INMAG APR 2015_page layouts 1/04/2015 7:19 pm Page 1
Swiss Re’s Mark Senkevics: Where some see threats, he sees opportunities for Australian insurers
Three experts explain what’s causing it, how it is transforming the global industry and what effect it will have on the local insurance market
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 2
Zurich Australian Insurance Limited ABN 13 000 296 640, AFS Licence No. 232507. 5 Blue Street North Sydney NSW 2060 www.zurich.com.au ZU22713 - V1 LBAT-009540-2014
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 3
DO BUSINESS YOUR WAY.
Offer your clients Zurich’s first - to - market single or bundled solution for ISR, Liability, Commercial Motor and Motor Fleet Insurance – Z.stream Commercial. You choose. Simply self-serve by quoting and closing on Z.stream or send your slips to your Zurich underwriter, whichever suits you best. To find out more call 1800 426 021 or visit www.zurich.com.au/zstream
ZURICH INSURANCE. FOR THOSE WHO TRULY LOVE THEIR BUSINESS.
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 4
Who’s the 1 #
We don’t know, we don’t care. All we care about is your success.
At PSC Connect, all we know is that your efforts and hard work should be rewarded with the success it deserves.
And all we care about is giving you the best support and tools possible to make sure your general insurance business succeeds. Become a PSC Connect Authorised Representative: FOR CONFIDENTIAL ENQUIRIES Call: Tony Walker (03) 9862 6528 Email: email@example.com Visit: www.BeMyOwnBoss.Com.Au
Proud members of NIBA and Steadfast.
PSC Connect endorses the Insurance Brokers Code of Practice. PSC Connect Pty Ltd ABN 23 141 574 914 AFS License No 344648
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 5
Contents 6 Newsmakers » 10 Search engines of change » The move online is transforming the way small businesses approach their insurance needs, presenting brokers with opportunities as well as threats.
16 Web of lies » In the digital age, corporations and individuals are finding it increasingly difficult to protect their reputations.
21 Reinsurance Revolution » 22 The exciting, dynamic, very rich and slightly mad world of reinsurance » With billions of dollars in investment capital pouring in, the global reinsurance industry faces a very different future.
64 Leading from the front » Michael Collins wants the Australasian Institute of Chartered Loss Adjusters to embrace change in the industry.
styleNEWS 48 Space to grow » Lockton’s new Perth headquarters reflects the company’s culture and wider ambitions.
lawNEWS 66 Duty bound » A new court ruling on disclosure puts added responsibility on insurers.
28 Playing the long game » Munich Re is riding out the current market with one eye firmly on the future.
32 Opportunity, crafted in Switzerland » The market is getting tougher, but reinsurance behemoth Swiss Re already has its sights firmly set on the positive possibilities.
companyNEWS 69 Going with the commercial flow » Z.Stream does it again for Zurich.
70 Sura 360 offers an all-round solution »
38 Happy families » Steadfast chief operating officer Dana Williams says cultural fit and great people are key to the group’s successful acquisitions.
44 Breaking the chain » Suncorp’s innovative joint ventures in the motor repair industry are producing big gains in an increasingly competitive market.
50 Driving change » NTI’s latest accident report shows truckers have turned a corner, but their journey is far from over.
Complex development ends with a simple format that brokers and clients really like.
peopleNEWS 72 74 76 78 80
Delegates have a ball at Insight » Business flows at UAC’s Hobart expo » Island retreat for Allianz Muster » McLardy McShane moves in » War hero caps off a special Sydney expo »
56 In it for the long haul » The competition might be tough, but Glenn Lambert has heavy transport group GT Insurance growing strongly.
82 maglog »
60 Communicating after the catastrophe » The Canterbury earthquakes provide valuable lessons on claims-handling.
Cover: Mark Senkevics, Managing Director and Head of Australia and New Zealand, Swiss Re Image: Kym Thomson:
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 6
insuranceNEWS.com.au is a free weekly online news service for the general insurance industry. The website has more than 22,100 subscribers. In February and March we published 458 articles online. These were made up as follows:
62 Local 98 Corporate 65 Regulatory & Government 53 Financial Services 71 The Professional 95 International 9 Analysis 5 Breaking News Some 17,865 news articles – including 178 breaking news bulletins – have been published since we started in 2001. All articles can be accessed through our archives. Access to articles and other services provided by insuranceNEWS.com.au are free.
Challenging future With the reinsurance market awash in alternative capital, insurance premium rates are expected to fall slightly this year in Australia, according to a new report from actuarial group Taylor Fry. In the longer term, insurers should expect reduced growth and profits. “We think the challenge for the insurance market is where to get growth,” Taylor Fry Actuary Sharanjit Paddam told insuranceNEWS.com.au. “Low investment yields are permanent, not short-term. And the large influx of alternative capital is transforming the supply of capital.” Alternative capital has more than doubled from 5% of total reinsurance capacity in 2007 to 11% last year, and is growing at a much faster rate than traditional reinsurance, Taylor Fry says. Last year alternative capital hit a record high of $61 billion, up from $19 billion in 2008. Traditional capital stood at $514 billion in the third quarter of last year, up from $321 billion in 2008.
“Additional capacity has entered the market from both traditional reinsurance and also alternative reinsurance capital, such as catastrophe bonds and collateralised reinsurance,” a new report from the company says. Mr Paddam says much of the alternative capital comes from US pension funds and is “sticky” – here for the long term. “They [the funds] have a very long investment horizon and are looking for 20 to 30-year returns. This is not a temporary oversupply of capital; it is a new state of the market.” Traditional insurers must work harder on service, technical expertise and structuring products, or risk losing market share to niche players. Mr Paddam says Youi in Queensland has been “very sophisticated” in its customer targeting, underwriting and technology, and there is evidence its loss ratios are lower than others’.
No let-up in growth struggle: actuary, 23 March
TIO was a strange instrument of the NT: it was an insurance company that many people loved. You do not often love insurance companies.
– Northern Territory parliamentarian Gerry Wood comments to a Senate inquiry about secrecy surrounding the sale of government-owned insurer TIO to Allianz in December
Big ships, mega risks Massive cargo ships could result in $US2 billion loss scenarios, according to Allianz Global Corporate & Specialty (AGCS). In its third annual Safety and Shipping Review, the global insurer notes the arrival of 19,000-teu container vessels has led cargo carrying capacity to increase 1200% in the past 50 years. These “mega ships” bring increased risk as cargo values rise and salvage becomes increasingly complex, and a collision between two such vessels could lead to losses of $US2 billion plus. “We have already seen a passenger ship case [Costa Concordia] where the final loss figure is about $US2 billion,” AGCS Global Head of Marine Risk Consulting Rahul Khanna said. “This is mainly due to the cost of wreck removal, and if an equivalent wreck removal process is used in the case of two 19,000-teu
Harmer goes digital
vessels, then cost could exceed $US2 billion.” With 22,000-teu ships potentially just three years away, the industry needs to think hard about how big is too big, the report says. It also highlights cyber attacks as a major threat to the industry. “Crews becoming smaller, ships becoming larger, and a growing reliance on automation all significantly exacerbate the risks from hackers disrupting key systems.” The report found last year’s loss of 75 large ships was down 32% compared with 2013, making it the safest year in a decade. Shipping losses have declined 50% since 2005. However, last year was marred by the loss of more than 300 lives in the sinking of the South Korean ferry Sewol in April. ‘Mega ships’ could lead to $US2 billion losses, 30 March
IAG has appointed Commercial Insurance Chief Executive Peter Harmer to the new role of Chief Digital Officer as it pours more resources into its digital strategy. IAG Commercial Insurance Chief Commercial Officer Ben Bessell will become Acting Chief Executive of the business while Mr Harmer leads the digital strategy over the rest of this year. Mr Harmer may then move back into the role. IAG this morning announced a raft of management changes to take effect on March 31. Leona Murphy will resume the role of Chief Strategy Officer while retaining her current responsibility for managing IAG’s move to its new operating model and the integration of the Wesfarmers business. IAG Chief Risk Officer Justin Breheny will retire in April and acting Chief Strategy Officer Clayton Whipp will take on his role. IAG changes executive team, Breaking News 11 March
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 7
Battling for business
Skipper signs on InterRISK has hired former Centric Wealth chief executive and Wallabies rugby union captain Phil Kearns as Managing Director. He will join the company on April 20. InterRISK shareholders sold 77.1% of the business to Austbrokers in June 2013, when managing director Dennis Guy also became chairman of the company, a role in which he will continue. Mr Kearns joined Centric Wealth in 2011, having been appointed by its private equity
owner to manage the business’ turnaround in preparation for its sale. He left last May after Financial Index Wealth Accountants Australia acquired Centric for $130 million. Austbrokers Chief Executive and Managing Director Mark Searles says Mr Kearns brings great experience and additional networks to the foundations built by Mr Guy and his team. InterRISK appoints ex-Wallabies skipper as MD, 30 March
Intense competition and pressure on premiums in the insurance market are set to continue, Marsh Managing Director and Head of Placement for Asia-Pacific John Donnelly warns. He says fewer catastrophic losses have ensured the market remains profitable, but competition will intensify as insurers go for growth. “We are seeing increased competition in domestic insurance markets, and that’s true globally as well,” he told insuranceNEWS.com.au. “Every insurer in the world has an appetite for growth and, given that there’s no major economic growth globally, if they’re going to get growth that means either stealing business from each other or going for mergers and acquisitions.” Mergers and acquisitions increased last year, and Marsh expects that to continue this year. But Mr Donnelly says the quest for revenue growth will shape market activity. “The big guys are looking at every area of the market to try to grow.” Rate reductions in the property market intensified last year and were most pronounced on larger risks as insurers competed for premium accounts to meet growth targets. Mr Donnelly expects rates to continue falling this year because of increased capacity and competition among insurers. He also predicts the decade-long decline in liability premiums will continue. Larger accounts experienced the greatest reductions last year, with many long-established client-underwriter relationships changing. Several accounts were “repatriated” from the UK as the Australian market intensified competition by offering broader coverage and better terms. “If you take Europe in the past 18 months or so, London and Europe have not been as competitive as Australia,” Mr Donnelly said. “A lot of business was repatriated to Australia and they’re now fighting to get it back.” Singapore’s emergence as a regional insurance hub will be another source of competition for Australian insurers. Insurance leaders flag competitive year ahead, 23 February
The future for agencies The underwriting agencies sector is gaining strength as agencies align their advantages to complement the role of insurance companies, according to Pen Underwriting Chief Executive Paul Lynam (right). Speaking after being given a lifetime achievement award by the Underwriting Agencies Council (UAC) in Sydney last week, Mr Lynam said UAC is “well positioned to be the beneficiary of a market that will change rapidly over the next 10 years”. “I believe insurance companies will more and more manage capital while the underwriting agencies will manage risk,” he told the audience at a luncheon following the annual underwriting agencies expo. “You can already see this happening, where the agency sector is building data and getting into a stronger position to take the front foot on underwriting management. “Back-office processing will be carried out more efficiently under the managing general agency model, and insurance companies will be able to fix their costs and concentrate on managing capital with small sophisticated teams.” Mr Lynam sold his company SRS to
Arthur J Gallagher in 2012. The Australian operation is now part of Gallagher’s global Pen Underwriting. He says he placed his first piece of business into the Lloyd’s market 27 years ago. “Underwriters recorded the entry on a card; there were no laptops,” he said. “Now we are talking about full life cycle policies, end-toend policy management and ‘owned distribution’. “I would estimate 65% of the gross written premium in the expo room today is owned by listed companies.” UAC General Manager William Legge told insuranceNEWS.com.au the award recognises Mr Lynam’s “strong support in helping set up UAC and providing continuing support”. “Paul is a foundation member and has been chairman of the council twice,” he said. “His support has been very important to the success of UAC.” The award has only been presented twice before, to fellow foundation members and former chairmen Bob Lee and the late Roy Ellis. Market changes ‘will benefit agencies’, 30 March
INMAG APR 2015_page layouts 2/04/2015 4:39 pm Page 8
“Consumers will be warned not to solely rely on the comparison to make a decision about selecting home insurance...”
The concerns of silence are not referred to what is available. Consumers also need more help to understand the scope of their policies. Since most call to ask about price, this limits the amount of information they seek on policy terms. Mr Kell says ASIC is aware of insurers’ concerns that the comparison website it is developing for north Queensland consumers will not provide a balance between price and policy features. The tool, due to go live by the end of March, will give indicative prices for various types of home and contents cover and a clear explanation of the site’s limitations, he says. “Consumers will be warned not to solely rely on the comparison to make a decision about selecting home insurance and will be encouraged to contact relevant insurers directly about their specific circumstances before making a decision.”
Publisher/editor: TERRY McMULLAN McMullan Conway Communications Pty Ltd Tel: + 61 3 9499 5538 Fax: +61 3 9499 5535 Email: firstname.lastname@example.org Advertising: NAOMI CONWAY McMullan Conway Communications Pty Ltd Tel: +61 3 9499 5538 Fax: +61 3 9499 5535 Email: email@example.com Artwork delivery to: McMullan Conway Communications Pty Ltd PO Box 116, Ivanhoe VIC 3079 Australia or Level 1, 120 Upper Heidelberg Road, Ivanhoe VIC 3079 (COURIERS ONLY) Email: firstname.lastname@example.org
Insurers ‘too conservative’ on consumer advice, 2 March
subscriPtion enquiries: www.insurancenews.com.au/subscribe Email: email@example.com contributions: We welcome all material that is relevant to the Australasian and regional risk insurance industry, including all aspects of risk management. Please contact the Editor, +61 3 9499 5538. Printing: Printgraphics, 14 Hardner Road, Mt Waverley VIC 3149, Australia www.insurancenews.com.au/magazine
Material in insuranceNEWS (the magazine) is protected under the Commonwealth Copyright Act 1968. No material may be reproduced in part or in whole without the consent of the copyright holders. The content of articles appearing in this magazine do not necessarily reflect the views of the Publisher. All statements made are based on information that is believed to be reliable and accurate, but no liability is accepted for any fault or omission. We also accept no responsibility or liability for any matter published in this magazine that reflects personal opinion. Printed on FSC® paper stock using vegetable based inks by a printer with ISO14001 Environmental Management System Certification.
A McMullan Conway production
Insurers can do more to help consumers buy the right cover without breaching laws on giving advice, according to Australian Securities and Investments Commission (ASIC) Deputy Chairman Peter Kell. Companies are being overly conservative on the help they give, he told last week’s Insurance Council of Australia regulatory update. “We do need to work on helping people get better information of what needs to be covered, particularly in home insurance.” There is plenty of “low hanging fruit” available to insurers, he says. Insurers argue regulations about providing personal advice restrict what their call centre staff can say, but Mr Kell says the “no advice” or “factual advice only” model may leave consumers underinsured. There is scope for giving consumers access to tools such as online calculators, but ASIC research of telephone sales shows most people who ring call centres
It’s become increasingly clear over the past few months that the general insurance industry is at the start of a rapid and challenging transformation. Factors completely outside the control of any industry sector, company or individual are sweeping us along. Resistance is futile. It’s a top-down process starting with reinsurance, where – as we’ve noted before – a massive influx of capital is opening up this most traditional of industries to new pressures. With so much investment capital looking for growth, reinsurance is undergoing dramatic change in the way it deals with risk transfer. While all that could seem a dramatic overstatement, consider this: It’s not so many months ago that we were quoting industry leaders’ predictions that alternative capital would disappear from the market as fast as it had arrived. Not any more. Investors like the possibilities inherent in reinsurance; they just need to tweak it a bit. In this issue Michelle Hannen interviews three reinsurance leaders with quite different takes on what’s happening – a reinsurance broker who sees the reinsurance premium becoming a tradable commodity; a “traditional” reinsurer from the top end of town who has his doubts, and a local leader who accentuates the positives. But none of them see new capital vanishing overnight. Understanding what’s happening right now is important, because the change flowing from the reinsurance revolution will inevitably affect us all. Many of the things we take for granted today will be challenged tomorrow. Markets and companies are changing to meet the new challenges and opportunities. Broker cluster groups are evolving into quasi-insurance companies. There are new entrants. Commercial products are increasingly being commoditised. Technology is suddenly a competitive differentiator. Efficiency is another area where insurance is not standing still, and one of the best illustrations of that fact is the change being wrought upon the fractious Australian car repair industry by Suncorp. Our article on the way one of the direct insurance giants has taken on entrenched interests to build 21st century solutions is well worth reading. This is an industry on the move, and we’d all better start learning to move with it – quickly. As Mark Senkevics, our cover subject for this issue, says: “Those with data and knowledge are going to be the winners in this game – if they can survive the next two years.”
