RECOGNISED FOR LIFE’S WORK
INSURERS WEATHER STORMS
Who pays for increased liquefaction vulnerability damage? Assignments of insurance claims and their effect on insurers’ reinstatement obligations Learning from complaints
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Going in to bat for you
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: firstname.lastname@example.org IBANZ National Office located at: Level 5, 280 Queen Street, Auckland (P.O. Box 7053, Wellesley Street) Telephone 09-306-1732. Website: www.ibanz.co.nz
s we approach the halfway point in the year it is useful to consider how we are travelling as an association. Since the creation of IBANZ some 12 years ago much has changed in the professional environment of insurance brokers. Back in 2005 our dealings with government were minimal, reflecting a general lack of specific legislation and compliance requirements for our members.Three years down the track and it started to change as work on legislation for financial advisers was begun. No sooner was that finalised than earthquakes produced another focus on insurance and in particular on the Earthquake Commission legislation. That - of course - is an ongoing unresolved matter, although not forgotten as we have just seen a second significant rise in the associated levy. Throughout this time the Fire Service has undergone numerous reviews, with the latest actually resulting in change, producing a major impact on insurance. Compliance for IBANZ members is now a significant and growing issue. The call on their resources both financially and in terms of staffing is far greater today. The risks to their business are also significant; getting it wrong is not an option as the consequences can be far reaching. Thus the major focus of IBANZ in 2017 must be on legislation, regulation and the resulting compliance requirements. Our primary role is to work on behalf of the industry to ensure an insurance broking business can continue to operate without being swamped by unrealistic expectations from government. Fortunately, we have developed solid working relationships with many in government and its associated entities. The challenge is to ensure the message, our members message, is not only heard but responded to in a positive way. Ours is a country with a significant exposure to risk, greater than most. Insurance is a vital part of New Zealandâ€™s risk management. IBANZ members need to be able to get on with their role of securing protection for society without being overly burdened by compliance. Their clients must be able to purchase protection without the burden of excessive taxes and levies. IBANZ will continue to speak up as the voice of insurance brokers and their clients in the interest of everyone who has a stake in the future of New Zealand. There is plenty to do in the second half of 2017.
Gary Young, CEO, IBANZ
Features 12. Business interruption misunderstood 20. Cyber risk just got very real
24. Getting Fleet Fit can increase profits Better drivers means better profits for transport
operators. Driver training programmes like NZI’s Fleet Fit are helping smart transport operators increase profitability.
10. Spotlight on CAMPBELL MITCHELL Suncorp New Zealand’s latest executive
34. Broker firms must find their way in new rules 40. Watch out for garage fires
appointment, Campbell Mitchell, talks to CoverNote about his transition from media to insurance, and reimagining insurance from the customer viewpoint.
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INSURE STORMSRS WEATHER
Who pays for increase Assignments d liquefac tion vulnerab of insuran effect on insu ce claims ility damage rers’ rein and their ? Learning from complaistatement obligati ons nts www.ibanz .co.nz
Building cost increase leaves insurance shortfall Rapidly rising building costs and changes to policy wording mean Kiwi homeowners are uninsured by an average of 28%, one broker group says. Jo Mason, chief executive of NZ Brokers, one of the country's largest insurance brokerage groups, said a spate of recent natural disasters had highlighted the need for homeowners to check policy wording carefully. “In the past six months we have had several devastating flood, fire, seismic and adverse weather incidents around the country,” she said. “It is crucial that homeowners are aware of what it would cost to rebuild their house from scratch and review this regularly.” Mason said changes to sum insured insurance policies could leave homeowners under-insured. “Sum insured policies limit the maximum amount your insurer will pay in the event your home is totally destroyed. “In an environment where building costs are rising at around 7% to 17% each year, there is no guarantee that the amount you are insured for will be enough to cover the cost of a total rebuild. “What this means is that a house which cost $500,000 to construct just two years ago could be up to $185,000 more to rebuild today. Effectively the risk of the rebuild cost being greater than the insured value is borne entirely by the policyholder,” she says. She said there was an urgent need for homeowners to check they were insured for the full replacement cost of their house, not just for a portion of it. She said the cost of building materials, architectural features,
council consents and a variation in the quality of workmanship meant the expense of a rebuild could vary significantly over time and across regions. “My advice to homeowners is don’t take unnecessary risks, consult with an insurance broker in your area who can assess your needs and is able to advise what type of cover is best suited.”
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IMF: Insurance could do better A review by the International Monetary Fund has recommended tighter controls on New Zealand’s insurance sector. It released its Financial Sector Assessment Programme findings in May and said improvements could be made to the intensity of supervision. The IMF said New Zealand’s insurance sector was small, increasingly focused on non-life business and characterised by high concentration and extensive foreign participation.
requirements and effective oversight.” There was potential for misconduct in claimshandling and complaints and advice given by registered financial advisers was unregulated. It recommended authorities consider broadening the Reserve Bank’s mandate for policy holder protection. “An explicit policyholder protection objective would provide underpinning for its peacetime supervision as well as crisis management, consistent with the emphasis on policyholder interests in its supervisory
hold solvency margin above the minimum. It has built sound supervisory processes (and strong expectations on management) around insurers’ financial condition reporting supported by the role of the Appointed Actuary. There is scope for the Reserve Bank to increase transparency over how it uses powers, including where it requires additional solvency margin, and clarity regarding its approach to enforcement.” More work was also needed to regulate insurance brokers and insurance conduct,
It said, although general insurance providers had recovered well from the Canterbury earthquakes, natural catastrophe risks still predominated – noting that those risks were shared with the Earthquake Commission. It said regulation of insurance was new to New Zealand and still developing. But in some areas the implementation of initiatives that would improve observance was incomplete, it said, including supervisory risk assessment and enhancement of regulatory reporting by insurers. Self-regulation in general insurance and external dispute resolution services were helping to reduce risks to consumers, it said, “but do not substitute for regulatory
work in practice,” the IMF said. “It would also support the increased policyholder protection recommended in this assessment, which could include the extension of statutory fund protection to nonlife policyholders and making policyholder preference explicit in insolvency.” The Reserve Bank could also further develop its licensing, supervision and enforcement in practice. “The Reserve Bank has taken a thorough approach to licensing and has since been ready to intervene in cases where it has identified shortcomings, including in relation to the risks from Canterbury earthquake exposure. It has required some insurers to
it said. The current review of the Financial Advisers Act would go some way to address the problems. “There is a need, which the government is addressing, to enhance the deliberately low intensity regime currently applying to most independent insurance advisers and brokers, which does not include even basic competence and disclosure requirements; to extend the range of conduct of business requirements specific to insurance beyond the current focus on advice; and to ensure that the appropriate requirements apply to all insurance activity, including sales without advice and ancillary sales.”
Understanding small business customers’ insurance needs For its first SME Insurance Index, Vero New Zealand surveyed more than 1000 small to medium-sized businesses (SMEs) about their attitudes towards insurance products and brokers. Executive general manager of distribution Cris Knell talks to CoverNote about the insights he believes can be opportunities for insurance brokers. According to MBIE, 97% of businesses in New Zealand are classified as small to medium enterprises - companies that have 1 to 19 employees. They account for an estimated $57,163 million of New Zealand’s annual gross domestic product. “For underwriters and brokers, that’s the bulk of our commercial customers,” says Cris Knell, executive general manager of distribution at Suncorp New Zealand, which includes the Vero brand. “It’s a really significant market for the insurance industry.” But in Australia, Suncorp Group has been running a SME Insurance Index for the past five years and has found that the rate of broker and adviser usage is dropping. In 2017 their survey showed that 30% of SMEs use a broker to purchase their insurance, compared to 50% four years ago. The same pattern has emerged in the UK and Canada, and Knell believes we are starting to see it in New Zealand, too. “Traditionally, the figures for direct purchasing have been very low, but we are seeing some SMEs with simple insurance needs move towards the direct insurance channels. In New Zealand we estimate that direct customers spend in excess of $100 million in premiums a year.” So Vero brought the SME Insurance Index to New Zealand to, Knell said, serve the dual purpose of tracking broker and adviser usage here, and identify which parts of the SME market brokers should target over the long term, and how. “We looked at all kinds of metrics when it comes to SMEs purchasing insurance including age, gender, location, business type, and industry. And what we found is that some segments of the SME market will increasingly want to buy insurance direct or online, but it won’t work for everyone. We wanted to find out which segments our brokers should be targeting, and the best way to put together a value proposition to meet the needs of those customers.”
For example, businesses with 6 to 19 employees are more likely to use a broker, but farming, forestry and fishing businesses are less likely to. Knell said Vero was turning the insights from the research into tips for its intermediated brokers and advisers. “For example, we found that one of the top concerns for SMEs is being unable to trade – and yet 72% of them don’t believe they have business interruption insurance. That’s a huge opportunity for brokers to educate and add value for SME customers, and to help them mitigate their risks.” The research also showed that one in five SMEs believe their broker underwrites their insurance. “If you think you’re buying insurance direct when you talk to your broker, you probably don’t understand the value of the independent advice you’re receiving. Brokers are insurance experts who can help SMEs assess their risk and find the best products to mitigate them – often at the best prices. “If customers don’t understand what they’re getting when they’re talking to a broker, it’s a clear opportunity to clarify that value proposition.”
SME INSURANCE INDEX – THE RESULTS AT A GLANCE • 60% of SMEs want to hear from their broker at least twice a year • Larger SMEs are more likely to purchase their insurance from a broker • Being unable to trade was the main concern • SMEs that describe a collaborative, partnership relationship with their broker are the most satisfied.
UFB hits alarms Businesses and homeowners are being warned that upgrading to ultrafast broadband can have an impact on their security systems. Michael Dunning, portfolio manager of commercial and rural at Suncorp, said older monitored analogue intruder alarm systems used copper phone capables to communicate with a monitoring station, which were not compatible with the new digital ultrafast broadband system. “If you’re getting UFB installed, you’ll need to arrange an alternative way to allow your alarm system to send its signals to the company monitoring the alarm.” He said whether a UFB-related alarm outage would affect an insurance claim would depend on the policy wording in place. “If something happens while your alarm isn’t turned on or isn’t working, the effect on your insurance claim will depend on both your policy, and the impact that the lack of monitoring had on your loss,” Dunning said.
“If having a monitored alarm is a condition of your policy and the alarm is no longer monitored, then you will not be meeting your policy conditions and your claim may be declined. A monitored alarm condition is more common in business policies.” Residential home policies were less likely to have a monitored alarm as a condition of the policy, he said. But those who received a premium discount because they had a monitored alarm might need to pay back that discount before any claim was paid. “In both cases, the impact on your claim would depend on whether having a monitored alarm would have prevented or lessened the loss,” he said. “We encourage our customers to keep activating their alarms even if they have been affected by the UFB switch, as even an unmonitored alarm is still a great deterrent to opportunist burglars.”
EQC levies increase Earthquake Commission (EQC) levies will increase from November to help rebuild the Natural Disaster Fund (NDF), which has been depleted by the Christchurch and Kaikoura earthquakes. “EQC has provided huge support to New Zealanders following the Christchurch, Seddon, and Kaikoura earthquakes, but in the process it has exhausted its reserves,” Finance Minister Steven Joyce said. “EQC has a Government guarantee and $4.7 billion in re-insurance cover, so homeowners will be covered if there is another natural disaster, but we need to start the process of replenishing the fund so it is available to contribute to future natural disasters.” Insured homeowners currently pay 15c per $100 of insurance cover, up to a maximum of $207 a year, as part of their insurance premiums. From November 1, they will pay 20c per $100 of insurance cover, with an annual cap of $276. “This is an increase of up to $69 per homeowner per year, including GST,” Joyce said. Minister Responsible for the Earthquake Commission Gerry Brownlee said the levy rise was needed to ensure EQC was on a sustainable footing into the future. “It would currently take more than three decades before the NDF reaches EQC’s re-insurance excess of $1.75 billion – and that’s in the absence of any significant natural disaster like the Kaikoura earthquake. The new levy rates mean we will be well on the way to restoring the Fund to this level within 10 years,” Brownlee said. The Government’s is reviewing the EQC Act more generally. “I expect that Cabinet will make decisions on the EQC Act Review in the coming months, however this is not expected to have any further impact on levy rates,” Brownlee said.
Port Hills fire bill tops $17.7m Wild fires that hit Christchurch’s Port Hills in February cost insurers $17.7 million, the Insurance Council says. Two separate fires combined to form one large blaze. There was $10.2m claimed on house and contents policies and $7.3m in business insurance. Another $165,000 was claimed on motor vehicles. Insurance Council chief executive Tim Grafton said it underlined the importance of insurance in the event of a disaster.
