Covernote June Issue 2015

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June 2015 The professionals’ magazine from IBANZ

AGENCIES TAKE HOLD New Zealand brokers look for nimble alternatives to the bigger players

The chair was a chair that was sick of being sat on. Not a trustworthy one for a fat cat to nap on. But here it was beneath the eager electrician, as he reached to wire the new office addition. ‘Stand tall’ said the chair as the sparky grabbed wires, ‘then I’ll drop, and you’ll pull, and we’ll spark up some fires.’

NZ6181 05/15

Bad’s not going anywhere. Neither are we.


Advertising/Editorial: Robert Johnson, Benefitz Telephone 09 477 4702, Mobile 027 4970 712, Email: Design/Production: Anne Vindriis, Benefitz Imaging: CTP by Benefitz Produced for IBANZ by: Benefitz, Cnr Constellation Drive & Parkway Drive, Mairangi Bay, North Shore City. PO Box 33-1630 Takapuna. Telephone 09 477 4700, Fax 09 477 4799 Advertising Deadlines: Bookings 10th of the month prior to publication, Material 15th of the month prior to publication.

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: IBANZ National Office located at: Level 5, 280 Queen Street, Auckland (P.O. Box 7053, Wellesley Street) Telephone 09-306-1732. Website:

Gary Young CEO, IBANZ

Government turns attention to insurance This year is fast becoming one of the most significant in terms of government involvement with the insurance sector. Last month saw issues papers produced for reviews of both the NZ Fire Service and the Financial Advisers Act. Waiting in the wings is a review of the future of the Earthquake Commission. All of these matters have the potential to significantly affect the future landscape of our marketplace. The government has said it is keen to engage with us as part of the review process. But some would say that in respect of the Fire Service, it has been too much talk but no action for decades. With very little action having come from 17 previous reviews, they might have a point. Achieving good outcomes is what makes getting involved worthwhile. The reality is that outcomes are significantly influenced by the parameters of the review. In the case of the financial advisers legislation the parameters encompass a wide range of issues and do not appear to have any pre-conceived preference for the end result. However in the fire service review the topic of real interest for insurance is funding and this clearly has a pre-determined outcome. The debate has been narrowed to a single outcome with only a little flexibility as to how that will be arrived at. Logical, appropriate solutions have been taken off the table before the conversation even starts. In the words of the Insurance Council chief executive Tim Grafton, this “has made a mockery of genuine consultation�. It would appear that for the 18th time the industry that produces the funds to run a national emergency service will again be ignored. Our industry, along with our clients, bears the burden of this blinkered approach to funding a vital national service. We are certainly more hopeful that the consultation on the Financial Advisers Act will live up to the promise of the issues paper and be truly open to considering all views of the future. The real challenge with this Act is for the different advisers to distinguish themselves from the widely divergent types of adviser caught up in the financial services net. This artificial grouping by the legislators has always had the potential to make the mistake of trying to create a one-size-fits-all solution. Ultimately, to be successful any legislation has to respond to the real world and work with it to achieve desired outcomes. It has to be fair, effective, relevant and efficient. A pessimist would say only one of the two reviews currently before us appears to have any chance of succeeding based on those criteria. Fortunately I have always been an optimist.

Gary Young, CEO, IBANZ

Features 10. Strong Markets Worldwide 14. Agencies take hold The number of underwriting agencies targeting niche areas of the market is growing and tipped to increase further as New Zealand clients look for nimble alternatives to the big players.

17. NZI launches CoverKit

22. Shaky start for IAG chief executive 24. UAVs cleared for takeoff 32. The CEO Agenda What's on the minds of insurance chief executives around the globe?

34. Insurance Advocates go in to battle 36. Increasing cyber risk brings rise to cyber liability insurance needs in New Zealand

28. A fresh outlook Kirsty Young and i2i are busting industry stereotypes.

Regulars 1. View from the CEO’s chair 3. News 18-19. Out & About 26. Ask an Expert

47. Professional Development: Professional IQ College 52. IBANZ Contacts INSURAN


40. FSCL Case Study

June 2015

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New boss for Suncorp Suncorp has announced its chief executive, Patrick Snowball, will step down in October and be replaced by Michael Cameron. Snowball will return to Britain. Cameron is chief executive and managing director of The GPT Group. He has more than 30 years’ experience in business and finance, and has been a non-executive director of Suncorp Group since April 2012. Suncorp Group chairman Ziggy Switkowski thanked Snowball for his service to the company in a statement made to the ASX. “Patrick Snowball has steered the Suncorp Group through a major transformation which has simplified operations, realised efficiency benefits and strengthened the capital base. Today, we are a vastly improved diverse financial services business with good prospects and are providing

attractive and sustainable returns to our shareholders. As importantly, Patrick has successfully fostered a culture of innovation, employee engagement, accountability and process discipline which provides a solid foundation on which Michael can build.” Switkowski also had praise for Cameron. “His understanding of Suncorp and the financial services industry combined with his discipline and long-term approach to business makes him the ideal person to lead the company through its next growth phase. I expect that our regulators, retail, institutional and international stakeholders will quickly build confidence in Michael’s leadership, values and priorities as they have with Patrick.” Cameron told media he would be leading a wellperforming organisation with no overhaul required.

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IAG nudges claimants towards cash settlement IAG is trying to get a handle on its Christchurch earthquake claims by encouraging claimants to accept cash settlements rather than joining the queue for the rebuild process. It has also extended its completion date for all new claims to mid2016. The move will reportedly affect about 2000 customers who are new claimants, entered the repair and rebuild programme in the last two years and are at the back of the queue, and those who have complex claims. IAG has already cash settled more than 4300 customer claims. The company said the feedback from those customers was that cash settlement put the power back in their hands and gave them freedom to make choices that worked best for their particular circumstances. IAG cash settlement offers are based on the full estimated cost of repair or replacement of damaged homes based on a detailed, professional scope of the damage. All IAG documentation is shared with customers who then have the opportunity to discuss their settlement with independent advisers. “This process has been extremely well received by our customers who have cash settled their claims, some of which have been large and complex,” said Dean MacGregor Canterbury recovery executive general manager. “We remain committed to our rebuild programme, which will still see us complete more than $1 billion of construction work. We simply can’t ask our customers who have not yet signed a contract to join a construction queue, if we can’t guarantee that we can reinstate their property within a reasonable timeframe. Any new claims going into the programme will be on a case-by-case basis, and will include vulnerable customers and those we determine needing the support of a reinstatement programme only. "We are channelling significant resources into cash settling remaining claims with the aim that every one of our customers with an earthquake related claim will have the certainty of that claim being in 4

June 2015

construction or settled by the end of 2015.” NZI, one of the IAG brands, said settling claims had always been a top priority. The total cost of the 2010 and 2011 quakes has now been estimated at $33 to $38 billion according to the Financial Stability Report published by the Reserve Bank of New Zealand in May of this year. As at March 31 this year, insurers had paid out $24 billion in Canterbury earthquake claims. NZI is putting significant resources into its construction programme to complete the current projects and has been working closely with its Christchurch-based brokers to ensure that every one of its customers with an existing earthquake-related claim has it settled or under construction by the end of 2015. It said New Zealand had never had to manage anything on such a large scale before and both the building and insurance industries’ resources have been tested. The rebuild has progressed more slowly than many of the insurers first thought due to a number of factors, not least longer build timeframes than originally anticipated and customer changes as a result. General manager of claims Garry Taylor said: “It has become unfair for us to ask customers to join a construction queue that would not see a final resolution until 2017. "With the number of claims still to come and a construction programme at full capacity, we’ve had to look outside of our own programme and we believe that the wider construction sector is in a good position to move quickly to rebuild customers’ homes working with them directly. Over the next six months we’re hoping to cash settle around 1000 more ‘overcap’ NZI claims, and I’m pleased to say that the majority of these customers are already in negotiation.” NZI said it would continue to manage each settlement on a caseby-case basis and where appropriate, would involve builders in the negotiation process to help customers have confidence in the settlements being offered.


Insurance panel appointed Economic Development Minister Steven Joyce has announced the five providers appointed to a new Allof-Government (AoG) panel for risk financing and insurance intermediary (brokerage) services. The providers selected following a tender process late last year are Aon, Crombie Lockwood, Jardine Lloyd Thompson, Marsh and Willis. “These providers have demonstrated the necessary capacity, capability and expertise to deliver worldclass brokerage and insurance intermediary services and solutions to government agencies,” Joyce said. “Government agencies spend a significant amount on risk financing and insurance each year. This new panel will ensure a more co-ordinated approach is taken to the way the Government purchases these services, and will help ensure resilience in the event of unanticipated, large-scale events such as natural disasters. In the event of a natural disaster like an earthquake, for example, the new solutions delivered by these providers will enable government agencies to respond and recover more quickly, because agencies will be better prepared and co-ordinated in terms of the funding mechanisms that will apply.” The panel will bring better oversight of risk, risk management and risk financing, and create consistent best-practice approach, Joyce said. Contracts will commence this year.

Add a camera to client cover Brokers no longer need to be placing business with Lumley to be able to add a DriveCam camera to the product mix. An exclusive deal between Lumley and In Vehicle Camera Systems (IVCS) to promote the DriveCam product ended at the end of 2013. Managing director Asian Pacific Haydn Bowbyes said that meant brokers could bundle a DriveCam system into any offering they put together for their client, for any fleet size and with any insurer in New Zealand or Australia. DriveCam provides a 12-second video clip, with audio, any time a vehicle is in a high-risk situation or involved in unusual motion. It means risky driving behaviour is immediately identified and evidence is available for training, comprehensive information is supplied on accidents, accidents are prevented because driver risk is reduced and the accident rate of vehicles fitted with DriveCam drops 90% in the first year.

IVCS have subsidised a special insurance industry flat rate for purchase of the DriveCam hardware as well as the monthly fee. Bowbyes said that rate was available equally to all insurers and it was then up to them what additional subsidy they offered to make the inlusion of DriveCam competitive. “After many years working with insurers, IVCS also offer consultation on how best to leverage the benefits of the outstanding risk and claims reduction driven by the DriveCam system to ensure that your efforts with this fleet risk management technology do not go unrewarded upon renewal.” Bowbyes said brokers could get in touch with IVCS directly. He said there had been huge interest in the product. More than 250,000 cameras have been fitted around the world. The company would guarantee a return on investment if the product was used correctly, he said.

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Online calculators ‘wrong by as much as 50%’ New Zealand’s quantity surveyors don’t want consumers relying on online insurance calculators. The president of the New Zealand Institute of Quantity Surveyors Julian Mace said homeowners who relied on the calculators to decide their sums insured were taking a significant risk. “Setting the insurance valuation on a property is a very complex business that requires a specialist – someone who’s actually trained and experienced in construction costing, like a quantity surveyor. Someone without that specialised expertise, who uses a generic online calculator, is taking a significant financial risk with their most valuable possession.” Mace said online insurance

calculations could be out by as much as 50% when compared to the figures provided by a registered quantity surveyor. The difference can be even more pronounced when comparing an architecturally-designed house with one built by a group housing franchise. He said a second factor in the wildly varying insurance valuations was the allowance made for escalation. “That’s a complicated issue which requires a detailed knowledge and understanding of what drives building costs and how those costs might change over the period of the insurance or, more importantly, in the often lengthy period before a rebuild can take place. That wait can sometimes be two or so years and building

costs will change, sometimes dramatically in that time, as new technologies are implemented or new building materials and standards take effect.” The New Zealand Institute of Quantity Surveyors has adopted a standardised approach to providing property insurance valuations and ensuring they are accurate. “We developed this in conjunction with the insurance industry specifically to ensure homeowners got accurate data and could rely on the insurance valuations provided by registered quantity surveyors,” Mace said. “To be safe, homeowners should have their insurance valuation reviewed every year to allow for escalation, and redone completely if they have renovated.”

Banqer takes message to the classroom If you ask a 12-year-old whether they want to spend money to insure their mobile device, the answer is likely to be no. But with the Insurance Council of New Zealand teaming up with Banqer, creators of an online tool that turns the classroom into a virtual economy, pre-teens around the country could start thinking seriously about how best to manage their financial risks. The Insurance Council and Banqer announced a partnership that will result in the development of an educational insurance module and resources that are expected to be launched in July. Banqer is a Wellington-based company that has developed a practical way of introducing 8 to 12-year-olds to the world of personal finances by creating a virtual classroom economy. “The Banqer interactive platform is a fun way for young Kiwis to learn about financial issues and we’re delighted with the potential our partnership has to help young New Zealanders better understand risk, how insurance contributes to the economy and the important role it plays in their daily lives,” Insurance Council chief executive Tim Grafton said. The Banqer online platform includes a hub which houses resources to help guide a teacher and links back to the Ministry of Education’s recently released Financial Capability Progressions, so is aligned with the education curriculum. Banquer co-founder Kendall Flutey said: “Our interactive, online platform is very much like online banking which makes it extremely


June 2015

practical when introducing children to the wonders of interacting with money. Teachers can also motivate children by offering rewards and expensing them, helping students learn valuable life skills in the process. “With Banqer the teacher can guide students through the concepts of earning interest, paying tax, and very soon through our partnership with the Insurance Council, managing risks and insuring their personal assets,” Flutey said. “I’m really excited to be partnering with an organisation that can offer so much technical expertise, ensuring that what we are teaching is relevant and appropriate for helping children understand risk and insurance.” Some high schools have also signed up for the Banqer service after it was launched earlier this year. Banqer recently won the 2015 BNZ Start-up Alley competition over five other start-up companies, as a part of this year's Webstock technology conference. Grafton said: “This partnership with Banqer is another exciting initiative in our three-year strategy to improve insurance literacy, a strategy that kicked off last year with the establishment of an insurance education website Are You Covered?, our partnership with the Young Enterprise Trust to develop financial education teaching and student resources and the annual Excellence in Insurance Journalism Award we offer jointly with Competenz.”


Insurance jobs on offer A big jump has been reported in the number of insurance and superannuation jobs on offer in New Zealand. The latest data from job listings website SEEK has revealed a 40% increase in the number of jobs in those industries from February to March 2015. Auckland drove industry growth with new job opportunities up 59% month-on-month. Canterbury followed closely behind, up 42%, while jobs in Wellington increased 6% over the same period. Janet Faulding, general manager of SEEK New Zealand, said the insurance industry had been through a period of change in recent years, caused largely by the need to adapt following the challenges brought about by the Canterbury earthquakes. “We have seen a marked shift in the kinds of roles needing to be filled, such as claims, and while this is to be expected following such a significant natural disaster, what we’re now hearing is that the sector’s renewed focus is

on employing people with diverse skills and a personal understanding of events that impact the sector,” she said. IAG had adapted to meet the complexities posed by the aftermath of the Canterbury earthquakes, said Martin Hunter, executive general manager of strategy, people and reputation. “The sector touches customers, suppliers, brokers, and businesses small and large and it requires expertise in a range of fields beyond just insurance knowledge, such as marketing, communications, data analysis, insights, technology/digital skills, legal and HR/people skills,” he said. “It’s a progressive industry, dealing regularly with big issues and that makes the work environment very dynamic. We’re pleased that word is getting out and that people know broad and exciting careers are available to those keen to take a look at the sector.” Faulding said candidate interest was also strong.

“Our data shows the industry has a competitive average annual salary of $75,000, which may contribute to the sector’s growing popularity as is evident in a 17% year on year increase in the number of job applications in insurance and superannuation made on SEEK in March.” Meanwhile, recruitment firm Hays has released its latest quarterly report, which shows the pool of quality candidates in the sector is diminishing and available candidates are being snapped up quickly. Hays managing director for New Zealand Jason Walker said the firm had a number of clients who wanted to hire advisers. “[They] are always on the look-out for really strong business development financial advisers either in the life and risk adviser side as well financial advisers that also deal with investments and wealth. Good ones are hard to find.” He said clients were looking for AFA and RFA advisers.