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 9
LOOK NO FURTHER FOR YOUR CLIENT’S EARLY LEARNING AND CHILDCARE CENTRE INSURANCE. AIB AUSTRALIA – THE CHILDCARE INDUSTRY INSURANCE SPECIALISTS Cover arranged Australia–wide for Childcare Centres, Kindergartens, Preschools, Before & After School Care, Vacation Care and for property owners of Child Care Centres. Our commitment is to deliver the best scope of cover at the most competitive price on behalf of our broker partners. We offer first class service, Australian insurer security and invite your enquiry.
Contact AIB Wholesale Division on 07 5409 4600 or email firstname.lastname@example.org to find out more about the unique features and benefits of our unique facilities.
www.aibinsurance.com.au/wholesale-broker.php ABN 87 009 635 527 | AFSL 246262 AIB Pty Ltd
All Policies are underwritten by Ansvar Insurance Limited ABN 21 007 216 506 | AFSL 237826
8588 AIB P
d i dd 1
16/03/15 10 39 AM
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 10
Search engines of change The move online is transforming the way small businesses approach their insurance needs, presenting brokers with opportunities as well as threats By John Deex NO ONE DOUBTS THE INSURANCE BROKING industry is going through a period of major change, thanks to the emergence of a technologically adept, younger breed of small business-owners. These natives of the digital world are more likely to research their own insurance needs online and buy their insurance direct. Despite this, brokers have at least been able to rely on their traditional – usually male, usually older – client base. Until now. Vero’s latest SME Insurance Index surveyed 1500 businesses and makes a number of significant findings – some good for brokers, some bad. But perhaps the most significant finding is that the bread-and-butter older client base can no longer be relied on. About 44% of respondents used a broker to buy their last insurance policy, compared with 50% last year. Surprisingly, and perhaps worryingly, the fall has been driven by older male business-owners. Broker use in men aged 40 and over has dropped from 54% to 46%, while among men aged 18-39 it fell from 43% to 36%. Women aged 40 and over dropped from 52% to 45%. The only group to increase broker use was female clients aged 18-39, rising from 36% to 42%. The younger generation may have started the move to new technology, but others are catching on to the advantages of it. “We are witnessing a ‘late adopter’ effect, in which males and over-40s are embracing new ways of doing things that have already largely been adopted by their female and younger peers,” the report says. The traditional broker audience is now far more
“54% of direct users claim they can arrange cover easily enough themselves, while 35% do not want to deal with a middleman and 27% simply don’t see the benefit of using a broker.”
likely to use the internet to research options before purchase, and is much more willing to forego personal contact to get a better price. Combined with this, younger business-owners continue to show a great desire to use technology to take control of their own affairs. The index looks at clients who have used a broker for less than three years – 37% of whom are under 40. About 53% of this group personally research the insurance needs of their businesses, compared with
42% of broker users overall. And 56% use the internet to research their insurance options before buying, compared with 39% of total broker users. Analysing the views of those who buy direct gives an insight into what is stopping some business-owners from using brokers. The index finds 54% of direct users claim they can arrange cover easily enough themselves, while 35% do not want to deal with a middleman and 27% simply don’t see the benefit of using a broker. April/May 2015
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 11
01 There is a new generation of broker users – tech savvy, involved and price conscious.
02 Many direct buyers are considering using a broker and will turn to online search and personal networks to find one.
03 Broker use is down overall as traditional broker audiences embrace changing ways of doing things.
Despite the fall in users, Suncorp’s Commercial Insurance National Manager Broker Distribution Sam Sanfilippo believes the broker model is in good shape, and says there are many positives to take from the report. “It is more of a tweaking environment than anything being broken,” he tells Insurance News. “There is an interest from young business-owners to surf the net – but those same young business-owners are also prepared to go down the path of a broker. “Yes, there has been a small drop in broker use, and the over-40s are also using the strength of the internet. But we see technology use as an opportunity rather than a threat. “The demographic is saying, ‘There is another medium we can use.’ We are saying that brokers should be aware of that, and take some time to think about what they can do about getting into that space. “Just because clients surf the internet doesn’t mean they will complete the purchase online. They are just better informed and prepared to have a conversation with brokers.” The index shows 35% of business-owners currently buying insurance direct will “definitely” or “maybe” consider using a broker. Younger people are more likely to feel this way, and medium-sized businesses are more open to the idea than small businesses. When asked how they will go about finding a broker, 60% say they will search online. This makes a strong online presence “the single most important factor” for brokers looking for new business. “Brokerages need to consider investing in their
04 Pricing is top of mind, and influences the behaviour of many insurance buyers.
05 Expertise is highly valued, yet informal sources of advice are prevalent.
06 Overall, broker clients remain satisfied and are looking for deep relationships that provide them with access to specialist risk expertise.
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 12
Researching ways to build their online presence, and making better use of all the available digital options.
Continually reinforcing the message to clients and potential clients that brokers have expertise which can save them money and ensure their protection.
Getting closer to their clients. Once-a-year contact is nowhere near enough.
Making sure clients understand what the broker is doing for them and why they are doing it, rather than just presenting them with a quote.
Four things brokers should be doing
online presence, not only through a strong website but also using methods such as search engine optimisation to ensure they have a good presence when prospective clients turn to online search to find a broker,” the report says. Pricing remains a high priority for clients, particularly new broker users. The index finds business-owners have again reported higher premiums, despite this being “at odds with insurance industry reality”. Some 54% of respondents report premiums have risen over the past year, with just 9% saying they have paid less. About 60% expect prices to rise over the next year, while just 4% predict a fall. “The past year has been notable for the sharp change in pricing direction, with extensive price discounting and premium reductions having an impact on revenue across the industry,” the report says. “Clearly there is a gap between insurance customers’ perceptions and reality, and this story of
slowing price growth is yet to be noticed by businessowners and decision-makers.” The perception of rising premiums, while erroneous, drives increasingly price-conscious attitudes. The index finds 42% of respondents believe buying online is a great way to get the best price, up from 34% two years ago. However, the price misconception can also be interpreted as an opportunity for brokers. This year 41% of direct clients say they will use a broker if they can obtain cheaper prices, up from 25% two years ago. Another key reason for using a broker is expertise. About 49% of clients say the knowledge and guidance their broker provides is one of the main reasons for working with them, and 46% cite peace of mind from knowing their broker provides them with the correct cover. But there is a caveat. Despite expertise being highly valued, business-owners are increasingly using “informal sources” rather than brokers to get informa-
Sources used by ‘considerers’ to find a broker
Online search 60% Colleague / friend / family 39% Business adviser (e.g. accountant, lawyer) 35% Association / industry body 19% Local business association / chamber of commerce 17% Other search (e.g. yellow pages) 14% Advertising 12% Social media (e.g. LinkedIn, Facebook) 8%
Source: Vero SME Insurance Index 2015
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 13
//ŶŽƵƌĮƌƐƚǇĞĂƌŽĨŽƉĞƌĂƟŽŶǁĞĂƌĞƉƌŽƵĚƚŽŚĂǀĞƌĞƚƵƌŶĞĚϳϬй ŶŽƵƌĮƌƐƚǇĞĂƌŽĨŽƉĞƌĂƟŽŶǁĞĂƌĞƉƌŽƵĚƚŽŚĂǀĞƌĞƚƵƌŶĞĚϳϬй ŽĨŽƵƌƐƵƌƉůƵƐƚŽŽƵƌEŽƚĨŽƌWƌŽĮƚƐŚĂƌĞŚŽůĚĞƌƐĂŶĚŵĂĚĞĂŶ Ž ĨŽƵƌƐƵƌƉůƵƐƚŽŽƵƌEŽƚĨŽƌWƌŽĮƚƐŚĂƌĞŚŽůĚĞƌƐĂŶĚŵĂĚĞĂŶ ĂĂĚĚŝƟŽŶĂůϭϵŐƌĂŶƚƐƚŽŚĞůƉƐŽŵĞƚĞƌƌŝĮĐĐŽŵŵƵŶŝƚǇƉƌŽũĞĐƚƐ͘ ĚĚŝƟŽŶĂůϭϵŐƌĂŶƚƐƚŽŚĞůƉƐŽŵĞƚĞƌƌŝĮĐĐŽŵŵƵŶŝƚǇƉƌŽũĞĐƚƐ͘
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 14
“Relationships are clearly very important to broker clients and, in these changing times, they cannot be taken for granted.”
tion on insurance. And that can create problems. “This is supported by anecdotal evidence suggesting the level of misinformation about and misunderstanding of insurance is very high, and that there is a significant risk of underinsurance as a result,” Vero’s report says. Brokers have a clear advantage due to the expertise they bring, but need to continually reinforce that message. The index consistently finds high levels of satisfaction with brokers, and this year is no different, with 91% of clients either satisfied or somewhat satisfied. However, many want more contact, with 63% preferring to hear from their broker at least twice a year. “Relationships are clearly very important to broker clients and, in these changing times, they cannot be taken for granted,” the report says. Mr Sanfilippo tells Insurance News brokers need to change the way they work. “Gone are the days of just saying, ‘Here is your
quotation.’ Through the use of the internet, the buyer is much more aware and brokers need to share a lot more of the process with clients.” They also need to improve their online presence and make full use of all digital platforms. “I imagine this is very much front of mind, and I don’t think any broker can afford not to understand and invest in this area,” Mr Sanfilippo says. Change is a clear theme of this year’s index: changing attitudes of younger and older clients, and changing business practices brought about by increased use of digital channels. But Vero believes this is not necessarily a bad thing for brokers. The fundamentals of broking are strong, and there is much that can be done to improve brokers’ position. “With change certainly comes risk, but more importantly opportunity, and the chance for busi* nesses to evolve and grow,” the report says.
Construction Const ruction Liability Looking for a policy that provides your client with automatic contractual liability and a waiver of subrogation? We don’t need to tell you how complex some construction projects p rojects can be. Our Broadform Liability fac facility ility prov provides ides you and your client with certainty, with a wording specifically tailored to the construction industry. Automatic $25M capacity with higher limits available Automatic on request. For more information, or a quotation, please make contact with Roy McClelland on: Ph: O7 3374 2022 | Mob: 0412-662 262 Email: email@example.com steadfast-irs.com.au/insurance/wholesale/construction-2/
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 15
Disillusioned with your licensee or AR network?
MAYBE YOU SHOULD CHECK OUT WHY SO MANY BROKERS ARE MOVING ACROSS TO UIG We’ve been working with ARs since 2003 – in fact, UIG was established by ARs for ARs. It is a group designed specifically to support independent broking experts. Call Trevor on 03 8676 0344 or 0431 705 660 or you can email firstname.lastname@example.org to discuss why we’re growing so quickly.
With United Insurance Group, you’ll never work alone
At UIG you’ll find: s
A competitive fee structure with no extra charges for PI or additional fees collected directly from clients
An easy transition with data transfer, on-site training and constant management support
Real-time response from experienced staff who really can assist you, and access to discuss business with a wider network of your broking peers
Support for the decisions you make and our commitment to maintain your independence
Access to the wider range of underwriting and support services through the Steadfast Group
www.uig.net.au ww w.u i g .n et.au | Co Contact n ta c t Ge General n er a l Ma Manager n ager TTrevor revor How Howard a rd | 03 867 86766 00344 34 4 | email@example.com trevor@ u i g .ne t . a u
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 16
Web of lies In the digital age, corporations and individuals are finding it increasingly difficult to protect their reputations By Andy Swales
Damned by online gossip: One Direction singer Zayn Malik left the band, citing stress over intrusions into his privacy
THERE WAS A TIME WHEN SLANDER might involve little more than a malicious rumour spread slowly among its victim’s immediate social circle or community, best remedied by loud protests of innocence, counter-rumours or, if all else failed, pistols at dawn. But in the digital age, slurs against a business or individual can come from anywhere, from anyone, and they can reach every computer, tablet and smartphone in the world, all in the blink of an eye. A few years from now the latest corporate Twitter-storm or celebrity rumour could be flashing across our Google Glasses before we even have time to check our Apple iWatches. It’s a scary scenario for anyone with a global reputation worth protecting, which is why “digital slander” – or perhaps more accurately “digital defamation”, given the material is published – features in Swiss Re’s Sonar report on emerging risks. “The digital era has conferred more power to individuals, for example through smartphones and social media,” the report says. “This has given rise to new risks. False rumours, spread over the internet, can have a devastating impact on a person, a group or an organisation. Any individual can potentially cause reputational damage to an individual or group of people by wildly attacking them on the internet. “Large corporations face an even greater challenge in managing their online reputation. Every employee is a potential ambassador, detractor or both. “A combination of pre-emptive mitigation and comprehensive pursuit of insurance coverage post-loss is likely to provide the best protection against social media-related losses.” Eric Lowenstein, a client manager and cyber specialist with global broker Aon, says the threat is growing, particularly in the context of “hactivism” – co-ordinated cyber
INMAG APR 2015_page layouts 2/04/2015 4:36 pm Page 17
Increase Your Income… A great opportunity for brokers and ARs is to simply build a marketing strategy to cross-sell and grow your book of business. One way of doing this is to offer ShieldCover’s Accident & Sickness Insurance to your existing clients.
attacks on specific targets such as businesses, government bodies and famous individuals. “I can see why it’s up there [in the Sonar report], because it’s a vastly unknown and vastly uncontrollable risk for an organisation. We’ve seen some really vivid examples in Australia,” he tells Insurance News. He cites a case in 2013 when an environmental campaigner sent a fake ANZ press release to media organisations, some of which immediately reported it online as fact. It stated the bank was withdrawing funding for a Whitehaven Coal project. The hoax knocked hundreds of millions of dollars off Whitehaven’s market value before it was discovered. “When you think about the importance of brands to organisations, it doesn’t take much for an event such as [the ANZWhitehaven attack] to have an impact on reputation,” Mr Lowenstein says. Product safety is a particularly vulnerable area for many companies, with misconception and disinformation rife. Coca-Cola’s website has a page dedicated to debunking dozens of internet rumours about the group and its product, from claims it contains ingredients unsuitable for Muslims (pork, according to one wild story) to scares about terrorists infiltrating plants and poisoning drinks. AIG’s Northern Region Manager Financial Lines Adam Suplina says businesses are well aware of the rising threat to reputation and the possible consequences of bad news now travelling so much faster. “I think it’s one of the biggest areas [corporations] are concerned about,” he tell Insurance News. “In large financial lines claims... their major concern is the flow-on, the loss of reputation, which is the part they’re trying to contain.” The growing risk presents an opportunity for insurers, but as yet the industry’s response appears patchy. Mr Lowenstein says some cyber policies respond to digital slander arising from hactivism.
Recently, ShieldCover worked with a broker who had an existing client, a large group of self-employed contractors. This broker had not actively sought Accident & Sickness options. By working with the team at ShieldCover, together they put a plan in place, which not only offered the client tailored cover options, but the broker increased his income.
We would welcome the opportunity to work with your upcoming Personal Accident & Sickness renewals or discuss any new opportunities.