MPs voice concern over Fire Service levies A law has been passed that will reform New Zealand’s fire service and change its funding structure – but it did not have unanimous parliamentary support. The Fire and Emergency New Zealand Act was passed in early May, establishing Fire and Emergency New Zealand. The burden of the cost of the new entity is set to fall on people who have insured their property, which has upset the insurance industry. It had called for the service to be funded from general taxation. On July 1, there will be a 40% increase in fire levy rates on insurance policies. For residential insurance-holders the fire levy only applies to the first $100,000 of cover, so the increase will be a maximum of $36.20 per year. But that cap does not apply to non-residential property so the average levy paid will be significantly larger. Labour MP Ruth Dyson noted the levy system was contentious and said: “I do not think we have got it right.” She said it should be possible to develop a fairer levy system, on a cross-party basis. But Minister of Internal Affairs Peter Dunne said thought was given to funding fire and emergency services through a local property tax. It was not pursued because some properties were exempt from rates. “Further, the insurance levy has the great benefit of being a long-standing arrangement in this country. Because 95% or more of houses in New Zealand are insured, ‘free riding’ is not a big problem for us.” He said levy rates would be consulted on and reviewed every three years. “Transparency will extend to how the amount of levy collected on different kinds of property relates to the costs of activities and responses associated with that type of property. So, for example, the public will be able to see that
the levy collected on motor vehicles will cover the costs of responding to motor vehicle incidents - no more, no less.” Dunne said people who criticised the bill were most illinformed. “Vested interests and ill-informed sources will always oppose an insurance-based levy system.” “I would not be as dismissive of the people who are concerned about it as the Minister was, but I certainly hope that their fears are not realised. I certainly hope that they are wrong in the description of the concerns they have, because they think they are genuine. They raised them with the committee, and we were unable to progress that,” Dyson said. Green MP Jan Logie said the levy issues had not been resolved. “I would like to again reiterate our hope and understanding and assurances that are on record around the levy process. I do hope that we will see a very simple and transparent system set up via regulation.” NZ First deputy leader Ron Mark said he hoped the new levy regime “would not unduly and unfairly hit people with levies while at the same time allowing others to sit on the sidelines and contribute nothing.” He said 96% of the submissions on the bill opposed the levy proposals. “Not opposing a levy at all, but this levy proposal.” Mark said Dunne might consider interest groups were focused only on self-interest, but “this Government, purporting itself to be business-friendly, is foisting upon commercial operators, commercial building owners, and even residents who rent properties, massive compliance costs. There is a word for that, and you cannot use it in this House, but it rings in the ears and it simply says that if you truly believed that when people voted this Government in, they were going to get a reduction in compliance costs in the business sector, forget it.”
CAMPBELL MITCHELL MARKETING MAN TAKES ON VERO CHALLENGE Suncorp New Zealand’s latest executive appointment, Campbell Mitchell, talks to CoverNote about his transition from media to insurance, and reimagining insurance from the customer viewpoint. Q: CONGRATULATIONS ON YOUR APPOINTMENT. TELL US A BIT ABOUT YOUR BACKGROUND? Thank you, I’m really enjoying being on board at Suncorp. My background is mainly in marketing, particularly in the media industry. Most recently I was chief marketing officer at Fairfax Media. That role had a big focus on using technology and innovation, and how those things have changed consumer behaviour, which leads nicely to my new role as executive general manager customer experience at Suncorp. Q. IT’S QUITE A CHANGE TO MOVE TO FINANCIAL SERVICES. WHAT MADE YOU INTERESTED IN THE CUSTOMER EXPERIENCE TEAM AT SUNCORP? One of the reasons I was excited to join Suncorp New Zealand is because of its focus on the customer, and I’m keen to continuously improve the experiences and services our customers and intermediary partners have with us. I think what I bring to this role is a deep understanding of the customer lifecycle, and the ways we can use insight to predict, personalise and inform what might add value for our customers. The job is quite a change in terms of industry, but when you get right down to that layer of understanding and meeting customer needs, industry becomes less relevant. Q: THE CUSTOMER EXPERIENCE TEAM IS RELATIVELY NEW TO SUNCORP NEW ZEALAND. WHAT WILL YOU BE FOCUSSED ON FOR THE FIRST FEW MONTHS? Right now my focus is on getting my hands on all the insights we have into our customers, our business and our partners. We want to reimagine things through a customer lens – we’re thinking broader than insurance, and financial services for that matter. To do that we need to understand our customers. Previously we’ve had a lot of insights for both our general and life businesses, but the new operating model for Suncorp New Zealand has presented a great opportunity to bring those all together under a framework of customer needs, and enabled us to build a clearer picture and identify any gaps. Q: WHAT ARE YOUR PRIORITIES FOR SUNCORP RIGHT NOW? We have a few big projects in the pipeline. One is the SME Index which we’ve just released. 10
The SME Index is an in-depth investigation into the insurance landscape for small to medium-sized businesses. It’s been running successfully in Australia for a few years, but this is the first time similar research has been done in New Zealand. We know how important SMEs are to New Zealand and how diverse their needs are.The SME Index will help brokers target the right ones, and offer them the most compelling value proposition. Another priority for me is developing our use of customer insights to build our marketplace and prioritise solutions to fix customer and intermediary pain-points. One good example is the work we’re doing now to improve some of the ways we communicate with our customers and brokers. Q: WHAT OBSERVATIONS DO YOU HAVE ABOUT THE NZ INSURANCE INDUSTRY, AND PARTICULARLY THE ROLE OF INSURANCE BROKERS? Advisers and brokers take highly personal situations, assess complex risks and tailor solutions to mitigate those risks and give comfort to customers. I don’t see that fundamental role changing, but technology has the power to disrupt any industry and it’s up to us, in the industry – both insurers and brokers – to embrace the innovation and use it to provide greater value than ever before. I’m really interested in the journey of a customer seeking insurance through the process of consideration, lead generation, acquisition, retention and claim, and I’d like to work with brokers to improve those moments and delight customers. Q: DO YOU THINK THE INSURANCE INDUSTRY IS READY FOR THE SAME KIND OF DISRUPTION YOU’VE SEEN IN MEDIA? Improving technology is disrupting every industry and we can either ignore it or embrace it. I’ve noticed that in this industry there’s a real appetite for change and a strong focus on what customers need, and that’s great to see. We have to move fast to keep up with customer demands.
BUSINESS INTERRUPTION MISUNDERSTOOD By Tim Grafton,
Chief Executive of the Insurance Council of New Zealand
usiness is all about risk and reward. Much of the time the focus is on commercial risk, often addressed with business and marketing plans. We know every business should have emergency funds set aside and a contingency plan in place in case the worst happens, but media reports publicised recently call that into question. Small-business owners are often worried about the immediate issues that arise on a daily basis and watch their cash-flow carefully, but neglect the proper scanning and thought that is needed to identify and mitigate business risks. Plenty of risks exist, but one that has poignancy now is natural disaster risk. The 14 November earthquake gave rise to businesses caught short or confused about what business insurance coverage they had purchased. As over 90% of businesses in New Zealand are SMEs it is highly unlikely there will be an insurance expert inhouse, so the role of the broker as adviser, including educating and explaining how business interruption and other insurances work, becomes even more important. Feedback from insurers is that business owners find it easy enough to understand insuring their assets for a fire or covering themselves for liability but much more difficult to imagine the impact an earthquake would have on the continuity of their business. Given we are an island nation with limited transport routes and a seismically active country, these scenarios and risks need to be mapped out clearly for businesses. In the last six years our second and third largest cities have been hit by major earthquakes disrupting businesses and profitability. We as an industry need to be encouraging businesses to have their own business continuity plans. How many businesses sit down and think what the impact would be on their business if the building they operate from canâ€™t be occupied? Or what if the building next door is so badly damaged that a cordon is put around the area preventing access, for weeks, months or even for a year or two? And what if transport routes or ports are cut off, so their business is interrupted? We suspect not enough SMEs do this planning. As many businesses lease their premises, loss of access to the building can run to a few days or to many months, as was the 12
case in Canterbury, even if the building was not damaged. Landlords need loss of rent insurance and tenants business interruption insurance. Standard business interruption policies are activated at the date of the event and may relate solely to the damage to the property. Typically, they can be for periods from 6 to 24 months. It has become evident after both Canterbury and Kaikoura earthquakes that businesses donâ€™t realise they can talk to their broker about obtaining a deferred indemnity period, for instance, if they need to trigger the cover while their premises are rebuilt which may start months after an event. What if their building cannot be accessed for several months to determine the damage? Most business interruption policies have denial of access provisions as extensions which would cover them if the area their business is in is cordoned off. Such cover typically has a stand-down period of 1-3 weeks and is capped, so itâ€™s important they understand how much it will cover and how much they need to cover themselves. In the recent quakes, depending on the type of business, there may not have been any physical damage to the business, but businesses are impacted by lack of supplies or depopulation for those in the retail or tourism sector. So, obtaining the right type of coverage to suit their circumstance is critical. Building owners should be aware that many commercial policies now have excesses or deductibles set as a percentage of the total insured cost of the building, not a percentage of the damage in the event of a catastrophe. So a $40 million building with a 5% excess that sustains $2.5m of damage will see the owner meet $2m of the claim. However, the excess for a non-catastrophic event like a fire will be a percentage of the damage. Building owners should also be aware that if their property is a total economic loss and they choose a cash pay-out but do not intend to rebuild then the insurer would normally pay the indemnity value (depreciated replacement). It is not the sum they have insured or the market value. Although Wellington is regarded as most vulnerable to earthquakes, anywhere in New Zealand is. The recent earthquakes tell us businesses anywhere should avoid complacency. All in the industry have an opportunity to better explain to customers their risks and policies.
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NEW ZEALAND INSURERS PUTTING IN A LEADING ROLE By Karl Deutschle
f all the new technologies emerging over the horizon, Blockchain is probably the least glittery. Robots, artificial intelligence and virtual reality have each featured in an array of Hollywood blockbusters, though, to my knowledge, there has never been a box office film made about distributed ledgers. Should the technology fulfil its potential, as experts believe it will, there may be more publicity. For every Matrix or Minority Report hitting the silver screen, the public may be just as excited to see Citizen Chain, or perhaps A Block to Remember. When that day comes, insurance companies are likely to already know the plot, having taken blockchain technology seriously from the earlier days of its inception. That’s one of the assumptions we can make based on the findings of PwC’s latest FinTech Survey for 2017, in which financial services firms around the world and in New Zealand shared their thoughts on how they intend to use the latest emerging technologies. After all, in New Zealand, almost three-quarters (72%) of insurers said they would dedicate resources to exploring the possibilities of blockchain over the next five years. We also asked them how they were planning on utilising it, with 57 per cent intending to put it to work on attestation, audit, record-keeping and maintaining data integrity. Every one of our New Zealand respondents in the insurance industry said the technology will be important (57 per cent) or very important (43 per cent) for 14
improving information security and predicting, detecting and analysing cases of fraud. For an industry that is entirely reliant on information to manage risk, blockchain is becoming a more valuable way of improving data quality and delivery, holding the potential to streamline premium payments and better detect fraud. However, it’s not solely a backend solution; the rise of peer-to-peer payment solutions, for example, is a blockchain-related trend that’s seen as either important or very important among almost three-quarters of New Zealand’s insurance industry over the next five years.