Fire Service discussion document sparks anger There are claims the Government has prematurely shut down the conversation about how the fire service is funded. Internal Affairs Minister Peter Dunne has released a discussion document on the future of the fire service, asking for views on what support and funding is needed. The fire service levy imposed on insurance has been a contentious topic for some time. The Supreme Court recently overturned High Court and Court of Appeal support for brokers who structure their clients’ policies in a way the fire service claims is trying to avoid its levy. Insurance levies pay for the vast bulk of New Zealand’s firefighting operations. Currently the levy is calculated on the indemnity value of properties insured against fire. However, the term indemnity value is not defined in the Fire Service Act. The indemnity value is fixed in the owner’s declaration or a valuation certificate The discussion document identifies that there are problems with the levy: The revenue it gathers does not reflect the total risk of fire, nor the range of activities the the fire service is involved in and can be confusing to calculate and difficult to forecast. “The fire service levy does not reflect the risk presented by the different properties and assets that the NZFS needs to be ready to protect,” the document says. “Furthermore some people and organisations do not take out fire insurance and therefore do not contribute to the levy.” A report by Martin Jenkins on the fire service’s sources of income and their types of activities estimated that $84.6 million was spent on readiness and response to non-fire incidents for the 2012/13 year. The Insurance Brokers Association of New Zealand (IBANZ) and Vero sought a declaration from the courts about how the fire service levy should be calculated on split tier and collective policies. The fire service opposed the IBANZ and Vero proceeding. Both the High Court and Court of Appeal found in favour of IBANZ and Vero, but that was appealed to the Supreme Court, which ruled against the earlier judgements. The discussion document said while the Supreme Court decision addressed the effectiveness of existing split-tier policies and would make it much more difficult to put in place effective collective policies, it was possible that other arrangements intended to minimise the levy might develop because the legislation was not as clear as it could be. “Unless there is reform to the Fire Service Act, further litigation may be necessary to settle disagreements about how the levy should be calculated.” But the only two options to improve the fire service funding suggested

in the discussion document are that the status quo is enhanced and the fire service levy is still based on insurance, but calculated on material damage rather than fire insurance, or a mixed funding model. Funding sources could include a levy based on insurance, contributions from the Government for non-fire activities and to reflect the under-insurance of Crown properties for fire damage and contributions from the motor vehicle sector. Insurance Council chief executive Tim Grafton said the alternatives being consulted on were narrow. Free and frank discussion about the best way to fund the fire service had been shut down. “The Government has made a mockery of genuine consultation by ruling out the fairest, most cost-effective and sustainable way of funding the fire service,” he said. He said the funding model needed to reflect that the fire service did more than put out fires. “The current system of funding pings everyone who insures their property so those who don’t insure free-ride and expect firefighters to rescue them when it counts,” he said. Grafton said: “One of the biggest free-riders of all is the government itself. Many government agencies don’t bother to contribute, or minimise their contribution, and so shift higher costs to people who do insure their home, contents and motor vehicles.” Insurers had been arguing for 20 years that the fairest way to fund the fire service was from general taxation, he said. “By sticking with a levy on insurance, the government’s review reads like a shame-faced apology with a narrow set of options that either suffer from creating unfairness, complexity, additional compliance costs or potential avoidance loopholes.” IBANZ chief executive Gary Young said: “They’ve taken off the table the two real options and just left us with a fiddle on the current system.” He said the levy should come out of general taxation. “But The Government isn’t about to release $350 million, that’s why they don’t want to do it. They’ve also said they’re not going to follow the Australian approach and apply it to property though the local body system. If you take those two out, what are you left with? How can we have a proper conversation if they aren’t prepared to talk about the real issues?”

ICNZ Vero chief executive Gary Dransfield is the new president of the Insurance Council. Dransfield takes over from IAG CEO Jacki Johnson who held the role for three years. She will continue to serve as a board member. FMG CEO Chris Black was re-elected ICNZ vice-president Two new members join the board, Co-op Insurance NZ’s chief executive Henry Lynch and MAS chief executive Martin Stokes. The other members re-elected to make up the 10-member board are: QBE chief executive Ross Chapman; AA Insurance chief executive Chris Curtin; Tower chief executive David Hancock; Head of Munich Re NZ Martin Kreft and Pietro Toffanello of General Re.


June 2015


DUAL appointments DUAL has promoted Andrew Beaton to the position of managing director. He will join Martin Stroud and Damien Coates on the board of directors for DUAL New Zealand and assume overall responsibility of our New Zealand operations reporting to Coates, who is DUAL's Asia Pacific chief executive. Stroud is taking on a new role as underwriting director, where he will have the overall responsibility of underwriting in property and liability, along with continuing to lead DUAL’s major account management. Coates said: “Andrew has significant experience in managing and leading a large underwriting business and with Andrew having now successfully launched our property operation it allows us to utilise this experience in a much broader role.” DUAL has made a series of new appointments over the last month with Luke Edmonds joining as operations manager, Sally Davis and Jade Hernon joining to further strengthen DUAL’s claims function and Hayley O’Neill, Razia Zaahid and Anjana Govind joining the underwriting team.

Ian Taylor

Ryan Clark

Michael Carswell

Jeff Crawford

NZI makes four key appointments With the purchase of Lumley late last year, NZI has continued to focus on attracting and retaining key people with expertise into the new business. This has resulted in four new key appointments: general manager corporate and facilities; national manager liability; national manager - commercial motor; and Auckland regional commercial sales manager. Executive general manager Travis Atkinson said: “We’re thrilled to welcome such high-calibre people on board and it’s a great testament to our reputation in the marketplace that they have chosen to join us. Attracting and retaining the right people is an important part of successfully combining the NZI and Lumley businesses and making sure NZI remains a sustainable, long-term trusted partner for our brokers and banking partners.” NATIONAL MANAGER – COMMERCIAL MOTOR NZI appointed Ian Taylor to the role of national manager - commercial motor in April.Taylor has specialised in the commercial motor vehicle sector for the last 10 years and is well placed to take on this national role. Taylor came to NZI from the Lumley part of

the business, which he joined in 2008. His insurance career spans 33 years, working in a variety of roles including claims, underwriting and business development both here and in the Middle East. Taylor is IAG’s representative on the Insurance Council Motor Committee and manages IAG’s commercial motor portfolio. He brings with him the collective expertise of both the NZI and Lumley motor teams. NATIONAL MANAGER LIABILITY Ryan Clark has taken up the role of national manager, liability. Clark started in May and is managing NZI’s newly combined general liability and financial lines division. He was previously at AIG where he worked for six years, most recently as AIG’s financial lines manager. Clark has extensive experience in liability insurance and has a legacy of bringing innovative solutions to the market. He is the chair of the Insurance Council of New Zealand liability standing committee and a sought-after guest speaker. GENERAL MANAGER CORPORATE AND FACILITIES

NZI appointed Michael Carswell to the role of general manager corporate and facilities in late May. Carswell has been acting in this role since February. Recognised as the Emerging Insurance Professional of the Year at the NZ General Insurance Industry Awards in 2010, he’s worked in a variety of senior roles across the corporate and facility business and has strong market knowledge. Carswell hass been with NZI for 19 years and has worked extensively in underwriting and relationship roles, heading up New Zealand’s largest client facility for eight years. AUCKLAND REGIONAL COMMERCIAL SALES MANAGER Jeff Crawford was appointed to the role of Auckland regional commercial sales manager to provide leadership and focus for this large region. Crawford started his role in early June and came to NZI from AIG where he also spent the last six years. His most recent role was New Zealand combined manager responsible for AIG’s national small medium enterprise (SME) portfolio. Crawford has previously worked in the direct business for IAG and brings with him a wealth of experience to NZI.




nsurance markets around the world softened in the first quarter of 2015, Marsh’s latest Global Insurance Market Quarterly Briefing reveals. Commercial insurance pricing declines were reported in most regions and lines of business. Marsh said that was driven in large part by an oversupply of capital. “Coupled with strong underwriting performance, this overcapitalised position is behind the softening market. In both the insurance and reinsurance markets, consolidation accelerated over the last several quarters. The trend, which is expected to continue, is a clear sign that the industry is experiencing excess capital levels.” Asia-Pacific reported the largest composite rate decrease, followed by Europe, the UK, Latin America and the US. In the Asia-Pacific region, renewal rate changes for property insurance decreased by 7.5% or more. Financial and professional rates dropped between 5% and 7.5%. Casualty rates decreased more moderately around the world. David Batchelor, president of Marsh’s international division, said: “It has been another benign year for major catastrophe losses and the abundance of capital in the primary markets and in reinsurance capacity, including new alternative capital, is driving increased competition, forcing rates lower.” Cyber insurance is one area that is bucking the trend. It was one of the few areas in the US where average rates increased. Marsh said carriers continued to innovate on policy language and to examine the different coverage types that companies might require, including network security, privacy, business interruption, extortion and crime. Marsh said pricing cyber cover was tricky for insurers because of the dynamic nature of the risk. “Carriers are asking detailed questions to better understand the nature of each insured’s exposure, controls and loss propensity, although those distinctions do not necessarily make their way into the pricing of accounts.” Pricing was driven by capital committed the market, which increased over the quarter, insurer profitability and pricing methodologies that were becoming more sophisticated as


June 2015

underwriting tools and techniques improved, the report said. Despite the weakened interest rate environment, strong underwriting performance has delivered attractive combined ratios for the industry. Marsh said the result of profitable underwriting performance was that excess profit was distributed as dividends, used to repurchase stock or put toward surplus levels. “Insurers need to write against that increased capital position to generate adequate returns. The pressure to write more premium grows every year.The supply-anddemand model dictates that as capital grows, market capscity and appetite grow and market prices generally decline.”


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Agencies take hold The number of underwriting agencies targeting niche areas of the market is growing and tipped to increase further as New Zealand clients look for nimble alternatives to the bigger players.


changing New Zealand insurance market is providing more opportunities for niche underwriting agencies to grab a slice of the action. There are about 15 operating in the New Zealand market, although several are offshoots of the same parent company. They cover specialist products such as aviation insurance, motorhome insurance, and cover for classic cars, forestry operations and motorcycles. Underwriting agencies play a big part in foreign insurance markets, such as Australia’s, but have only started to increase in number in New Zealand over the past three or four years. Many are backed by underwriting giant Lloyd’s of London. Lloyd’s general representative in New Zealand, Scott Galloway, said the growth in agencies in this country had been noticeable since 2011. There are now 21 Lloyd’s coverholders in New Zealand and he expected that number to continue to grow. He said: “Coverholders are businesses which are authorised to exercise binding authorities on behalf of the underwriters. They might be specialist underwriting agencies or they might also operate as brokers. Coverholders play an important role in Lloyd’s distribution strategy as they offer a compelling combination of local knowledge and products, with Lloyd’s underwriting expertise and financial security.” Galloway said a number of factors, including the impact of the Christchurch earthquakes, had


June 2015


combined to make the New Zealand market hospitable to budding agencies. “In the aftermath of the Canterbury earthquakes it became apparent that there was a need for access to underwriters with financial strength, flexibility and an appetite for risk. Lloyd’s underwriters were the first to accept risks when others were reluctant to do so. I think this created an awareness amongst brokers and their clients of the benefits of having a broader range of insurance options. Underwriting agencies can provide brokers with that access to the expertise and strength of global specialist underwriters. “ He said Lloyd’s underwriters saw New Zealand as an attractive market in which to do business and could use the network of underwriting agencies to access good quality clients. The agencies would then provide the local knowledge and ability to serve clients in the event of a claim. John Baker, of Star Underwriting Agents, said the market was on the cusp of expansion, as a culmination of two events. The first was the introduction of a compliance regime to a level he said limited innovation and the amalgamation of underwriting capacity. He said that left brokers who wanted to arrange cover for specific risks at the mercy of corporations who were not always good risktakers. “Brokers in the past have developed ‘schemes’ for groups of their clients they have in their portfolios with a specific requirement. This was seen as a way to grow their business with a commodity-type product that they marketed as exclusive and in this way sought a market advantage. “ But he said that approach limited the potential growth of the schemes to the groups themselves. “The potential was not realised until the acquisition orgy of Aon and Crombie Lockwood and the outbreak of clustering of Broker Web, Broker Net and Allied. In recent times the two large Australian clusters who have devoured the New Zealand clusters have introduced a raft of Australian based underwriting facilities who promise new possibilities but are limited because they are designed to fit with the compliance requirements of the Australian market and


therefore need to be translated and broadened to gain any relevance into the New Zealand market,” he said. “The New Zealand market, which is still relatively free from unnecessary compliance, has an environment where opportunities of well-run facilities can provide intermediated insurers with new income streams with significantly reduced costs of administration and the elimination of endless corporate meetings to get ideas signed off.” He said competing agencies would evolve, creating a diverse and vibrant market which brokers could use to demonstrate to their clients their market intelligence and provide a tailored solution to the client‘s requirements. IBANZ chief executive Gary Young agreed the market consolidation had created an opportunity for smaller underwriting operations, which would deal with brokers and cater for very specialised segments of the insurance market. “If you look at the Australian market there are a huge number of underwriting agencies. They might have got to the point where there are too many. In New Zealand we’ve gone through a patch where there are hardly any, we’re certainly going to see more pop out of the woodwork. The merger will have created some opportunities where it is perceived Lumley had particular expertise.” He said underwriting agencies tended to thrive where the large insurance companies offered standardised cover. “The agency will offer more bespoke covers developed for specific, often more niche, needs.”

Andrew McFetridge, of Rosser Underwriting, which specialises in cover for not-for-profit organisations, said underwriting agencies would pop up from time to time to offer more effective ways of doing business. “I think they’ll become more prevalent in New Zealand as more complex and technical products are coming out.” Many are represented by the Underwriting Agencies Council, based in Australia. it has 11 members with full voting rights in New Zealand. General Manager William Legge said he wanted to get the New Zealand membership to 20 by the end of the year. He said all of the council’s members in New Zealand were reporting that they were writing business, although the market is softening. due to increasing competition and falling premiums “It’s good to be growing in an area where a lot of things are static.” The council has two types of members: Brokers who have limited binding authority and either wholesale their products to other brokers and the public or have an exclusive product for their clients but they have no claims-settling authority; and standalone wholesale facilities with agreed limits of acceptance plus the authority to settle claims. The first type removes the acquisition and marketing costs from the security but not the claims management. The second type removes all cost except the cost of capital from the security. They act as agents of the insurer but cover designed by them is far wider than that provided by underwriters directly, and there is flexibility to hand-make the



terms of the agency. One of the newest players is Delta Insurance, which provides specialist niche liability alternatives. Managing director Ian Pollard said underwriting agencies were becoming a popular model in the New Zealand market and had been tried and tested successfully in Australia. Craig Kirk, general manager of the firm, said: “Bigger companies are getting bigger and less nimble. They’re not able to respond to all the needs of their clientele. This creates an opportunity for smaller providers who are more nimble and innovative.” A Gratex International survey of underwriting agencies’ chief executives found confidence in

THERE’S GOING TO BE A LOT OF CHANGE IN INSURANCE BROUGHT ABOUT BY TECHNOLOGY. SMALL PLAYERS HAVE SEEN THE OPPORTUNITY TO GET IN AND TAKE ADVANTAGE OF THAT. WHILE BIG PLAYERS DOMINATE, IT DOESN’T MEAN THEY CAN’T MAKE MONEY AS SMALLER PLAYERS. the market opportunity in New Zealand and Australia is strong. But the relationship with brokers was seen as crucial to success. Almost 90% said they felt very optimistic about the future, 83% reported confidence in the growth potential in their markets. An overwhelming 94% of respondents “strongly agreed or agreed” that underwriting agencies delivered a higher level of service to customers, while 68% “strongly agreed or agreed” that they helped insurance organisations to shorten the time to market for new products. Gratex said the response indicated the delivery


June 2015

of superior customer service was perceived as the most significant value for underwriting agencies. Only 57.4% of respondents said they handled claims processing internally, whereas 27.7% worked with third-party administrators and 29.8% relied on their insurance partner. Almost half said fierce competition was a challenge. Karl Deutschle, PwC insurance team leader, said the emergence of smaller players was creating an interesting dynamic. “There are some smaller players coming in and trying to differentiate themselves and create a niche for themselves. I don’t know yet to what extent the large players are starting to respond to that because the small players are still pretty small but it’s something we’re keeping an eye on.” Some were positioning themselves with their products while others would focus on how they interacted with a customer, he said. “There’s going to be a lot of change in insurance brought about by technology. Small players have seen the opportunity to get in and take advantage of that. While big players dominate, it doesn’t mean they can’t make money as smaller players.” But the big players are not very troubled so far. Travis Atkinson, executive general manager of NZI, said: “In every market there are niche operators and we’re not afraid of competition and certainly not afraid of niche operators.” But he said if it was just price that was being differentiated on, that would not be positive for the market. The agencies said the emergence of more niche players was good news for brokers because they could set their own rules, terms and conditions and create a competitive alternative to the bigger companies. They enabled the broker to talk directly to someone who could make a decision about the policy in question. Baker said Star was growing at a rate of 20% compounding per year. Its book of business is now ten times what it was when it started but Baker said it only had about half the business it wanted in its niche. SUAL has about 10 per cent of the value of New Zealand’s motor fleet under its cover. Legge said agencies were available 24/7, which was a big bonus for brokers who needed an answer quickly. “You talk to the person who’s going to work with you to achieve the end result, rather than if it doesn’t fit the box, can’t do it. We don’t have a box.” He said sometimes agencies were used as a way to test the water for a big international backer.

