurances Limited Certus Insurance Brokers NZ Ltd Coastline Insurance Services Commercial & Rural Insurance Brokers Ltd Crombie Lockwood (NZ) Ltd Dawson Ins. Brokers (Whakatane) Ltd Dawson Insurance Brokers (Rotorua) Ltd Edward Ruys & Co Ltd Elders Insurance Limited Emerre & Hathaway Insurances Limited Executive Insurance Services Ltd Future Agency Co. NZ Ltd Gary Jamieson Insurance Brokers Ltd Glenn Stone Insurance Limited Graeme England Insurance Services Ltd Grayson & Associates Ltd Gregan & Company Ltd Harden & Hart Insurances Ltd Hawke's Bay Insurances Ltd Hazlett Rural Insurance Limited Hopkins Paton Ltd Hugh Vercoe and Associates Ltd Hurford Parker Insurance Brokers Ltd Hutchison Rodway Ltd I C Frith (NZ) Ltd i2i Insurance Brokers Ltd Ian K Everett Ltd ICIB Limited ILS Insurance Brokers Inbroke Ltd Ingerson Insurances Ltd Insite Insurance Insurance Advisernet NZ Ltd Insurance Brokers Alliance Ltd

Christchurch Whangarei Dargaville Auckland Wellington Wellington Lower Hutt Auckland Lower Hutt Auckland Auckland Auckland Auckland Manukau Whangarei Christchurch Auckland Christchurch Auckland Auckland Tauranga Christchurch Auckland Palmerston North Auckland Hamilton Christchurch Auckland Tauranga Napier Palmerston North Kerikeri Christchurch Auckland Wellington Ashburton Tauranga Auckland Thames Alexandra Auckland Whakatane Rotorua Hamilton Auckland Gisborne Auckland Auckland Thames Auckland Auckland Auckland Papakura Auckland Napier Christchurch Auckland Morrinsville Hastings Auckland Auckland Wellington Auckland Auckland Auckland Auckland Wellington Pukekohe Auckland Invercargill

Insurance Design Insurance People (Fire & General) Limited Iremonger Insurance Brokers Limited James Forster Insurance Brokers Ltd JLT Holdings (NZ) Limited JRI Ltd Ken McNee Family Trust Lifetime Insurance Brokers Ltd Lloyd East & Associates Insurance Brokers Lowe Schollum & Jones Ltd Luxor Insurance Brokers Ltd MA Risk Solutions NZ Limited Mainprice King Chartered Brokers Ltd Malcolm Flowers Insurances Ltd Marsh Ltd Matt Jensen Insurance Brokers Ltd McDonald Everest Insurance Brokers Ltd Mike Henry Insurance Brokers Limited Montage General Insurance Ltd Multisure Ltd Neal P Sadgrove & Associates Ltd Nelson Bays Insurance Brokers Ltd (NBIB) Neville Newcomb Insurance Brokers Ltd Nexus Insurance Brokers Ltd North Harbour Ins Services (1985) Ltd Northco Insurance Brokers Ltd Northcrest Insurance Brokers Ltd Oamaru Insurance Brokers O'Connor Warren Insurance Brokers OFS Insurance Brokers Ltd Omni Fire & General Ltd Paramount Insurance Agencies Ltd Paterson & Co NZ Ltd Penberthy Insurance Ltd Peter C Cranshaw Insurance Broker Ltd PIC Insurance Brokers Ltd Pinnacle Insurance Brokerage Ltd Presland Tocker Insurance Services Primesure Brokers Ltd Property and Commercial Insurance Brokers Protekt Insurance Brokers 2008 Ltd Provincial Insurance Brokers Limited PSC Connect NZ Limited Pulsar Insurance Agency Reid Manson Ltd River City Insurance Brokers 2000 Ltd RMA General Ltd Rosser Underwriting Ltd Rothbury Group Ltd Runacres & Asssociates Limited Seneca Insurance Brokers Ltd Sit & Blake Limited Smith Pitman Insurances Ltd South Pacific Insurance Brokers Ltd Sweeney Townsend & Associates Ltd Thames Valley Insurance Ltd The Insurance Brokers Ltd The Stoneman Group Thorner General Insurances Ltd Towes Insurance Brokers Ltd Trevor Strong Ins Ltd Vision Insurance (S.I.) Ltd Waikato Insurance Brokers Limited Wallace McLean Ltd Wanganui Insurance Brokers Ltd Wholesale Insurance Brokers Ltd Wilkinson Insurance Brokers Ltd Willis New Zealand Ltd Yesberg Insurance Services Ltd

Warkworth Auckland Auckland Christchurch Auckland New Plymouth Christchurch Christchurch Auckland Hamilton Auckland Auckland Auckland Taupo Auckland Taupo New Plymouth Auckland Auckland Auckland Auckland Nelson Auckland Auckland Orewa Masterton Auckland Oamaru Tauranga Dunedin Auckland Auckland Auckland Auckland Levin Auckland Rotorua Cambridge Auckland Feilding Auckland Masterton Auckland Auckland Timaru Wanganui Warkworth Waipukurau Auckland Christchurch Auckland Auckland Wellington Auckland Rotorua Thames Auckland Wanganui Upper Hutt Te Aroha Auckland Ashburton Hamilton Auckland Wanganui Papakura Wellington Auckland Christchurch

www.covernotemag.co.nz

53

Star Underwriting Agents Limited is...

New Zealand owned

available 24/7

behind NZ Brokers

privately owned

of claims settled by SUAL

focused on providing a professional and quick service

underwriting decisions are ours (we ask advice sometimes)

share holding by any insurance company or brokerage

Star Underwriting Agents network of products include

A specialist in the true sense of the word. Star Insurance provides specialist motorcycle insurance, knowledge and policy conditions specific to motorcycles such as helmet and leathers cover. When it comes to claims we have motorcycle specific assessors covering the country.

The unrivalled prestige motor insurer, Prestigio Insurance provides policy holders with exclusive benefits such as replacement vehicles, manufacturer’s parts, lifetime No Claims Bonus, medical expenses and other benefits you expect from a Prestige Motor Policy.

With a razor sharp focus on providing a policy wording that’s second to none, alongside an over achieving claims service. Camper Care’s aim is to be New Zealand’s leading specialist in motor home and caravan insurance.

Tailor Made Money provides credit card payment facilities, monthly payments, direct debits, and other payment services to insurance brokers of New Zealand.

24hour roadside solutions and emergency assistance for motorcycles, vehicles and fleet operators. From basic solutions such as flat tyre, to accident coordination, legal and medical advice. Journey On is designed to operate as an affiliate program allowing you to increase your income by providing added value to your clients, while maintaining client ownership.

Warranty Plus provides electrical extended warranties and service plans for both the consumer and electrical retailers. Our systems are set up to ensure commissions are paid for the original sale, and any future warranty repairs are directed to the original retailer.

For more information on how we can help your business call us on 09 250 6009 or email admin@sual.co.nz