Subsequently, and as you may imagine, advanced information management and platforms to support wider blockchain adoption are the two trends our insurers in New Zealand
are most likely to put their investment money behind over the coming half a decade. NEW KID ON THE BLOCK For all its potential, we are still lagging in our understanding of the blockchain innovation. Only 14 per cent of financial services professionals (including CFOs, CEOs, Directors, and Heads of IT,Technology and Digital) say they are ‘very familiar’ with blockchain. Almost twothirds say they are merely moderately familiar, meaning they have read a news article about it or conducted a small amount of research. And yet those who are intimate with blockchain are choosing to run with it across all forms of financial services. In the past couple of months alone, the Royal Mint and Euroclear have succeeded in testing blockchain-based gold trading, while the Canadian Royal Mint has gone a step further and created a blockchain platform on which the public can buy and sell gold bullion. The aim is to create a more liquid market for trading gold, smooth settlements, verify ownership of bullion and lower counterparty risk. The payments industry has perhaps seen the most successful adoption of blockchain, using it as a way to improve the transfer of cryptocurrencies. Under blockchain, bitcoin has flourished both in terms of its value and in the number of services out there that are making it a bigger part of day-to-day life – from using the currency as a form of employee payroll to creating a derivatives market around it. And yet many of the applications in the insurance sector
have been largely theoretical. That’s likely to be, in part, due to a lack of familiarity of blockchain at the moment among insurance professionals and organisations – although it’s worth taking the time to understand its impact. A separate piece of PwC research from 2016 suggests that blockchain solutions could provide up to US$10 billion in cost savings to reinsurers alone through faster, more efficient, and more accurate placement, claims settlements and compliance checks. At the same time, blockchain allows for smoother, more accurate information flows between client, broker, reinsurer and outsource service providers – so something the whole industry can benefit from. It’s no wonder, then, that New Zealand’s insurance industry sees it as a way to move forward. What’s more, it could be seen by some as a way to find a much-needed competitive advantage. BLOCKCHAIN REACTION We have already seen across financial services as a whole that FinTech startups are generally the ones pushing ahead with these bold new ideas. Their smaller size has allowed them to experiment with new technologies and platforms; and when they work, it’s showing the way for established insurers. However, it’s also putting them at risk from disruption. It’s no longer just large competitors that are taking market share, but dozens of highly mobile, customer-friendly startups. New Zealand already has a highly competitive financial services environment, and consumers
are notable for their willingness to take their business elsewhere, even from an established insurer to a startup that meets their needs. The 2017 FinTech Survey shows that while 38 per cent of global insurance companies believe their consumers already have conduct with FinTechs, more than half (54 per cent) of insurers in New Zealand said the same. Those in the insurance industry would be keen to limit as much customer churn as possible. Let’s remember that blockchain not only has the potential to refine back-end operations and improve data security, but customers benefit from the ripple effects that run throughout the business. If customer data is more secure, there’s less chance of reputational damage, while the improved speed of settlements brought about by use of a distributed ledger would only be seen as a competitive advantage – a real blockchain reaction. EXPLORING THE POSSIBILITIES So, where does the insurance industry go from here? With blockchain technology almost undoubtedly on course to be a growing part of our lives in five years’ time, it’s going to be important for all insurers to understand the nuances of it sooner rather than later. While using AI in customer call centres and sending out drones to survey land are worthwhile technologies in their own right, and will likely continue to add value to the insurance industry, the opportunity to build trust, share information, reduce costs, speed up operations and verify identities through a distributed ledger cannot –
or perhaps should not – be underestimated. Blockchain is not particularly shiny, nor is it going to be the headline of any marketing campaigns in the near future. It’s pragmatism and numbers over sentimentality and silver-bullet technology solutions. If it was the lead in a film, it would be more Tom Hanks than Tom Cruise. It will also be a means to divide those in the insurance industry into the leaders and the laggers – those who understand how it can be used and those who still have research and development to do. Exploring the possibilities over the next five years, as the majority of insurance companies in New Zealand are doing, seems to be a smart choice. After all, five years is a short amount of time – 2012 was only two iPhone generations ago. While we might not quite have the script written for that blockchain film by 2022, many more insurers will have a better idea of how the story will go.
Karl Deutschle is a Partner at PwC and the Insurance Sector Leader. www.covernote.co.nz
RECOGNISED FOR LIFE’S WORK C
olin Crombie’s name is synonymous with the general insurance business in New Zealand. The Hawke’s Bay businessman started his firm in 1978 in Napier, and Crombie Lockwood now has a presence in 21 cities and towns across the country. Crombie was awarded a Queen’s Service Medal in 2013 for his efforts to contribute to his local area, including giving money to the local museum and art gallery and funding scholarships for local school students. The business was acquired by Arthur J Gallagher & Co in 2014 and Crombie retired, although he retains an office in the Hawke’s Bay premises. Throughout his career, he has had strong ties with IBANZ. “I was on the board [of IBANZ or its predecessor organisations] for years,” Crombie said. “I rose to the heady heights of vicepresident, then decided I didn’t want all that extra work.” He said belonging to an industry association was important for people who wanted to ensure that their voices were heard. A strong professional body could be there to protect the industry and make sure it could make its point to the government, he said. In 2005 he was made a life member, one of 17 on IBANZ’s books. The most recent addition to the list was Richard Russell, last year. “It’s lovely recognition of your input into the industry of all the years you’ve been there,” Crombie said. IBANZ chief executive Gary Young said life memberships were given to past and present members when the board considered the
member worthy of it because of their position, experience and contribution. He said they were usually nominated by someone who recognised the extra effort and work they had put in. “The key is their voluntary contribution to the industry. Life members are entitled to the all the ordinary privileges of membership without, of course, paying for membership. IBANZ board has granted seven life memberships, in addition ten life members were carried forward from the two previous associations which merged to form IBANZ in 2005.”
before managing a broking firm and eventually going into business on his own in 1990. Hall and Russell were responsible for drafting the IBANZ constitution. He said IBANZ and its predecessor associations had served the industry well. “It has won a few battles over the years through regulation and providing education – that was in its infancy while I was there. It has another few battles on its hands at the moment, again with the Government meddling in regulation and you’ve still got the perennial battles
WE’RE ALL WORKING FOR THE SAME CAUSE, TO DO THE RIGHT THING FOR OUR CLIENTS. WE ALL SHOULD BE ABLE TO TALK TO EACH OTHER AND WORK TOGETHER. Murray Hall, who was added as a life member in 2009, said he was one of the few for a long time who was still active in the industry while a life member. He retired two years ago, five years after selling his broking firm to Crombie Lockwood. “There weren’t too many life members around, it was usually given to retiring people who had given service to the industry.” He started in insurance in 1965 and worked with insurance companies for almost 20 years
with the two levies.” Allan Morris, former chief executive of Willis, was made a life member in 2009. He had been on the committee of CIBNZ for many years and was president. It was during his tenure that the IIBA and CIBNZ were brought together to form IBANZ. He said he had a keen interest in the insurance sector, despite having retired, and was still a director of a broking house. He said brokers were
COLIN CROMBIE RECEIVING THE QUEEN'S SERVICE MEDAL
meet people, and each day was different, with constant challenges. But education was vital whether brokers were new to the industry or not, he said. They always had to keep learning - even over the past five years, things had changed rapidly, as the Christchurch earthquake changed the rules and industry landscape, he said. “You’ve got to be on the ball, keeping up with the changes.”
a key part of the industry and that was unlikely to change, despite the emergence of automated advice. Although there had been consolidation over recent years as smaller broking firms moved under the wing of bigger corporates, he said it was likely that more would start to break away again in time. Brokers’ key strength was their ability to build relationships and manage them, he said. “They do that generally pretty well.” The bigger broking firms were wielding significant power in the market, he said, and were able to dictate a lot to underwriters. Coming regulatory change would tighten up the quality and service delivery, which would be positive for the wider industry. Don Grayson, who was made a life member in 2005, was honoured for his input into developing the industry’s training programmes. He has been in insurance since 1958 and his work eventually led to the establishment of what is now the Professional IQ College. His son, Scott Grayson, is now taking over his business, Grayson and Associates in Parnell. Grayson said the industry was one that should appeal to more young people starting out in the careers, because it provided opportunities to
2016: 2011: 2009: 2005: Formerly CIBNZ: Formerly IIBA:
Grayson said a strong professional association was important for the health of the industry. He said many people did not understand that most insurance brokers did not consider themselves in competition with each other. “We’re all working for the same cause, to do the right thing for our clients. We all should be able to talk to each other and work together.”
Richard Guy Murray Allan Colin Don Graeme
Russell Harvie Hall Morris Crombie Grayson Robertson
David Don Murray John Pat Richard David Richard Neil
Harrison Harrow Hogan Richardson Samson Ahlers Batterbee Burrows Sole www.covernote.co.nz
GOOD ADVICE IMPORTANT FOR FIRMS B
usinesses must find advisers who are skilled and experienced in business insurance, if they want to protect themselves against disaster, one academic says. Michael Naylor, of Massey University, has penned an opinion piece, in which he said the recent earthquakes, which affected Kaikoura and Wellington, showed how important it was to have quality cover in place. “The Government has arranged some grants for small businesses affected, but has indicated they expect larger businesses to have done adequate predisaster planning and be able to cope without government help,” he said. “While this has put some larger businesses in a tough position, the government is right – businesses should really have planned for this, including adequate business contingency cover. All businesses should have learned from the experiences of firms after the Canterbury earthquakes.” He said all business owners needed to take the time to understand their business risks, and to find a quality insurance adviser who could help them determine the right policy. 18
“This is not so much insurance as scenario planning – going through a list of all the things that can go wrong, whether earthquakes, or fires, or the death of a key staff member, and planning for what the business does when that event occurs. “Policy triggers need to be understood. For example, some policies are very restrictive in that they require physical damage to the business premises.” He said many businesses in Canterbury suffered after the region’s earthquakes because their customers could not get to them – not because their own buildings were damaged. “Finding an adviser who is skilled and experienced in business insurance is vital and could save many businesses from bankruptcy,” he said. “Owners need to take time to discuss their risk contingency solutions with their staff and their adviser. Those advisers need to find policies that suit – and explain any cover limitations.”
DOING GOOD IS A SUSTAINABLE BUSINESS MODEL
elebrating excellence in sustainability is something that the Sustainable Business Network (SBN) and NZI know all about. For the last ten years NZI has supported the SBN and sponsored the NZI Sustainable Business Network Awards - the longest-standing sustainability awards in the country. The Awards celebrate the contribution that businesses, government agencies, social enterprises and individuals are making on a daily basis to transform New Zealand into a more sustainable nation. Travis Atkinson, Executive General Manager of NZI says, “the SBN is a logical fit with our business and our business strategy. Together we share a vision to make New Zealand more sustainable.” “Over the last decade, we’ve watched the SBN make a valuable contribution to our country by working with Kiwi businesses to help them reshape how profit is made. “Sustainability is all about the capacity to endure and these businesses continue to revolutionise the business landscape as we know it, and all of us at NZI feel very privileged to play a small part in that by sponsoring the SBN and these awards.” The Awards open for 2017 on 1 June and entries close on 4 August. The categories are: Sustainability Superstar; Communicating for Change; as well as Community, Mega Efficiency, Renewables and Restorative Awards. Applications can be submitted online at sustainable.org. nz/awards/ In celebration of its 10-year anniversary with the SBN, NZI has produced a video featuring some of the inspirational winners of the SBN Awards over the last few years. To view the video go to nzi.co.nz
CYBER RISK JUST GOT VERY REAL
by Ryan Clark,
National Manager Liability, NZI
here is a quote that goes like this: There are only three kinds of companies in the world - those that have been hacked, those that are going to be hacked and those that don't know they've already been hacked. The internet knows no boundaries when it comes to cyber crime, yet two thirds or 69% of Kiwi businesses don’t know they can insure their business against a cyber attack. New Zealand business owners need to expand their risk-management thinking and considerations from the traditional perils of fire, flood, theft, health and safety, to now include topics such as cyber security, crisis response and subsequent reputational damage control. In a Cyber Security NZ SME Landscape report prepared for Vodafone New Zealand in July 2014, it was found that only half of the New Zealand companies surveyed had a defined IT security policy in place. When all were asked (those that had a policy and those that did not) if their company had guidelines to follow should they be attacked by malware or a hacker, 51% said they did not and 5% didn’t know. The survey also found that while most companies were ready for ‘traditional’ threats, they did not understand that these were not the main risks in the cyber security landscape. Many companies also believed that virus protection or firewalls meant they had adequate security. Risks that come from within an organisation are also often overlooked. Employee education and guidelines are important. 83% of Kiwis rarely change their passwords and 48% do not have a password on their work smartphone according to the Minister for Communications, the Hon Amy Adams. She said in the foreword of New Zealand’s Cyber Security Strategy 2015 report that it is estimated cyber crime had cost New Zealand almost $257 million in the year prior and that 56%of businesses had experienced an attack once a year. Last year, Symantec released an Internet Security Threat Report that said cyber criminals were setting up call centres to run scams and were extending their reach. Its Technology Strategist Mark Shaw said they were seeing an increase of 163% in ransomware attacks which equated to around
108 attacks per day in New Zealand. Over the last six months (September 2016 to February 2017), the NZI online Cyber Risk Survey reported 18% of users presented at high risk and 29% at medium risk. Doing business online exposes companies to risks they may not have even considered. When these risks become a reality, the damage can have devastating consequences for their business. Business decision-makers can no longer hide their head in the sand, cyber protection is a critical, must-have insurance for any business. A cyber attack is like a battle vortex – a whirlpool of violent activity - often hitting you from different directions. It’s hard to know where to begin to defend yourself, let alone what to do, who to call and how to deal with the fallout. The way we’ve set up our cyber products at NZI means that if your business suffers a cyber breach or attack you can call our Cyber Emergency Helpline to gain instant access to our team of specialists who can advise you on what you need to do. We wanted to ensure our customers had access to 24/7, anytime, anywhere advice to quickly work towards mitigating the damage. Cyber Ultra can also cover businesses for loss of revenue and help minimise any damage to professional reputation. Once the Cyber Ultra hotline number has been activated, our team will assess the situation and manage it to its final conclusion to get the company back up and running. Since we launched Cyber insurance in March 2016, it’s been highly sought after by the market. But we wanted to do more to ensure our products were accessible, particularly to small businesses. So in February this year, we took it one step further and launched the NZI Cyber Calculator to provide customers with an instant estimate of what it could cost them to purchase a Cyber insurance policy. The online form they fill out can be downloaded to take to their broker to purchase NZI Cyber Ultra. In the first six days of going live, more than 2000 users logged on to get an estimate. The calculator can be accessed through our cyber website - nzicyber.co.nz
If your clients suffer a data breach, their business could be liable. Get an estimate of what it could cost to cover your clientsâ€™ business against data breaches and other cyber threats at nzicyber.co.nz/estimate Terms, conditions and exclusions apply. Please see policy for full details.