Firms could try out the appetite for a product by offering it through agencies, rather than risk investing in a full start-up that might not get off the ground. “It’s a way of developing a market without expanding the expense account.” Mike Street, of International Underwriting Agencies, said using an agency would offer brokers more alternatives. “We can provide service straight away because we’re not a mega corporation that has a huge number of rules.” The biggest challenge for the agencies now will be to navigate a softening insurance market. McFetridge said premiums, especially on property insurance, had come down a lot as insurers and underwriting agencies became more aggressive for their share of the market. Unlike the big insurers that can slash their premiums to win business, the agencies are more limited in their ability to play with pricing. Street said underwriting agencies were not able to play with their reserves or reinsurance in the way the big insurance companies did. “It’s harder in a competitive market where big players are slashing premiums. When the market is soft business always goes to the part of the market that gives them the biggest contingency at the lowest price.” But Legge said the agencies would likely be less negatively affected this cycle because of the work that had gone into building broker relationships. “We’ve recognised the skill set of intermediaries, not just treating them as a business source but a representative of the insured and a very important cog in the wheel. If you treat people well they will respond.” Pollard said there was a lot of demand for Delta’s services and the availability of global insurance capacity made it easier to access cover for New Zealanders. Brokers who used an underwriting agency could target clients with something that directly matched their needs, he said. “We have a fairly healthy $400 million premium liability insurance market here which I believe has potential to grow. However, we now have essentially an oligopoly of generalist insurers which cannot meet the needs of many businesses and leaves them exposed over the longer term,” he said. “There’s definitely space in the market for more to come in. We hear from brokers across the spectrum that there is demand for property insurance and in other areas as well. I certainly think there’ll be more. Look at Australia, they’ve got very niche agencies focusing on industries and professions.”


AIG rugby safety awards 2015


IG has launched the AIG rugby safety awards 2015, encouraging players at all levels to share rugby safety tips via social media to champion the importance of improving safety and reducing the risk of injury. The 2015 awards are focused on the theme of preparation and how this is key to ensuring safety both on and off the rugby field. AIG is giving rugby players worldwide the chance to win the ultimate rugby experience by posting a photo showing how they prepare to play safe rugby. Entries can be submitted via Twitter or Instagram using the hashtag #AIGSafeRugby. Speaking about the awards, Daniel Glantz, global head of sponsorship at AIG commented, “We are committed to growing rugby’s presence, and player safety is fundamental to the development of the sport. Similar to risk mitigation in insurance, preparation and safety awareness is crucial to reducing injury risk in rugby.” New Zealand Rugby’s general manager of community rugby, Brent Anderson, said: “Rugby is a contact sport. Everyone accepts that bumps and bruises are part and parcel of the game, but equally we want to reassure parents and players both young and old, that we are working very hard with our coaches to make rugby as safe as possible. Programmes like the AIG Rugby Safety Awards are a great way to raise awareness and help rugby become safer.” The winner will travel to London this September to meet players from the current All Blacks squad and see the team in action. Entry is open until Friday 26 June 2015 with entries available for viewing at com/saferugby. The winner and three runners-up will be announced in July.


STEADFAST STEPS UP Just under 100 delegates including insurer representatives and 40 brokers from New Zealand attended the recent Steadfast Insurance Brokers convention in Adelaide. New Zealand chief executive Bruce Oughton

said the group was taking off since its acquisition of Allied Insurance last year. It recently hired Tony Philpott, formerly of Lumley and AIG, as its new technical manager. His priority will be to finalise Steadfast’s

Delegates waiting to enter the Tuesday night dinner.

Bruce Oughton talks to Andrew Cartwright.

agreed wordings with its insurer partners. He will also provide support to the company’s network of brokers on technical issues and help with training. Steadfast now has 50 offices throughout New Zealand.

Delegates at the opening ceremony.

Sir Bob Parker delivered the opening address about the effect of the Canterbury earthquake.

Steadfast marketplace.

The setting for the gala dinner for the 1900 attendees.

Steadfast New Zealand brokers network delegates.


June 2015


MARSH IN THE COMMUNITY Each year, Marsh, Mercer and Nera staff get involved in community fundraising initiatives and donate their time on volunteer leave days. In 2015, more than $47,000 was given to a range of charities and more than 70 volunteer spots were filled. Among the efforts: Marsh supported two of Variety’s Kiwi Kids – a programme that assists disadvantaged children. The Marsh corporate charity golf day in New Plymouth in February raised $6097 for the local chapter of Diabetes Youth. During Marsh’s annual conference staff were “fined” for various fun misdemeanours. The proceeds were given to Arthritis NZ. In August, Mercer colleagues participated in the annual SPCA cupcake day. October saw Mercer organise a drive for Dress for Success. The team at Marsh New Plymouth took some time out in April to help clean up the grounds of the local hospice. Nine Marsh colleagues in Dunedin collected for St John during their annual appeal. A crew of 14 spent half a day at Auckland Zoo doing cleaning and maintenance in May. The Breast Cancer Appeal in October received the assistance of some brightly dressed colleagues helping to collect in Auckland. A group of five Marsh staff helped to spruce up the playground of a low-decile school in Auckland in November.



NZI launches CoverKit N

ZI has partnered with Xero, a New Zealand-based software company that develops cloud-based accounting software for small and medium-sized businesses (SMEs) to launch a new add-on service called CoverKit. CoverKit offers Xero customers the ability to extract their own financial information from their Xero account and create a statement that they can use to work with their broker to get a business insurance solution that is right for them. It is quick and easy to use and can be accessed from NZI’s website NZI says this is part of a bigger plan to facilitate stronger relationships between customers and insurance brokers and help New Zealanders get better insured. Xero is thrilled to team up with NZI on such a market first for insurance in New Zealand, says managing director Victoria Crone. “It's set to be a game changer, making it so much easier for customers to access the information they need for broker advice,” she said. She said SMEs might not always have the resources or specialist knowledge that was available in larger organisations. CoverKit allows these businesses to compile relevant financial information that enables them to get the best advice they can based on their unique circumstances. According to The Small Business Sector Report 2014 released by the Government, small businesses account for 97% of all enterprises in New Zealand. In total there are around 460,000 small


June 2015

IT'S SET TO BE A GAME CHANGER, MAKING IT SO MUCH EASIER FOR CUSTOMERS TO ACCESS THE INFORMATION THEY NEED FOR BROKER ADVICE businesses across the country. More than 584,000 people are employed in enterprises with fewer than 20 people, making up 30% of the workforce (these figures do not include self-employed who number more than 380,000). Combined, SMEs contribute nearly 30% of New Zealand’s GDP. NZI says it is clear that these businesses are important to the communities they operate in, providing employment and often vital local services and if anything goes wrong it could have a big impact on the country. “Many small business owners appear to be unaware of the numerous risks within their business and the effect that these risks could have on their ability to keep trading should something unexpected happen,” says NZI’s general manager of commercial underwriting, Stephen Everett. “The Insurance Council of New Zealand has said that only one in four SMEs are adequately insured and across New Zealand 23% don’t even have business insurance, and yet having an insurance policy that can offer a quick solution to a problem is critical to business survival. The

statistics are sobering for both businesses and insurers,” he says. The Insurance Council has already acknowledged small businesses’ lack of insurance as being an issue and is developing education resources to target SMEs that don’t have insurance. Its chief executive, Tim Grafton, has said that lack of insurance could pose a significant risk to the economy. NZI’s CoverKit service will act as a conduit to help small businesses liaise with their insurance brokers to manage their risk and protect their business against unexpected events so that they have a better chance of staying in business should anything go wrong. NZI has produced a small business risk management guide targeted specifically at SMEs in an effort to help them reduce their risk. Eight other guides are also available and include NZI Risk Solutions on: Deep Fryer Cooking; Hot Work Safety; Restaurant and Cafe Guide; Earthquake Checklist; NZI Surveyors; Electrical Safety Inspections; Fire Extinguishers; and Sprinkler Systems guides.




Shaky start for IAG chief executive Jacki Johnson took a New Zealand job expecting a more benign insurance environment. Instead, she got a once-in-1000-years earthquake.


hen it comes to being thrown in the deep end of insurance, you can’t get more of a trial by fire than arriving in New Zealand in September 2010. IAG chief executive Jacki Johnson was due to migrate from Australia to take up her new role in New Zealand in November that year. But at 5am on Saturday, September 4, she received a call from her new deputy in New Zealand that signalled the start of a major change of plans. “He was telling me not to worry, everything was under control. I was still asleep and I wasn’t sure quite what he had under control. I had to get on a plane the next day,” Johnson remembers. Christchurch had been struck by the first of two major earthquakes that were to completely change the face of the city. There were no fatalities as a direct result of the September quake but buildings were badly damaged, water lines broke and power to the city was disrupted. The second quake, on February 22, was much more destructive and killed 185 people. If Johnson wanted to come to New Zealand to make a difference to Kiwi lives, her opportunity arrived early. “To this day, I am very grateful to my team and the community,” Johnson 22

June 2015

says. “I was accepted very quickly, spending most of my time on the ground in Christchurch during those early weeks.We had 1000 people there before the earthquakes so we were not only looking at how we respond to the community but how we keep our people safe. It was a bit different to what I thought my induction would be.” Johnson said she had been prepared for having to learn about leaky buildings, or the cultural differences between doing business in Australia and in New Zealand. But the earthquakes put everything on a fast track. Soon, she was not worrying about things like how to pronounce place names any more. Johnson has been part of the insurance industry for the past 25 years. But she started her career in Australia as an occupational therapist, working in a teaching hospital, treating people with significant injuries including burns and amputations. “I was working on how do you help people recover and get their lives back,” Johnson remembers. From there, she was asked to work for a consulting firm, IRS Total Injury Management, that was owned by an insurer. It worked on injury


NEVER IN MY WHOLE INSURANCE CAREER, MORE THAN 25 YEARS, HAVE I EVER SEEN TEAMS ACROSS INDUSTRIES IN A COMPETITIVE ENVIRONMENT WORK SO WELL TOGETHER prevention at companies such as Ford, BHP, Foster’s and the mines. “We were working on how do you prevent accidents as well as helping people recover.” The company grew and before long she was deputy managing director, a non-executive director on the board of Workcover Authority in New South Wales and became more involved with things such as actuarial reserving. “All the things that make a prudent insurer in terms of collecting enough premiums to pay the claims when the worst happens.” It might seem a big leap to move from occupational therapy to insurance but Johnson says the two roles are not really so different. “For me it was a sort of transition into insurance, a similar thread of being able to help recovery and making sure people are protected. People often say it’s been an unusual career segue but for me it’s quite congruent with what I believed in a as a young graduate at 20. I apply it in a different was as CEO of an insurer.” Stints at HIH Insurance and Allianz followed before she started with IAG in 2001 in its strategy team, just after the firm was listed on the stock exchange. She quickly worked up the ranks, becoming chief executive of business partnerships, e-ventures, and digital start-up The Buzz Insurance. “Then I came to New Zealand in 2010 to lead what I thought was an insurance company in a much more benign environment than my experience in Australia, given I navigated through cyclones, bush fires, hail storms and everything else in between.” A downside of being in insurance is that she has an encyclopaedic memory of disastrous weather events.“Usually if you can pull out a weather event I can tell you what year it was.” Johnson says she has been impressed with the way the New Zealand insurance industry pulled together to deal with the Christchurch earthquakes. She still chairs a regular meeting between Government officials and the insurance industry. “Never in my whole insurance career, more than 25 years, have I ever seen teams across industries in a competitive environment work so well together.” She says the Christchurch event was unique because of the huge number of aftershocks that rattled the city, and New Zealand’s system where claims have been dealt with by the Earthquake Commission as well as insurers. New Zealand insurers also had to work hard to make sure they could hold on to reinsurance backing through 2011 and 2012 and ensure that investors could see New Zealand was not a bad market for insurers to be operating in. Johnson says she frequently lost sleep in 2011 over the possibility of capital disappearing and insurers not being able to offer protection to those who needed it. “The way I’ve seen colleagues come together to solve the issues… I don’t think the community understands how many weekends and how

many late nights, how much time has been invested to solve very complex problems to make sure we could respond and not just taking a short-term view but a long-term view as well. Even now, we still have these meetings.” Now, premiums have dropped substantially and competition is ramping up. “Maybe we’ve done too good a job telling the international world what a great market it is and how well people are working together.” The challenge now is to make sure Christchurch and other parts of New Zealand remain well insured at a time when the economy is growing and migration patterns are changing.“If new people are coming in to New Zealand who are not used to buying insurance, how do we make sure they see the value in being insured in a country they might not understand?” The opportunities for insurers will come in making insurance available, accessible and sustainable, she says. “I see a real role for brokers and advisers for those people who really want a risk conversation and have complex needs.That is absolutely paramount.We partner very closely with brokers,” Johnson says. Insurers need brokers to help them fully understand their clients as risks change. “You only have to look at the trucking industry, with road usage up this year and more trucks on the road, carrying different sorts of cargo from different ports, the broker understand of clients is really instrumental for us so we can make sure they’re getting the right product. Our priority is to make sure people stay insured and adequately insured and understand the risk they’re taking.” Johnson is also working through the acquisition of Lumley. “It’s gone particularly well and I have great respect for all the people working together and becoming part of IAG. We’re constantly investing in systems and our premises to make sure people are safe and in safe buildings. We’re also making sure we continue to be viable in terms of the long term in being efficient and focusing on attracting capital to support out business.” There are no plans to return across the Ditch any time soon. Johnson says she considers herself an adopted Kiwi now. But New Zealanders still often do not seem to appreciate what this country can offer. “There’s something about the New Zealand psyche, isn’t there? I constantly got asked in 2010 why did you come? I didn’t take it as an insult but people ask why you’re here. We love New Zealand.” And insurance is where she will stay, too. At a recent reunion, a doctor acquaintance told her he could not believe she had stayed in insurance when she was once such a good occupational therapist. “I said I still make a big difference, if not bigger, in terms of the things I do in my career in insurance. He was probably sorry he asked. People do not understand how dynamic insurance s and what rich careers you can have, what a difference you can make in communities. I probably became a bit of a zealot.”