Contact Rebecca Sawers on 1300 850 188 19 Rosedale Street Coopers Plains, Brisbane 4108 E: firstname.lastname@example.org W: www.shieldcover.com.au ShieldCover: Your People, Protected. Directors Personal Accident | Enterprise Bargaining Agreements | Group Personal Accident | Individual Personal Accident & Sickness | Sports Personal Accident | Voluntary Workers Personal Accident insuranceNEWS
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 18
“It could be something involving social media or involving a security breach that has an impact on an organisation. “The cyber policy will cover public relations (PR) costs, loss of revenue or impact to a brand that can adversely affect an organisation’s bottom line.” However, Mr Suplina says AIG’s cyber cover does not respond to reputational damage. In the US, the insurer has a policy called Reputation Guard, which provides access to a panel of PR experts and coverage for preventative and restorative communications strategies. Mr Suplina has been working on a similar product for the Australian market, which is expected to be released in coming months. While insurers can cover easily quantifiable costs such as PR campaigns and legal bills, putting a cash value on the damage to a business’ reputation is not so easily done. Mr Lowenstein says insurers are “still making their way through that... it’s never a clear-cut case”. He says reputational damage must be clearly linked to loss of revenue, but “there are many reasons why a client might leave... going through that loss adjusting process can be hard”. Mr Suplina says it is difficult to ascertain the “flow-on” from digital slander. “How many clients are leaving because they’ve realised, ‘I don’t want any part of a company that has had this event occurring.’ “That’s the hard part, and that’s the part everyone wants to manage and quantify.” And it is not only corporations that are affected. Celebrities, politicians and other high-profile individuals are frequently the subject of gossip and libels spread online. Pop stars such as the late Michael Jackson and Lady Gaga have endured endless speculation about their private lives and personal histories. In 2013 French actress Julie Gayet sued bloggers over claims she had an affair with President Francois Hollande. And more 18
“This risk is starting to become personal and there’s not always a company, or a company’s insurance, that stands behind protecting a risk of allegation.” recently Zayn Malik, a member of boy band One Direction, was forced to deny social media rumours he cheated on his fiancée. He later left the group, citing stress over intrusions into his privacy. “More and more information is becoming available,” Mr Lowenstein says. “Twenty years ago a lot of celebrities and public figures did things in their private lives and it was never made public, but now there’s just a trail. We’ve seen a lot of celebrities have their Twitter accounts hacked, iTunes, their photos – all sorts of past activities coming to light.” So is there scope for reputational protection as a personal line for the rich and famous? After all, many singers insure their voices for millions of dollars; their personal ‘brands’ may be just as valuable. “Who knows?” Mr Lowenstein says. “As an industry we do need to think a little bit outside the square and realise this risk is starting to become personal and there’s not always a company, or a company’s insurance, that stands behind protecting a risk of allegation, and therefore maybe there is a need or an opportunity around products that [help] individuals.” Mr Suplina says specialty cover for reputational damage has been a niche area so far, and “hasn’t really been on [insurers’] agenda”. But he expects that to change. “I think it will be an adaptation of cyber and these types of policies... I think definitely over coming years it will become a * focal point [for insurers].” insuranceNEWS
INMAG APR 2015_page layouts 1/04/2015 7:20 pm Page 19
A third of SMEs are influenced by friends and family in their decision to use a business insurance broker Do you know how to maximise this opportunity?
Find out in the
Vero SME Insurance Index 2015 Simply visit vero.com.au * AAI Limited (ABN 48 005 297 807) trading as Vero Vero Insurance. Source: VVero ero SME Insurance Index 2015, available for free download at vero.com.au
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 20
Mobile Solutions by Ebix %H IUHH IURP WKH FRQÀQHV RI \RXU RIÀFH ZLWK (EL[·V 0RELOH 6ROXWLRQV range. Advanced solutions allow you greater access to information within your Ebix systems. Retrieve key client and policy information securely wherever you are, easily.
An all new range coming soon.
On-demand Insurance Solutions
ebix.com.au Ebix Australia Pty Ltd
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 21
Reinsurance Revolution By Michelle Hannen
2015 BEGAN WITH THE GLOBAL reinsurance market abuzz, but not due to a northern hemisphere winter storm or a southern hemisphere cyclone or flood. The soft January 1 renewals had some tongues wagging, but the noise reached fever pitch when the news of two big deals broke – XL acquired Catlin to create the world's eighth-largest reinsurer, and a merger between Axis Capital and Partner Re formed the fifth-largest reinsurer globally. It has not quietened down since. The volume had been building for some time – since so-called “alternative capital” entered the market in massive amounts, seeking higher yields than they could earn elsewhere in the fallout of the global collapse of interest rates. In 2014 the investment of alternative capital, in the form of hedge funds and pension funds investing in catastrophe bonds, insurance-linked securities, sidecars and collateralised reinsurance, reached $US62 billion, or 18% of global catastrophe capacity. Mercifully, global insured losses of $US30 billion in 2014 were the lowest for four years, and despite
depressed investment returns and taking a haircut at mid-year renewals, most reinsurers performed relatively well, with several posting combined operating ratios in the 80% range. But the M&A activity signalled that for some, the pressure was becoming insurmountable. In perhaps the clearest sign yet, it indicated that rather than just another soft cycle, a structural change in the market was happening. With diversification and scale the new buzzwords, Insurance News has interviewed both local and global reinsurance leaders at the top of their game to glean their views on where the market is heading. While each sees the future a little differently, Ludger Arnoldussen, the Munich Re board member with oversight of the Asia Pacific, African and German markets; Mark Senkevics, Australia and New Zealand Managing Director for Swiss Re; and John Cavanagh, Chief Executive at Willis Re, all believe that the rules of the game have changed, and reinsurers will need to reinvent themselves to thrive – and in some cases, to survive.
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 22
The exciting, dynamic, very rich and slightly mad world of reinsurance
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 23
With billions of dollars in investment capital pouring in, the global reinsurance industry faces a very different future
AT A RECENT MEETING WITH HIS financial adviser, Willis Re Chief Executive John Cavanagh was offered the option of putting a new type of investment – cat risk – into his pension fund. His response was a resounding no, based on the reasoning that he already has enough exposure to catastrophe risk at work. The point Mr Cavanagh makes in telling the story is not to embarrass his adviser, who perhaps should have known better, but to indicate just how mainstream an investment option reinsurance has become. “It’s starting to creep into the firmament of people’s pension funds, and it’s now becoming part of the bedrock of pension fund activity, albeit small at present. It’s never going to go away, is it?” He tells Insurance News another story to help explain how alternative capital in the reinsurance market reached a total investment of $US62 billion at the end of 2014. It is the story of a fund that, in mid-2012, had $US800 million invested in reinsurance, and whose investment in the industry now totals $US3 billion. “Capital is seeping in much more fluidly than in the past. You can’t understate the value of reinsurance as a diversifying asset, and the current financial market view that this is a very interesting market to be in.” And with that, Mr Cavanagh backs his assertion that alternative capital is here to stay. What impact, then, would a major catastrophe have on the market? “America tends to drive the global market in terms of overall market response, so we just won’t know until we see another large US loss or series of large losses.” Even so, aside from a bit of “sorting the men from the boys”, Mr Cavanagh says it
would need to be a “really, really significant storm to move the needle”, before adding “and even then I don’t think it would”. “If we had a major, $US100 billion cat, would those guys see it as an opportunity or time to take a pass? I think they’d see it as an opportunity. Their footprint is so small, that it would hardly move the needle at the moment and they would see it as an opportunity to come in more substantively. And there’s a lot of capacity on the sidelines in our business.”
better understanding of the risk. “The market just swallowed it whole.” He says buyers are now becoming accustomed to the new capital players. But this “process of education” is nothing new. “When the reinsurance market was materially damaged after [Hurricane] Andrew and the series of cat events preceding that, we had to educate all our clients about the new wave of Bermuda cat reinsurers.” But the Bermuda market confounded
“The way capital comes into our market now will act as a flattening mechanism. I think now we’re going to see flatter cycles.” Furthermore, he predicts that the presence of alternate capital will bring about such a significant structural change in the reinsurance market that it will put an end to the extreme peaks and troughs of its cyclical nature. “The way in which capital comes into our market now will act as a flattening mechanism. I think now we’re going to see flatter cycles as a consequence.” To demonstrate, he says the combination of Superstorm Sandy, two Australian floods, two major New Zealand earthquakes, the Thai flood and the Japanese earthquake – events that totalled approximately $US160 billion in insured losses – “didn’t do anything material to global rates” aside from some localised readjustments based on a insuranceNEWS
the sceptics and “performed admirably”. Nevertheless, Mr Cavanagh maintains there are still distinguishing elements among the alternative capital players that help to separate the wheat from the chaff. Reinsurance brokers are keeping checks in place to ensure markets perform to expectations. “The first thing we’ve got to do is differentiate the quality of security. Some of the established, broader-based funds have so far performed admirably in paying their claims, but most of the alternative markets, particularly the cat bond funds, haven’t been properly tested yet. So we’re not necessarily sure how they’re going to perform. “We recommend that [clients] keep their core reinsurance program with the people they know can and do respond. 23
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 24
Reinsurance Revolution Everyone’s chasing premium: Willis Re’s John Cavanagh
“So we’re saying to our clients: act with caution, deal with these guys if you feel comfortable and they’ve offered you some great deals, some interesting aggregate stuff. “But keep your core intact, because you know that the traditional reinsurers have a proven track record and are going to be around.” But despite some market loyalty, the pressure on traditional reinsurers is undoubtedly building. The January 1 renewals saw pricing slip further, Mr Cavanagh tells Insurance News. Terms and conditions came under increasing pressure while reinsurers are also suffering from a contracting market, with “a lot less” reinsurance-buying taking place due to the centralisation of a number of big programs and the majority of insurers looking to retain more net risk. And he warns the worst is probably yet to come, with more pressure on rates expected at the April and June renewals. “There’s a lot of pressure on, with lower premiums coming through the system and more capital to underwrite against it.” The inevitable result, he says, is the mergers and acquisitions activity that has gained momentum in the reinsurance market over the past six months. And Mr Cavanagh predicts there is more consolidation to come. “It leaves some of the players that haven’t joined hands quite vulnerable, in my view.” He adds that aside from the oversupply of capital and increased competition in the market, regulatory pressures and the concerns of ratings agencies are also forcing the hand of some insurers. While he believes larger companies will feel the pressures less, “there are still some very high-quality markets of relatively small 24
scale. You can point to Lloyd’s syndicates in that regard, but even there I think we’re going to see some consolidation.” The other key trend in the reinsurance market at present is that of diversification, both geographic and by product line. Mr Cavanagh says that most of the former specialist underwriters have become much more diverse in their underwriting. “Everybody’s broadening their horizons. Those markets that were purely North
One way to help find a home for the abundant capital while leaving the core reinsurance market intact would be the development of a secondary market, which Mr Cavanagh says would allow funds to trade the price without trading the physical risk. “At the moment we’ve got too much money trying to trade the physical. Other financial services markets like commodities, currencies, equities and bonds have deep secondary markets.
“Most of the alternative markets, particularly the cat bond funds, haven’t been properly tested yet.” American-focused are looking more globally. It’s endemic of the fact that everybody’s chasing premium.” And the flight to diversification also applies to reinsurers focusing on primary insurance activities. “There are very few pure-play reinsurers. Most of them have an insurance arm, so what they’ve tended to do is actually focus on their insurance business while reinsurance is being squeezed. “In America, [commercial insurance] rates have been going up of late and there’s good expansion in emerging markets. So reinsurers can put their foot on the gas there and take their foot off the gas in the reinsurance market, and they’ve got a nice balance in their business.” insuranceNEWS
“If you look at commodities, few investors are actually trading the commodity end – they’re trading price discovery. They’re not interested in taking a lorry load of tin or copper. What they want is to trade the price, because it’s part of their diversifying asset strategy. “If you ask a lot of these funds whether they want to be in the reinsurance business, the answer is no. ‘We don’t really want to get into the technical nitty-gritty of what you do. What we really like is trading cat.’” Reinsurance derivatives have been explored before. One, the Carvill Hurricane Index (now the CME Hurricane Index), was developed by broker RK Carvill after Hurricanes Katrina, Rita and Wilma in 2005. Mr Cavanagh says that at that time new rein-
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 25
INTRODUCING SURA 360 FROM SURA COMMERCIAL
WHAT IS SURA 360?
S SURA URA 3 360 60 is is o our leading p product offered ffered b by y SURA SURA Commercial. Commercial. ur market market leading roduct o This commercial This facility facility targets targets a wide wide range range of of ssmall mall tto o medium medium c ommercial and and industrial industrial occupations edge occupations delivered delivered through through a cutting cutting e dge electronic electronic delivery delivery platform. platform. SURA 360 value on watch SURA 3 60 – exceptional exceptional cover cover and and v alue for for money. money. Get Get o n board board and and w atch your quotes business. your q uotes convert convert to to new new bu siness. COVERAGE
WHAT MAKES US DIFFERENT
Asset Protection: Protection: all risk property eliminates the need for multiple sections.
Liability Protection: Protection: wording simplified wording incorporating advertising liability. liability. advertising
Income Protection: Protection: business interruption based on income with agreed rates of accounting gross profit.
Protection: Crime Protection: money and combined money fidelity section to reflect today’s business climate. today’s
For For contact contact details details head head to our our website website
SURA Commercial Pty Ltd. SURA Commercial is a trading name of SURA Pty Ltd ABN 36 115 672 350, AFSL 294 313
— — — — — —
100% 100% b backed acked by by an an A Australian ustralian A APRA PRA a authorised uthorised insurer, insurer, C CGU GU IInsurance nsurance L Limited imited F Fully ully integrated integrated o online nline ssystem ystem E Electronic lectronic documentation documentation A Automatically utomatically updates updates your your system system – no no double double keying keying F Flexible lexible c commissions ommissions F Fast ast and and e easy asy q quotes, uotes, bind bind and and manage manage o online nline
sur sura.com.au/commercial a.com.au/commercial
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 26
surers – mainly based in Bermuda – covered the demand for capacity fairly quickly and extinguished the need for an exchangetraded solution. “Next time it will be different.” He envisages a structure much like the bond market, with a very bespoke primary market and a more indexed secondary market. “[Funds] will go and play their game there, and we’ll continue to play our game. There’ll be some crossover, but not as much as there is now, and it will give our clients a whole bunch of alternative options.” To those who may be cautious about such radical change, Mr Cavanagh acknowledges it is a “brave new world”, and one that must be properly managed. “We’ve got to be very careful of the maintenance of market order. What we’ve got to do is build off what works and create something that identifies and delivers what these guys are looking for – which is diversified asset trading – while keeping the integrity of a proven market infrastructure.” Willis certainly has the capability to operate in the space with its Willis Capital Markets & Advisory subsidiary, which has a wide remit to conduct capital markets transactions and advisory, in areas such as insurance-linked securities (ILS), catastrophe bonds, collateralised reinsurance, mergers and acquisitions and other investment banking-related services. The division recently revealed plans to open a Sydney office. Diversification is also the key to success for reinsurance brokers in the current market. “Theoretically, in a soft market, people should be buying more reinsurance. But 26
because of the pressure on returns and the drive for margin, people are buying less. So what’s happening is counter-intuitive. “People have forgotten what it feels like to have a Katrina, Rita and Wilma. And thankfully we haven’t had a California earthquake in 21 years.” He characterises the market as “pretty tough”, before adding that Willis Re is “performing very well under the circumstances”. The company does not publish its financial
“We need to get access to where the growth is, and that’s on the insurance side so we see a lot of our revenue coming down that pipe. “I see us doing more hybrid-type structures going forward, and that will take the form of ILS-type deals and multi-structures, where we’re a facilitator to move wholesale insurance premiums to wholesale capital, using reinsurance capital as the vehicle for that.”