LEARNING FROM COMPLAINTS
HOW TO BEST ASSIST CLIENTS AT CLAIM TIME
By Karen Stevens
Insurance & Financial Services Ombudsman
As children, we are told to learn from our mistakes. As we grow up, we find out that it’s easier to learn from the mistakes of others.
nsurance and Financial Services Ombudsman (IFSO), Karen Stevens, says 22 years’ experience resolving insurance and financial service complaints has created a rich database of IFSO Scheme complaint case studies, which the industry can learn from. “Lessons from past complaints can be used to prevent future complaints,” Stevens said. “A big part of our role is to help our 4000-plus participants improve business practice and client relationships, with an emphasis on ensuring compliance. Essentially, the continuing professional development (CPD) training we provide helps brokers, insurers, and other providers of financial services to avoid future complaints.” The IFSO Scheme partners with Professional IQ (IBANZ) and the IFA to provide training through webinars. “The feedback is great; you can access training from your desk wherever you are, which is time and costeffective. We encourage all financial advisers to try it.” A recent IFSO Scheme webinar presented for Professional IQ (IBANZ), focused on how brokers can best assist their clients at claim time. Here is a summary:
CLAIM TIME – ADDING VALUE AND AVOIDING PITFALLS As general insurance brokers, you assist your clients at claim time in a number of ways – from providing information or explaining what the insurance policy covers, to assisting with forms, managing the claims processes, or acting as an advocate for your client. What is good practice and what isn’t? What issues should be considered when you become involved? And what are the boundaries of your role? The IFSO Scheme wants more brokers to understand what can and does go wrong; how you can best add value, while keeping in mind the parameters of your role and the steps you can take to protect yourself professionally.The last thing you want is a client making a complaint about you, when all you were do was trying to help. Claim time is often stressful, with clients dealing with a range of difficult circumstances. On top of that, they might struggle to understand the policy, what they are and are not covered for, the information to provide, and the process. The following case study demonstrates three key lessons for brokers.
COVER STORY CASE STUDY #132703 (2015) On 19 November 2014, Mr and Mrs Smith* emailed their broker, Gary*, requesting “builders risk insurance”, because they were relocating and renovating a house. The policy was intended to cover the house renovations when it had been relocated. Gary emailed Mrs Smith the completed proposal and quotation, asking her to confirm that she wished to proceed, and cover commenced on 21 November 2014. In January 2015, the house was moved onto the new site. Further engineering work and structural surveys were required as the house was deemed too dangerous to enter. In February 2015, Mr and Mrs Smith noticed an issue with the house foundations, which were built with different dimensions to the house. This caused the house to be under-supported - damaging floors, walls and roof framing. The cost to fix the foundations and damage was more than $200,000. The insurer declined Mr and Mrs Smith’s claim for the costs of remedying the foundations under the policy exclusion for faulty or defective workmanship. But the insurer accepted the claim for the damage to the floors, walls and roof framing, as these were a subsequent loss, which was covered by the policy. *Not real names LESSON NO. 1 – SET EXPECTATIONS: EXPLAIN THE POLICY AND CLAIMS PROCESS Mr and Mrs Smith did not understand their insurance policy. Claim time can be stressful enough.You can help clients avoid further confusion and disappointment if you set expectations from the outset. How you can help: • Remind clients to check the policy wording • Explain the cover, so they understand the likelihood (or not) of the claim being successful • Talk through what information is required to prove a claim, or comply with policy conditions • Explain the claim or appeal process • Ensure clients have realistic expectations regarding outcomes and timescales. CASE STUDY REVISITED When Mr and Mrs Smith asked their broker, Gary, whether they could claim for the damage, Gary advised them by email that it was outside the policy. Gary wrote “any claim for misalignment of piles or incorrect positioning of the house ... should be addressed with [the builders] and their insurer”. Gary did not refer the claim to the insurer. A month later, Mr and Mrs Smith made a claim directly to the insurer, and the insurer agreed to an ex-gratia settlement of the claim, for the damage to the floors, walls and roof. Mr and Mrs Smith complained that they had taken unnecessary legal action against the builders, on the basis of Gary’s advice, which had caused a delay of 11 months in their house renovations.They wanted $65,000 compensation from Gary (including legal fees $10,000; extra rent payments; additional costs for contracts work cover and stress). The insurer said that, although the claim was outside the policy terms, it would have expected Gary to refer the claim to the insurer for a decision to be made. Although Gary’s advice was not incorrect, the IFSO Scheme case manager said that by not referring the complaint to the insurer, Gary failed to carry out the service with “reasonable care and skill” under section 28 of the Consumer Guarantees Act 1993. Gary could have advised Mr and Mrs Smith that it was unlikely the claim would be paid, as it was outside the scope of the policy, while still referring the claim to the insurer. There was a maximum delay of one month from when Gary declined to refer the claim to the insurer until Mr and Mrs Smith made the claim directly to the insurer. So, Gary’s actions only led to the cost of four weeks’ additional rent, and 25% of the solicitor’s invoices related to advice about the policy cover and the claim. Gary offered to pay the Smiths $5,000 to settle the complaint, and they accepted.
LESSON NO. 2 – CLARIFY YOUR ROLE • Refer all claims to the insurer, unless directly instructed not to by your client • Be clear about what your role is at claim time • Be clear when you are providing advice and when you are providing information. LESSON NO. 3 – KEEP GOOD RECORDS • Keep records of all dealings with clients – meetings, telephone calls, emails and letters • Have good processes in place for following client instructions and records to show your processes were followed • Good records can establish that you used the care, diligence, and skill that a reasonable financial adviser would exercise in the same circumstances. THE LAW – YOUR ROLES AND RESPONSIBILITIES Under the Financial Advisers Act 2008, Section 33(1) all financial advisers, which includes general insurance brokers, regardless of category, type of financial product or type of client, must exercise the care, diligence, and skill that a reasonable financial adviser would exercise in the same circumstances. Three sections of the Consumer Guarantees Act 1993 can apply to brokers. • Section 28 “reasonable care and skill” • Section 29 “fitness for particular purpose” • Section 30 “reasonable time of completion”. FURTHER LESSONS – GOOD PRACTICE Together with setting expectations, clarifying your role and keeping records, there are some further steps you can take to demonstrate good practice: • Always find out what outcome your client is seeking • Educate clients about the cover they have (at the point of sale and claim time) • Provide your client with information regarding timescales and usual practice • Help to guide and navigate the process, rather than becoming personally involved in the outcome • Keep in mind the parameters of your role. If the advice you provide is not correct, your client could make a complaint about you. “The complaints we see about brokers all highlight the value of documentation and, in particular, emails and file notes,” says Karen Stevens. “This enables you to demonstrate the process you followed in the event the client is not happy with your service. We also receive complaints that are dealt with promptly and through a clearly documented complaints process, have the best chance of being resolved early. We work with our participants, sharing our experience to enable them to resolve client dissatisfaction and get the client relationship back on track – that’s in everyone’s best interests.”
You can access case studies of all complaints considered by the IFSO Scheme at no cost on the website www.ifso.nz
GETTING FLEET FIT CAN INCREASE PROFITS Better drivers means better profits for transport operators. Driver training programmes like NZI’s Fleet Fit are helping smart transport operators increase profitability.
river performance has never been more important in the profitability of a trucking company, according to NZI’s Head of Commercial Motor Vehicle, Ian Taylor. “Smart operators have realised that driver performance is the biggest single factor they can control and can directly affect the profitability of their company. They’ve come to understand that every dollar they invest in driver training has the potential to be multiplied several times over onto their bottom line.
“Probably the biggest potential savings to a trucking company from our Fleet Fit programme is increased roadworthiness of vehicles. If a driver is being more sympathetic to his machinery, then damage to engines, running gear, brakes and oil boxes can be greatly reduced. That means lower maintenance costs, longer parts replacement cycles and trucks are roadworthy for longer periods, and everyone - drivers and management - can get on with their jobs productively,” he says. The driver training programmes offered as part
to other trucks in their fleet, they’re often taken aback at the speeds they have been driving. The typical reaction is ‘Crikey, was I really doing that speed?’ It’s a real wake-up call,” she says. Watson says that using the GPS records has already seen the DriveSmart programme lead to a 30-80% reduction in the time drivers spend driving at speeds over the speed limit. NZI’s Fleet Fit programme also offers qualifying drivers from NZI and Lumley insured companies access to the Autosense truck simulator.
PROBABLY THE BIGGEST POTENTIAL SAVINGS TO A TRUCKING COMPANY FROM OUR FLEET FIT PROGRAMME IS INCREASED ROADWORTHINESS OF VEHICLES. Taylor says NZI offers two driver training courses through the NZI Fleet Fit programme. Both training programmes can have a transformative impact on a fleet’s profitability, according to Taylor. First, there’s the obvious financial benefit that comes from fewer crashes. That means a lower human cost, fewer physical injuries and less trauma for drivers who go off the road or worse. Then there’s the money saved on repairs and the crippling cost of time off the road while the truck is in the workshop. There are fuel savings to be made as well. When drivers learn to regulate their speed effectively by reducing severe acceleration and deceleration and keeping below the speed limit, fuel savings can be considerable. Taylor says the greatest benefit can be in longevity of machinery from more sympathetic operation. 24
of NZI Fleet Fit are the 12-month DriveSmart programme from CCS Logistics, and sessions in a truck simulator delivered by provider Autosense. The DriveSmart programme has two parts. First, review, analysis and benchmarking of the data sourced from the GPS system already installed in the truck by the operator. Second, discussion and action planning with the manager of the fleet to use this insight to make improvements. As DriveSmart is a 12-month programme, the ongoing monitoring and review allows the manager to ensure the new levels of awareness are playing out on the road. CCS Logistics Corinne Watson says engaging with the GPS data generally has a very positive impact on drivers. “We find that seeing GPS data makes drivers far more open to having discussions about issues. An example is when they see the GPS speeding data from their truck, and how that compares
Ian Taylor says sessions in the simulator can be a unique opportunity for even the most experienced drivers to prepare for the very worst conditions in advance. “The simulator can recreate really adverse conditions with incredible accuracy. So drivers can experience driving in heavy snow, through black ice and in heavy rain conditions - the kind of conditions that drivers face very rarely and almost always on their own, often late at night. To encounter these conditions with an instructor reminding them of how to deal with them can be massively beneficial for drivers of every experience level,” he says The NZI Fleet Fit programmes and services are available to qualifying NZI and Lumley customers and can be either subsidised or complimentary. Find out more at www.NZIFleetFit.co.nz
Welcome to the bright side of insurance. Star Insurance Specialists creates and manages specialist insurance policies for a specific range of vehicles. With years worth of niche insurance experience our team of specialists know everything about insuring RVs, Motorcycles, Prestige, Classic and European cars. Some policyholders deal with us direct, but our primary customers are New Zealand insurance brokers, who are members of the Insurance Brokers Association of New Zealand (IBANZ). Brokers choose to work with us because we’re experts at delivering happy results in the niche vehicle insurance space, which makes their lives easier. Everyone
likes easy. We’re really happy to empower our customers by sharing our knowledge so they can make informed decisions. We’ve been told we deliver star treatment. If that sounds good to you, we’d love to chat with you.