FLYING UAVS IN NEW ZEALAND The Civil Aviation Authority controls the use of UAVs in New Zealand. Under the current Civil Aviation Rules, UAV pilots must:

UAVs cleared for takeoff I n April 2015, AIG received approval from the Federal Aviation Administration (FAA) for the use of small unmanned aerial vehicles (UAVs) for customers in the US – a major milestone in AIG’s international UAV research and development programme to evaluate the benefits of UAVs for risk assessment, risk management, loss control, and surety performance. The programme included test flights in New Zealand, which provided valuable insights on technology, flight operations, and image collection techniques that will be incorporated in AIG’s global UAV strategy. UAVs are a cost-effective way to quickly and safely reach areas that could be dangerous or inaccessible for manual inspection, and provide richer information about properties, structures, and claim events. As a result, UAVs will offer significant benefits following catastrophe events by accelerating surveys of disaster areas with high resolution, enabling faster claims handling, risk assessment, and payments. While there is no set roll-out for the use of UAVs in New Zealand, Bob Holdstock, loss control engineer for AIG New Zealand, thinks the benefit of this technology


June 2015

for the insurance industry is clear. “The footage captured during test operations in Auckland was sufficiently detailed that it would certainly be of value for us. As well as the ability to reach places that would be difficult for us to access otherwise, such as roof tops and construction sites, there is scope to use UAVs to obtain a more complete picture of a property’s surroundings to detect possible flow-on scenarios between locations,” said Holdstock. “The information captured by the UAVs may help us to better identify risks, enabling us to help our clients to reduce or mitigate those risks, and assist us in making better underwriting decisions.” “Previously we either wouldn’t have had access to this information, would have had to wait, or in some cases collect it with hands-on methods, including ladders, safety lines, and cherry pickers,” said Eric Martinez, executive vice-president, claims and perations, AIG. AIG sees the potential for UAVs to be used for inspections/ engineering, claims handling, and underwriting for a wide range of situations, for example wind farms, condemned buildings, catastrophe sites, or even hail damage on roofs. “UAVs can capture imagery quickly, safely and from multiple

UAVS WILL OFFER SIGNIFICANT BENEFITS FOLLOWING CATASTROPHE EVENTS BY ACCELERATING SURVEYS OF DISASTER AREAS angles. They are tools which we want to use to better serve our customers” said Martinez. With the FAA approval, AIG will begin operating UAVs in the US in controlled settings to survey properties after natural disasters and for risk management purposes. Operations will only be conducted over private or controlled-access property with permission from the property owners and local authorities obtained prior to each flight. As in New Zealand, UAV operators in the US must be able to see and maintain sight of the UAV directly (i.e. not through binoculars, or a monitor or a smartphone) at all times.


Fly in a safe manner so that their aircraft doesn’t create a hazard to other aircraft, persons and property.


Be able to see the aircraft with their own eyes (e.g. not through binoculars, a monitor, or phone screen.


Only fly aircraft in daylight.


Give way to all crewed aircraft.


Fly aircraft at or 120 metres from ground level.


Not fly closer than four kilometres from any aerodrome.

The Minister of Transport has signed new rules which will become effective August 1, 2015. The primary change is the requirement for pilots to obtain Unmanned Aircraft Operator Certification prior to flying. Source: Civil Aviation Authority http://www.caa.

While the company is still in the initial phases of exploring the benefits of UAVs, AIG sees the potential to expand as regulations continue to evolve around the globe. “AIG is committed to continuous improvement and innovation in providing better, faster, and safer risk and claims assessments to our customers,” said Martinez. “Leveraging cutting edge technologies like UAVs can enhance our ability to assess and mitigate risks to better help our customers and their communities prepare for and rebuild after a catastrophic event.”


Insurance Fraud - How can brokers help? by Dave Ashton, ICR manager


he Insurance Claims Register (ICR) was established 15 years ago to allow insurers to share claims data to help combat the growing problem of insurance fraud. Insurance fraud in New Zealand is estimated to cost the industry over $350 million a year. The ICR has been an immense success story for the insurance industry in New Zealand and similar initiatives have evolved around the world, such as Australia, the USA and the UK. The ICR has constantly evolved since it was first designed in 1999 and is currently undergoing another evolutionary change which will see a much smarter underlying technology. One constant issue with any database is data quality and with seven million recorded claims, we are finding there are some big holes in our data. HOW CAN YOU HELP? One of the problems we are encountering is that a lot of claims generated by brokers are using the broker’s own address to relate to the claim or a generic location. As an example, we have many references to names and addresses like: N SMITH, North Island.

This means when we do some analytics, we are unable to identify patterns and trends of claims and we are also limited in the ability to do geo-spatial analysis of the claim data as the clusters of claims are linked to brokers’ addresses. In addition, the names passed on at claim time are often shortened to just an initial for first name and the surname. This makes it hard to differentiate between similar named persons. Whilst we can try to improve on this from insurers’ own databases, it is sometimes a difficult process to retrospectively fill in the gaps Our new ICR will be a very powerful tool to combat fraud but we need help, not just from brokers, but for all those that fill in claims forms. I would be grateful if you may consider this when you complete claims forms in the future. Adding the client’s full address and full name as a minimum would massively upgrade our ability to identify fraud. Working together, we can make significant improvements to combatting insurance fraud in New Zealand. If you would like to discuss these issues, please contact me at the Insurance Council.

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Body Corporates – Intentional Damage QUESTION… A unit owner in a body corporate (my query was initially about residential but I suppose it equally applies to commercial) deliberately sets fire to his unit, which subsequently destroys the entire building. Would the expectation be that the entire claim would be declined by the insurers, or just the "offender's" portion, or not declined at all as the offender is not the insured party, the body corporate is? Does it depend on how wide the definition of "the Insured" is in the policy wording?

RFA disclosure updates QUESTION… Do we need to send a disclosure statement every year if there is a staff change? We have one document with several staff names and signatures which was sent to our clients initially. Do we have to keep sending this every renewal or should it only be sent if advice is given by a person who wasn't staff at the time of the first disclosure statement?

REPLY…GARY YOUNG, IBANZ There is no requirement to send a disclosure statement every year although the regulator (FMA) does consider it good practice. However it is a requirement to give your client an updated statement when there is a material change. If the change was relatively minor then there could be other ways to inform clients such as email newsletters. A client receiving advice from a new adviser would be considered a material change and so a new statement is required. The updated statement should be given to the client as soon as practicable such as at the next meeting with the client. A further issue raised by your question is whether it is acceptable to have a single statement with several advisers’ names and signatures on it. The relevant requirements are set out in the Financial Adviser (Disclosure) Regulations 2010. The FMA advises that they would expect advisers (brokers) to individually provide a disclosure statement.The reason given is that this is so that clients, the disputes resolution scheme and FMA are able to easily identify the adviser who has provided advice to the client. I would suggest therefore that you look at your current approach to disclosure statements. At least by separating the statements when there is a change of staff only those clients who deal with a new person will need have an update not all clients.


June 2015

REPLY… CROSSLEY GATES, DLA PIPER As you probably know, a body corporate is a separate legal entity from the unit owners, like a company is a separate legal entity from its shareholders.The insurer insures the body corporate (usually) not the unit owners themselves. A body corporate is a legal fiction like a company. It can only operate through human representatives. Therefore, I suggest there is a direct analogy with a company under the Companies Act. Company law uses the attribution test in order to determine whether the actions of a certain person should be attributed to the company. The person must be in a sufficiently senior position in the company before his or her actions will be attributed to the company. If they are, that person's actions are the company's actions. Therefore, if the chairperson of the body corporate deliberately burns any of the insured structure down, it may be open to the insurer to attribute his/her actions to the body corporate and decline the claim. On the other hand, if a unit owner who is not the chairperson and is not on the body corporate committee burns it down, this action may not be able to be attributed to the body corporate. This is not an entirely satisfactory state of affairs because innocent unit owners may be at the mercy of the actions of another unit owner over whom they have no control.

Do you have a question for our experts? If so, visit iNavigator,, or the IBANZ website, - and let us know.


RFA disclosure QUESTION… As of July 1 it is mandatory that we provide our clients with a disclosure statement prior to providing financial advice. This alone is not an issue but if several staff members who are RFAs also provide advice to the same client does this mean that they also need to be providing the client with a copy of their own individual disclosure statement? If so this could potentially result in 10 disclosure statements being sent to one client throughout the year. Can a disclosure statement from the leading broker in this situation be sufficient? If not can we provide our clients with a disk holding all staff disclosure statements meaning all staff can provide advice and there is not the necessity to send several different disclosure statements throughout the year? Would providing disclosure statements in such an electronic format be acceptable and should the client have any issues with opening the statements paper copies can then be sent?

REPLY… GARY YOUNG, IBANZ Each adviser is required to supply a disclosure statement either before giving advice or as soon as practical afterwards. Therefore if all ten give advice they will each have to supply a statement. It is only compulsory to give a statement to a retail client when giving personal advice so it may not be necessary to supply all your clients. IBANZ does suggest that providing all clients with statements may be easier than working out which are retail and which wholesale. Sending just the lead broker's statement is not sufficient. You can scan the disclosure statements and send copies by email. This would be more efficient than sending a disk which have to be updated as staff change. You only need to send the statement once unless some detail changes.

Mechanical Failure QUESTION… My client's boat engine has suffered mechanical failure and the insurers have declined accordingly. The cause of the failure is the port belts breaking. These belts ran the alternator that ran the electrical system that serves the electrical warning system. The engine overheats but the warning signals do not sounds the alarm due to the above. Had the warning sounded, the engines could have been shut off and this damage would not have happened. The client believes that whilst the original mechanical failure of the belts is not covered, the resultant damage should be due to the failure of the warning system, and not mechanical failure as such. Can anyone offer any words of wisdom on this? Are there any relevant court cases or thoughts out there please or am I still stuck on the mechanical failure exclusion.

REPLY… CROSSLEY GATES, DLA PIPER It depends how the exclusion is worded. Does it exclude mechanical breakdown as a cause of the damage or as a type of damage. Also, is there any resultant damage write-back? REPLY…ORIGINAL POSTER The exclusion is very brief: We do not cover: 1. Physical damage or losses caused by or resulting from normal wear and tear, gradual deterioration, delamination, marine life (except for marine mammals and large fish), mechanical breakdown, electrolysis, osmosis, corrosion, rust, dampness, normal wetting or weathering. There is no write back as there are in motor policies.

REPLY… CROSSLEY GATES, DLA PIPER The exclusion is addressing damage caused by or resulting from mechanical breadkdown (rather than mechanical breakdown itself). The position is complicated and very fact specific. I am not sure what 'port belts' are but they broke, which sounds like a mechanical breakdown. This mechanical breakdown will be covered unless it was caused by or results from another mechanical breakdown (or wear or tear, or one of the other perils named in the exclusion or in another exclusion). The mechanical breakdown of the belts resulted in the damage to the engine. This means the exclusion applies to that damage because it resulted from mechanical breakdown (of the belts). The non-operation of the warning lights sounds like a red-herring. Its failure was a lost opportunity to avoid the damage to the engine. But it does not stop the fact that the damage to the engine resulted from breakdown of the belts, I assume. Of course, whether this was the underwriting intention is a completely different question, but does not alter the legal position.



A fresh outlook Kirsty Young and i2i are busting industry stereotypes


irsty Young is used to doing things that are a little bit out of the ordinary. The broker manager at Wellington’s i2i Insurance Brokers Ltd started her business just a couple of months before having her first child, ditched commissions in favour of a fee-forservice model and did what is unthinkable for some broker businesses: Offloaded clients that weren’t a good fit. Young says she fell into the insurance industry a little over 20 years ago while she was a 19-yearold at university, studying human resources. “I was very lazy at university and spent too much time playing pool and at the pub. The subjects I was interested in, the lectures were at drinking hour. It wasn’t until I was in second year I was kind of thinking I was not cut out to be a fulltime student. I thought if I got a job I could apply myself better studying part-time.” Young took a job as a customer service officer at State Insurance and finished her degree on the side. “I got there in the end doing papers parttime.To this day my degree is still wrapped in the


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tube it came in.” When she was not selected for a claims position that she had her eye on at State, she left “with chips on both shoulders” to work for Wellington financial advice firm Cameron Chote, headed by Peter Chote, a founding member of AdviceFirst. There, she managed the fire and general portfolio and spent a bit of time as a PA. “The PA side was not my bag at all.” Stints at CMG and Marsh’s corporate risk division and QBE’s liability underwriting team in Auckland followed. But a serious illness and stint in hospital made her take stock of what she really wanted

to be doing and in 2003, she returned to Wellington. She continued to work with QBE for a time, then moved to Willis before a planned restructure saw her meet up again with former boss Chote. “I said ‘have I got a proposition for you’. He listened, gave me the benefit of the doubt and I joined their team as the fire and general manager.” Then, five years ago, at seven months’ pregnant,Young decided it was time for a change. She remembers: “I decided I could either go on maternity leave and come back to the grind or I could do something different. I decided to tackle my own broking business. I opened the business three months from delivery and worked all the way through. The only time I didn’t pick up the phone or get on the laptop was the 24 hours I was in labour.” Young blames a hatred of failure for her desire to work through a period when other people might have taken the opportunity to ease up on work. “I can’t stand it. It’s a blessing and a curse. I just kept going and going and I did the exact same thing with my second child.” Having been on both sides, within the industry and at large and small broking firms, gives Young a different perspective, she says. “I wanted to take all the good bits and get rid of the bad bits. What makes us different is we’re not motivated by sucking up business. I don’t have to take every single piece of business that comes my way. I can choose to work with that person or


choose not to. I tend to like the relationship side of the business. I look at a person and whether a relationship can be formed. Do we have a partnership here or a need for now, if it’s a need for now I’m not interested because I can invest time in them and they’ll leave.” She has also removed commission from the equation. Clients pay less for their insurance because of it, but pay a fee for Young’s service. For some clients – and insurers – that’s taken some time to get their head around. Setting the fee itself was a long process.Young kept track of the time spent on the business and the cost incurred. She then worked out what a suitable annual wage would be for herself based on her experience and what she could offer clients, then worked out the workload for every client to determine her hourly rate. The fee is discretionary to an extent and Young also works on a flat retainer. “We’ve found it difficult but great. We don’t have as many inherent conflicts of interest,” she says. Revenue dropped in the first 12 months, prompting some difficult discussions with the accountant and causing some concern for Young, whose family relied on her income. But the move away from commission soon started to pay off. Clients were using the firm more efficiently to maximise their fee for service, such as phoning once instead of sending multiple emails. She says they also develop better long-term relationships

with insurers because of the move. “We’ve got rid of the moral hazard of working in a commission-based environment. That had played on my mind for a lot of years. When you’re paid on performance, in our case volume of business, an immediate incentive comes into play. You’re not human if you ignore that. The motivation to sell becomes a bit different.” Young said the move forced her to look at the type of broking business she wanted to run and she offloaded a number of clients that did not meet her vision. “That was quite a coup.You don’t hear of many people offloading business, usually you hear of them selling them or hanging on with their fingernails. I explain fairly honestly that the business model has changed and in doing so means that we won’t be able to be of service to them going forward – then I suggest a broker that I’ve worked with in the past and trust explicitly. I’ve only had one book of business, commercial motor, where I simply went back to the insurer who underwrote it and asked them if they would deal directly with the drivers – they did, they have, so far, so good.” Changing technology means what clients need from their brokers is changing too, she says. Technology is steering clients and brokers towards more of a DIY approach to insurance. “Time becomes the issue.” The fee-based approach gives clients the message that it’s their time that they are saving by having an adviser help them through the

process, interpreting the products and how they can fit with a business, and in return paying for that service. “We take that time and give it back to you, rather than you spending time on the internet we give it back to you. In order to do that properly, we charge you for it.” i2i is predominantly a liability specialist, covering contractors insurance, recruitment agency insurance, commercial property programmes, product recall, tamper and contamination and escrow insurance. Young says she’s going through a period of decision, working out where to take the business next. “Do we expand and engage staff, or do I hang up my hat and spend more time with my lovely children? At the moment I can’t say what the next step will be. I’m in a decisive moment.”