“If you ask a lot of these funds whether they want to be in the reinsurance business, the answer is no… What we really like is trading cat.” results, but he says that Willis Re’s performance is “a stand-out relative to our immediate peer group”. “It’s been driven largely by new business activity and the ability to retain our clients, and it’s because of our attention to our customers that we keep the business.” He says innovation, attention to detail, quality analytics, fresh approaches and “our ability to get stuff done when nobody else can” are key to the success of the business. But even if (or when) the soft market passes, with a shrinking reinsurance market, revenue diversification will continue to be key. insuranceNEWS
When asked whether the term “reinsurance broker” may subsequently become a misnomer, Mr Cavanagh is blunt. “We’re wholesale providers of wholesale risk to wholesale capital – that’s what we do. “I don’t see any diminution of what we do for our core business. Despite market challenges clients are still buying plenty of reinsurance and our rates of renewal are exceptionally high. “But we could have another five years without a big cat loss. We’re working hard to stand still at the moment, so somewhere we’ve got to find the opportunities. We have to be on our toes in a market like this.” *
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 27
NEW PURPOSE BUILT COVER FOR THE LABOUR HIRE MARKET
WHO IS SURA LABOUR HIRE?
SURA L abour Hire Hire iiss tthe he p urpose built built sspecialist pecialist a gency for for L abour Hire Hire a nd SURA Labour purpose agency Labour and Recruitment Recruitment industries industries iin nA Australia. ustralia. F Formerly ormerly kn known own a ass Lawsons Lawsons Underwriting Underwriting Australasia Australasia L Limited imited ((Lawsons), Lawsons), this this change change will will b be e effective effective ffrom rom 1st 1st M May ay 2015. 2015. xceptional sservice ervice SURA SURA L Labour abour Hire Hire w will ill continue continue to to provide provide tthe he ssame ame e exceptional ith the the ssame ame professional professional you you h have ave c come ome tto oe expect xpect over over tthe he pa past st 6 6½ ½ years years w with personnel personnel you’ve you’ve come come tto o kn know. ow. COVERAGE C OVERAGE
liability — Public Public an and dp products roducts liability Professional indemnity indemnity — Professional Directors an do f ficers liliability ability — Directors and officers Commercial legal legal p rotection iinsurance nsurance ((CLPI) CLPI) — Commercial protection Statutor y fines fines a nd p enalties — Statutory and penalties mployment p ractices liliability ability ((EPL) EPL) —E Employment practices — Ta xa udit Tax audit —H ost e mployer liability liability ((worker worker tto ow orker). Host employer worker).
—R Recruitment ecruitment firms collar ollar and white hite collar) collar) firms – (both (both blue blue c and w —L Labour blue collar abour hire hire both both b lue collar collar and and white white c ollar including including but not Factory workers; but n ot limited limited to: to: Mining; Mining; Construction; Construction; F actor y w orkers; Farms; Drivers Farms; Hospitality; Hospitality; Engineering; Engineering; D rivers and and Welding. Welding.
KEVIN K E V I N CO CORKERY R K ER Y MANA MANAGING G IN G D DIRECTOR IR E C T O R
MEGAN M E G AN SHEEHAN SH E E HAN SENIOR S EN I O R U UNDERWRITER N D ER W RI T ER
TTELEPHONE. EL EP H O N E . 02 0 2 9672 96 7 2 6088 EEMAIL. M A I L . KKEVIN.CORKERY@SURA.COM.AU EV I N . CO RK ER Y @S U R A . CO M .A U
TELEPHONE. T E L E P H O N E . 0033 6234 6 2 3 4 9324 9 3 24 EEMAIL. MAI L . MEGAN.SHEEHAN@SURA.COM.AU ME G AN . S H E E HAN @ S U R A .C O M . A U
SURA Labour Hire Pty Ltd ABN ABN 67 604 373 088 A corporate authorised representativ representative e of SURA Pty Ltd, ABN 36 115 672 350, AFS 294313
S URA.COM.AU SURA.COM.AU
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 28
Playing the long game Munich Re is riding out the current market with one eye firmly on the future
THIS YEAR MARKS THE 60TH anniversary of Munich Re in Australia, and the message is clear: whatever may be happening in the rest of the market, the reinsurance giant will weather the storm. On his recent annual visit to Australia Ludger Arnoldussen, Munich Re’s board member with responsibility for the Asia Pacific, Africa and Germany, told Insurance News the company is still reserving judgement as to the longevity of the new alternative capital that has flooded into the market over the past two years. “I think there is no competitive advantage yet of the alternative capital compared to the capital we get from our shareholders,” he says. “And it depends really how their risk appetite develops and how hard the pressure becomes from the low interest rate environment.” As a whole, the global reinsurance market has benefitted from a fairly benign catastrophe period in the past few years, but Dr Arnoldussen believes that once normal loss expectations begin playing out “then maybe some of these dream castles will start to crumble a bit”. “My experience over more than 25 years in the reinsurance industry is that sometimes you need to wait a few years until reality comes through again, and then normally the more disciplined, sustainable players… they will be the more successful ones.” 28
Not that Munich Re is resting on its laurels. Dr Arnoldussen says the company is actively considering whether the latest market conditions are “just a normal cyclical turn” or whether “the advent of the alternative capital will again change our lot”. “We are watching it, and we are taking it seriously. We have looked at the different players coming into the market, tried to understand their business model and what are their limitations and what are their pressures, why are they moving in the market. “And we’ve also tried to establish a comparative competitiveness between our model and their model.” The Munich Re approach, then, is to focus on prudent cycle management of its existing portfolio to protect its position, while also dipping a toe into the alternative capital waters. “We are experimenting with it, so we have started one sidecar and added another one for specific business areas. For these vehicles we are looking for alternative capital with a mid to long-term focus that matches our way of doing the business.” He says the reason for this is not because Munich Re needs the capital – in fact, the company is several years into a share buyback scheme that is seeing it deploy around €1 billion a year – but more as a hedge against the risk of a changing market dynamic. insuranceNEWS
“We want to acquaint ourselves with these players in the market, establish a track record, and gather some experience with it so that if it’s needed, we can quickly turn this to a much more substantial amount. “We are not at a point where we could say, ‘Okay, this is the future’, but we want to prepare; we don’t want to be caught off guard. We are not ignoring it. We are using it to some extent, but it’s not a vital activity for us.” But despite Munich Re’s open-minded approach to the changing market, the irony of the situation traditional reinsurance players now find themselves in is not lost on Dr Arnoldussen. “We had the financial crisis where Munich Re and the insurance industry in general fared quite well,” he tells Insurance News. “We didn’t need government support. And now the insurance companies are paying for saving the banks. “We are also punished by low interest rates and additional competition from the pension funds. But life is not fair, you know.” When it comes to what type of event might trigger a market change Dr Arnoldussen says it is something the Munich Re board has “given up speculating about”. “The events you hear – they get bigger and bigger. And we have significant excess capital in the market. I think it would probably be a number of effects that have to come together.”
INMAG APR 2015_page layouts 1/04/2015 7:21 pm Page 29
Ludger Arnoldussen: a life in reinsurance After undertaking a banking traineeship at Commerzbank, Dr Arnoldussen completed a doctorate in business economics at the University of Cologne. He then went on to join Swiss Re-owned German reinsurance company Bayerische Ruckversicherung as a graduate trainee in 1988. Four years later he was transferred to Dublin, charged with establishing the company’s presence in Ireland. On his return to Munich in 1996, Dr Arnoldussen was appointed Head of Bayerische Ruckversicherung’s NonProportional Division. The following year, he was appointed as a deputy member of the board of management, responsible for Germany, Austria, Switzerland and facultative property/casualty, and was promoted to member of the board of management in 2000. When Swiss Re began to integrate the Bayerische Ruckversicherung operations into its Swiss Re Europe Division in 2001, Dr Arnoldussen was appointed project manager for the integration and joined the Europe Division executive team. He was subsequently appointed to the board of management of Swiss Re Germany Holdings in 2002, before a promotion to the Swiss Re Europe executive team committee with responsibility for Northern, Central and Eastern Europe in 2005. In 2006 he moved to Munich Re, and remains a member of the board of management with responsibility for Germany, Asia Pacific and Africa as well as the central services division.
He says “excessive” competition for natural catastrophe business – “which was a core profit source for the whole reinsurance industry, and even more for some specialised players” – is the main driver behind the mergers and acquisitions activity witnessed in reinsurance in recent months. “You don’t merge a company for fun. You merge because you think that if you try to go it alone the pressure is going to get too high for you.” He also sees irony in the current mergers bringing together companies with combined primary insurance and reinsurance operations and pure-play reinsurers. “Munich Re has always had this business model of having an almost 50/50 mix of primary insurance and reinsurance,” he says. “We were long criticised for not having a clear, focused organisation. It seems [now] that maybe this is not such a bad way to approach the market.” Dr Arnoldussen notes that the valuations ascribed to the various M&A participants seem to attach more value to primary insurance operations than to reinsurance business. “That already shows that investors see the reinsurance market – they’re aware of the softening – as less attractive.” Diversification, of course, means more than operating in both insurance and reinsurance or having a global reach. Dr Arnoldussen says with competition for busiinsuranceNEWS
ness greatest in those lines with strong modelling, a long statistical history and an accurate prediction of expected losses, underwriting emerging risks “is one of the other escape routes we see from the soft market”. “We’ve found that if you dare to move into unchartered territory, initially the margins are higher,” he says. Areas where Munich Re is benefitting from first-mover advantage are in renewable energy, weather derivatives and cyber liability. “But you have to know what you’re doing there; there could be huge accumulation risk.” Innovation is another area Munich Re believes can help it maintain its competitive advantages. Dr Arnoldussen says innovation can be incremental, such as designing enhanced reinsurance structures that fulfil client needs or launching new primary insurance products with clients in return for the reinsurance business to support it. But the company is not just tinkering at the edges of innovation. Dr Arnoldussen explains that it involves devoting more resources to “radical innovation” such as sending three senior managers to California’s Silicon Valley for a year to serve as “innovation scouts”. “Their duty is to network with start-ups, and look at their ideas with the view of an insurance or reinsurance company. What 29
INMAG APR 2015_page layouts 1/04/2015 7:35 pm Page 30
“Our Australian clients appreciate that we understand the risk landscape here. We know [catastrophes] can happen. We’ve seen it before with significant catastrophes, and we did not reduce capacity.” Australia is a market that Munich Re likes: Dr Arnoldussen with Insurance News journalist Michelle Hannen
Backing business in Australia and New Zealand: Australasia Managing Director Henrich Eder with Dr Arnoldussen
we are learning is that not many reinsurers have been down there yet, and we are trying to identify ideas that could be an innovation in the insurance or reinsurance value chain.” He explains that after a year the team will be swapped with other Munich Re employees, with other innovation centres such as Tel Aviv, Bangalore and – more specifically to the insurance industry – Bermuda. “We are too far away from these innovation hotspots, so we feel we need to connect closer so that we are aware of what’s going on, and we hope that we will find ideas that can open up new market opportunities for us.” He says connecting with these innovative start-ups may also prove fruitful, not just in improving the systems, processes and efficiencies at Munich Re but by “using Big Data solutions to find ways to insure risks where at the moment we still struggle”. Dr Arnoldussen describes the bold move as “our insurance against the change in the business model”. When it comes to Australia and New Zealand, he says Munich Re views them as some of its “most important” markets, despite the fact that “the series of claims that started around 2010 is far from being repaid”. “It’s a market that we like. We have a insuranceNEWS
high exposure to Australian and New Zealand risks. But it requires capital strength if you really want to be playing there.” Dr Arnoldussen says Munich Re is expecting “similar trends” at the local renewals on April 1 for New Zealand and July 1 for Australia as those it experienced in other parts of the world at January 1. The capacity Munich Re allocates to the local market in future will be dictated, to some extent, on how far prices fall. “It depends a bit on how the renewals go what the exposure will be going forward, especially for nat cat business. That means if prices go down and get close to the technical premium, or lower, then we also think about reducing exposure to maintain proper cycle management.” He says despite the multitude of new capital options in the reinsurance market, Australian insurers have remained supportive of Munich Re. “Our Australian clients appreciate that we understand the risk landscape here. We know [catastrophes] can happen. We’ve seen it before with significant catastrophes, and we did not reduce capacity; actually we increased our capacity following the last loss series. I think that’s the way to do business in Australia.” And with 60 years of local experience to support that assertion, there’s a fair chance * that the Munich Re approach is right.
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 31
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 32
Opportunity, crafted in Switzerland The market is getting tougher, but reinsurance behemoth Swiss Re already has its sights firmly set on the positive possibilities
MARK SENKEVICS IS ALL TOO FAMILIAR with the difficult market reinsurers now find themselves in. After taking up the reins as Managing Director and Head of Australia and New Zealand for Swiss Re in 2010 he’s faced a string of local disasters, followed by the current capital oversupply. So you could forgive him if he came across as a little dour and downbeat. But when meeting Insurance News in his Sydney office he is remarkably upbeat and optimistic about the future. Where other reinsurers may see threats, Mark Senkevics sees opportunities – everywhere. “There is an enormous underinsured portion of risk in the Australian market,” he says. “Some studies suggest, for instance, that two-thirds of renters don’t insure their contents. To me, that’s an untapped space. “If we look at the stats over the last – say 30 years – in terms of cat losses, 45% of that is uninsured. It just says to me that there’s an enormous uninsured risk out there that we should be, as an industry, seeking solutions for.” Underinsurance, and levels of insurance uptake among the lower socioeconomic demographic is a subject many have tried to tackle before consigning it all to the toohard basket. But Mr Senkevics says failure is not an option. “We shouldn’t give up on this. It’s a hard nut to crack, and that’s what makes it special. When you crack it, you celebrate it even more.” And, he adds, the consequences for not finding a market solution do not make an attractive alternative. “The affordability crisis in north Queensland is a good example,” he says. “If the insurance industry had found a solution, we wouldn’t be trying to deal with the Government’s aggregator solution and the invitation to bring unregulated offshore insurers into the space.” Opportunities also abound in the lia32
bility market, he says, particularly through the increased appetite of state governments to privatise statutory classes such as workers’ compensation and compulsory third party (CTP) insurance. He admits there are challenges, mainly due to the number of stakeholders involved, but insists the upside is worth the fight. “If the privatisation of statutory classes across the Australian landscape is successful – and some governments seem to have an appetite for it – it provides the industry with the single largest growth opportunity over the next decade. “We’re spending a lot of time engaging with government and with our clients in that space. We’re advising them that based on global trends, private insurance is more
bit of work with governments around the world in terms of post-event funding of risk.” He lists the professional liabilities market as one ripe for continued growth, “because more people look to blame someone if something goes wrong”, leading to both bigger limits and broader coverage. Another driver of change in the liability market is what Mr Senkevics characterises as the “corporatisation of the legal fraternity”. “Consider the fact that [law firm] Slater & Gordon is a now publicly listed company which rather than paying the partners now has targets to satisfy shareholders. “That means that their strategies will need to be quite well defined in order to make certain that their income stream continues to grow.”