Find us online:
0800 250 600
THE IMPACT OF AUTONOMOUS VEHICLES
Q&A session with Travis Atkinson, Executive General Manager, NZI
WHAT DO YOU THINK THE IMPLICATION OF AUTONOMOUS VEHICLES IS FOR THE INSURANCE INDUSTRY? Vehicles are increasingly being designed with advanced driver assistance systems (ADAS) to help make the driving experience safer and more enjoyable, and it is inevitable that this technology will lead to semi and fully autonomous vehicles in the future, where the driver becomes a passenger, and the vehicle becomes the driver. There’s no doubt this technology will lead to changes for the insurance industry and how we insure vehicles. As an organisation we support the safe introduction of autonomous vehicles as a new way to help solve transport and safety problems for our customers. We’re also focused on understanding how autonomous vehicles can impact safety and risk, and how we can evolve our products and services to meet the future needs of our customers. HOW IS NZI PREPARING FOR POSSIBLE DISRUPTION TO REVENUE CAUSED BY THE ADOPTION OF AUTONOMOUS OR SEMI-AUTONOMOUS VEHICLES? We believe that insurance is a key part of the adoption of driverless vehicles, and that we have a role to play in ensuring consumer trust, protection and safety on the road.Through the IAG Research Centre, we’re 26
already exploring and testing the impact certain vehicle technologies have on safety and risk. We’ve partnered with external industry and research groups to help us deepen our understanding of the impact this technology will have on our roads and our customers. In the future we anticipate a mix of autonomous, semi-autonomous and traditional vehicles on our roads, and we’re committed to evolving our models to make sure our customers are protected, regardless of the type of vehicle they choose to travel in. WILL THE DATA GENERATED BY THESE INTERNET-CONNECTED VEHICLES HAVE AN IMPACT ON THE KINDS OF POLICIES AND PRICING YOU OFFER? Connected vehicles can generate data that has a range of potential applications, from helping drivers better navigate their journeys, to vehicle servicing alerts and trip-based products. Our organisation is already encouraging the uptake of new autonomous technology that improves the safety of our customers through offering price discounts on things like Autonomous Emergency Braking. We’ll certainly continue to introduce new ways we can improve customer safety on the roads in the future.
Cyber criminals can lock your clients out of their business using ransomware. NZI Cyber insurance can help to mitigate the damage caused by these attacks. Learn more at nzicyber.co.nz Terms, conditions and exclusions apply. See policy wording for full detail.
Insurance Advisernet Conference 2017 “How far we’ve come”
was the theme of the recent Insurance Advisernet conference held in Napier last month. 110 Brokers, Insurers and Suppliers attended and participated in a fun filled 2 days which commenced with the inaugural IANZ Golf tournament and concluded with a gala dinner to acknowledge and celebrate winners of the coveted Insurance Advisernet awards. The conference was held at the Napier War Memorial Conference Centre, where a trade exhibition area provided key insurers and partners the opportunity to educate and network with the brokers, while the sessions were filled with aspirational speakers who not only motivated but inspired. Our congratulations go out to the winners of the IANZ 2017 Awards : Broker of the Year - Financial Independence Insurance, Tauranga Chairman’s Award - Hayley Morrice Shining Star Award - Tina Liedeman Insurer of the Year Award - Delta Insurance Insurance Personality of the Year Award - Jun Wang, NZI
We would also like to acknowledge all of our Sponsors who so generously supported a great conference - Thank You!
MIND your OWN BUSINESS Start your own broking business today with Insurance Advisernet. Want to retain 100% ownership of your clients while benefitting from the strength of one of NZâ€™s fastestgrowing general insurance groups? Are you interested in building an asset that you can sell in the future? Or are you just frustrated by corporate politics and meetings for the sake of meetings? Then now is the perfect time to partner with Insurance Advisernet. For a confidential discussion contact:
DAVID CRAWFORD Director 021 905 537
SUE CRAWFORD National Development Manager 027 224 5900
Young Insurance Professionals Australia & New Zealand
WHO PAYS FOR INCREASED LIQUEFACTION VULNERABILITY DAMAGE? By Andrew Horne, partner, and Jennifer Hambleton, senior associate Minter Ellison Rudd Watts
ome properties affected by the Canterbury earthquakes are now more susceptible to damage from liquefaction. This increased vulnerability is called increased liquefaction vulnerability (ILV). EQC has settled many ILV claims by making payments to cover the cost of repairing the land. However, it has been reported that EQC has declined to meet the costs of enhanced foundations on the basis that these are not costs of land repairs. IAG New Zealand (which owns the State, AMI and NZI brands) and Tower Insurance have issued separate High Court proceedings against EQC seeking to recover payments they have made to or on behalf of their insureds for land remediation or enhanced foundations that are required to address increased ILV damage to their land. Media reports indicate that Tower claims $6.1 million from EQC in relation to 102 claims. The quantum of IAG’s claims has not been reported. EQC reported in January 2017 that it had settled 6,540 ILV claims and had 1,750 still to settle. In this article we look at EQC’s liability for ILV damage and the issues that may be resolved through the court proceedings. EQC COVER FOR ILV DAMAGE EQC insures residential land for natural disaster damage on an indemnity basis under section 19 of the Earthquake Commission Act (EQC Act). In Earthquake Commission v Insurance Council of New Zealand & Ors, a Full Bench of the High Court considered whether ILV constitutes ‘natural disaster damage’ for the purposes of the EQC Act and, if so, whether the EQC’s proposed approach to settling ILV damage claims was appropriate. The Court held that: 1. ILV qualifies as ‘natural disaster damage’ for the purposes of section 19 of the EQC Act; and 2. EQC could approach settlement of ILV land damage claims in the following ways: (a) paying the costs of relevant and appropriate repair or reinstatement work; (b) in appropriate circumstances, paying the loss of market value or “diminution of value” of the insured land together with any associated residential buildings; or (c) by undertaking appropriate repair or reinstatement work itself. In practice, EQC has settled many ILV claims by paying an amount that in its view represents the diminution of value of the affected land, subject to the statutory cap. THE PROCEEDINGS ILV damage may be remedied to allow for rebuilding or repair of a building in a number of ways, including: 1. remediation of the land by 'ground improvement' techniques such as stone columns; and/or 2. using enhanced foundations or some other method of repairing or rebuilding the building in a way that reduces the impact of ILV.
Private insurers, in order to expedite settlements and facilitate repairs, have made payments to policyholders for either or both of these methods to address ILV damage rather than waiting for payments from EQC. The private insurers have reported that they did this on the understanding that EQC would compensate them for those costs. While EQC has settled many ILV claims by making payments that represent its assessment of diminution of value, their stated preference is to pay the cost of repairing the land, such as by ground improvement. EQC has been unwilling, however, to pay the cost of enhanced foundations as an alternative to ground improvement, although it has recognised that the cost of enhanced foundations may be relevant to its methodology for assessing diminution of value when it pays claims on this basis. IAG has reported that EQC has declined to meet the costs of enhanced foundations on the basis that they are not land repairs, notwithstanding that the foundations have been enhanced as an alternative way of dealing with the land damage. EQC has not made a public response to the claims. EQC’S APPROACH TO SETTLING ILV CLAIMS RAISES THE FOLLOWING ISSUES: 1. Whether EQC’s liability for ILV land damage requires it to pay for repairs or enhancements to foundations or other work that addresses the land damage without repairing the land itself. EQC’s current settlement approach and methodology indicates that the costs of improved foundations may be relevant to its calculation of diminution of land value caused by ILV damage where the building is being repaired (although not where a rebuild is required) which is inconsistent with its refusal to pay claims for enhanced foundations to address ILV damage; 2. Whether enhanced foundations are required because of ILV damage insured by EQC or other uninsured causes such as existing land defects and the need to upgrade foundations to meet modern building standards; 3. Whether the cost of repairs or foundation enhancements where a building is repairable should be treated differently to the cost of repairs or foundation enhancements where a building must be rebuilt for the purposes of determining EQC’s liability for ILV land damage; and 4. The insurers’ legal basis for bringing the claims where they may not have assignments of policyholders’ claims against EQC. IAG has indicated to its customers in a FAQ document that it has brought proceedings in respect of some claims notwithstanding that it does not have an assignment on the basis that it has overcome the policyholders’ land damage through paying for their foundations or ground improvement. IAG and Tower have assured their policyholders that they will not be negatively affected by the proceedings, although it is possible that they may benefit from the outcome. The proceedings will, however, have implications for other private insurers that have paid for improved foundations or ground improvement to address ILV damage. www.covernote.co.nz
ASSIGNMENTS OF INSURANCE CLAIMS AND THEIR EFFECT ON INSURERS’ REINSTATEMENT OBLIGATIONS
hat is the effect on reinstatement insurance claims when earthquake-damaged properties are sold prior to repair or rebuilding? As it stands, an insured cannot assign a property insurance reinstatement claim to a purchaser without the insurer’s consent. Many properties damaged in the Canterbury earthquakes have not yet been repaired and remain the subject of unresolved insurance claims with the EQC and private insurers. Sale and purchase agreements for these properties are often accompanied by deeds of assignment of the vendor’s rights in respect of their insurance claims. In this article, we address the effect of assignments of insureds’ rights in respect of their property reinstatement claims. ASSIGNMENTS OF INSURANCE PROCEEDS The proceeds of insurance claims are freely assignable as “things in action”. This is because, unlike insurance policies, insurance claims are a right to receive “payment of a debt”. For these purposes “payment of a debt” includes the performance of an obligation that is not necessarily an obligation to pay money. So while an entitlement to a cash payment in settlement of a claim may be assigned, so may an insurer’s contractual obligations in respect of a claim that extend beyond a payment of money. A valid assignment of the proceeds of an insurance claim requires only a document between the insured and the assignee. Consideration is not required, nor is the insurer’s consent, absent policy wording to the contrary. However, the insurer must be notified. An increasing number of policies require the insurer’s consent to the assignment of a claim, but few preearthquake policies contained such a requirement. REINSTATEMENT COVER AND ASSIGNMENT Full replacement property insurance typically provides two types of cover: 1. a right to the indemnity value of the insured damage on the happening of an insured event; plus 2. a right to payment of the costs of reinstating or rebuilding as and when the works are carried out or those costs are incurred. The policy rationale for this two-tier response is to prevent the insured from obtaining a windfall by claiming the cost of reinstatement or rebuilding without expending all or part of the proceeds. Where a building that has been damaged by an insured event is sold, a purchaser will generally wish to benefit from the assignor’s reinstatement cover and the vendor will wish to have this entitlement reflected in the purchase price. However, difficulties may arise where the building has not been repaired and the insurer is yet to discharge its obligations. The leading case in New Zealand is Bryant v Primary Industries Insurance Co Limited. The plaintiffs purchased a farm and an old house at an auction the morning after a fire destroyed the house. The property was insured for “indemnity value” and “excess of indemnity”. The insurer was not obliged to pay more than the “indemnity value” if the insured
was “unable or unwilling” to effect reinstatement or replacement of the property. Sometime after the fire, the vendor assigned its rights under the policy to the purchasers, who sought to claim from the insurer for both the indemnity value and the excess of indemnity. The Court of Appeal held that the purchasers were entitled to “indemnity value” but were not entitled to the excess of indemnity when reinstatement works were carried out. This was because an insured’s right to reinstate or rebuild is personal and cannot be assigned. The Court’s decision was founded on the principle that a contract of insurance was one of indemnity for the particular insured, who can never be entitled to more than their actual loss. The assignment after the fire could not make the purchasers retrospectively the insured at the time of the fire. They could acquire no more than whatever assignable rights had accrued to the insured before the assignment. But the right to replace under the excess of indemnity clause was personal to the insured. As stipulated in special condition (ii), if the insured was unable or unwilling to effect reinstatement or replacement of the property, the insurer was under no liability in respect of this item of insurance. Reinstatement policies by their nature require the insured to carry out the works or commit to fund the works prior to payment. Failure to do this must constitute an inability or unwillingness on the part of the insured to carry out the works or fund them prior to the assignment. PRACTICAL CONSEQUENCES Insurers are dealing with the assignment of reinstatement claims in a number of ways, with some relying upon Bryant to restrict payments to assignees of indemnity value. Commentary suggests that the decision in Bryant goes beyond the underlying purpose of the insured’s obligation to carry out reinstatement, which is to prevent a windfall. Arguably, insureds should be entitled to assign the benefit of reinstatement cover, so that an assignee who incurs the cost of reinstatement may benefit from it. This approach would appear to be consistent with section 53 of the Property Law Act, which permits the assignment of rights to future payments that fall under the rights already possessed by the assignor. A right to reinstatement cover may be viewed as a right to a future payment that is conditional upon work being carried out. One option that may be available to vendors, depending upon the policy wording, is to enter into a building contract for reinstatement works so as to trigger the right to reinstatement cover. The insurance claim and building contract could then be assigned to the purchaser. This issue arises in relation to houses in the “red zone” which have been acquired by the Crown and have been or will be demolished and not rebuilt.Where that is the case, unless policies provide for reinstatement at an alternative location, insureds are likely to lose their entitlements to reinstatement cover with their claims being limited to indemnity value. www.covernote.co.nz
BROKER FIRMS MUST FIND THEIR WAY IN NEW RULES
igger insurance broking firms may choose to become financial advice providers under the new legislation governing the industry, and enlist their brokers as financial advice representatives. A review of the Financial Advisers Act was launched two years ago. New legislation is expected to come into force in 2019. The draft of the Financial Services Legislation Amendment Bill, as released for submissions, creates new designations for those offering advice and broking services to New Zealanders: Financial advisers, financial advice providers and financial advice representatives. Everyone who is an RFA, AFA or QFE adviser will have to fit into one of these three new categories.