Meet the winners of the Smith&Smith $10,000 travel promotion


mith&Smith is pleased to share with the insurance community an update on our $10,000 travel promotion winners. FIRST DRAW WINNERS Phil H of Masterton, was the first of our four winners. Phil H visited our Masterton authorised dealer, Ewen Glass, to have a chip repaired on his windscreen. When we called Phil to tell him his name had been drawn, he and his wife, Karen, were out on a bike ride. Karen told us she was so excited by the news she almost fell off her bike. Phil and Karen, who married three years ago, will use some of the prize to have a belated honeymoon. Phil and Karen said: “We are over the moon, about winning such an awesome prize, and feel extremely grateful.” The couple have told us they are planning a trip of a life time and are considering the following itinerary: Wellington – Auckland London – Paris (by train) – Rome (by train) – Tuscany - Venice (do a tour, including biking) – Auckland – Wellington SECOND DRAW WINNERS Our second lucky winner was a loyal cash customer, a Jim P of Stratford. Jim visited our Stratford authorised dealer, Norm Webby Panelbeaters, to have his windscreen replaced during the month of March.


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THE COUPLE SAY THEY ARE “INCREDIBLY GRATEFUL” TO SMITH&SMITH FOR THE PRIZE. "I HAVE NEVER WON ANYTHING BEFORE, I COULDN’T BE MORE THANKFUL." Jim and his partner are loyal customers of Smith&Smith and were surprised to hear they are our March winners. Jim, who has never travelled outside the North Island before, say the couple haven’t decided where they are headed to but adds it’s exciting to think about the possibilities. “We are deciding whether to spend a lot on flights to go far away or head over to Australia and spend the vouchers on experiences and activities.” Jim says his first plan of action is to get himself a passport, “I’ve never had the need to have one before, I better get on to it”. The couple say they are “incredibly grateful”

to Smith&Smith for the prize. “I have never won anything before, I couldn’t be more thankful” says Jim. THIRD DRAW WINNERS Shirley B, had her windscreen replaced at our Blenheim branch and is our third winner. When we called Shirley to tell her the good news she could not quite believe it. Now that the news has had time to sink in she is looking forward to receiving her prize. Shirley will be sharing her $10,000 in travel vouchers with her husband and two daughters. We are thrilled for the family and look forward to hearing of their travel plans. Fourth draw winner to be announced The travel promotion ended on May 17. The final draw will take place on June 3.The winner’s details will be announced in the coming weeks on Twitter and on our website. Wayne Carter, Smith&Smith managing director, says: “It has been a wonderful experience to our reward our loyal customers with the gift of travel. Our local teams have really enjoyed meeting our winners in person to present them with their prize and share in their excitement. We are looking forward to hearing about our winners travel plans.” To see how our four lucky winners spend their $10,000 in travel follow us on twitter @ SmithandSmithNZ.


RFAs under FAA spotlight


egistered financial advisers (RFAs) are coming in for significant scrutiny in this year’s review of the Financial Advisers Act. The Ministry of Business, Innovation and Employment (MBIE) has released its issues paper, which will inform the direction of the review. It asks for feedback on a number of questions, many targeted at the regulation of registered, but not authorised, financial advisers. MBIE said its surveys of the market showed that more than half the RFAs had been working as an adviser for more than 20 years. Another quarter had been in their roles for between 11 and 20 years. Most dealt with more than 100 clients every year. They gave a number of reasons for not wanting to move to authorised financial adviser (AFA) status. The most common was that authorisation was not required for the products they dealt with and the qualifications required were not relevant to their current role. Some said their clients did not see value in the AFA status. The issues paper asks whether the term “registered financial adviser” gives consumers an accurate understanding of what RFAs are permitted to provide advice on. If not, it asks whether an alternative term could be considered. It also asks whether it is appropriate to delineate based on the type of products dealt with and whether the distinction between AFAs and RFAs should be removed or clarified. It questions whether RFA conduct and

disclosure requirements are sufficient. Commission is also a hot topic. The paper says: “One issue that we specifically seek comment on from submitters is whether all advisers should be required to disclose their commissions. Currently only AFAs and QFE advisers have a positive obligation to inform clients of conflicts of interest. However insurance advisers (who are almost all RFAs) almost exclusively derive their income from commissions received for placing clients with a risk provider, and are not required to actively disclose conflicts to their clients. This may contribute to some of the risks that the FMA has identified about the sale of personal insurance products.” It asks for feedback on whether commission should be banned. RFAs are currently not required to have any qualifications and the issues paper asked whether that situation should be allowed to continue. “We have heard that the minimum qualification requirements have made some progress in creating a more professional advice market for AFAs. Many stakeholders have argued that similar, if not the same, requirements should apply to all financial advisers, including RFAs. Do you think that RFAs should be required to meet a minimum qualification relevant to the area of advice they specialise in? If so, what would be an appropriate minimum qualification?” An options paper will be released later this year and final recommendations given to the Commerce Minister in the middle of next year.

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THE CEO AGENDA What’s on the minds of insurance chief executives around the globe? By Karl Deutschle


o win in this business, insurers first and foremost need trust. Policy holders want to know that the companies insuring them will put customer interests first by providing adequate coverage and settling claims quickly. However, in this year’s PwC Annual Global CEO Survey, the proportion of insurance CEOs who see lack of trust as a threat to their growth prospects continues to rise – 64 % today, compared to 59 % last year. Behind that top-line figure there are national and regional variations. In markets where trust is strong, insurers are seeing the benefits. The industry’s response to the 2011 Japanese earthquake and tsunami, when large numbers of workers were sent to the affected areas to support claims identifications and payments, has helped pave the way for a very positive image among consumers. An International Monetary Fund report says 80 % of earthquake claims were settled within 10 weeks. Alongside trust, insurers also need to keep pace with changing consumer expectations. Within non-life, price generally drives most purchase decisions, as many customers don’t understand their policies or they underestimate the value of the coverage they’re buying. What differentiates products beyond price is the ease of purchasing and customer service. While this isn’t news to anyone in the business, this is where


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IT'S RESHAPING THE RELATIONSHIP BETWEEN CUSTOMERS AND COMPANIES AND BREAKING DOWN THE WALLS BETWEEN INDUSTRY SECTORS technology can make – or break – the financial services industry in New Zealand. The insurance industry across the globe, and here in New Zealand, is plagued with slow and unwieldy legacy processes and systems, which often hamper insurers’ abilities to provide convenience at competitive prices. Seventy per cent of insurance CEOs see the speed of technological change and the shift in consumer spending and behaviour as threats to growth, more than in almost any other industry in the survey. This rapid, technology-led change presents

many risks – but it also has many opportunities. It’s reshaping the relationship between customers and companies and breaking down the walls between industry sectors. It’s making forward-thinking CEOs question the very businesses they’re in as they re-assess how their organisations’ differentiating capabilities can better solve customer problems. Here in New Zealand, it’s a race against time. Established players in financial services are all either undergoing digital transformation projects, trying to open channels to reach customers or – for many – doing both simultaneously. Add in the impact of the Christchurch earthquakes and increased industry consolidation in the past couple of years, and insurers have had a tough time using technology to capture a single view of the customer. In this year’s PwC Annual CEO Survey, we explored some core themes to address these challenges. Among them, we looked at how businesses are creating value in new ways through digital transformation and how they are creating and leveraging partnerships. And to succeed, business leaders will have to show vision, flexible thinking and carefully listen to and learn from stakeholders to make clear, informed decisions. One of the most striking findings for the insurance sector is that they view changes in


customer behaviour and distribution channels as more disruptive than other financial services sectors. Does this suggest that they have been slower to respond? Further disruption is likely to come from the new entrants targeting the sector. Overseas, we’ve already seen the game changing impact of price comparison sites. Here in New Zealand, we have seen nimble new players entering the market – and aggressively. Think of what a big mobile or internet provider could do if it applied its customer insight to insurance. Nearly half of insurance CEOs who responded to our survey said they plan to enter into a new joint venture or strategic alliance this year. Twothirds see these partnerships as an opportunity to gain access to new customers, much more than in other financial services sectors. Business networks, customers and suppliers are seen as the most important focus for strategic collaborations. However, is it possible that a telecom or internet giant would want to tie the knot with an insurer? Think outside your core product or even your industry for a moment. Who has the information you need to better serve your customers? In our New Zealand CEO survey, one chief executive recently told us his business probably has information on “one in two Kiwis, but it

is held in a lot of different boxes. What we are trying to do is get all the boxes to talk to one another.” More than 30 % of insurance CEOs see alliances as an opportunity to strengthen innovation and gain access to new and emerging technologies. Yet only 10 % are looking to partner with startups, even though such alliances could provide valuable access to the new ideas and technologies they need. Earlier this year, TechTarget’s Tom Goodwin made the following observation: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.” It’s not the product that’s winning; it’s the customer interface. But we aren’t technology businesses — yet. We are a sector full of actuaries, accountants and bankers with an inherently low appetite for risk. The challenge of partnering with another company or industry is how to align objectives and get people from different industries to talk the same language. Who owns the customer relationship? How do you ensure priorities and timing of investment and returns are compatible?

Technology, changes in customer behaviours, new market entrants and new channels, these all create threats and opportunities. The elephant in the room, which I haven’t addressed, is regulation. Growing regulation is a concern for all insurers, that’s inevitable. However, 91 % of insurance CEOs – more than CEOs in any other industry – told us that regulation would be a threat to growth prospects this year. Many of these chief executives are based in the US and Europe, but there is no doubt that a smaller insurance market like New Zealand would feel the ripple effects of greater regulation globally. Adapting slowly is not a viable option in the face of relentless disruption and change. Insurers need to be more radical in challenging and changing business models and move quicker in developing the necessary competitive capabilities if they want to sustain growth and keep pace with market expectations. If you’re in the insurance business, then you specialise in assessing others’ risks. And the biggest mistake you can make right now, is not looking at your own in today’s rapidly changing marketplace. Karl Deutschle is a Partner and Insurance Sector Leader for Pwc New Zealand. He can be reached at



Insurance Advocates go in to battle New company aims to help resolve embattled claims. But that’s prompted concern from the Insurance and Savings Ombudsman.


nsurance is a bit like wisdom teeth, says Nigel Kelly, of Insurance Advocates: Everyone hears the horror stories, not the instances where things have gone well. Insurance Advocates opened its doors for business this year. It pursues rejected insurance claims on a customer’s behalf if it is believed the claim has merit and charges 20% of any amount it is successful in negotiating from the insurer. Kelly said the demand for his firm’s services had been enormous. Last month, there were 25 complaints open on its books. “We’re an advocate for an insurance claim. We don’t side with the claim or the insurer, we examine the claim itself for its merit and shortcomings, and where there is merit we pursue it on the behalf of the claimant,” Kelly said. “Where there is none, we tell the claimant that.” He said he was trying to bring integrity, transparency and simplicity to a frustrated claims experience. “In the majority of claims experiences, people have made a claim and it’s paid. They don’t realise the number of people who work in the background to get the claims paid.” Insurance Advocates had been asked to look at complaints about claims across the insurance spectrum, from fire and general to health and life insurance, he said. In many cases, the claimant had become frustrated by the process and


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just wanted to pass it on to someone else to deal with. Others were in situations, such as health emergencies, where they did not have the time or money to argue a claim. Sometimes a claim was declined because of bad advice from a financial adviser, he said. “They might have been sold entirely the wrong product and something they should have been covered for, they’re not.Then it’s not only the terms and conditions of the insurance contract that you’re looking at but the appropriate tenets of contract law.” Kelly said his firm was very clear with potential clients about the fee that would be charged if they were able to have a claim paid out. But he said it made sense for a lot of people. “If they didn’t pursue the claim, they’d get nothing. So by handing it over, they’re getting 80% of what they otherwise would not have got,” Kelly said. “There’s an argument that they have nothing to lose.” Some complainants were at the start of the process, some were preparing to take their case to an external disputes resolution scheme and wanted to make sure everything was in order, and some had already been through the EDR process, Kelly said. But Insurance and Savings Ombudsman Karen Stevens issued a caution. “Since the ISO Scheme was established in 1995, we have dealt with over 5,000 complaints and over 45,000 complaint enquiries. Over the


WE’RE AN ADVOCATE FOR AN INSURANCE CLAIM. WE DON’T SIDE WITH THE CLAIM OR THE INSURER, WE EXAMINE THE CLAIM ITSELF FOR ITS MERIT AND SHORTCOMINGS, AND WHERE THERE IS MERIT WE PURSUE IT ON THE BEHALF OF THE CLAIMANT years, many consumers have been represented by lawyers and other representatives. However, it is only in recent years that we have dealt with consumer advocates. Primarily this has arisen because of the Christchurch earthquake claims,” she said. She said she generally discouraged any representation that added unnecessary cost for the consumer. “From time to time, some representatives can really assist to achieve a

better result for the consumer, depending on the circumstances. However, I have real concerns about representatives who charge a ‘success fee’, or take a percentage, when their involvement does not improve the customer’s overall position.” She pointed to organisations such as the Community Advice Bureaux, who offer free assistance. Kelly said there was also a market for his firm’s services with insurance advisers who found that claims became too complex to deal with. “What we’re finding is that we can pick up issues that very rapidly get out of the adviser skillset.” He said it was often beyond an adviser’s capability to deal with a claim once it became a legal battle. Those who were paid by commission had no incentive to spend a long time battling for a claim. “We say to them ‘hand it over’. It will cost the client money but when that’s acceptable to them, hand it over and it will free you up to address the work that makes you money.” Kelly said his challenge was to raise awareness of the business sand maintain credibility. Many would-be clients were concerned that he was trying to sell them more insurance, he said. “We work to be neutral. We don’t get referral fees. There’s no money changing hands behind the scheme.”




however the most relevant threats, especially to SMEs, being data loss and corruption caused by viruses, are not covered under any standard insurance policy.” He continued: “Our report also alarmingly found that the most vulnerable companies are often SMEs who don’t believe they are big enough to be targeted. But more often than not, cyber risks are not just international espionage but include malware, botnets, viruses and even simple human error that can leave them exposed and facing a massive data restoration bill and huge loss of revenues as a result of a business interruption. As such they aren’t taking adequate steps to ward off the risks before they occur.” The Safeguarding Business From Cyber Threats white paper also examines the gaps in the legal system to protect consumers, particularly where an offshore cloud service provider is compromised and looks at the strategies available to manage those risks. It also considers key risk management tactics that can help SMEs, the dominant segment in the New Zealand economy. “The primary issue with the current legislation is the lack of jurisdiction and resources to deal with offshore cyber and privacy events affecting New Zealand businesses. The law has also not been updated to take into account advances in technology, leaving businesses vulnerable,” said Pollard. Delta Insurance, which offers New Zealand’s most comprehensive cyber insurance solution, also revealed that while the take-up of such insurance is sharply on the rise, many SMEs are still not taking adequate steps to implement cyber risk management strategies before it’s too late.



yber risk will soon cost New Zealand businesses up to half a billion dollars a year and cybercrime is New Zealand’s third most prevalent crime according to a new white paper, Safeguarding Business From Cyber Threats, released by Delta Insurance in conjunction with The University of Auckland. The white paper reports that up to 133,000 New Zealanders fall victim to identity theft each year, and that more than 42% of people have had their employee records compromised. A staggering 86% of New Zealand executives for public amenities (such as water and power) have said their organisations suffered at least one security breach that compromised confidential information over the last year. It also revealed that there was little in the way of evidence around insurance being widely purchased for companies who had cyber risks or who have suffered a privacy breach. Ian Pollard, Delta Insurance managing director, said: “Most New Zealand companies wrongly assume they are covered under other insurances such as professional indemnity and general liability;


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Pollard continued: “We are expecting a doubling in companies seeking cyber insurance over the next 12 months, but our report also uncovered that only 22 % of companies conduct incident response planning, leaving themselves more vulnerable to cyber attacks.” Delta Insurance believes all companies, especially SMEs, should be asking themselves: • What are the possible points of intrusion from unwanted sources? • Are my existing security measures enough to address the cyber risks facing my business? • Have I provided my employees sufficient training to minimise cyber-threats? • If my business is affected by a cyber incident, will it be able to cope with the increased costs and loss of business? Pollard said: “Many companies don’t stop to consider something as simple as malware that can often be disguised as anti-virus software, or even that an accidentally dropped USB stick can create untold havoc. It’s not just big businesses who are victims of cybercrime or privacy breaches. More significant to the New Zealand economy is that smaller businesses are often more vulnerable due to their lack of appropriate risk management strategies.”