“There is an enormous underinsured portion of risk in the Australian market. Some studies suggest, for instance, that two-thirds of renters don’t insure their contents.” effective than publicly owned assets.” He also sees secondary opportunities for Swiss Re in such changes, because state governments in particular will be carrying retrospective CTP and workers’ compensation liabilities on their own balance sheets. The same applies to natural catastrophes. Mr Senkevics says there is a role for the insurance market to assist governments with their payout obligations under the Natural Disaster Relief and Recovery Arrangements. “Is there a better solution that the insurance industry can provide government around this sort of risk? We’ve done quite a insuranceNEWS
In the life insurance market, which Mr Senkevics also heads up for Swiss Re locally, law firms are producing “quite pointed, targeted advertising in the disability insurance space” to generate business. He says general insurers should take note. “On the property and casualty side, the workers’ compensation opportunity has been reduced, so where will [the law firms] look [for new business]? “I think we need to have a close look at some of the findings of the Royal Commission [into institutional responses to child sexual abuse], and whether the legal
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 33
Mark Senkevics: upbeat, despite tough market conditions
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 34
Pressure on premiums as reinsurance evolves
fraternity will seek to access the various civil liability covers that would have been in place when these abuses were committed. “That’s an emerging risk where we’ve already captured the premium, underwritten some time ago, without this sort of scenario in mind. “I think potentially it’s going to be a flood, and we as an industry need to make certain that we’re making the right moves in response.” Emerging technologies – an area Swiss Re flags as providing growth in a soft market – clearly excite the tech-savvy Mr Senkevics, who is an active Twitter user. He identifies cyber insurance – once considered a niche product – as a current growth market, aided by recent incidents such as the hacking of Sony Pictures, presumably by North Korea. And he says the shift of 3D printing from an experimental to a mainstream technology could have huge implications for the building and automotive industries and their supply chains. 34
Reinsurance brokers are pointing to rates coming off by up to 20% at the January 1 renewals, and the attention will soon shift to the New Zealand market renewals on April 1. The bulk of Australian market renewals are completed at July 1. “The backdrop in Australia and New Zealand is easily identifiable,” Mr Senkevics says. “There were significant claims back in 2010 and 2011, and even since then. “Those significant claims have been the gift that keeps on giving,” he says, in large part referencing the Christchurch earthquake, with reserves for that event still continuing to rise. “June will be interesting because this is a renewal that’s already been through a cycle of softening. And in Australia we’ve had some loss activity. But how much that will influence underwriters is hard to say. “We still don’t know the effects from Cyclone Marcia; it could have been much bigger. So that pressure will remain.” When it comes to the debate on the longevity of the latest batch of alternate capital in the market, Mr Senkevics believes it is here to stay, although he cautions those insurers who may be looking to partner with the new players to think carefully. “It’s very different, this scenario, from what we saw post-Hurricane Andrew in 1992 and post-World Trade Centre in 2001, with companies establishing licences in domiciles like Bermuda. There’s this fluidity of capital that makes entry and exit very easy. “People who are taking advantage of that capital need to consider the fact that the exit for some of these players is just as easy as the entry.” Nevertheless, he predicts that much of the capital will probably stick around the reinsurance sector, even in the event of a cycle-changing loss. That’s primarily due to the lack of yield available from other investments.
Whatever the future of alternative capital, it is certainly changing the dynamics of the global reinsurance market, with the traditional players looking to diversification – both by geography and by product line – and to bulk up through mergers and acquisitions. “The reality is scale will win out here, and over the next couple of years it’s going to be a case of survival of the fittest,” Mr Senkevics tells Insurance News. “With the pressure of the new capital, with the need to diversify, with the need to drive cost, I think we’ll see other M&A activity and an increase in concentration in the traditional reinsurance market. If in two years you’re still a relatively small player sitting in Bermuda, it’s going to be hard work.” The recent mergers, and in particular that of diversified commercial insurer/reinsurer Axis Capital and pure-play reinsurer Partner Re, also highlight another trend in the reinsurance space; that of reinsurers diversifying into primary insurance. It makes sense; the global commercial insurance market is worth some $US600 billion a year, or around three times more than the value of the global reinsurance market. Swiss Re is up with the play, with Mr Senkevics explaining that a key strategy of the group more widely is to “reduce the reliance on pure reinsurance income, and diversify the revenue stream”. “The global reinsurance business is worth about $US200 billion in premium. It’s shrinking in some instances by way of softening, but also with clients retaining more risk. “To continue to operate in a shrinking market suggests that you need to look outside your current core to look at where else you can grow.”
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 35
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 36
“The industry is going to go through significant change over the next decade – a whole new era, I think, in terms of risk exposures.” “If you can have a part printed on the spot, who needs a factory in China? And what does that mean for the liability landscape?” Car-sharing services such as Uber, and driverless cars such as those under development by Google and Apple, have the potential to bring about massive change in the motor insurance market, he says. “Motor insurance plus its liability is the largest insurance product in Australia right now. So what does that mean for the future of insurance? “It’ll creep, but I think it’ll creep far more quickly than any other change that we’ve had in the past 50 years.” Cognitive computing, such as the development of the IBM Watson system which can understand questions expressed in normal language and provide more precise answers, is another advance that Mr Senkevics predicts will bring about major changes in insurance, not only in the types of cover available but also to the way insurance companies operate. “Does the future of the underwriter come under question when an IBM Watson is doing all the work for you? “The industry is going to go through significant change over the next decade – a whole new era, I think, in terms of risk exposures. And data of course is connected to that. “So, in 10 years those with data and knowledge are going to be the winners in this game – if they can survive the next two * years.” 36
From engineer to reinsurer Mark Senkevics’ path to Australian reinsurance leader is an unlikely story, although it doesn’t quite follow the usual script of falling into the industry. After studying electrical engineering at Sydney University – “because that’s what my father did”– he spent several years working as an engineer for diversified industrial firm Honeywell in the area of process control for the mining industry. “I recognised that engineering probably wasn’t going to provide me with the career satisfaction I was looking for,” he tells Insurance News. So he decided to change tack, with his sights set on financial services. It was something of a sign, then, when he stumbled upon a job advertisement in 1995 with the banner: “Engineers: need a change?”. The ad was for the role of a facultative property engineering underwriter with the local operation of French reinsurer Scor. “That ad was talking right to me,” Mr Senkevics says, although he admits his first question to the recruiter was, “What’s reinsurance?” A stint at Gerling Global Re followed Scor Re before Mr Senkevics joined Swiss Re in 2003. In 2005 he was appointed general manager and head of Swiss Re Taiwan’s property and casualty business, and so he packed up his young family and embarked on an adventure in Asia. He was subsequently promoted to head
of client markets for Swiss Re in Korea. “I learned a lot in Asia for different reasons,” Mr Senkevics reflects. “Dealing with Koreans versus Taiwanese versus Chinese requires an understanding of cultural differences. That’s valuable in establishing who you are and building a level of patience as well, I think.” In 2010 he returned to Australia to take the helm of the local operations. His welcome home was something of a baptism of fire, or as Mr Senkevics puts it, an “annus horribilus”. “I started in mid-2010, so I had the Darfield earthquake [one of the major earthquakes in the series that hit Christchurch], the Brisbane floods, Cyclone Yasi and the Lyttelton earthquake [outside Christchurch] all in short succession.” Luckily his family’s adjustment to life back in Australia wasn’t quite as tumultuous, with his wife Kimberley scoring a plumb role as a development manager with Lend Lease on Sydney’s transformative Barangaroo project and their teenage children embracing Australia’s sun, surf and sporting culture. It’s something Mr Senkevics has also relished, and he says his weekends are spent surfing with his son and throwing a ball around with his touch football and soccer-mad daughter. There’s also a fair amount of ferrying the kids around in the car, just like any other Aussie dad.
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 37
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 38
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 39
Happy families Steadfast chief operating officer Dana Williams says cultural fit and great people are key to the group’s successful acquisitions By Jan McCallum
IT HAS BEEN A HOLD-ONTO-YOUR-HATS ride for Steadfast over the past couple of years, with a public listing and a series of acquisitions. The role of chief operating officer involves bringing acquisitions into the company and ensuring seamless integration, and Dana Williams can tell early on if a potential purchase is going to work for Steadfast. “A large part of it, in my view, is cultural fit, great leaders and great staff, because it’s essentially a people and relationship-oriented business,” she says. “We’re really buying the whole entity – the clients, the people – so we get a very good sense early on if that’s going to be a fit with us at Steadfast.” There is also the number-crunching, and Ms Williams is responsible for the due diligence on a prospective addition. She says acquisitions involve both hard and soft analysis, “and they both matter”. No one hears about the times Steadfast walks away, but it does happen, usually for “non-fit” reasons or price. “We’re fairly streamlined, so there’s the initial meetings then a discussion around fit and then price,” Ms Williams tells Insurance News. That discussion can take two to four weeks, but the due diligence will take a month or two and the whole process generally takes one to three months. It has been a rapid journey for Steadfast, which listed on the Australian Securities Exchange in August 2013, and for Ms Williams, who consulted to the company in 2012 on its initial public offer.
She joined Steadfast as executive general manager acquisitions in January last year and became Chief Operating Officer last June. Ms Williams enjoys the technical complexity of insurance, and having worked in (re)insurance and broking says it has offered plenty of variety. The job of chief operating officer can encompass many roles, but at Steadfast there are two primary components: operations, which is working with equity brokers on improving their operations; and acquisitions, “which is bringing new companies into the Steadfast family”. Once a company is acquired, she has responsibility for its integration and ongoing results. “I like that connection,” she says. Is there potential for a culture clash when brokers, who are often entrepreneurial individualists, join a listed corporate entity with responsibilities to shareholders? “We are an entrepreneurial company,” she says. “Many of us have worked in these entrepreneurial companies ourselves, or started them. “We have the right leaders in our operations who grow with us as we become larger, but we don’t have a lot of bureaucracy or infrastructure that would stifle that entrepreneurship.” Ms Williams says Steadfast attracts entrepreneurial brokers who, having set up their own businesses, can see themselves progressing further with a larger, growing organisation. Some see career possibilities opening, and Steadfast has a career-planning project insuranceNEWS
Dana Williams started her career in a completely different line from insurance, but for the past 15 years has worked in broking, insurance and reinsurance. She grew up in Montreal and followed her father into engineering, obtaining a degree in mining engineering. After working in mining communities for several years and gaining an MBA, she joined Deloitte Consulting, working with the company in Canada, the US and Australia before joining Marsh. Later she worked in senior roles at a North American broker, a Bermudabased reinsurer and an Australian earthmoving company. She credits Deloitte with introducing her to both insurance and Australia. “I had lived here about 15 years ago and I liked it so much I came back three years ago. I have always loved it here. I fell into insurance originally on the captive side in the Cayman Islands and on the reinsurance side in Bermuda, and then I came into broking with Hub International.” US-based Hub is one of the world’s largest brokers, and Ms Williams worked in the operations of brokers and underwriting agencies. “That experience has really helped inform some of the work I do here at Steadfast,” she says. “I really, really know how brokers and underwriting agencies work and that is very helpful in a head office environment.” She has experienced the risks that go with brokerages and has seen the pros and the pitfalls of acquisitions, both with Hub and Steadfast.
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 40
“We have the right leaders in our operations who grow with us as we become larger, but we don’t have a lot of bureaucracy or infrastructure that would stifle that entrepreneurship.”
under way to enable head office staff to move into brokerages and broker staff to come to head office roles. “There’s quite a breadth of career opportunities for people and I think they enjoy being with us. We’re entrepreneurial, we’re fun, we’re growing.” Some brokers are selling as they look towards retirement, which raises the risk of the person who makes the business valuable taking the money and walking out the door. But Ms Williams says brokers want to sell for a variety of reasons and retirement can be managed so the principal hands over to someone who is passionate about growing a business. Her team will look to match one of those people to a business whose principal is looking to leave. “It’s like a mentorship.” The younger broker might shadow the principal for a year or two during a handover period, being introduced to clients and getting to know them while ensuring continuity for Steadfast. Although there is talk in the market of fierce competition between broker groups keen to make acquisitions, Ms Williams finds this is generally not the case. Steadfast attracts brokers and underwriting agencies that are already affiliated to the company and which see it as a natural fit. The parties already know each other. Bidding wars don’t work well and the field is fairly disaggregated, she says. “There are quite a lot of small and medium brokers still out there and if you’re attractive to them, then they approach you.” 40
Sometimes Steadfast makes strategic approaches, and occasionally there will be a phone call out of the blue. After looking at hundreds of companies, Ms Williams says “you get a pretty good sense if that person is going to be a good fit”. Steadfast has rapidly become a major player in the underwriting agency sector, buying eight Calliden agency businesses last December and QBE’s underwriting agencies in March. Ms Williams says expansion into underwriting agencies does not seem so unusual when Steadfast is recognised as the largest distributor of insurance products in the country. She sees brokers and agencies as the two parts of distribution, with similar business models. Rapid growth via acquisition always raises the issue of integration risk, but Ms Williams says it is a matter of resourcing for growth, such as hiring former Lloyd’s Australia general representative Adrian Humphreys as General Manager Business Development. “We want to stay lean, but you have to add a little bit of support as you grow,” she says. “We resource for acquisitions. When a couple of large ones come along we resource to integrate them properly.” She says the primary risks for acquisitions of brokerages and underwriting agencies are revenues and people in the first year. “Like any integration, it’s important that as they join our family, people are happy, integrate and settle in well.” Competitors may be attacking, and insuranceNEWS
people need to be reassured that business is going to continue, so revenues are protected in the first year. It will typically take three to six months for the change to settle down, but Ms Williams notes the business will still have its own leader running day-to-day operations. She does not see the acquisition pipeline dwindling, although it does ebb and flow, with a few quiet months and then a burst of activity. “But the process keeps going.” In the meantime, there are the daily operations, such as working with brokers to overcome the challenges of a soft market. “In a soft market it’s even more important to have client retention and new business, so we’re trying to support our brokers better on the revenue side, both in client retention and new business,” she says. With Steadfast now 18 months into life as a public company, what keeps the job interesting? “There’s a lot going on and these are very, very interesting times,” Ms Williams says. “It’s very interesting for me – and for everyone – to be part of a growing company.” She says the team knows there will be more opportunities as the company grows, but that Steadfast will retain its entrepreneurial spirit, in which individuals have an amount of autonomy and the chance to create a role that will facilitate the vision. “We have become quite a large company with quite a small office, but it gives you a lot of responsibility and a lot of * autonomy. There’s a lot of energy.”
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 41
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 42
Summit – Prestige Homes
Liability – General
Accident & Health
Liability – Niche
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 43
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 44
Breaking the chain Suncorp’s innovative joint ventures in the motor repair industry are producing big gains in an increasingly competitive market By Andy Swales
Innovation rules: Suncorp focuses on getting faster repairs
THE PAST FEW YEARS HAVE BEEN CHALLENGING ONES FOR the two giants of Australian motor insurance, with a growing pack of smaller players nipping at their heels. Suncorp and IAG’s assorted brands may still hold about twothirds of the market, but aggressive recent entrants such as Youi, Real, Auto & General and Progressive have been chipping away at their dominance, often offering cheaper products, discount deals and no-frills service. There is no let-up in sight. The most recent Pendulum report from actuarial consultant Finity says challenger brands have been growing their share by 1-2% a year, writing about $1 billion of the $8 billion motor market last year. And their growth is set to continue. The Pendulum report also warns loss ratios in the sector may rise – they were low at about 64% in 2013 – “if the major insurers continue to lose some pricing power” due to this competition. With market share and profit margins under threat, the top two have taken some comfort in their marketing clout and the appeal of superior service over low prices, as well as the challengers’ tendency to churn customers between themselves. But if these giants are to truly flex their muscles, innovation is crucial.