Financial advisers will have to work for licensed entities and will be individually accountable for complying with their legislative and Code of Conduct obligations, in much the same way as AFAs are at present. But financial advice providers, which will be similar to existing QFEs, will have the option of using financial advice representatives, and taking some of the compliance accountability for them. Advice provided by financial advice representatives will be bound by the processes, controls, and limitations set by the financial advice provider which engages them. Representatives and advisers will have to meet common standards of competence, knowledge and skill set out in the industryâ€™s new Code
FEATURE of Conduct. Financial advice representatives will also need to meet any additional competence standards specified by the Code of Conduct for the particular types of advice they provide. But the Ministry of Business, Innovation and Employment said they would be essentially acting as a conduit between the financial advice provider and the client, which made it appropriate for some of the accountability to rest with the provider. Barry Read, of compliance firm IDS, said he had been surprised that more of the larger fire and general insurance broking firms did not take the option of becoming QFEs when the first round of regulation kicked in. He said the new rules would give them a chance to reassess the way they were set up. Some fire and general broker firms might opt to become financial advice providers. They could then have direct sales staff following set systems and processes acting as financial advice representatives, whom the firm is responsible for, and senior brokers as financial advisers, who are jointly responsible for advice. “It would be good to see what comes out of the competence requirements from the Code of Conduct,” Read said. “What do they expect to see from
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WE ARE A MANAGEMENT COMPANY ACTING ON BEHALF OF INDIVIDUALLY PRIVATELY-OWNED MEMBERS. IF THE BROKERS WANT TO TRADE UNDER THEIR OWN BUSINESS NAME THEN THEY WILL NEED TO REGISTER INDIVIDUALLY IF THE NEW REGULATIONS END UP AS PREDICTED. fire and general? They’ll have to define that.” He said some might not realise that in situations where RFAs were working for firms, they were already jointly liable. In some cases, where staff were only offering transactional services, they would not be covered by the regime at all, he said. As the rules currently sit, anyone advising someone with turnover of more than $1 million could classify their advice as a wholesale service. Many in the industry said they were waiting to see how the detail of the changes worked out. “At this stage the proposed reforms are at a preliminary stage, but if they progress as indicated, then insurance broking firms will have to make some decisions in terms of whether they will become a financial advice provider,” said Duane Duggan, head of legal at Crombie Lockwood. “While firms, in practice, already carry the responsibility for their advisers, there will be increased obligations and exposure in becoming directly licensed by the regulator if firms chose to go down that path.While a lot of the detail on the reforms has yet to be determined, there will be a significant difference in moving from an employer of RFAs to becoming a financial advice provider.” At NZBrokers, it was unlikely that the group would become a provider for its members. Chief executive Jo Mason said: “We are a management company acting on behalf of individually privately-owned members. If the brokers want to trade under their own business name, then they will need to register individually if the new regulations end up as predicted.”
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INSURERS WEATHER STORMS Industry told it must manage climate risks, not hope to avoid them.
loods, high winds, storms, cyclones – when it comes to weather we’re all in for a rocky ride. Scientists predict that climate change will see major catastrophic weather events increase dramatically over the next decades, and those who live in areas already prone to flooding or slippage should expect the worst. The chaos caused by ex-Cyclone Debbie earlier in the year highlighted how vulnerable many New Zealanders are to weather woes. Edgecumbe in Bay of Plenty got the worst of it – over 2000 residents were evacuated after the Rangitaiki River burst through its floodbank and sent a tidal wave of water into the town. While the costs of Cyclone Debbie in Edgecumbe haven’t been finalised, at the end of April Suncorp said that it has received 1300 claims related to the event, at a cost of around $17 million. Weather events that hit Auckland and Coromandel from March 7-12 (colloquially called the Tasman Tempest) resulted in costs of $41.7 million, according to the Insurance Council of New Zealand. This is comprised of 5800 house and contents claims, 760 commercial material damage and business interruption losses and 315 motor vehicle claims. With such events set to ramp up as the reality of climate change hits home, it’s timely for insurance companies and brokers to consider the best way to handle claims relating to weather. Travis Atkinson is the Executive General Manager of NZI. He says that there is a strong sense that the world is becoming a riskier place when it comes to weather events. “Other issues such as strain on our infrastructures, flood protection and increasing values are also factors that are changing the face of risk in New Zealand,” he says. Atkinson says that it’s important the industry adapts and evolves with these changing risks, and that it’s critical to price adequately for risk in order to remain sustainable. “This sustainable notion is critical as it is often under-reported how vital a strong insurance sector is to New Zealand’s economy,” he says. “It’s important that we are here to provide homeowners and businesses with the asset protection they need to live and operate confidently.” There has been little local research undertaken so far as to the impact of weather events in New Zealand as they relate to insurance, but a report commissioned by Deep South National Science Challenge – Insurance, Housing and Climate Adaptation - recommends that insurance companies need to start thinking hard about such issues. Professor Ilan Noy (one of the report’s authors) says that the aim of the report was to highlight the need for more research on sea-level rise and insurance of residential properties. But the report is relevant for weather events such as flooding as well. He says that it’s not a matter of if, but when, thousands of people on lowlying or coastal properties will find their homes uninsurable. “I am sure there will come a point where insurance companies will refuse to insure coastal properties [or those on flood plains],” he says. While it’s impossible to know when such an eventuality will occur, how much it will cost the country, and how many people will be affected, the general consensus seems to be that it's inevitable that insurance companies will cease to insure coastal properties, or those prone to flooding, in the foreseeable future. www.covernote.co.nz
His advice to insurance companies is to start planning for this inevitability. “If I was an insurance company in New Zealand I would start thinking about this now. What are the risks, what should we tell homeowners? I would start having a dialogue with local government and start identifying areas that are in particular danger from climate change.” John Sloan of Sloan Risk Management says that globally, government entities are working with insurance companies to establish the best way in which to deal with these extreme weather events. “This is especially around mitigation measures. It is trite to say that insurance is against a risk that may or may not happen, but when it is a certainty insurers take a much more hard-nosed view.” He says that homeowners need to be realistic about insurance coverage in areas that are likely to be affected by weather events. “After all, if people live in a flood plain that is constantly being flooded, why should insurers keep on paying to rebuild homes only to see them flooded in a few months’ time?” Sloan says that some local insurers are hardening their attitudes to areas exposed to constant floods. “Some years ago in a West Coast region which was experiencing regular, uncontrolled floods, insurers denied or restricted flood cover until the local authority fixed the stop banks,” he says. He also says that insurers have started warning property owners who own and insure buildings precariously perched on cliffs and exposed to inevitable sea erosion, that insurance may no longer be provided. While there is no local research around the possible impacts on the insurance industry around climate change-related weather events, there is growing research internationally. Two recent reports by Climate Wise (a network of 29 insurance industry organisations convened by the University of Cambridge Institute of Sustainability Leadership) warn that there is an urgent need to address an estimated $100 billion annual climate risk “protection gap”. The reports reveal that since the 1950s, weather-related catastrophes, such as windstorms and floods, have increased six-fold. This has led to previously insurable assets becoming uninsurable, and those which were underinsured 38
being compromised even further. The economic impact of these natural catastrophes is growing exponentially, with total losses increasing five-fold since the 1980s to around $170bn (US) today. Over the same period, the average annual protection gap has widened quickly from $23bn to $100bn (US) today. The chairman of global general insurance at Aviva and chair of ClimateWise is Maurice Tolloch. At the breakfast launch of the reports Investing for Resilience and ClimateWise Principles Independent Review he said that the insurance industry’s role as society’s risk manager was under threat. “Our sector will struggle to reduce this
Sloan says that some insurers in New Zealand already impose higher premiums in flood-prone areas. This is the case internationally as well. “A major multi-national insurer, the Factory Mutual, on a global basis, limit their flood cover to $100 million (US) per insured site. New Zealand companies who own properties in some Asian countries have encountered insurers limiting their flood cover in areas regularly inundated with floods or monsoons,” says Sloan. Closer to home, he says that insurers have limited or declined flood or storm/hurricane damage in some Pacific Islands which are also exposed to such frequent, catastrophic losses. “Australian insurers have responded similarly for the regions where they experience regular,
IT’S IMPORTANT THAT WE ARE HERE TO PROVIDE HOMEOWNERS AND BUSINESSES WITH THE ASSET PROTECTION THEY NEED TO LIVE AND OPERATE CONFIDENTLY. protection gap if our response is limited to avoiding, rather than managing, society’s exposure to climate risk. As a risk carrier and risk manager, the insurance industry has significant, and as yet untapped, potential to lead others, in reducing this gap,” he says on the Cambridge University website. The Investing for Resilience report says that insurers should start to align their asset management, underwriting and risk management activities to support greater investments in resilience across financial markets. They recommend investing in green bonds, resilience impact bonds and infrastructure that encourages resilience in the face of climate change. This will help them to weather the storms of weather events caused by climate change and continue to function as managers of societal risk. Traditional risk-response measures including raising premiums, withdrawing over or transferring exposure to other parties will continue to be key features of the insurance industry’s response to increased weather events.
catastrophic floods.” So what is the role of the broker in the face of this uncertainty? How can we balance the needs of clients with the realities of increasingly volatile weather? Sloan says that brokers need to start paying equal attention to flood and water risks when they are reviewing client’s possible risk exposures. “A total loss by flood is just as devastating as a total loss by fire or earthquake,” he says. He says that insurance alternatives are limited in flood-prone areas, and pressure on local authorities can be the only logical way forward. “[People who find themselves not covered by insurance should consider] putting pressure on local authorities to solutions to flood mitigation protection.” He says that the lessons learned around the Canterbury earthquakes are still being played out in some courts. “But progress has been made between the EQC and private insurers,” he continues. According to Atkinson, NZI’s immediate
outlook is to provide customers with protection wherever they can, but this needs to be underwritten smartly. “It could be that certain customers in highrisk areas may be faced with differing terms such as a higher excess.” Brokers also need to understand that compassion is important when dealing with people who have been affected by extreme weather events. This is especially important in the immediate aftermath of such an event. Christine Morrison owns a home in Edgecumbe that she rents out to a tenant. She says that the response of the claims team she dealt with immediately after the event left her unsettled. “They made me feel like the flood was somehow my fault,” she says. “The first two phone calls to my insurance company really alarmed me. They said that my policy didn’t cover many things that I thought it did, and I was worried that the entire process would be a nightmare.” Morrison called her insurer soon after the flooding happened. She says that her dealings
with the company later in the day (she assumes the staff had been properly briefed by this stage) were exemplary and the claims manager reassured her that she was fully covered. “I think that people who deal with the public after such events really need to be properly trained. Otherwise it can be an extremely stressful situation.” Narelle Hoarton is an Edgecumbe resident who also had a property affected by the flooding. She has advice for brokers and companies after extreme weather events. “There needs to be consistency. If they hire a third party to handle the claim they need to ensure that company is doing the right thing and representing the insurance company well.” She says that brokers and insurance company representatives need to ensure they communicate clearly. “They need to ensure the client is getting the correct information, and in a timely manner.” Atkinson reiterates that it’s extremely important for brokers to engage closely with their customers to understand the risks they face. “[It is particularly important for brokers to]
think about what future risks are emerging,” he says. “As we have managed claims arising out of the events over recent months we continue to encounter high levels of under-insurance both in personal lines and for business customers. We have to collectively address this for customers.” Sloan says it's worth noting that while insurance policies cover many extraneous risks, the main losses have always stemmed from the major perils of fire, earthquakes or flood/storm which cause massive losses both in New Zealand and worldwide. He says that insurance is incredibly important in the face of such perils. “Many European, Asian and South American countries have little insurance in place for the natural disasters they experience with the uninsured losses, often in the billions of dollars falling on communities and governments.” As managers of risk in an increasingly volatile world, it’s important that all of those involved in the insurance industry continue to be forwardthinking and innovative in order to address the challenges of climate change.