How do you use your smartphone? We’re all using our smartphones more and more. It seems everyone is peering at the little screen of their phone to keep up-to-date with the world around them and their friends and family. There has been lots of research into smartphones and the effect they have on vision. The biggest problem is the length of time people are spending on these devices. It really should be limited to half an hour. We also tend to hold devices such as our smartphones and iPhones closer than printed materials when reading, a new study suggests. This difference could affect vision correction and at Visique Milford Optometrists we are now gauging visual demands based on how you may use smart phones and other new technologies. The study asked 129 smartphone users to demonstrate how they would hold their mobile device while reading a text message or a typical internet page. The participants wore their usual glasses or contact lenses while reading. The researchers also evaluated the size of the text on the devices, in order to determine whether the working distance at which users held their phones was appropriate for the font size used on the devices. The findings showed that the "working distance," which is how far away a person holds what they are reading to comfortably view the text, varies depending on what the person is looking at on their phone. Researchers found that the average working distance for text messages was 36cm, whereas the average working distance for viewing a webpage was 32cm. But those were both closer than the typical working distance of 40cm used when reading printed text, such as a newspaper. Holding smartphones at such short distances can place increased demands on the eyes' ability to correct for distance, which is known as accommodation. Short distances can also increase demand on the coordination between eyes, or vergence, compared with the distances typically used when reading printed text. Smartphones “may present a variety of visual demands that are significantly different in terms of working distances, gaze angle, and text sizes," the study said. Over time, this increased demand on eyes can lead to conditions such as eyestrain and headaches. And, about the light… We recommend that you don’t use your smartphone in bed — and not just because night-time smartphone use messes up your sleep cycle. The blue light from personal electronic devices has been linked to serious physical and mental health problems. Blue light is part of the full light spectrum, which means we’re exposed to it by the sun every day. However, night-time exposure to that light, which is emitted at high levels by smart phones, tablets, laptops, and other LED screens, may be damaging your vision. There are reports that the light can accelerate macular degeneration changes and also researchers believe there is also a link with cataracts. It also suppresses production of the hormone melatonin, which throws off your body’s natural sleep cues. When your melatonin levels and sleep cycle go haywire, your risk goes up for a wide range of ailments, from depression to cancer. If you have any concerns about your sight or have not had a thorough eye exam in the last two years please drop by our practice on the main street in Milford.

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*Ideal results achieved between the ages of 12 - 25.





elta Insurance has launched a new technology liability insurance product to cater for rising demand and growth of the technology, computer and information services sector in New Zealand. Figures from Statistics New Zealand show the information and technology sector is now worth $23.5 billion in 2014 and represents about 10% of New Zealand’s GDP. John Moore, head of financial lines for Delta Insurance New Zealand Limited, said: “We’ve seen that hand-in-hand with the growth of the technology and information services sector in New Zealand over the last ten years, we have seen a rapid growth in companies buying technology liability insurance, which is a combination of professional liability and general liability insurance. At Delta Insurance technology insureds represent about 15% of our portfolio and growing”. General manager Craig Kirk said the reasons for the increase in New Zealand were similar to those driving technology liability cover internationally. “Domestic and foreign clients demanding high standards of protection as a contractual

AT DELTA INSURANCE TECHNOLOGY INSUREDS REPRESENT ABOUT 15% OF OUR PORTFOLIO AND GROWING condition, particularly those in Europe, North America and EU, companies in New Zealand are increasingly finding that professional liability insurance is a prerequisite when tendering for business with overseas companies and domestically with larger organisations particularly government organisations. Technology liability insurance is a key component of business - this insurance can aid smaller companies to negotiate contracts, especially when they are tendering against a larger organisation with a stronger brand image or greater market presence; and critically the rising number and cost of claims. Risk exposure to litigation and claims are rising and New Zealand is not immune to this influence.” Delta Insurance said the cost of investigating and defending computer-related claims was particularly high and complex due to their inherently intangible nature. Many firms found themselves embroiled in expensive disputes without even realising they had done something wrong. Many found that failing to defend allegations properly could cause irreparable damage to the reputation and financial stability of their businesses. Moore said: “Technology, communications and information services firms can also think about the transfer of risk to cater for the fortuitous by having the right technology liability insurance policy in place, just in case, that’s why we at Delta Insurance New Zealand Limited have launched the most comprehensive technology liability insurance product in the New Zealand insurance marketplace today.” Coverage benefits include civil liability, defence costs, intellectual property rights infringement, breach of data protection legislation, defamation, loss of computer records and employee dishonesty. Unique benefits include unlimited reinstatements, public relations expenses, patent coverage and claims reparation costs cover. Managing director Ian Pollard said: “We believe passionately in product innovation and we embrace the changing landscape of the New Zealand economy both of which are highlighted with our new technology liability product offering. This product perfectly complements our market leading cyber insurance offering”. 38

June 2015

TYPICAL REASONS FOR CLAIMS MADE AGAINST IT / BPO COMPANIES INCLUDE: 1. Software design / input failure e.g. an incorrect computer program design and coding. 2. Intellectual Property Rights Infringement -- An area currently under the spotlight in many emerging markets. 3. Simple data processing errors. 4. Failure to render a professional service or negligently commit an error or omission in the execution of services. 5. Failure to implement a satisfactory system. 6. Misrepresentation/ noncompliance made by the insured 7. Disclosure of confidential information by Insured’s invoking claims from individuals for data privacy / data protection.

Ian Pollard Managing Director T: +64 9 300 0162 M: +64 27 700 8959 E: | W: Level 3, 57 Fort Street, Auckland 1010, PO Box 106 276, Auckland 1143 About Delta Insurance New Zealand Limited: Delta Insurance is proud to be the only locally owned and operated specialist liability underwriting agency in New Zealand.We provide comprehensive insurance coverage solutions with a range of liability products in both the financial lines and casualty insurance sectors. Delta Insurance accesses capacity via Lloyd’s of London as a Lloyd’s Coverholder. As a local Kiwi company, we want to be a change leader in the local industry. Embrace Change!










Convictions and Infringements

Non-disclosure of dodgy driving history reduces claim payout.


elvin accidentally hit a wandering cow while driving home late one night. Kelvin’s car was written off in this accident, but the insurance company declined Kelvin’s claim for the cost of the car. The insurance company argued that Kelvin had not disclosed previous traffic infringements when he applied for insurance cover. When applying for cover, Kelvin wrote on the application form that he had previously been convicted for drink-driving. On his claim form after the accident with the cow, Kelvin wrote that he had received traffic infringement notices for speeding, failing to give way, and failing to wear a seatbelt. The insurance company revoked the insurance policy and refunded Kelvin’s premiums. The insurance company argued that if it had known of all of Kelvin’s traffic infringements, it would not have covered him in the first place. Kelvin explained that his mother filled in the insurance policy application form, and that failing to disclose his traffic infringements was simply an oversight by her. Kelvin also argued that other insurance companies would have covered him anyway, even with knowledge of Kelvin’s other traffic infringements. The parties asked FSCL to resolve the complaint. REVIEW FSCL investigated the complaint and found:


June 2015

KELVIN EXPLAINED THAT HIS MOTHER FILLED IN THE INSURANCE POLICY APPLICATION FORM, AND THAT FAILING TO DISCLOSE HIS TRAFFIC INFRINGEMENTS WAS SIMPLY AN OVERSIGHT BY HER. • The insurance company’s application form asked about traffic convictions .The form did not ask about traffic infringements. • The insurance company had not followed its internal underwriting guidelines in accepting Kelvin’s application for insurance. The guidelines required the insurance company to ask Kelvin for more details about his conviction(s), and it had not. If the insurance company had asked the question, the likelihood is it would have discovered Kelvin’s traffic infringements. • Some (but not all) other insurance companies may have accepted Kelvin’s application, in full knowledge of his traffic convictions and infringements. FSCL’s view was that although Kelvin acted innocently and in good faith, he had an overriding duty at law to disclose his traffic infringements. Further, Kelvin’s traffic infringements were material in that they would have influenced the

judgment of a prudent insurance company when deciding whether or not to accept the risk. The insurance company was acting within its legal rights to decline Kelvin’s claim. RESOLUTION FSCL’s CEO recommended that the insurer pay Kelvin 30 % of his loss.This recommendation was made because: • there was evidence that Kelvin could possibly have found insurance cover with a different insurance company, in knowledge of all of his traffic convictions and infringements, and • the wording on the proposal form could have been more specific about the need to disclose traffic convictions and infringements. FSCL’s CEO also recommended that the insurance company should change the wording on its application form, to make it clear that the insurance company wanted to know about traffic infringements as well as traffic convictions.


Estimates may be too low: RBNZ


he Reserve Bank is warning that insurers may still face bigger costs than they expect from the Christchurch earthquakes. At March 31, insurers had paid out $24 billion in earthquake claims and many have significantly increased their estimates of the final bill. The Reserve Bank now expects the total to be between $33 billion and $38 billion and says some insurers may encounter negative surprises. “In aggregate, estimated outstanding Canterbury earthquake claims have not reduced by much in recent months, with payments roughly matching increases in estimated ultimate costs,” the bank said in its six-monthly financial stability report. “The substantial claim amounts still outstanding suggest it will be challenging for insurers to meet their announced target for completing the settlement of all Canterbury earthquake claims within the next year or so.” The report notes that low long-term interest rates are a challenge for the sector, although the declining cost of reinsurance has helped and put downward pressure on prices, particularly in commercial property. “Global insurers are finding it relatively easy to raise capital and this is pushing down the cost of reinsurance, although rates for the Asia-Pacific region remain higher than in other major world regions.The New Zealand

general insurance sector is benefiting from these global trends.” The Reserve Bank said, in a competitive market, it was important that insurers maintained sound underwriting standards so that premiums would remain appropriately priced in relation to risks.




Quarter of businesses uninsured

he Insurance Council is developing education resources targettng small-to-medium sized enterprises because one in four New Zealand businesses don’t have insurance. Announcing the renewal of its partnership with financial capability education experts Young Enterprise Trust, the Insurance Council said one focus of the 2015 work would be developing insurance resources aimed at small businesses. “Small-to-medium-sized enterprises are the engine room of the New Zealand economy yet only one in four businesses are adequately insured,” said Insurance Council of New Zealand chief executive Tim Grafton. “This could pose a significant risk to the economy. The value of business insurance proved itself in helping the Canterbury economy through the aftermath of the earthquakes in 2010-11 as over $1 billion was paid out in business interruption insurance after the quakes, providing stimulus to the local economy, keeping jobs open and pay packets full. But across New


Young Enterprise Trust CEO Terry Shubkin and Insurance Council chief executive Tim Grafton have agreed to extend a partnership that will produce risk and insurance-related resources targeting small to medium-sized enterprises in 2015.


June 2015

Zealand, 28% of business owners don't have business insurance.” As part of its three-year financial literacy strategy, the Insurance Council is partnering with Young Enterprise for a second year to develop more risk and insurance-related educational resources Young Enterprise Chief Executive Terry Shubkin said: “We see that part of being financially capable is having the skills and knowledge to make the right decision for your own personal situation. Understanding the risks we face daily and being aware of the role insurance plays is a key part of this capability. We’re delighted to extend our relationship with the Insurance Council of New Zealand to be able to raise this knowledge and awareness for people of all ages.” The 2015 Young Enterprise partnership will also result in education resources on home and contents insurance, activities during Money Week in September 2015, support for the public education insurance website Covered and ongoing promotion of resources developed in 2014. Last year, Young Enterprise produced educational resources targeting secondary school students, including four Unit Standard Packages with a focus on insurance and risk.


We are

Our business is insured by ACE.

Insurance for businesses, families and individuals |

What does it mean to be ACE insured? We have access to experts who truly understand our casualty risks, from manufacturing to export liability. We can count on the people at ACE to take a creative and flexible approach, from risk management advice to designing global insurance programmes. We can get on with growing our business, knowing we are protected by ACE Group, one of the largest and strongest multiline Property and Casualty insurers in the world. Contact ACE now regarding the new Public and Products Liability Insurance policy. ©2015 ACE Group. Coverages underwritten by one or more companies of ACE Group. Not all coverages available in all jurisdictions. ACE®, ACE logo®, and ACE insured are trademarks of ACE Limited.


Safe-keeping A client argued a broker's advice had not been sufficient.


n August 2010, C asked P, a financial adviser business, to provide a quote for house and contents insurance. As part of this process, P provided C with a contents checklist and a valuation guide. P provided C with a proposal from an insurer to complete. The proposal said the policy had a limit of $10,000 in total for unspecified jewellery or watches. C and his wife completed the proposal and specified three items of jewellery, including $15,000 for pearls and $5000 for a ring (“the specified items”). The insurer agreed to provide C with cover (“the first policy”). In September 2010, P said it sent C a policy schedule, outlining the first policy’s terms and conditions (“the first 2010 schedule”). About two weeks later, the insurer sent P a policy schedule (“the second 2010 schedule”), which contained the following warranty: “When not in a locked safe, each specified item of jewellery or watch must be worn, or be in your actual physical presence and within your reach. The safe is to be of a quality sufficient to protect the specified items and must be anchored to the floor or to a wall. If you fail to adhere to these requirements we will not accept any claims for burglary, theft or unexplained loss” (“the warranty”). In May 2011, C discovered he already held house and contents insurance for the relevant period and asked P to obtain a refund of the premiums he had paid for the first policy. In June 2011, P arranged for the first policy to be “cancelled back to inception”, and provided


June 2015

C with a refund of the premiums he had paid. P arranged a new policy with the same insurer (“the second policy”). P emailed C another policy schedule (“the 2011 schedule”), which contained the warranty. In November 2011, C’s house was broken into and various items of contents were stolen, including the specified items. C made a claim to the insurer for the loss. P received a settlement offer from the insurer for $10,000, which was the maximum payable under the policy for unspecified jewellery. The offer excluded payment for the specified items, because they had not been kept in a locked safe. When C disputed the claim payment, P advised C that the insurer had “discharged [its] obligations in respect of this claim fully”. However P agreed to approach the insurer to see whether it could obtain an ex-gratia payment for C. C believed P had not explained the policy properly and sought “a full settlement on the ... specified items.” P insisted it had clearly advised C of the warranty on the 2011 schedule. The insurer did not agree to make any ex-gratia payment to C and P advised C it was “not able to take the matter any further.” ASSESSMENT The main issue for consideration was whether P failed to provide C with the level of service expected from a financial adviser. DUTY OF CARE The case manager considered the Financial Advisers Act 2008, the Code of Professional

Conduct for Authorised Financial Advisers and the Insurance Brokers of New Zealand Inc’s (IBANZ) Code of Professional Conduct. The Financial Advisers Act 2008 (“the Act”) regulates the provision of financial adviser and broking services to clients in New Zealand. Under this Act, all authorised financial advisers (AFAs) must also comply with the Code of Professional Conduct. Under the Act, all financial advisers (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. The Code sets out minimum standards for matters relating to (among other things) client care, competence, knowledge and skills. The minimum standards for client care include: requiring financial advisers to communicate clearly, concisely and effectively and ensuring clients are able to make informed decisions. Code standard six provides that “an authorised financial adviser must behave professionally in all dealings with a client, and communicate clearly, concisely and effectively.” The Code explains that communicating “effectively” “requires an AFA to take reasonable steps to ensure the client understands the communication.” The IBANZ Code contains a similar provision. BREACH OF DUTY The warranty The issue was whether P had breached its duty of care, by not expressly bringing the warranty to C’s attention.