Suncorp has hit upon one particularly creative solution: reshaping the distribution chain for smash repairs and spare parts. The owner of such popular brands as AAMI and GIO has formed the Capital SMART joint venture, establishing dozens of industrial-scale repair centres across the country that apply the latest technology and manufacturing-style processes to slash wait times for Suncorp customers. Suncorp Personal Insurance Chief Financial Officer James Knox says the business, which has rolled out over the past few years, “came from asking customers where their frustrations were”. “Our business is not just a protection insurance policy – it’s around restoration when they have an accident. “We were reliant on a fragmented industry and we found and identified a partner who had a vision of what he could create, and we backed him. We bring him the volume [damaged vehicles], he brings the innovation.” That partner is Capital SMART founder and panel-beating veteran Jim Vais, and the innovations include infrared gas heating technology that helps reduce paint-drying times by 90%, a booking process that is integrated with Suncorp’s claims-handling, and the Key2Key tracking system, which monitors a car’s progress through
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 45
“Most insurance customers are sceptical about the inherent variations in quality and potential safety risks of using aftermarket parts in their car repairs.” every stage of the repair process, from drop-off to pick-up. Last year Capital SMART won an Australian Business Awards service excellence prize. The venture now has 26 facilities across metro centres in Australia, plus one in Auckland, and is this year expected to handle more than 120,000 of the 500,000 vehicles Suncorp fixes. Mr Knox tells Insurance News that Capital SMART has cut small and medium repair times from an industry average of five days to just 11 hours. “Customers are getting their cars back faster, with lower rectification.” For an insurer that positions itself on service rather than low premiums, the benefits are clear. “The SMART business consistently gets customer satisfaction scores of nine-plus,” Mr Knox tells Insurance News. “We’ve got a 10% higher likelihood of customers who have had a SMART experience recommending our brand. It affects our retention.” It also affects the insurer’s bottom line, slashing claims costs and creating a new revenue stream. Suncorp has also moved into heavy repairs, opening a joint venture with Sydney-based “super-shop” Q Plus in early 2013. In January this business was merged into Capital SMART and renamed SMART Plus. Mr Knox says the venture’s main aim over the next two years is “expanding SMART Plus in the heavy-hit space and looking at those opportunities nationally”. He says the business can reduce extensive structural repair times from weeks to days. Having addressed inefficiencies in the smash repair chain, Suncorp has also turned its attention to another major bottleneck – parts. It has formed the ACM Parts joint venture with US component group LKQ, which works with insurers across the world. The business began supplying low-cost parts industry-wide at the end of last year. “Parts make up half of the claims cost for repairers,” Mr Knox says. “There is absolutely a lack of competition in that market. You’ve got an inefficient supply chain and a lack of transparency in that industry.” He says with suppliers, dealers, intermediaries and so on at all points of the repair chain, “there’s a lot of mouths to feed”. The result? “A small to medium hatchback that retails for $21,000, but the cost of replacement parts is $114,000. [There are] massive inefficiencies, and it all comes back to the cost of the premiums our customers are paying.” ACM’s solution is to provide parts direct, using the “full spectrum” of sources: genuine parts, aftermarket (including non-genuine) and recycled. The aim is to “design a business that gets parts to the repairer quicker, as a cheaper alternative that doesn’t jeopardise quality,” Mr Knox tells Insurance News. “We’re trying to lift the standards and [reduce] costs in this whole industry. “We’re working with a number of other insurers and the wider repair network to provide a genuine alternative to the existing supply chain.” insuranceNEWS
IAG chooses an alternative route IAG HAS TAKEN A DIFFERENT PATH TO Suncorp in its own quest to improve customer experiences and reduce claims costs. The insurer established its “partner repairer model” six years ago, “to enable us to deliver high-quality repairs with fast turnaround times”, a spokesman tells Insurance News. The model operates nationwide, barring the Northern Territory and Tasmania, and involves IAG partnering with “innovative small businesses to conduct vehicle repairs, rather than owning or operating the businesses”. “Adopting this model was a strategic decision that allowed IAG to concentrate on its strengths of providing world-class insurance and assessors, while also allowing us to tap into the expertise of leading motor vehicle repair businesses.” IAG insists its brands, which include NRMA Insurance and a joint venture with RACV Insurance, base their expertise on insurance, “not fixing cars”. In terms of turnaround times, it can keep pace by “partnering with innovative smash repairers using the latest technology, smart systems and processes. These partnerships have resulted in an approximate 20% reduction in overall cycle times within our network, and more than two days’ reduction across the entire supply chain across Australia. “In some instances where vehicles have only minor damage, our customers’ cars are dropped off at the repair shop and returned within 24 hours.” The insurer also puts great stock in its unique Quality Program, which in 2013/14 checked almost 39,000 vehicles nationally after they were repaired to ensure the work met its expectations. IAG’s approach to parts is influenced by concerns over quality and customer preferences: it is unlikely to grace Suncorp’s ally ACM with its custom any time soon. “Poorly fitted, incorrect or counterfeit parts pose a major safety risk to road users,” the spokesman says. “That’s why IAG is committed to the use of genuine parts. “Predominantly, IAG recommends [original equipment manufacturer] parts for repairs to vehicles less than three years old. “Non-mechanical reuseable parts or non-genuine parts would only be used when it’s consistent with the age of the vehicle, does not affect the safety or structural integrity of the vehicle, complies with manufacturers’ specifications, doesn’t adversely affect vehicle appearance and does not void the warranty.” IAG says it has forged close relationships with suppliers and leveraged its scale to improve the price and availability of genuine parts to its repairer network. It says a December 2013 survey it conducted revealed about 40% of consumers would consider switching insurers if their present insurer has a policy of using aftermarket or non-genuine parts. “Most insurance customers are sceptical about the inherent variations in quality and potential safety risks of using aftermarket parts in their car repairs,” the spokesman says. April/May 2015
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 46
“We make an investment each year in sourcing [Australian] vehicles and sending them to the UK, where they are effectively dismantled and reviewed, and the detail is updated in the system.”
A Capital SMART repairer at work: not everyone supports the Suncorp initiatives
ACM has expanded through acquisitions of parts shops and recycling businesses, and has set up a certification process for all its components. Mr Knox says the joint ventures are unique to Australia, with the smash repair operation the biggest business of its type in the southern hemisphere. “At the core of our investment is... trying to build a customer focus, [getting] our customers back in their vehicles quickly through high-quality, cost-effective repairs.” However, and perhaps not surprisingly, the ventures have drawn fire from motor trades associations, including the Victorian Automobile Chamber of Commerce, which has warned that independent repairers risk being squeezed out and consumers left with limited choice. Last year the New South Wales Parliament held an inquiry into the relationships between insurers and smash repairers, in which, as Mr Knox notes, “one of the areas of focus was... insurers moving into the supply chain. Funnily enough, we’re the only one that has done that.” And not everyone is backing its efforts in the parts sector. “I wouldn’t say the insurance industry is 100% behind this 46
[ACM],” Mr Knox says. “You’ve got IAG, which is very much pushing genuine parts, and Allianz, which sees this as a threat to its own supply chain. “But we want to work with both parties over time, because it gives us a better customer outcome.” Another area where Suncorp is taking a lead is in repair data. It has formed a partnership with UK research group Thatcham, investing $3.5 million over five years to bring online vehicle repair database Escribe to Australia and New Zealand. Over the past couple of years it has added more Australian motor models to the database to provide repairers with detailed information on how to fix them. “That for us is not a profitable objective,” Mr Knox says. “That’s us taking a responsibility in the industry around information. “It’s very hard to get [repair] information from manufacturers. It’s not a transparent environment. “We make an investment each year in sourcing [Australian] vehicles and sending them to the UK, where they are effectively dismantled and reviewed, and the detail is updated in the system. “I think we’re at something like 80% coverage [of Australian * cars] now. We’ll continue to invest to improve that.” April/May 2015
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 47
AND A SCENE
ONLY WE’D TOUCH
aturday morning, 8.15am. What do you do when one of your longest serving customers has a rolled B-double spilling 40 tonnes of liquid tallow into a creek that runs into the Brisbane River? When you’re Rob Wass, Manager of NTI Accident Assist, you go out and buy an inflatable boat. “Having worked at NTI for over 27 years, I’d thought I’d seen everything”, Rob said, “but I was wrong. This was a real disaster. With the driver unharmed the focus was on cleaning up the site, and fast.” “The young woman at NTI Accident Assist who took the call was exceptional”, explained Julie Russell from Russell Transport. “Before we knew it, all the necessary emergency services and environmental protection people were on site, along with NTI themselves.” Rob explains further. “We had disposable oil booms in place to stop the tallow spreading into the Brisbane River, but because the tallow had solidified and was breaking up, we needed to find a way to direct it towards the vacuum sucker trucks.” Ken Russell, Julie’s brother and fellow company director, was keen to get in on the action – he too went out and bought a boat. “They were out on the water with poles pulling the solidified tallow towards the sucker trucks”, says Julie. “I guess I shouldn’t have been surprised about the hands-on role NTI took. They’ve always been great, but it was above and beyond what I expected. They managed everything – the clean up, the police, the media – they even arranged for part of the road to be resurfaced.” It’s certainly an event no one will soon forget. And that’s exactly why R.B. Russell Transport has been with NTI for longer than they can remember. Visit truestories.nti.com.au
Insurance products are provided by National Transport Insurance. NTI Limited (ABN 84 000 746 109) (AFSL 237246) is the Manager for National Transport Insurance, an equal-partner joint venture of CGU Insurance Limited (ABN 27 004 478 371) (AFSL 238291) and AAI Limited trading as Vero Insurance (ABN 48 005 297 807) (AFSL 230859). Each insurer is only responsible for its 50% share of the policy.
AUSTRALIA’S NO 1 TRUCK INSURER
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 48
Space to grow Lockton’s new Perth headquarters reflects the company’s culture and wider ambitions By Leo D’Angelo Fisher
US GROUP LOCKTON IS already the world’s largest privately held insurance broker, but there’s always room for growth, and Asia-Pacific remains a region full of untapped potential. Since 2012 Lockton Companies Australia (LCA) has been at the centre of the global broker’s regional growth plans.
Now it has unveiled stylish new offices in Perth, to ensure the Australian operations look the part. LCA, which specialises in insurance, risk management and employee benefits, has relocated its head office from Subiaco to a newly developed building in Vincent Street, Leederville.
The 760 square metre openplan office was designed by Würkspace7. “Space” is the operative word – or more accurately “creative space”. With a design that combines comfort, elegance and just a touch of funk, the emphasis is on ease of movement throughout the work floor; an environment that encourages collaboration while also providing privacy for those who need it. The open-plan design includes three meeting rooms, two work-pod “quiet spaces”, breakout areas and enhanced staff facilities. Chief Executive Adam Rhodes says the office creates “the perfect synergy of work and play”. “The layout encompasses advanced platforms to facilitate workflow, while also boasting impressive leisure facilities for staff,” he says. “This is a perfect time for LCA to relocate and is a reflec-
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 49
tion of our significant growth and development since being established in May 2012.” With 40 employees currently occupying the Leederville office, its seating capacity of 65plus provides flexibility for long-term growth. The space is also designed with technology-enhanced work practices and streamlined workflows in mind. Mr Rhodes says LCA is “rapidly working towards being a paperless office”. The Perth headquarters offers amenity, flexibility and informality – while being mindful that it is a place of work. “The office of the future is not fixed,” Würkspace7 says. “Adaptable, multipurpose spaces will be commonplace. The office of the future is equipped with venues that flex, and bends with business demands.” It says the office must be a place where employees want to be, not where they have to be. “Since technology allows
most of us to work anywhere, the office of the future will become a destination of choice.” For LCA this is consistent with the parent company’s reputation as an employer of choice. In 2014, Kansas City-based Lockton won a “best place to work in insurance” award for the sixth consecutive year.
Group Chief Executive John Lumelleau says a work environment that engages and motivates staff to work at their best is the key to Lockton’s “vibrant culture”. For Mr Rhodes, the Perth office is a marker of LCA’s success to date, and an incentive for more.
“This is the first significant office move for the company and is a reflection of our solid growth in the industry over the past three years,” he says. The workspace not only has room for expansion, but it provides the kind of environment in which vibrant cultures * can thrive.
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 50
Road toll: despite industry progress, fatal truck accidents, such as this one in Melbourne’s Burnley Tunnel in 2007, still occur
Driving change NTI’s latest accident report shows truckers have turned a corner, but their journey is far from over By John Deex THERE IS A DISTINCT LACK OF DATA ON THE safety performance of the Australian trucking industry. So thank goodness for heavy motor specialist National Transport Insurance (NTI), which recently released its sixth Major Accident Investigation Report. Admittedly, the figures are restricted to NTI losses, but due to its market penetration the report still provides a real indicator of industry performance. And the overall picture is positive. This year’s report analyses losses of more than $50,000 that occurred in 2013. There were 549 such incidents reported to NTI, at a total cost of $71.7 million. Since the first report in 2002 the freight task has grown 30%, but the number of serious crashes has fallen 35%. “In 2015 we have safer vehicles, safer speeds, safer roads and generally more responsible and safer behaviour,” the report says. Problem solved? Unfortunately, no. Heavy vehicle crashes continue to regularly occur, sometimes with tragic consequences, and there is no place for complacency. The report finds inappropriate speed to be the major cause of crashes, accounting for 27% of claims, up from 25.4% in the previous study. More than 73% of speed losses resulted in rollover. 50
Fatigue was responsible for 12.8% of incidents in 2013, the worst result since 2007. After the 2008 reform of heavy vehicle driver tiredness legislation, considerable improvements were noted. But standards have started to slip again, suggesting an element of complacency. “We’ve ticked that box and moved on, and that is a problem,” lead author and NTI Industry Affairs Manager Owen Driscoll says. Fires accounted for 10% of large losses in 2013, with electrical failure responsible for 68.5% of cabin and engine compartment blazes. Mechanical failure, including tyre failure, accounted for less than 5% of losses. More than 70% of claims were single-vehicle accidents, and in multi-vehicle smashes the NTI-insured vehicle was liable almost 60% of the time. However, this did not apply in the most serious incidents, with trucks at fault for just 16% of fatal collisions. In terms of the timing of accidents, Mondays, Tuesdays and Wednesdays account for 55.7% of incidents, with 35.7% of fatigue-associated losses occurring on Mondays or Tuesdays. Crashes increased between 1am and 5am, with fatigue causing 25% of incidents in this time bracket, but losses were highest between 10am and 4pm, when transport traffic is at its heaviest. insuranceNEWS
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 51
Business Practices n ion ctio Protect
Management Liability with cover e you need it most!!! ere wher
a lw a y s t h in k in g .
34!454/29 ,)!"),)49 3 4!454/29 ,)!"),)4 49 9
$)2%#4/23 !.$ /&&)#%23 ,)!"),)49 $ )2%#4/23 !.$ /&&)#%23 ,)!"),)49
0ROSECUTIONS BY REGULATORRY Y AUTHORITIES
0ROTECTING DIRECTORS AND OFFl lCERS PERSONAL ASSETS
What is covered? s Not sub-limited s Fines s Enforceable undertakings s Legal costs accrued to defend and negotiate s Most Acts of Parliament including: Â· WH&S Â· Pollution Â· Transport Â· Spam
What is covered? s Wrongful acts arising from discharge of duties as a director or officer s Legal costs accrued to defend s Spousal property
)).15)29 #/343 ).$%-.)49 .15)29 #/343 ).$%-.)4 49 9
/ /2'!.)3!4)/. ,)!"),)49 2'!.)3!4)/. ,)!"),)4 49 9 )NDEMNIFFY YING THE ORGANISATION AGAINST WRONGFUL ACTS What is covered? s Claims for compensation arising out of the organisationâ€™s wrongful acts s Legal costs accrued to defend
Y AUTHORITIES )NVESTIGATIONS BY REGULATORRY What is covered? s Legal costs accrued to investigate and attend an Inquiry s Broad definition of inquiry s Cover commences at point of notifiable Incident s Most regulatory authorities including: Â· WH&S Â· Pollution Â· Transport Â· Spam
% %-0,/9-%.4 02!#4)#%3 ,)!"),)49 -0,/9-%.4 02!#4)#%3 ,)!"),)49 %MPLOYEEEMPLOYER DISPUTES
!54/-!4)# %84%.3)/.3 ! 54/-!4)# %84%.3)/.3 s s s s s
Isolated D&O limit Advance payment of costs Blanket O/S directorships Retirement of employees Includes volunteers and deemed employees
/ /04)/.!, %84%.3)/.3 04)/.!, %84%.3)/.3 s Reputation expenses s Fidelity guarantee s Taxation audit expenses
What is covered? s Unfair, unlawful and wrongful dismissal s Failure to promote or employ s Discrimination and harassment s Backpay following reinstatement s Legal Costs to defend and negotiate the action
contact ccontac ontactt ontac s 7 s 7YN ,E YN ,E Ph: 07 3624 9405 Mob: 0422 765 303 email@example.com
quick quic k fac facts ts s HR QUOTING HR QUOTING s P TO M AVAILABLE s 5 P TO M AVAILABLE s & EW OCCUPATION LIMITATIONS s EW OCCUPATION LIMITATIONS
s 7 7ENDYE -USGRAVE s ENDYE -USGRAVE Ph: 07 3624 9404 Mob: 0400 180 974 firstname.lastname@example.org
This is an overview of the coverage pr provided. ovided. W We e recommend recommend rreading eading the policy wor wording ding prior to considering cover cover.. Contact us to obtain the policy wor wording. ding.