EDGECUMBE FLOODING © PHOTO COURTESY OF VERO INSURANCE www.covernote.co.nz
WATCH OUT FOR GARAGE FIRES
ew Zealanders are being told to be careful about the electrics in it to the ground. The man and his family evacuated their home, and were their garages, especially if they have been converted into extra covered by their full replacement policy for $665,000, including temporary accommodation. rooms or sleepouts. In another case, a tenanted, two-storey property with a garage and storage It comes after a number of significant fires. In the last 12 months, up to 15% of major fire claims handled by AA shed was destroyed by fire. It was discovered that the electrical wiring of the Insurance started in garages, with some spreading to the family home and main power supply, which serviced the sub-main in the garage, had been overloaded, arced and caused $80,000 worth of fire damage. resulting in the total loss of their house and belongings. “While losing your entire home to a fire is rare, when it does happen it’s “Knowing that some New Zealanders are converting garages into additional rooms to their homes, we strongly recommend they check devastating for those involved,” Macandrew said.“So it really does pay to do the electrics are up to scratch, and don’t overload power sockets or all you can to improve the safety of your home, including your garage and multi-boards,” said Amelia Macandrew, customer relations manager for sheds, to prevent or mitigate the worst from happening.” AA Insurance.“Garages,as well as sheds,tend to have fewer power sockets available than in the main house,so it’s really important to use them appropriately, and ensure they aren’t covered to prevent overheating.” AA Insurance’s claims data shows that while the majority Data Recovery of house fires start in the kitchen, garage fires are less likely to be detected as quickly because they are not as well used, and Repair Corrupt & Physical are sometimes not connected to the main dwelling. Problems on HDDS “Many kitchen fires are discovered before they spread Repair Flash/Memory to the rest of the house when a person remembers they’ve Drives, SD Cards & left something on the stove,” Macandrew said. “Conversely, Smart Phones people come and go from their garage, so may not be aware RAIDs of a fire until it’s too late.” Bad Sectors In one case, a customer woke one night to discover his Password Locked Drives Ph: 0800 777 722 standalone garage ablaze. He had forgotten to disconnect an Formatted Drives Mob: 021 031 1744 extension cord from a power socket and hot plate used to Deleted/Damaged Files E:email@example.com smoke fish earlier in the day. It had arced and caused a fire that www.digitalrecovery.co.nz Forensic Investigation quickly spread from the garage to the roof of the house, razing
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A client of ours purchased a large volume of stock in a liquidation sale three years ago and since this time has been periodically using the stock in their business. Recently the client suffered a fire which destroyed this stock, so a claim has been lodged with their insurer to indemnify the client for the replacement stock.
We have a claim for a granite bench newly installed in June 2016. The cracks appeared a number of weeks after installation and then grew. The bench is in a bay window. Insurers have declined as they have stated it is gradual and due to being exposed to heat from the bay window. They are also stating that the bench top was not suitable for the kitchen. The installation company would not return calls from the assessor. The insurer rang another installation company who have had nothing to do with the job and they advised that they have had similar issues and now stopped installing granite bench tops near bay windows. The insurer has declined the claim based on this advice from a company which has had no involvement. We would like to try and help the insured and appreciate any comments or input.This was installed in June – winter – so it’s questionable whether the heat would be extreme enough at that time of year. Has the insurer justified the decline sufficiently? If it is heat damage, the cracks appeared within a couple of weeks of installation. Does gradual apply, could one argue that one extreme hour of heat may have caused the initial cracks? The insurer has also declined based on this wording3. any loss, cost or expense arising from any fault, defect, error or omission in: (a) design, plan, or specification, and/or (b) workmanship, construction or materials.
The client's insurer is stating that as the stock is three years old and no longer available, they will only pay the market value of the items or the original cost price to the client. As an example 78 items were purchased three years ago with 15 items remaining, so 63 of these items have been sold over the last three years, so they cannot be classed as obsolete stock. The exact same make and model may not be available but it does not make them obsolete as they are still being sold. Our argument is regardless of what the client paid for the stock, the cost to replace the stock is what the client is insured for, based their stock values on for insurance purposes and paid a premium for. If they were to go and purchase replacement stock identical/similar to that purchased three years ago, they are not going to get it at a liquidation price! They may have purchased a stock item for $500 in the liquidation sale but the true cost price for such an item may be $1000 if bought from a normal wholesaler. The cost price today to replace the item on the nearest equivalent is still approximately $1000, therefore the client is entitled to be indemnified for this amount as per quotes provided to the insurer. Regardless of their good fortune when originally purchasing the stock, the cost price to replace now is considerably more and that is what they are entitled to. Do you agree with this?
REPLY… CROSSLEY GATES, DLA PIPER The basis of settlement clause usually specifies how a claim for stock is settled. This governs what your client is entitled to. You say above that the policy pays for the replacement of the stock. Is that right? The policy usually says it will pay indemnity for stock. Where the stock is brand new, indemnity is the cost of replacing the stock with brand new stock - so in practice this is the equivalent of replacement. But this is because the stock is brand new. If the stock is three years old, it may still technically be brand new but it is possibly outdated with a more recent version? You say replacement stock of this version is not available. If it can't actually be replaced (which is not the underwriter's fault) then isn't your client's loss limited to the original purchase price paid? Unless and until a higher replacement cost is incurred by your client, his or her loss is limited to the purchase price for goods that no longer exist. This is an unusual fact situation, which is making the application of the policy more difficult than normal.
REPLY… CROSSLEY GATES, DLA PIPER The declinature appears to be on two grounds: (1) Gradual damage; (2) the exclusion quoted above. The gradual damage exclusion is unlikely to apply. Whether the damage occurred gradually is to be considered in the context of the subject matter concerned. A granite bench shouldn't crack for decades if not centuries, so a crack appearing after a few weeks is hardly gradual. Something is wrong. There is some evidence from what people have said to you above that the specification of a granite bench in a bay window subject to sun is a defective specification. Presumably, the granite cannot cope with the heat variations (particularly if it is dark) and cracks. The onus is on the insurer to prove this. The rationale behind this exclusion is that the policy is not designed to ensure that the materials specified in renovations or construction are the correct ones. If the exclusion applies, your client's only redress is against the supplier of the granite bench.
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Body corporate concerns QUESTION…
We currently insure a domestic body corporate, the sum insured is set by a valuation. The building is insured under a material damage wording as the sum insured is too high for a domestic insurer to consider. If a unit hold spends money on their own fit-out, say a high-end kitchen or bathroom, how should this be insured? The valuation specifically excludes this. Should each unit holder estimate the reinstatement value of any fit-out ahead of us approaching the body corporate insurer? Or does the individual unit holder need to arrange their own cover? In which case, what type of cover?
We have a situation where our clients’ property was damaged. The driver did not leave details but via the registration a witness took we have now made contact. The registered owner has stated they were not driving the vehicle, they were teaching someone else to drive. The vehicle is uninsured. We have not been able to contact the learner driver to discuss. To our knowledge the appropriate licences were held by the driver and supervisor. This has raised a discussion in the team about who is liable the learner driver or the supervisor of the learner? One thought is the driver is liable. The supervisor is to provide guidance but is not able to prevent the crash as they have no control panels to stop the vehicle. Although the question is, has the supervisor done enough to guide the learner to try to prevent the crash? Does anyone have experience with this situation and if so what is the standard approach?
REPLY… CROSSLEY GATES, DLA PIPER Each unit owner needs to arrange his or her own cover for the contents of the unit. The body corporate policy will only cover the buildings and structures, not the contents. There can, of course, be issues about the demarcation between the two.
Statute of limitations QUESTION… We have a client who lodged a claim for a damaged spa pool under their dwelling policy. The loss occurred in 2013, and the claim was accepted by the insurer, and replacement quote also accepted. For one reason and another, the client has been unable to replace the item as yet, and isn't sure when they will be in a position to (although they definitely do intend to). The insurer is advising that if it isn't replaced within six years of the loss, the statute of limitations will apply, and they will be unable to claim the costs. I would have thought that if the claim was already lodged and accepted, and costs already agreed, the SOL wouldn't apply. Can you advise please?
REPLY… CROSSLEY GATES, DLA PIPER Yes, the Limitation Act doesn't apply to this situation, but I can see why the insurer is grumpy - if the claim is accepted and being met, why doesn't the insured get on with it? In material damage policies, there is an express requirement that the insured replaces the item with reasonable dispatch. There is often no such term in a domestic policy, but an insurer could argue it is an implied term. I suggest a delay of four years is starting to become unreasonable. The prejudice to insurers is the inflationary increase in the cost. 42
REPLY… CROSSLEY GATES, DLA PIPER Assuming the driver has been negligent, the driver is liable for the damage arising from that negligence. The owner can only be liable if he or she is vicariously liable. This can arise in a number of circumstances, including: 1. Employer/employee relationship 2. Principal/agent relationship Unless the owner delegated a specific task to the driver, which the driver is undertaking, there is unlikely to be vicarious liability. It sounds like it was the other way around. The owner was doing a favour for the learner driver.
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Property owner’s liability QUESTION… With the earthquake having wiped out Christchurch buildings, some commercial sections - once cleared - remain empty for now. Following the cancellation of the material damage cover, it has been a habit to offer a property owners’ liability, including some stats cover. It has recently been brought to my attention by insurers that they believe this to be a "Clayton’s type" offering, they do not believe that the policy is necessary. To an extent I agree, but also err on the side of caution, say for example the empty site has long grass that has needed to be mowed, and an astray cigarette butt ignites a fire that spreads to third party property. In your opinion can legal liability still be attributed to a property owner of an empty section for negligence which causes damage to property or bodily injury?
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.
REPLY… CROSSLEY GATES, DLA PIPER 8280 Covernote 1 23/02/2017 3:48 PM Page 1 Yes,SMT it canADAS and the scenarioadvertisement.qxp_Layout you set out is one example. Obviously the exposure is low and that should be reflected in the premium.
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FSCL CASE STUDY
NO GRAIN, ALL PAIN A
series of frosts in December 2014 badly damaged Fergusson Farms’ wheat crop. Fergusson Farms placed a claim with its insurer but this was declined as the frosts that caused the damage happened the month before the insurance was placed. Fergusson Farms understood from its insurance broker that, as long as its crop insurance proposal form was submitted by 10 January 2015, it would be covered for any event that occurred during the growing season. The insurance broker says this was not possible. Is the insurance broker liable for the lost profit of the damaged wheat? Roger and Bernadette and their son, Peter, ran Fergusson Farms wheat farm in Canterbury. They had some crop insurance through United Wheat Growers but wanted to fully insure their crop. In October 2014, Peter contacted an insurance broker to inquire about crop insurance for the coming season. The insurance broker forwarded a crop insurance proposal form with a cover letter which said:
IF YOU REQUIRE CROP INSURANCE FOR THIS COMING SEASON, FOR YOUR CONVENIENCE WE HAVE ATTACHED THIS SEASON’S CURRENT POLICY WORDING AND RELATED PROPOSALS. PLEASE COMPLETE THE PROPOSAL AND ATTACH AN UPDATED FARM MAP DETAILING LOCATION OF CROP PADDOCKS TO BE INSURED ETC. WE NEED TO HAVE THE PROPOSAL BACK BY 10 JANUARY 2015 IN ORDER TO HAVE COVER IN PLACE.