At the time of the burglary, the specified items were not secured in accordance with the terms of the warranty and, therefore, prima facie, the warranty was breached. Notwithstanding the requirements of the warranty, the case manager believed it was an onerous term. The law, in regard to the inclusion of onerous terms in a contract, is that onerous terms must be fairly brought to the notice of the other party and not hidden in standard terms or conditions. P believed it fulfilled its responsibility to C by emailing him the 2011 schedule, which contained the warranty. While the 2011 schedule did contain the warranty, given the surrounding circumstances, the case manager did not believe it was sufficient to bring the warranty to C’s attention. When the first policy was arranged, there was no evidence that P advised C of the warranty (expressly, or otherwise). The first 2010 schedule did not contain the warranty. While P assumed the second 2010 schedule (which did contain the warranty) must have been sent to C, there was no evidence it was sent. Even if the second 2010 schedule was sent, the evidence indicated the first 2010 schedule would have been received by C before the second 2010 schedule. P assumed both schedules must have been sent to C. If C received both schedules, given that both documents appeared to be identical, it would have been reasonable for C to read the first 2010 schedule (which he received first) and disregard the second 2010 schedule. In these circumstances, for P to sufficiently bring the warranty to C’s attention, the case manager believed it would have been necessary for P to explicitly direct C to the difference in the second 2010 schedule (the warranty). There was no evidence that this had occurred and, accordingly, the case manager did not believe P fairly brought the warranty to C’s attention in 2010. When P arranged the second policy, C was not asked to complete any policy documentation. C’s contents were insured subject to the first policy and then, within a short period of time, were insured subject to the second policy. Therefore, the case manager did not believe C would have viewed the second policy as a “new” policy, as such. The 2011 schedule did contain the warranty. However, given the circumstances surrounding the inception of the second policy, when C received the 2011 schedule, it would have been reasonable for him to assume that his understanding of the terms and conditions of

THE MINIMUM STANDARDS FOR CLIENT CARE INCLUDE: REQUIRING FINANCIAL ADVISERS TO COMMUNICATE CLEARLY, CONCISELY AND EFFECTIVELY AND ENSURING CLIENTS ARE ABLE TO MAKE INFORMED DECISIONS the first policy were the same as the second policy i.e. that there was no warranty. There would have been little reason for C to read the 2011 schedule, as he would arguably have believed it was the same as the first 2010 schedule, which did not contain the warranty. The 2011 schedule was attached to an email from P to C. There was no indication in the email that the attached schedule differed from the first 2010 schedule. Without explicitly directing C to the warranty in the 2011 schedule, the case manager did not believe that merely including it in a subsequent (and apparently identical) schedule was sufficient. P argued that the warranty was set out on the 2011 schedule on the same page as the premium payable and, as such, C would have seen the warranty when he referred to the premium payable. However, because C received a refund of the premiums for the first policy, which was offset against the premiums owed for the second policy, the premium requested in the 2011 schedule was incorrect. P had attached the 2011 schedule to an email to C. However, in the same email, P advised C of the correct premium. C did not need to open the 2011 schedule email attachment to see the premium payable, because the correct amount was advised in the body of the email. Therefore, the fact that P included the warranty on the same page of the 2011 schedule attachment as the (incorrect) premium advice, did not prove P fairly brought the warranty to C’s attention.

Accordingly, the case manager believed P breached its duty of care to C in respect of the warranty, by not explicitly bringing it to his attention in 2010 or 2011. THE SETTLEMENT NEGOTIATIONS From the documents provided to the ISO Scheme, it was clear that P managed the claim settlement and made representations to the insurer on C’s behalf. During the negotiation of the claim, the case manager believed P should have advised C of his option to make a complaint to the ISO Scheme against the insurer, regardless of whether it believed the insurer had fully discharged its obligations under the policy. C continually complained to P and the insurer that he was seeking payment of the specified items, on the basis that he was not made aware of the warranty. At the very least, the case manager believed P should have referred C to the insurer’s internal complaints process. Because P did not do this, arguably C had been prejudiced by accepting a “full and final settlement” of the claim from the insurer. The case manager believed P breached its duty of care to C, by not advising him of the ability to make a complaint against the insurer. UNDERINSURANCE C also complained that P’s lack of care resulted in substantial underinsurance. P argued that, if there was underinsurance, it was due to C’s under-estimation of the contents and his decision to only specify 3 items of jewellery. P had provided C with a checklist, which outlined the values for which items were required to be specified. It also included a valuation guide, to enable C to determine the level of cover they required. The proposal noted the policy had a $10,000 limit for items of unspecified jewellery or watches. The proposal also stated, “if you want to insure their full value, please specify below and, if we require them, provide valuations.” C specified the 3 items of jewellery. Having regard to the information provided in the checklist and valuation guide, the Case Manager did not believe P breached its duty of care to C in respect of the valuation of the contents. C acknowledged he was partly responsible for not specifying the jewellery correctly. The case manager discussed the complaint in detail with P and C and, following these discussions, P offered C an ex-gratia payment of $5,000, in full and final settlement of the complaint. C accepted P’s offer. Result: Settled



Businesses pay high price for poor drafting of statutes By Crossley Gates, DLA Piper


ity poor Parliamentary Counsel who spend all day in their cardigans drafting Bills for Parliament to pass as statutes. It is their job to turn Parliament’s intention into words fashioned in such a way that a person not wanting to follow the intention must do so. While the drafting will always have to be technical in nature, the intention ought to be discernible to not just lawyers (despite my obvious self-interest). Indeed, I think statutes ought to pass some sort of person-in-the-street test, before they are passed to make sure an “ordinary” person can understand them. Why do I say this? The insurance industry has now seen two relatively recent examples of statutes whose drafting was so opaque, not only couldn’t lawyers understand the drafting, but according to our Supreme Court, nor could High Court and Court of Appeal Judges! The Court of Appeal sits with a minimum of three Judges, so that is four Judges who got it wrong. The first example is section 32 of the Sentencing Act 2002. Many readers will know where I am going with this. Cutting a long story short, that Act allows a criminal court to pass a sentence of reparation (civil judgment awarding damages) against the offender in favour of the victim, at the conclusion of sentencing the offender to his or her punishment. A District Court Judge sentenced an offender to pay reparation that expressly topped-up the victim’s ACC entitlement. This was at odds with the Accident Compensation Act 2001, which expressly prohibits civil recompense for injuries covered by ACC. Whether the District Court Judge was correct or not, was governed by section 32 (6) of the Sentencing Act 2002. That section said: … the court must not order the making of reparation in respect of any consequential loss or damage … for which the court believes that a person has entitlements under the Accident Compensation Act 2001. That seems clear enough; but is it? It can be read two ways. Does the prohibition on making an order of reparation apply if the victim receives any entitlements under ACC (total


June 2015

prohibition), or only to the extent of those entitlements (prevents double dipping only and so can be topped-up). The High Court and the Court of Appeal said its intention is to only prevent double dipping and so the District Court Judge was free to top-up the victim’s ACC entitlement. The Supreme Court (by a majority of three Judges to two) reversed those lower court decisions and said its intention is to create a total prohibition. Interestingly, if you add up all the Judges who considered the issue, including the District Court Judge, seven found in favour of topping up ACC and only three found against. However, the three were in the majority in the Supreme Court and that’s what counted. My point here is that where there is this degree of disagreement amongst the Judges, how are mere earthlings meant to get this right? The second example is section 48 of the Fire Service Act 1975, governing the calculation of fire service levies. There can’t be an insurance broker in New Zealand who is not aware that the Supreme Court recently overturned (this time unanimously) the lower court decisions of the High Court and the Court of Appeal. This time the total Judge count is slightly the other way – four Judges found in favour of IBANZ and five found in favour of the Fire Service Commission. The key area of difference between the Supreme Court and the lower courts was the interpretation of this subsection: (7) This section shall not apply to any contract of fire insurance that is limited to an excess over the indemnity value of the property or to any portion thereof which is in excess of the indemnity value. Is the “indemnity value” referred to here the actual indemnity value or the figure set by the insured? According to the Supreme Court, the answer is the actual indemnity value. The law is now clear that tiered policies and collective insurance arrangement do not have any effect on the levy calculation. This has taken a huge amount of time, effort and expense to resolve. It is not an exaggeration to say that a few small changes to some of the words in section 48 would have avoided all this. How does section 48 work? The Supreme Court conveniently summed this up at

paragraph [51] of its judgment. Paraphrased, it said: a) Where the property is insured under an indemnity only policy that states a maximum sum insured, the levy is calculated on that sum insured, regardless of whether this is below the actual indemnity value of the property. b) Where the property is insured under a policy that does not state a sum insured, the levy is calculated on the actual indemnity value of the property determined either by a declaration signed by the owner declaring its fair and reasonable indemnity value (which can be challenged by the Commission), or by a valuation given by a registered valuer. c) Where the property is insured under a policy that provides cover better than indemnity value (replacement cover), the levy is calculated on the actual indemnity value calculated in the same way as b) above. d) If the insured fails to provide a declaration or valuation for a replacement cover policy, the levy is calculated on the maximum (replacement) sum insured for the policy or in a manner determined by the commission. The Supreme Court noted that d) above is an incentive for the insured to comply with c) above, otherwise the insured risks paying the levy on the replacement sum insured, or as the Commission determines, which is likely to be at a higher level than c). After all this time of uncertainty, we finally have a clear understanding of what the law requires. It has been the practice in the insurance industry in some quarters to obtain the declaration/valuation from the insured only every few years. Nothing in the section allows for this and it seems clear that this is not complying with the law; for replacement cover, the declaration/valuation is required for new business and at every renewal.

CASE STUDY Professional

Professional Development: Professional IQ College


Principal’s Update



he huge changes to the insurance sector over the last year have seen a consolidation of insurers and brokerages. What has this meant to those talented people in the industry? For some it has meant a change of role, for others a change of organisation and perhaps even a change out of the industry. The insurance sector as a whole is impacted by the growing economy especially in terms of skills. In the latest Chartered Insurance Institute (CII) 2014 Skills Survey skills shortages were the hot topic. Sixty-four per cent of those surveyed believed there was a technical skill shortage in broking up from 59% in 2013. Those in claims and underwriting believed there was a 71% to 72% technical skill shortage. Sixty-two per cent of the firms in the UK surveyed said that attracting talent was a problem. While the government may have increasing people’s skills as a priority I don’t believe it is focused in our direction. At Professional IQ College I am

all too aware of the rapid change in the industry and that is why we have flexible training options for you. The need for more technical insurance specific skills is all too prominent and we have seen a large increase in demand for our technical insurance webinars and the Professional IQ broking certificates. According to the CII survey, fewer employers indicate they have issues retaining staff than attracting talent. However CII and I agree that you cannot become too complacent; with employees staying longer for companies that invest in them. A range of measures to support the employee today is necessary from professional qualifications, to professional development, or in-house training and mentoring all going a long way to achieve a great culture and increased business. On the topic of professional qualifications, the new level 5 qualification is up and running along with the insurance brokers’ certificate. Give me a call to discuss which option is best for you or your team.



Professional Development: Professional IQ College



Sum Insured


here is still a lot of confusion about sum insured house policies among consumers. You can assist your clients by providing them with more information about the change to sum insured and what it means for them. Common questions people are asking the ISO Scheme are: • Whose responsibility is it to determine sum insured? • How do I measure my house in sq m? • Are online calculators adequate? • Why is the sum insured higher than the house’s value? • What features and costs are included in sum insured? • How do you determine the proportion of sum insured for a repair? • What does sum insured means in the event of a total loss claim? Most complaints to the ISO Scheme regarding sum insured and under-insurance have arisen out of Canterbury Earthquake claims. The following case study highlights potential problems clients may encounter with sum insured policies. CASE STUDY 123288 (2013) In 1996, Tom* insured his house for “replacement” cover with an insurer based on a floor area of 486m². In June 1999, Tom changed to a “specified sum insured” policy. Every July, the sum insured was inflationadjusted by the insurer, with the sum insured being $325,500 in July 2010, and $358,100 in July 2011. Tom’s house was damaged in the September 2010, February 2011 and June 2011 earthquakes. In October 2011, the insurer mistakenly offered to settle the claim on a full replacement basis ($1.3 million), but later withdrew the offer and offered to settle the claim on the basis of the July 2011 sum insured ($358,100), in accordance with the policy. Tom believed that his cover was for replacement


June 2015

value, and he’d understood that the sum insured would provide a fair and reasonable cover for a house such as his, which had a very large non-living area. The insurer said it offered the sum insured policy at the request of the customer, and all invoices and policy schedules sent to Tom since 1999 showed the sum insured amount. After discussions with the case manager regarding the inflation adjustment of the sum insured, the insurer amended its offer to settle on the basis of a sum insured of $430,000 based on the Reserve Bank’s CPI index. Tom rejected this offer. The ISO Scheme found that the insurer’s liability was limited to the sum insured. *Names have been changed to preserve anonymity TOP TIPS Your clients must: • understand that the sum insured amount represents the cost to rebuild the house, not the cost of the house if they were to sell it • understand what they are covered for under their policy • read and understand renewal documentation • take responsibility for determining the sum insured amount • decide what cover is appropriate beyond the level of premium. To cover yourself against risk when advising clients, the key questions to ask yourself are: 1. Is it personalised, or generic, advice? 2. Have you got adequate records? 3. Is it within the scope of your expertise, i.e. you are offering financial advice not advice on the rebuild costs/ sum insured estimate? To mitigate these risks, the ISO Scheme recommends you: 1. Have standard wording/ explanations 2. Include a disclaimer, depending on the type of information/ advice being given 3. Have a list of contacts (within the insurer or other professionals) to which you can go to ask for more information, or refer clients.

hese people have completed their qualifications in the last three months. Congratulations and well done. Many students continue to complete their modules and are busy working towards their National Certificate or the new New Zealand Certificate Level 5. Congratulations to the six people who have completed their NZ Certificate in Financial services in Investment. This has been no mean feat and they have all worked really hard to meet the deadline required. Also welcome and congratulations to the 41 new students who have enrolled in the New Zealand Certificate in Financial Services. It won’t be long until your name is on our success honours board.