3ANDGATE 2D !LBION 1LD s 0/ "OX #LAYlELD 1LD 3ANDGATE 2D !LBION 1LD s 0/ "OX #LAYlELD 1LD 0H s &AX s INFO 0 H s &AX s INFO S SUACOMAU UACOMAU
Specialist Underwriting Agencies Pty Ltd ABN 18 010 862 745 AFSL 231104
INMAG APR 2015_page layouts 1/04/2015 7:36 pm Page 52
Accident cause, 2013 35% 30% 25% 20% 15% 10% 5% 0% Inappropriate speed
At fault – driver error
Not at fault
Source: NTI 2015 Major Accident Investigation Report
More than 67% of crashes took place on outward journeys, a statistic that has been relatively constant since the first study. The report finds an increase in major accidents involving drivers over the age of 51. Ageing male truck drivers dominate the industry – a concern for the future, because the profession is failing to attract younger people. “We are looking at the same batch of drivers that are just getting older,” Mr Driscoll says. “If you are going to use older drivers you need to retrain them. In 10 years we could be in a total mess, with 74-year-olds driving B-doubles. “As an insurance company we do not get scared off by younger drivers.” Queensland and Western Australia continue to be over-represented in the accident statistics when their share of the freight task is taken into consideration. Losses in New South Wales and South Australia increased marginally, while Victoria confirmed its position as the best-performing state. The Pacific and Hume highways in NSW were the worst-performing highways, closely followed by the Great Northern Highway in Western Australia. “One of the most concerning issues with the Great Northern, apart from single-lane bridges, is the fact much of it is unfenced,” the report says. “This creates the potential issue of livestock being allowed to roam free, with obvious consequences.” There were fewer major incidents on Queensland’s Bruce Highway, but it remains a concern. Mr Driscoll tells Insurance News the industry has come a long way since some devastating crashes in the 1980s, but there is still a great deal of work to be done. And NTI, he says, can’t do it all. “The industry does a lot off its own bat but gets little or no [government] support. “Governments are very ready to bash the industry if there are heavy vehicle accidents, but the level of 52
investment has been next to nothing,” he says. “Governments have a responsibility to road safety and looking into why accidents are occurring. “They should not be reliant on NTI for data, but if they aren’t able to make their own investigations, they should be looking at our findings much more closely.” One area where Mr Driscoll is particularly keen to involve governments is in the use of mobile phones in driver cabins. He believes a total ban – already being considered in the US – is the way forward. “You have only got to stand on a street corner to see how many drivers are using their phones. You are six times more likely to crash if you are on the phone and 23 times more likely to crash if you are texting. “It is worse in a truck than a car because you are higher up. It is too hard for us to identify as a cause in our statistics, but the police say it is a huge problem. “After an accident one of the first things they check is whether a phone was being used. “We are looking for government support on this.” Mr Driscoll accepts technology can have positive, as well as negative, effects. This year’s figures have undoubtedly been helped by the growing use of telematics, he says. “It is becoming fairly common. Vehicles can be tracked and driver behaviour monitored. “It’s not something for the future any more – all this stuff is happening now. You can put geo-fences around certain areas, so an alarm goes off when a driver enters a danger spot. “This is a really big deal and can have a major impact.” Mr Driscoll and his team are determined to see the industry continue improving its record. It is all part of NTI’s philosophy of giving something back. And looking at the progress made so far, you have to believe they’ll reach their destination in the end. *
Flood/ high water
INMAG APR 2015_page layouts 2/04/2015 4:29 pm Page 53
REACHING NEW HEIGHTS IN STRATA INSURANCE QUS and AIG have partnered together to deliver superior value and stronger support to strata insurance brokers.
This new partnership with AIG enables QUS to provide even stronger support to the Australian broker market, through an increase in risk capacity and location appetite. For more information on our new product enhancements or for full details regarding this switch, visit www.qus.com.au.
1300 814 011 www.qus.com.au AFSL 321877
In Australia, products and services are written or provided by AIG Australia Limited ABN 93 004 727 753 AFSL 381 686. Not all products and services are available in all jurisdictions and are subject to actual policy language and underwriter discretion.
INMAG APR 2015_page layouts 1/04/2015 7:37 pm Page 54
Accident day, 2013 25% 20% 15% 10% 5% 0% Monday
Tuesday Wednesday Thursday
Accident time, 2013 10% 8% 6% 4% 2% 0% 01:00 03:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 24:00 Source: NTI 2015 Major Accident Investigation Report
The price of safety HOW DRIVERS ARE PAID COULD BE A KEY factor in the safety performance of trucking businesses, according to Zurich-sponsored research. University of New South Wales academic Lori Mooren led a study into the practices of 50 companies, examining what distinguishes those with low insurance claims from those that claim regularly. One of the key findings is that all the lowclaiming companies pay their drivers for time worked, whereas high claimers are five times more likely to pay by truck load or trip. “The evidence is pretty clear,” Ms Mooren tells Insurance News. “Drivers tell me they can come in at 6pm to make a delivery and be left waiting three or four hours for it to be loaded. “If they are not being paid for that time, they get tired, stressed and hot under the collar. They have then got to make up the time if they don’t want to be out of pocket. “Most firms still pay by the kilometre, or by the truckload, and it is a real issue. It is a fundamental driver of risk factors such as speed and fatigue.” She says some businesses have made the switch to a “time worked” basis without losing money, and such a step may improve industry efficiency. “They wouldn’t keep drivers waiting so long if they knew they were going to have to pay them.” Some of Ms Mooren’s findings are, at first glance, counter-intuitive. For example, high-claiming companies have
more safety policies and use more in-vehicle telematics systems. Low claimers use more traditional forms of monitoring, such as sending experienced drivers out with new recruits. Ms Mooren suggests this shows successful safety management is more about establishing a culture than employing reams of policies and the latest technology. “It’s about whether there is a policy living in the place or just on a shelf. Drivers can be given lots of bits of paper, but do they actually read them? “It’s about attitude and culture, starting with the owner but going all the way through the company.” Low claimers take a more active approach to managing safety, and tend to consult and involve drivers much more. Many businesses are using telematics, Ms Mooren says, but often for the wrong reasons. “Drivers know they are being monitored, but if all the bosses really want to know is whether the goods will be delivered on time, then it will have little impact. “Technology is going to help a lot eventually, but the focus has to be on safety for it to work.” Ms Mooren’s team is now working on an optimal safety management system that can be tested by companies. “This would be the first safety management system developed through research,” she says.
INMAG APR 2015_page layouts 1/04/2015 7:37 pm Page 55
Berkley Insurance Australia Berkley Insurance is celebrating it’s one year anniversary of writing motor business in the Australian market! In one year we have: -
Written close to 1000 policies Insured up to 4500 vehicles Received $2m worth of claims Managed hundreds of claims to the satisfaction of our brokers and clients
Motor Claims 17% of claims are caused by “hit in rear” which is the highest single loss cause type in the portfolio. Looking at all driver at fault incidents, lost control, single vehicle, right of way and hit in rear accidents amount for up to 60% of the total of claims. Split of claims within these categories are: ʭɮʊʕʊʏʓʆʂʓ̯̦̬̚ ʭɹʊʏʈʍʆɼʆʉʊʄʍʆ̯̦̪̚ ʭɲʐʔʕɩʐʏʕʓʐʍ̯̦̩̚ ʭɸʊʈʉʕʐʇɽʂʚ̧̯̦̚
Get in touch with one of our Motor Underwriters today! NSW / ACT Paul Macdonald email@example.com 02 9275 8557
VIC / TAS Tim Moore firstname.lastname@example.org 03 8319 4031
QLD / NT Barry Ung email@example.com 07 3220 9910
WA / SA Richard Dettmer firstname.lastname@example.org 08 9380 8326
Contact: email@example.com Local call: 1300 800 772 Berkley Insurance Australia is a registered business name of Berkley Insurance Company ABN 53 126 559 706 an APRA authorised insurer. Australian Financial Services Licence 463129.
INMAG APR 2015_page layouts 2/04/2015 4:45 pm Page 56
In it for t The competition might be By Shelley Dempsey
GLENN LAMBERT IS A respected operator who has spent decades in insurance and other industries, but he says being managing director and part-owner of heavy transport insurer GT Insurance is his favourite role to date. He says that’s the result of having skin in the game – it helps to concentrate the mind. “Because it’s your own money invested, it keeps you very, very focused on the outcome,” he tells Insurance News. Of all the jobs he has held – at Austbrokers, Allianz Australia, Johnson & Johnson and TAB NSW – “GT should end up being the most rewarding of all, because I’m a part-owner of the business. That was my original goal in moving into insurance.” Allianz owns 81% of GT, and Sydney-based Mr Lambert is one of two other shareholders with a personal stake. After three years as managing director, he has made major IT changes, introduced staff development strategies and developed a plan to take the insurer to new heights. “We would like to see GT grow considerably – once we get through the end of this soft cycle – to probably another third larger than it is today. 56
INMAG APR 2015_page layouts 1/04/2015 7:37 pm Page 57
or the long haul
ght be tough, but Glenn Lambert has heavy transport group GT Insurance growing strongly
We’re hoping that will occur in the next four years.” Mr Lambert is targeting larger risks such as big fleet owners. That is core business for GT – more than 60% of its income comes from the highly competitive heavy transport space. “The risks we insure are relatively complex because of the sheer number of vehicles in the fleets,” he says. “Losses can be quite sizeable. “The total loss on a truck with two trailers can easily be more than $300,000.” Just as he sees the insurance industry consolidating, the transport sector has already done much the same thing. There are many very large operators, and Mr Lambert sees Japan Post’s recent acquisition of Toll Holdings for $6.5 billion increasing competition and opportunities. “You have Linfox dominating some of the large contracts, but the fact is there are a large number of companies out there that are sizeable operators that we simply do not insure,” Mr Lambert says. GT also aims to develop its sizeable taxi business, as well as plant and equipment risks. “What we’re looking to
achieve is to be better at what we do and make ourselves even more attractive than we already are to our customers, who are the brokers.” GT is arguably the second or third-largest insurer in heavy transport. It’s chasing the tail of market leader National Transport Insurance, which is 50/50 owned by Suncorp and IAG. “NTI is the clear leader at this stage. We had designs to at least match it, if not pass it, but with the Wesfarmers acquisition that IAG made, including Lumley, that’s probably out of reach now with regard to gross written premium.” Heavy transport is extremely competitive, with overseas players such as Berkley Insurance entering the field. Three transport underwriting agencies shut last year, but another three started straight away. Traditional players include NTI, Zurich, Lumley and, to a lesser extent, QBE. “That competition will never go away and I don’t expect it to,” Mr Lambert says. He took charge at GT early in 2012, following in the footsteps of Nick Zissis, who started the company as Global Motor in 1996. His first task was a major IT upgrade.
“Nick made a decision that we needed to address our biggest deficit, which is our systemisation,” Mr Lambert says. “So we’ve spent quite a large sum of money on a core platform called Underwriting Process Management.” Designed for niche insurance agencies, the platform from Gratex International has
Mr Lambert says his IT experience was one of the reasons he was approached to take over at GT. While at Austbrokers as general manager of operations and strategic development from 2006 to 2011, he launched a new technology platform for brokers. “The technical piece had
“We would like to see GT grow considerably to probably another third larger than it is today.”
improved efficiency by 30%, by allowing GT to offload backoffice work such as claims and customer and financial management onto the business management system, and set up a data centre. “It has given us a big efficiency uplift and has allowed us to get where we are today,” Mr Lambert says. Using GT’s Transportal website, brokers can quickly obtain quotes online. April/May 2015
just started here at GT in 2011, so I was seen as a good fit.” As a former Allianz man, Mr Lambert has come full circle. He was Allianz’s general manager of facilities in 2005 during the start of the Allianz-GT negotiations with Nick Zissis. “I actually did the acquisition of a majority shareholding in GT for Allianz in 2006. The original groundwork was not done by me, but I completed the contractual stuff.” 57
INMAG APR 2015_page layouts 1/04/2015 7:37 pm Page 58
“The transport sector is under a lot of pressure and you get a lot of issues with speed and fatigue.”
Road to success With an MBA, a diploma in management and engineering qualifications he earned at night school, Glenn Lambert has come a long way since he started out as an electrician in Tasmania. He decided to move away from blue-collar work because “I could see myself doing the same thing in my 50s, and that was not going to suit me”. He worked at NZI for 12 years, where he earned his MBA. “I believe in selfimprovement.” It is an approach he has promoted at GT, where most staff now have business qualifications from the Australian College of Commerce & Management. “At GT it’s one of our strengths that as our workforce becomes more skilled, we lift our efficiency.” It is the same with his own career. “The insurance industry offered me the opportunity to develop myself and be the best I can possibly be. “I built up my relationships and was lucky enough to be offered a number of great opportunities on the way.”
GT’s relationship with Allianz works “very well” and is “a winning combination”, he says. “Allianz acquired its shareholding with the sole purpose of specialising in the transport sector, and it’s worked out well for it and for shareholders.” GT has grown quickly since the takeover. It now has 130 staff, up from 30 in 2006, while gross written premium (GWP) has grown from $50 million to $187 million in 2014. In 2006 it had only two branches. There are now six, plus three regional offices in Australia and two in New Zealand. GT has outpaced the market for GWP growth, Mr Lambert says. The agency aims to stand out for its strong service to brokers, whether in claims, where it over-staffs, or sales. “We’re known for our service. Service to us is very, very important and we obviously have to compete on price as well.” GT endeavours to ensure that new claims will be acknowledged within 24 hours, with acceptance or denial confirmed in five days wherever possible. Its Accident Assist service is available round the clock. Claims are “remarkably coninsuranceNEWS
sistent” quarter by quarter, but are under pressure. Last year claims numbers were up, but this reflects business growth. “The transport sector is under a lot of pressure and you get a lot of issues with speed and fatigue, which show themselves in an elevated claims outcome.” Speed, fatigue and maintenance are the three biggest issues in claims. New technology and a greater focus on health and safety among operators are helping insurers. “What we’re seeing with our large customers is their loss ratios coming down, due to more adherence to speed control and fatigue management.” Truck technology is improving and stabilisation is starting to appear on trailers. “You have stabilisation technologies, speed control and dashboard cameras. Random drug tests are also quite prevalent now in larger operators, so you’re seeing a shift there.” Telematics has been used in trucking for some time but application has been patchy, Mr Lambert says. GT’s A-class customers all have some form of telematics for fatigue management and speed control. Dash-cams are increasingly April/May 2015
prevalent in buses and taxis and will probably become standard for trucks in the next five years in Australia, he says. In the UK dash-cams are used extensively in trucks, due to third-party injury issues. “Sometimes a third party is at fault and sometimes the truck, taxi or bus is at fault. The dash-cam takes away a lot of the indecision over who should pay and who should not. We’ll see more of that here.” Larger operators now view driver safety “with a great deal of focus, to try to address the number of deaths that occur”. In 2013 39 truck drivers were killed in Australia. It is the riskiest occupation, according to Safe Work Australia. Steering GT into the future is a role that suits Mr Lambert, who likes the autonomy. “I am a generalist in insurance, not a specialist,” he says. “We have a flat management structure at GT, which gives me the freedom I like.” He is now at GT for the long haul. “Being a shareholder, I have a financial investment. I have a contract with Allianz that has a few more years to run, after which the board will review what * is best for the business.”
INMAG APR 2015_page layouts 1/04/2015 7:37 pm Page 59
Some people just like to lead At LIU, claims come first. Our highly rrecognised ecognised claims team ar are e as proficient proficient at assessing risk as they are are in managing claims. Itâ€™s Itâ€™s this in-depth knowledge of each risk that ensures ensures their claims response response is pragmatic, fast and well-communicated. For claims service that puts you ahead, contact LIU.