During December 2014 and January 2015, Fergusson Farms experienced a series of frosts. In early January 2015 the insurance broker wrote to Fergusson Farms asking if it wanted to go ahead with insurance cover. On 6 January, Peter returned the proposal to the insurance broker, noting a commencement date of 1 December 2014 – when the wheat crop would have been flowering at the start of the growing season. In March 2015 it became apparent that the wheat crop had been damaged by the earlier frosts. United Wheat Growers paid out $100,000 after assessing the wheat crop for damage. Fergusson Farms then put in a claim for its remaining loss of approximately $100,000 with the new insurer. The insurer investigated, but declined the claim, as the frosts which caused the damage had happened before the insurance was in place. DISPUTE Fergusson Farms complained to the insurance broker claiming the broker’s letter stated they would be covered for the ‘coming season’, provided the proposal was completed and returned by 10 January 2015. This would include backdating cover to the proposed commencement date of 1 December 2014. The insurance broker said it was sorry that Fergusson Farms’ loss 44
was uninsured, however it was not responsible. Fergusson Farms then complained to FSCL. REVIEW We were satisfied that the insurance broker had immediately placed cover with the insurer when it received the proposal on 6 January 2015. The insurance documents confirmed the policy was issued on 6 January and that cover started on that date. This information had been provided to Fergusson Farms. We explained to Fergusson Farms that insurance law is clear that an insured party cannot recover lost profits from the insurer where the loss occurs before the start of the policy term. We found the insurance broker’s letter did not misrepresent that cover would be backdated. We considered that, although the letter could have been clearer about when cover would commence, the wording of the letter overall would not lead a reasonable person to conclude that cover could be backdated to a time before the insurance proposal form had been received by the insurer, or that the insurer or insurance broker had agreed to place temporary cover pending the return of the proposal. We considered it was implied that cover could only be placed from the date the proposal was received until the conclusion of the season, provided the proposal form was returned by 10 January 2015. RESOLUTION We found that the insurance broker was not responsible for Fergusson Farms’ lost profits and it had not agreed to extend the coverage period to backdate cover to 1 December 2014. However, we did note that the insurer had calculated its premium on the basis that the crop was undamaged and suggested that Fergusson Farms ask the insurer to consider whether a premium refund was appropriate as the wheat crop covered was already damaged when the cover was placed and the premium paid. INSIGHT Insurance is about protection against the risk of an event happening in the future. Insurance cannot respond to events that have already happened before the period of insurance starts. The insured cannot decide the period of insurance as this will generally commence when the insurance contract is accepted by the insurer. The term of a policy will be recorded in the insurance policy schedule. However, this complaint would have been unlikely to have come to FSCL had the broker’s letter of 28 October been more clearly worded about when the insurance period would start. Insurers and brokers should take all steps to ensure their customer communications are clear, jargonfree and leave no room for misinterpretation.
FSCL CASE STUDY
GOOD RECORDS AND PROCESSES SAVE THE DAY CASE STUDY - 124817
n April 2011, a woman emailed her broker to say she needed cover for a new leased vehicle. The application gave the broker’s address for policy notices. He had a system to check and record mail, then forward it to clients by post.
His client put a direct debit payment in place, but premiums were often defaulted due to insufficient funds. The insurer notified her in writing (to her broker’s address) when premiums were in arrears, and warned that the policy would be cancelled if not paid within 32 days. She made sporadic payments but the premiums remained in arrears, and the insurer cancelled the policy in September 2012. In December, she asked her broker to reinstate the policy. He organised “hold” cover with the insurer over the Christmas period. On December 27, 2012, the insurer emailed the broker to say it was withdrawing the “hold”cover, because the insured’s policies had been cancelled for non-payment five times.They said they’d only offer cover if she completed a new proposal and paid the full premium. The broker forwarded the insurer’s email to his client and asked her to complete an application and pay the premium. He couldn’t access email over Christmas. He sent his client several text messages to check if she had completed the application and paid the premium. She confirmed by text that she hadn’t, and would consider it in the New Year. He confirmed by text that she understood she currently had no insurance in place. On January 3, 2013, the woman’s vehicle was written-off in an accident. She had no cover and made a complaint about her broker. She stated she hadn’t received the notices of unpaid premiums sent by the insurer in 2012.
The broker was an RFA under the Financial Advisers Act 2008 (“the FAA”). However, his notice arrangement (from the insurer to the client) did not fall within the definition of “financial adviser service” under the FAA, so the FAA obligations did not apply to this service. Section 28 of the Consumer Guarantees Act 1993 requires services to be carried out with reasonable care. His notice arrangement was a service to his client, as a consumer, so he owed her a duty to provide that service with reasonable care. The broker provided documentary evidence to show he operated a system to ensure that mail received from the insurer about his client’s policy was recorded and mailed to her correct address. The IFSO Scheme Case Manager concluded that this evidence showed that he met the statutory standard required by section 28 of the Consumer Guarantees Act. The client said she thought her broker was obliged not just to pass on the notices, but to followup with her if she hadn’t paid and the cover was lapsing. However, the “reasonable care” obligation did not require him to ensure she made the payments. Whether or not she received the premium default notices, she was aware that at least some of the direct debit payments for the policy hadn’t been successful in 2012, because she made manual direct credit payments to cover some of them. The text messages showed that she was aware in December 2012 that she no longer had cover for the vehicle and made a deliberate decision not to put cover in place.
WHAT CAN WE LEARN FROM THIS? • EXPLAIN YOUR ROLE TO YOUR CLIENT • DOCUMENT ALL CLIENT INTERACTIONS • HAVE GOOD PROCESSES IN PLACE
Ashley Lowther update
Professional Development: Professional IQ College
Are you competent?
hat if a client asks you if you are competent? What would you tell them? Who determines that a person is competent? Is it your boss? Is it your clients? Is it the government? You may have years of experience working in your profession and clients that recommend you. But do you have proof of competence? Does competence matter to you, your organisation and your clients? If you are reconsidering your competence levels and want guaranteed proof of performance, then Professional IQ College can help you. We deliver New Zealand Qualifications Authority-accredited qualifications designed to meet future minimum standards of education that will apply to all General Insurance Advisers. The New Zealand Certificate in Financial Services (Level 5) qualification provides a good mix of core and specialist knowledge and practical application to help all advisers within the general insurance sector excel in their role. The certificate is made up of two modules, module one core knowledge module five general risk insurance. MODULE 1 CORE KNOWLEDGE By completing the core knowledge module, all graduates will be able to: • Demonstrate an understanding of financial services best practice and professionalism • Gain an understanding of the wider financial services regulatory environment • Apply research and analysis processes needed to develop fit for purpose solutions • Demonstrate an understanding of financial markets and how economic conditions impact market participants MODULE 5 GENERAL RISK INSURANCE By completing the general risk insurance strand all graduates will gain skills and knowledge relevant to the industry and will be able to: • Demonstrate understanding of insurance concepts and risk management principles to general insurance situations. • Gain an understanding of general insurance market, legislation, regulations and codes of conduct that are of particular relevance to the provision of general insurance services to provide services in a professional manner. • Demonstrate understanding of the relationship between insurance needs and general insurance product types to provide appropriate solutions for general insurance needs. • Gain an understanding of the processes of creating, maintaining and ending of general insurance contracts and assess the impact of a change of circumstance on general insurance arrangements. For More Information - To find out more about these modules get in touch and we can help draft a study plan and programme. Contact Sylvia Heywood today on 09 306 1737 or email Sylvia@professionaliq.co.nz 46
ince undertaking the New Zealand Certificate in Financial Services Ashley Lowther has nearly completed Module 1 Core Knowledge. Whilst Lowther already has a Bachelor of Business degree majoring in Commercial Law, Human Resource Management and Employment Relations she says that the New Zealand Certificate in Financial Services has provided her with greater knowledge of the overall financial system and economic environment. It has reinforced the legislative and regulatory requirements for financial advisers and how they should be applied in day-to-day best practice and professionalism. The learning material has helped in her role with Paramount Insurance as a broker support/administrative assistant by strengthening the skills she had and given her more understanding within the insurance industry, and financial sector overall. Lowther is keener than ever to move into the role of a broker or underwriting role in the future. Her study has re-enforced this. Broking services and underwriting are still an essential part of the insurance industry and will develop as the market responds to the changing risk within the NZ insurance market. For example, the weather events that have hit New Zealand the last few months, how is the market to respond? Analysis of risk will always be an ongoing part of the insurance industry. Lowther says that the general insurance sector has provided her with a great job and she would like to encourage more young people to consider general insurance as a career.
Soroptimist International of New Zealand
BETTY LOUGHHEAD SOROPTIMIST SCHOLARSHIP 2018 Soroptimist International exists to inspire action and create opportunities to transform the lives of women and girls. The Betty Loughhead Soroptimist Scholarship provides financial assistance to mature women who are studying for a qualification to: enter or re-enter the workforce; or change occupation Who can apply? Women who are: New Zealand citizens At least 25 years old on 1 September 2017 Enrolled in an NZQA approved education programme, undertaken in NZ Have a proven record of academic achievement Able to use the scholarship in the 2018 academic year Download an application form at: www.blsst.co.nz
Application period is 1 June 2017 to 1 September 2017 “Educate
a man, you educate one person; educate a woman, you educate a generation”
Give a woman the opportunity to gain skills, information and self-confidence through education, and she will become a better mother, worker and citizen
Turning your email into your CRM program
Auckland & webinar
Learn how to use the two most under utilised features of your email program with a few email tricks to turn you into a master of client service, retention and business development. You’ll never view your Contact and Tasks the same again!
A round-up of recent FSCL cases
Auckland & webinar
Complaints to FSCL are on the rise, including complaints about financial advisers, insurance and mortgage brokers.
Auckland & webinar
This webinar is webinar 3 which is part of a negotiation course that consists of six webinars each around 60 minutes long. At the end of each webinar there will be a short assignment. Upon completion of the full course attendees will be issued with a completion certificate. There is also the option of undertaking any of the webinars individually and not as part of the certificate course as each is ‘self-contained’. There is also an additional complaint handling webinar for those interested.
Emerging issues – methamphetamine damage claims and problems with earthquake repairs
Auckland & webinar
In the last year, the IFSO Scheme has seen an increase in issues in relation to claims for methamphetamine damage and with earthquake repairs. These emerging issues have meant that insurers have had to look closely at their policy wordings and the IFSO Scheme has worked with insurers to assist them resolve issues with their clients.
More walk less talk getting out there and getting known
Auckland & webinar
One of the most universally challenging activities, across all industries and markets is trying to get you and your product or service ‘out there’ and known to the people who count (and who you don’t at this stage know). How can you do it in a way that doesn’t come across as pushy, but also doesn’t waste your time.
What Do I Bring to the Negotiation Table?
Auckland & webinar
This webinar is webinar 4 which is part of a negotiation course that consists of six webinars each around 60 minutes long. At the end of each webinar there will be a short assignment. Upon completion of the full course attendees will be issued with a completion certificate. There is also the option of undertaking any of the webinars individually and not as part of the certificate course as each is ‘self-contained’. There is also an additional complaint handling webinar for those interested.
More heart less hype
Auckland & webinar
Ensuring that your one on one (and one to many if you choose that strategy) are impactful and memorable, and getting the balance of necessary information gathering and understanding their world at a broader sense.
Auckland & webinar
Details to come.
Dealing with Emotions in Negotiations (including debriefing)
Auckland & webinar
This webinar is webinar 5 which is part of a negotiation course that consists of six webinars each around 60 minutes long. At the end of each webinar there will be a short assignment. Upon completion of the full course attendees will be issued with a completion certificate. There is also the option of undertaking any of the webinars individually and not as part of the certificate course as each is ‘self-contained’. There is also an additional complaint handling webinar for those interested.
Another interesting workshop by FSCL to come
Auckland & webinar
Details to come.
More care, less crap
Auckland & webinar
How to create systems and strategies to design a nurture strategy that works for you and your customers and means that each subsequent interaction with your customer or prospect is a value based one. This will include a reference to keeping in touch with your existing database in a way that not only ensures repeat business/ cross selling and upselling, but quality referrals and recommendations.
Auckland & webinar
Whether talking to a client; a staff member; interviewing a potential employee; or just entertaining around the dinner table – you could benefit greatly by knowing these essential secrets for’ persuasive discussions’ and selling.
This webinar is webinar 6 which is part of a negotiation course that consists of six webinars each around 60 minutes long. At the end of each webinar there will be a short assignment. Upon completion of the full course attendees will be issued with a completion certificate. There is also the option of undertaking any of the webinars individually and not as part of the certificate course as each is ‘self-contained’. There is also an additional complaint handling webinar for those interested.
Effective Communication: Powerfully Persuasive People, Proposals, Presentations
Undertaking the Negotiation
Auckland & webinar
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PO Box 74557 Market Road, Auckland 1051 Tel: 09 926 2062 Mob: 021 905 537 email@example.com Gary Young Chief Executive, IBANZ
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Wellington Ph: 04 815 8007 email@example.com Rod Severn CEO, PAA
Auckland Ph: 09 600 5171 firstname.lastname@example.org Jason Smith Managing Director, Property & Commercial Insurance Brokers
PO Box 4, Feilding 4740 Tel: 06 323 8820 Mob: 027 293 8724 email@example.com
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