NATIONAL CERTIFICATE LEVEL 5 COMPLETIONS: Aleki Lane Cheuk Man Chapman Leung Plaxo Mortgages Olivia Fraser

Omega Capital Corporation

Philip Kelleway

Mike Henry Insurance Brokers Limited

Wenqing Hua

Plaxo Mortgages

Ying Shi

Sunshine Housing Ltd

Zhilei Zhang

Tai-Chi Capital Markets Ltd





OM Financial Limited

Mark Johnson

OM Financial Limited

Sharon Mckendry

OM Financial Limited

Wayne Dickson

OM Financial Limited

Paul Webber

OM Financial Limited

Stuart Ive

OM Financial Limited

Xioa Ping Luo

OM Financial Limited

The five pillars to the future


ast month the College Board held a strategic planning meeting to refresh the strategic direction of the College. As a result the College has established 5 pillars to support everything we do. The Pillars underpin everything we do and support our brand in terms of professionalism 1. The most trusted Financial Services Provider in New Zealand with the highest reputation 2. The pride of our industry stakeholders 3. Sought out as an attractive investment & sponsorship opportunity 4. Maintains the highest NZQA accreditation possible 5. Financially sustainable by 2017 So what are we doing to implement the strategy? THE FIRST PILLAR: THE MOST TRUSTED FINANCIAL SERVICES PROVIDER IN NEW ZEALAND WITH THE HIGHEST REPUTATION • Measure it (trust – reputation) • Create new relationships & reinforce existing relationships with key reputation makers • Develop our reputation standards/trusts • Provide key reputation makers with our “reputation and trust standards” SECOND PILLAR: THE PRIDE OF OUR INDUSTRY STAKEHOLDERS • Ask our ‘stakeholders’ what would make them proud of us. (survey to come out in June) • Determine and maintain key stakeholders groups • Deliver results to these groups • Have a plan to communicate this success to sector

THIRD PILLAR: SOUGHT OUT AS AN ATTRACTIVE INVESTMENT & SPONSORSHIP OPPORTUNITY • Identify education, learning and CPD needs • Develop and deliver high quality solutions that key stakeholders see value in ‘investing in’ • Identify strategic aims of sponsors or potential sponsor and match this to PIQ strategic aims • Present innovative sponsorship opportunities • Involve governance of PIQ in generating investor and sponsor support THE FOURTH PILLAR: MAINTAIN THE HIGHEST NZQA ACCREDITATION POSSIBLE • Invest resources in QM systems • Invest resources to prepare for best NZQA audit outcome in 2016 • Set high education outcome targets to achieve peak NZQA accreditation • Have simple, effective and well communicated self-assessment processes THE FIFTH PILLAR: FINANCIALLY SUSTAINABLE BY 2017, • Be ‘first to market’ for core new Level 4 & Level 5 qualification • Provide gap analysis to market for new quals • Have meaningful IT projects that lead to high quality, lower cost solutions • Have flexible delivery options for training • Focus on workshops that are high value, high financial return, high volume As I go around talking to you all in the July roadshow I will be asking for feedback on these pillars and we want to listen and learn what it is you want and how we can support you in your business so we can grow our business.

College partners with Commission


ne of the key roles of the Commission for Financial Capability is to build financial capability across all generations, to equip the retirees of today and tomorrow. That work takes up around two-thirds of CFFC's resources and it cannot do it on its own, so it works in partnership with other organisations to reach those who need support. One of the ways it does this is through a 10-module financial literacy programme that is run over nine weeks in the workplace. It was piloted and evaluated at The Warehouse's distribution centre in Wiri. Those who took part were hugely positive about the programme, which sets out to foster long-term behaviour change in people's financial habits. One of those, Poppy, said: "I've really enjoyed these sessions and now have a better and smarter way of thinking towards money, debt, life and insurances. "These sessions have changed my life. Thank you for sharing, caring and being part of not only my life but my whanau's too."

Following on from the success at Wiri, the programme also ran in The Warehouse retail store in Wainuiomata, Wellington. It is now ready to be delivered across the country by Commission-certified facilitators. But in order to reach as many people as possible, the Commission needed to identify and train facilitators to run the programme. To that end, the Commission has been working with Professional IQ on a series of workshops. The aim is to bring together facilitators to share and develop their knowledge so they can be certified to deliver the programmes effectively. There will be ongoing review and monitoring of the programmes. CFFC's project manager Rebecca CameronTurner, said: "It's been invaluable to work alongside Professional IQ and facilitator Ngaire Newland.Their expertise has ensured the quality of the facilitator workshop meets and exceeds our expectations. "We are delighted to have built up a bank of highly-qualified, passionate people to deliver our

programmes throughout the country. But we're still looking for more people to get involved." The workshops differ from traditional training programmes featuring an expert who teaches the audience about a topic. Instead a safe environment is created for people to share their ideas and experience. The aim is to remove any judgements or assumptions about the participants, so they feel confident speaking up and learning from each other. Part of the workshops involve filming the participants as they deliver a module from the workplace programme, based on what they've learned from each other the previous day. This has been hugely successful in assessing them and allowing them to see how much they have progressed during the course of the twoday workshop. It is also a very effective way of receiving feedback and self-reflection. More workshops are planned through to September. Anyone interested in taking part should contact Stephanie Hayter at stephanie.



Professional Development: Professional IQ College









Professional Indemnity and Liability claims – helping clients avoid nasty surprises

Virginia Douglas

Auckland & webinar


When clients have a problem they must pay for, they are sometimes surprised to find that their liability cover does not cover everything they thought it would. Using real case studies from the ISO Scheme, this webinar will look at common surprises clients get regarding the policy provisions.


Principles of Risk Management

Kevin Allen

Auckland & Webinar

1.00 - 3.00

The course starts by examining the statement: ‘The success of a business is built on understanding and managing risk’ and continues from there. You will gain an understanding of what constitutes business risk, the relationship of business risk to insurance and your role as a partner to the business.


Professional & Effective Broker

Kevin Allen

Auckland & Webinar


Learn about how to improve your skills as a broker.


Finding Your Workflow

Mike Barnes

Auckland & webinar


Understanding what is the right type of client work for you, and the right sort of clients. Finding the work that puts you in your best performance state, and working out how to get there.


Update on ACC, and changes to the laws around sentencing and reparation?

Andrew Hooker

Auckland & Webinar


What cover might your clients need?


Gradual damage and faulty workmanship exclusions - the pitfalls for clients

Virginia Douglas

Auckland & Webinar


Using real examples from complaints to the ISO Scheme, this webinar will look at a variety of case studies where claims have been declined on the basis that the damage was either gradual or caused by faulty workmanship. In these instances, clients often ask you to assist. The webinar will look at the issues faced by clients and how you can assist a client in this situation.


Unfair Contract Terms and Reparation Sentences

Crossley Gates

Auckland & Webinar


Find out what would make a contract term unfair and find out when reparation is likely to be an issue under a policy.


Common issues clients face with motor vehicle claims and how you can assist

Virginia Douglas

Auckland & Webinar


Clients are often surprised when their motor vehicle claim is declined. This webinar looks at the common complaints to the ISO Scheme regarding declined motor vehicle claims and how you can assist clients either avoid these issues or understand why they are not covered. The webinar will look at : breach of licences, values of vehicles, modifications and driving under the influence.


Health & Safety Liability seminar

Steve Keall

Auckland & Webinar


This seminar will include an overview of the legal landscape from a broker perspective, an update on recent developments and consideration of relevant insurance products of interest to customers.


Effective Business Writing: Emails, Letters and Presentations

Ngaire Newland



Written communication - in our business you can't avoid it, but how good at you at it? Full of practical tips and help, this workshop focuses on emails, letters and presentations It will put you on right track to confidence and competency in the effective use of written communication.


Commercial Property – declined claims and disappointed clients

Virginia Douglas

Auckland & Webinar


Using real examples from complaints to the ISO Scheme, this webinar will look at a variety of case studies where commercial property claims have been declined and clients have been disappointed. The discussion will also consider how brokers can assist clients avoid disappointment in the future.






Common exclusions for general insurance – help clients understand the cover

Virginia Douglas

Auckland & Webinar


Before they make a claim, most clients find it difficult to understand how policy exclusions might apply to them. Using real case studies from the ISO scheme this webinar will look at some of the common exclusions in general insurance policies and how these were applied to claims. The discussion will focus on lessons learnt and strategies for explaining exclusions to clients.


Presentation Skills

Ngaire Newland



An interactive practical workshop where you will develop the confidence and capability to give good presentations and get you message across. Gain the skills to engage your audience, overcome your fears and be present and authentic in front of crowds large and small.


June 2015

Scholarship applications open


BE, the principal sponsor of Professional IQ College, has a commitment to raising the standards of professionalism within the insurance broking industry through education and learning. The QBE Scholarship covers all enrolment fees to undertake a Professional IQ College NZQA-accredited online programme for the New Zealand Certificate in Financial Services (Level 5) including any optional workshops.

The QBE Scholarship is open to: • Students employed by an IBANZ member company, both at the time of application and at the time of taking up the scholarship. • Students with at least one year’s experience in a risk adviser (insurance broker) role. • Students who are citizens or permanent residents of New Zealand. Applications for the QBE Scholarship are now open, and must be received no later than 5pm on July 17, 2015. Good luck!

QBE Professional IQ College 2015 Scholarship QBE aims to support brokers in every way including raising their educational and professional standards. As a principal major sponsor of Professional IQ College, QBE is pleased to announce the QBE Professional IQ College Scholarship again for 2015 to allow a deserving broker to undertake a recognised course of study.

WHO CAN APPLY? • The scholarship is available to employees

of an IBANZ member company, both at the time of application and at time of taking up the scholarship. • Applicants with at least 1 year’s experience

in a risk adviser (insurance broker) job role are preferred.

WHAT WILL THE SCHOLARSHIP COVER? The QBE Professional IQ Scholarship will cover all Level 5 programme costs; • to the value of the NZ Certificate in Financial

Services Level 5, including any optional workshops.

HOW TO APPLY? Application forms for the QBE Professional IQ College Scholarship can be downloaded from, or contact Professional IQ College for further details on: phone email

09 306 1731

• Applicants should be able to take up

the scholarship within 12 months of announcement of the winner. • Applicants must be citizens or permanent

residents of New Zealand.

Applications must be received no later than 5.00pm on 17 July, 2015 - Good luck!





Richard Russell

Roger Abel Managing Director Rothbury Group Limited PO Box 1596 Shortland St, Auckland 1140 Mob: 021 852 230

(Chair) Branch Director, Crombie Lockwood NZ Ltd

PO Box 34, Invercargill 9840 Tel: 03 218 8994 Fax: 03 218 8996 Mob: 027 258 8433 Ruth Steele Brokerage Manager, Seneca Group Ltd

PO Box 305415, Triton Plaza Auckland 0757 Tel: 09 476 1670 Fax: 09 4761679 Mob: 021 590 698 Gary Young CEO IBANZ

PO Box 7053, Wellesley Street Auckland 1141 DDI: 09 306 1734 Fax: 09 307 0960 Mob: 027 543 0650 Andrew Gunn Consultant CIFA Training Manager

Wellington Ph: 04 815 8007 Bruce Howat CEO World Skills NZ

Auckland Ph: 021 671 566 Rod Severn

Tony Bridgman (Vice President) Executive Director Marsh Ltd PO Box 2221 Auckland 1140 Tel: 09 928 3015 Fax: 09 309 9891 Mob: 021 873 399

Fax: 03 358 3343 Mob: 021 909 148

Triton Plaza North Shore City 0757 Tel: 09 477 0277 Fax: 09 478 0277 Mob: 021 707 025

Stuart Speirs Director Abbott Group PO Box 3086 Christchurch 8011 Tel: 03 366 7536 Fax: 03 379 5395 Mob: 021 358341

Allan Daly Managing Director Avon Insurance Brokers PO Box 3923 Christchurch Mail Centre Christchurch 8140 Tel: 03 3710301 Fax: 03 3666589 Mob: 0275 358128

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

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

Nick Cressey (Immediate Past President) Director Aon New Zealand PO Box 305019

Craig Buckle Willis New Zealand Ltd PO Box 369 Auckland 1140 Tel: 09 356 9368

Jason Smith Managing Director Property & Commercial Insurance Brokers PO Box 4 Feilding 4740 Tel: 06 323 8820 Fax: 06 323 8872 Mob: 027 293 8724 Ruth Steele (Vice President) Brokerage Manager Seneca Group Ltd PO Box 305415 Triton Plaza Auckland 0757 Tel: 09 476 1670 Fax: 09 4761679 Mob: 021 590 698


Auckland Ph: 09 600 5171



STAFF Gary Young CEO DDI: 09 306 1734 Mob: 027 543 0650 Robyn Gosden Finance & Office Manager DDI: 09 306 1733 Mob: 027 275 2477 Karen Scard Membership & Secretarial Support DDI: 09 306 1738 Steve Wardley Technical Support DDI: 09 306 1736 Lesley Southwick Principal Professional IQ College DDI: 09 306 1735 Mob: 027 459 9804 52

June 2015

Sylvia Heywood Student Liaison & Compliance Manager DDI: 09 306 1737 Mob: 021 152 7174

IBANZ Physical address: Level Five, 280 Queen Street, Auckland 1010 Mailing address: PO Box 7053, Wellesley Street, Auckland 1141 Toll free: 0800 306 173 Website:

Each issue of CoverNote is packed with vital information, news, commentry and advise for the insurance industry from experts within the industry. To keep abreast with all the issues affecting New Zealand’s insurance broking industry just email TO ADVERTISE... Contact Robert Johnson on: e-Mail: Phone: 09-477 4702 Mobile: 0274-970-712 CoverNote is published quarterly by IBANZ, the Insurance Brokers Association of New Zealand. All correspondence should be addressed to: CoverNote, PO Box 33-1630 Takapuna, North Shore City, Auckland.

Next issue is due out: SEPTEMBER 2015


June 2015 The profe ssionals’

AGENCIES TAKE HOLD New Zealand bro alternatives to kers look for nimble the bigger players


magazine from



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Lowe Schollum & Jones Ltd Hamilton Luxor Insurance Brokers Ltd Auckland MA Risk Solutions NZ Limited Auckland Mainprice King Chartered Brokers Ltd Auckland Malcolm Flowers Insurances Ltd Taupo Marsh Ltd Auckland Matt Jensen Insurance Brokers Ltd Taupo McDonald Everest Insurance Brokers Ltd New Plymouth Montage General Insurance Ltd Auckland Multisure Ltd Auckland Nelson Bays Insurance Brokers Ltd (NIB) Nelson Neville Newcomb Insurance Brokers Ltd Auckland Nexus Insurance Brokers Ltd Auckland North Harbour Ins Services (1985) Ltd incl Northsure Group Limited Orewa Northco Insurance Brokers Ltd Masterton Northcrest Insurance Brokers Ltd Auckland Oamaru Insurance Brokers Oamaru O’Connor Warren Insurance Brokers Tauranga OFS Insurance Brokers Ltd Dunedin Omni Fire & General Ltd Auckland Paramount Insurance Agencies Ltd Auckland Paterson & Co NZ Ltd Auckland Penberthy Insurance Ltd Auckland Peter C Cranshaw Insurance Broker Ltd Levin PIC Insurance Brokers Ltd Manukau Primesure Brokers Ltd Auckland Property and Commercial Insurance Brokers Feilding Protekt Insurance Brokers 2008 Ltd Auckland Provincial Insurance Brokers Limited Masterton PSC Connect NZ Limited Auckland Pulsar Insurance Agency Auckland Reid Manson Ltd Timaru River City Insurance Brokers 2000 Ltd Wanganui RMA General Ltd Warkworth Rosser Underwriting Ltd Waipukurau Rothbury Group Ltd Auckland Runacres & Asssociates Limited Christchurch Seneca Insurance Brokers Ltd Auckland Sit & Blake Limited Auckland South Pacific Insurance Brokers Ltd Auckland Sweeney Townsend & Associates Ltd Rotorua Thames Valley Insurance Ltd Thames The Advisors 1 Limited New Plymouth The Insurance Brokers Ltd Auckland The Stoneman Group Wanganui Thorner General Insurances Ltd Upper Hutt Towes Insurance Brokers Ltd Te Aroha Trevor Strong Ins Ltd Auckland Vision Insurance (S.I.) Ltd Ashburton Waikato Insurance Brokers Limited Hamilton Wallace McLean Ltd Auckland Wanganui Insurance Brokers Ltd Wanganui Wholesale Insurance Brokers Ltd Papakura Willis New Zealand Ltd Auckland Yesberg Insurance Services Ltd Christchurch



Our customers own unique, classic or prestige cars, motorcycles or travel in homes on wheels. They don’t fit neatly in a box which is why we don’t offer run-of-the-mill policies. Your customers will feel appreciated with customised policies that tick all their boxes. And you’ll appreciate our high performance team who are super-fast and easy to deal with. That’s because we have no apron strings. We’re fully autonomous in our no-fuss dealings with you. We write our own specialised, custom policies and terms, calculate rates, communicate one-on-one with you and pay claims quick-smart; all with a smile.

Call us for a friendly chat about quality, customised insurance you can trust.

Call us on 09 250 6009 or email