LIU. The People, The Products, Products, The Capacity Capacity.
www.liuaustralia.com.au www .liuaustralia.com.au
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 60
Communicating after the catastrophe
Building relationships: Vero Executive General Manager Claims Jimmy Higgins, left, with Selwyn Mayor Kelvin Coe outside the restored Springston South Soldiers Memorial Hall
THE CANTERBURY EARTHQUAKE SEQUENCE WAS A UNIQUE event, but it has delivered lessons on claims-handling that can be applied across the industry. These include how to communicate with customers and the value of building relationships with external parties such as government agencies. Maybe that should be obvious, but it’s not always easy to achieve in the middle of a catastrophe. Vero changed its processes through the four-year rebuild and last year hired Deloitte Access Economics to report on the insurer’s contribution to the recovery, and to draw insights that may improve future disaster response. Vero New Zealand Chief Executive Gary Dransfield tells Insurance News a key lesson has been the importance of close communication with customers. “Maintaining communication in case management is integral to give customers comfort at a time of severe dislocation,” he says. The first earthquake in September 2010 triggered the series, but
the February 2011 one caused 185 deaths and much greater insured loss. Vero received 31,050 earthquake claims valued at almost $NZ4.8 billion after reinsurance recoveries. The company set up a dedicated earthquake program in April 2012, and in October that year it adopted “a more communicative and customer-centric model in an effort to expedite residential claims in particular”, Mr Dransfield says. That meant increasing the local presence, hiring senior and experienced case managers and relocating claims from Auckland to Canterbury. From February 2013 every policyholder had a case manager – a person to contact rather than a call centre number. Mr Dransfield says this proved particularly important for customers, who knew who to talk to rather than feel they were being dropped into a “cloud of hundreds of people”. Case managers were given time to become familiar with a customer’s details, type of claim and possible next step. They also got the authority and accountability needed to close out claims. Staffers who remained in Auckland provided expert policy advice and oversight to support the claims resolution process. The New Zealanders tapped into the experience parent company Suncorp had gained from the 2011 Queensland floods, which Mr Dransfield says highlighted the need to identify and develop close
The Canterbury earthquakes provide valuable lessons on claims-handling By Jan MCCallum
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 61
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 62
“Maintaining communication in case management is integral to give customers comfort at a time of severe dislocation.”
A worksite where Vero customers’ homes are being rebuilt
Vero NZ chief executive Gary Dransfield with Betty Simmonds at her rebuilt Pegasus home
relationships with government and other agencies involved in disaster recovery. A discrete earthquake program enabled Vero to maintain stronger strategic oversight of its response and greater control over how it worked with agencies. New Zealand home and contents insurers have to work closely with the state-owned Earthquake Commission (EQC) because it covers the first $NZ20,000 of contents loss and up to $NZ100,000 of building damage, and then passes on the “over-cap” amount to them. Vero decided to identify those customers whose claims were approaching the cap and take control of the repairs, so the householders were not caught up in a debate between the EQC and insurer. In most of these cases the EQC liabilities had not yet been determined or formally assessed, but Vero assumed the liability of the damage costs within the terms of the policy and decided to settle apportionment with the EQC later. Mr Dransfield says this meant the insurer took on some risk of not being able to recover costs from the EQC, but it did achieve a faster outcome for the customer. The earthquakes raised a number of new issues around liability, and some had to be settled by the High Court. In September 2011 the court ruled separate events could each attract up to the $NZ100,000 cap in policy coverage, which meant the EQC and insurers had to agree the insurable damage from each quake and how it was apportioned.
“The outcome of this judgement created a unique and complex situation in claims management practices that had not been experienced in other disaster recovery programs,” the Deloitte report says. Mr Dransfield says the earthquakes have been gruelling for customers, but the insurer is also mindful of the toll on its staff and the need to support them. This means ensuring workloads are manageable and bringing in more senior resources when a situation becomes too difficult for claims staff to resolve. Although commercial claims, which do not involve the EQC, have been settled faster than residential losses, business-owners have faced their own challenges, such as losing customers because of depopulation or seeing their premises cordoned off in the central business district red zone. Mr Dransfield says commercial and government clients have benefitted from having local underwriters “who have been able to achieve rapid outcomes for very complex claims”. These underwriters have local knowledge and a network of technical expertise available. Vero set up a dedicated commercial earthquake team early in 2012 and Mr Dransfield appointed a specialist claims management team alongside external loss adjusters for the biggest claims, such as from the Ministry of Education and large manufacturers. He says it has been easier for the local underwriters to be flexible * and take on some risk to achieve resolution for the customer.
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 63
A single faulty part can have a serious impact on both a companyâ€™s brand and balance sheet.
Catlin underwriters donâ€™t just recognise potential risk, they anticipate it. At Catlin Australia, the Crisis Management team realise that every client is unique, which is why we work with you to design a consumer recall cover that is tailor-made for your client. Add to that our reputation for integrity and durables product superior claims service and you have every reason to talk to a Catlin underwriter with the expertise you of our wide offerings. need in any array of product
Start a long-term relationship with us today at CatlinAustralia.com
SPECIALTY INSURANCE Aquaculture I Aviation
AM Best rating of A (Excellent) XV
Construction Liability I Financial & Professional Risks I Energy Liability I Fine Art & Specie I General Liability I Kidnap & Ransom I Livestock
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 64
Leading from the front
Michael Collins wants the Australasian Institute of Chartered Loss Adjusters to embrace change in the industry By Leo D’Angelo Fisher
THE NEW PRESIDENT OF THE Australasian Institute of Chartered Loss Adjusters (AICLA), Michael Collins, catches himself as he expounds on the importance of the loss adjuster’s role: “Sorry… you’ve probably picked up that I’m very passionate about my profession.” All that passion may come in handy over the next couple of years as Mr Collins inhabits the sharp end of an industry sector undergoing enormous change. A senior liability adjuster with Adelaidebased YDR, he hasn’t always been a loss adjuster. He joined the industry in 2002 from the South Australia Police. After 17 years’ service and rising to the rank of detective senior constable with the anti-corruption branch, “I was asked to join this thing called private enterprise”. Mr Collins was recruited by UK-based loss adjuster GAB Robins Australia (which in 2009 became part of US-based Cunningham Lindsey), and he hasn’t looked back. “I knew nothing about loss adjusting before I joined GAB Robins,” he tells Insurance News. Even so, his background as a policeman ensured he was not in entirely unfamiliar territory. insuranceNEWS
“Has it been useful to have a police background? Absolutely. I thank it every day for what it’s taught me as an investigator. “As a detective you need to exhaust every line of inquiry, and as a loss adjuster that skillset has proven invaluable.” Mr Collins specialises in casualty and product liability claims. He is retained by law firms and insurers to conduct detailed investigations. Embracing his new vocation with gusto, Mr Collins’ interest soon translated to leadership positions with AICLA, the peak industry body. He was a South Australian councillor in 2008, state chairman in 2010 and a member of the national executive by 2012. He became deputy president in 2013 and in October last year started his two-year term as president. Mr Collins’ agenda for his presidency is influenced by his own start in the industry. When he joined GAB Robins in 2002, he was taken under the wing of industry veteran David Tallent, who has since retired but remains in regular contact with his protégé. Mr Tallent acted as mentor for the first four years of Mr Collins’ second career. “I am a big believer in mentoring – in fact I see it as absolutely critical for our industry,” he says. “I came into the industry
INMAG APR 2015_page layouts 1/04/2015 8:08 pm Page 65
“The loss adjusting industry is in a period of rapid change, and loss adjusters can’t afford to stand still.”
as a late starter, which is typical of most loss adjusters, who usually come from another career. “I would like to see newcomers provided with more opportunities to be mentored in their role.” AICLA has considered developing its own formal mentoring program, but it was decided mentors should ideally come from within a “mentee’s” organisation. Mr Collins says that’s often easier said than done. “In a busy office there’s very little opportunity for mentoring, because everybody’s so busy. “But the issue I’m putting out there is that people who want to become loss adjusters really need someone they can buddy up to, who is prepared to give them the time to guide them.” Loss adjusters come from a wide range of primary careers, such as builders, engineers, lawyers, insurance professionals and the occasional police officer. This explains why 58% of AICLA’s 880strong membership is aged over 46, and about 10% is over 65. Whether veteran or new-chum loss adjuster, one thing is certain as far as Mr Collins is concerned: the importance of a career-long commitment to learning. As well as keeping up with the technical
aspects of loss adjusting – including the increasing role of technology – there is another reason for this approach. “The loss adjusting industry is in a period of rapid change, and loss adjusters can’t afford to stand still,” he says. Insurers are continuing to zero in on loss adjusting as a procurement cost, to the extent that it now poses a direct challenge to the profession’s viability. Insurance companies are increasingly handling claims of up to $20,000 in-house, or offshoring to cheaper overseas providers. Even when insurers use local loss adjusters the use of builder panels and loss adjusting panels – and turnaround times. “We have to accept that the industry is changing and we have to adapt to that, but some people don’t like change – they’ve been doing things a particular way for a long time and they become despondent,” Mr Collins says. “Some people have specialised in small claims for 30 years. That’s where they are most comfortable and they don’t want to change, but that makes them vulnerable because that’s the work that’s dropping off.” He says a number of industry veterans are bringing forward their retirements, but this is not an option available to everyone. insuranceNEWS
“It comes down to choice. Some senior people who don’t like change have retired. I’ve heard it more than once – ‘I wasn’t going to go just yet, but it’s getting too hard’. I understand how they feel; most of us don’t like change, but we have to.” His advice is to maintain a positive approach to the future of the industry, and avoid being “pigeonholed” in a particular line of work. Mr Collins says it is up to the industry and individual loss adjusters to prove their worth. “We need to demonstrate our skill set and worth much more than we are currently doing,” he says. “I believe there’s a disconnect between what we do and how we’re perceived in the market. It’s up to us to put that right.” Increasing membership is another priority for Mr Collins. Women constitute just 11% of AICLA’s membership. A survey of female loss adjusters will be conducted this year to build a strategy to improve this. Asia is a rich source of membership, and the institute plans to step up its work in the region. In March AICLA held its fourth Asian Claims Convention, this year in Hong * Kong. 65
INMAG APR 2015_page layouts 2/04/2015 4:47 pm Page 66
Duty bound A new court ruling on disclosure puts added responsibility on insurers
INSURERS CANNOT REFUSE A CLAIM on the grounds of non-disclosure unless they can prove they have clearly informed the policyholder about the duty of disclosure, according to the New South Wales Court of Appeal. It has ruled against Allianz Australia over a $20,000 car claim from an insured who disclosed driving convictions but not criminal convictions. In May 2010 Phillip O’Farrell insured his car with Allianz, and in October 2011 the car was stolen and he made a claim. Allianz refused to pay on the basis Mr O’Farrell did not disclose prior convictions for offences arising out of brawls. He says he had disclosed driving convictions but had not been asked about criminal convictions. Mr O’Farrell took his claim to the NSW Consumer, Trader and Tenancy Tribunal, which agreed he was not properly advised about his duty of disclosure. The tribunal rejected Allianz’s submission that all questions in the proposal form were put to Mr O’Farrell, and accepted he was only asked about his driving history and not the criminal convictions. The tribunal was not satisfied that Mr O’Farrell’s convictions were relevant to the risk being covered, and ordered Allianz to pay the $20,000 claim immediately. Allianz appealed to the District Court, which in November 2013 set aside the tribunal’s orders. Mr O’Farrell then went to the NSW Court of Appeal, whose three judges in March overturned the District Court decision. The judges say the Insurance Contracts Act does impose a duty of disclosure on the insured, who has to reveal matters relevant to the insurer’s decision to accept the risk – 66
or matters a reasonable person would expect to be relevant. For their part, insurers must “clearly inform” policyholders about the nature and effect of the duty. Only then can they rely on failure to disclose to refuse the claim. The Court of Appeal agreed with the tribunal that Allianz did not clearly inform Mr O’Farrell about his duty of disclosure, “and therefore it could not rely on non-disclosure to refuse payment under the policy”. The judgement says the case turns on whether Mr O’Farrell was clearly informed about what he had to disclose. Allianz had to prove it complied with its obligations to clearly inform him. There was no allegation of fraud in the case. When Mr O’Farrell bought the cover through Lloyd Walker Insurance Brokers in Dubbo, he told the broker about driving convictions. In an affidavit to the tribunal, he says a member of the broker’s staff filled out a policy questionnaire as she asked him questions, including about his driving history. The broker told him she would enter the information into a computer later. He does not recall any reference to duty of disclosure and says he was not asked about criminal convictions. He paid the premium in cash and then received documents, which apparently included one stating “your duty of disclosure” and urging him to read it. The Court of Appeal judgement says neither the tribunal nor the District Court relied on this, “perhaps because it was only provided to the applicant after he had entered into the contract of insurance”. The Court of Appeal says Allianz concedes it is bound to accept that the broker did not ask about criminal convictions. *
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 67
Confidence is on the agenda.
D&O insurance solutions from AIG. Todayâ€™s directors and officers face more risk than ever, due to a growing breadth of regulations and heightened enforcement. Having the right coverage is critical. At AIG, we offer cutting-edge insurance solutions built to meet the challenges of D&O risk todayâ€”and will keep innovating to meet the challenges of tomorrow. Learn more at www.AIG.com.au
Insurance Products issued in Australia by AIG Australia Limited ABN 93 004 727 753 AFSL 381686. Insurance and services provided by member companies of American International Group, Inc. Coverage may not be available in all jurisdictions and is subject to actual policy language. For additional information, please visit our website at www.AIG.com.au
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 68
Need insurance for clients in the
fire protection industry?
Working for You SPECIALIST INSURANCE DESIGNED FOR THE FIRE PROTECTION INDUSTRY INSURANCE FOR:
• Public & Product Liability • Professional Indemnity • Business Package
• Highly competitive rates • Approved by ACCC • Underwritten by Vero Insurance
Please contact AWIB AWIB on: Phone 1300 888 111 Email firstname.lastname@example.org W eb www .awib.com.au Web www.awib.com.au
Alan W Wilson ilson Insurance Brokers PO Box 1045 T Traralgon raralgon VIC 3844 AFS Licence No 234502 Proudly supported and recommended by the Fire Protection Association Australia. Approved by ACCC to allow enhanced policy benefits and affordable premiums.
INMAG APR 2015_page layouts 2/04/2015 4:52 pm Page 69
Established in February 2015 under the NM Insurance banner oteus banner,, Pr Proteus Marine Insurance pr ovides provides local marine underwriting and claims expertise via insurance intermediaries to the Australian market. Proteus commercial commercial The Proteus marine focus complements stablemate Nautilus Marineâ€™ Marineâ€™ss pleasurecraft industry focus, pleasurecraft allowing the NM Insurance group to become a one-stop group broad scope shop to service a broad of marine insurance coverage acr oss marine car go, hull and across cargo, liability market sectors.
Going with the commercial flow: Z.Stream does it again for Zurich IN 2002 ZURICH TOOK A big technological plunge that changed the insurerâ€™s place in the SME market, providing a quick and easy way for brokers to place business for smaller clients. It was Z.Stream, an online platform aimed to serve brokers with SME clients. It was welcomed with open arms, because brokers with SME clients were at last able to request quotes and close business with a minimum of effort. Now Zurich has done it again with Z.Stream Commercial, an online platform which provides everything for the mid-market that the original Z.Stream does for SMEs. Z.Stream Commercial lets brokers offer single or bundled solutions for industrial special risks (ISR) and liability, commercial motor and motor fleet. Not only does the new platform provide faster access to pricing and the flexibility to transact business at any time, brokers can obtain premium discounts for bundled policies. Executive General Manager Commercial Adrian Riminton says brokers now have the flexibility to choose the best business mix, can access documents and certificates of currency in seconds, and will know â€œin minutes rather than hoursâ€? if Zurichâ€™s offering is the right choice for their clients. As one broker told Insurance News: â€œItâ€™s all about faster response times, the ability to bundle risks, doing the job at any time so it actually makes me more efficient, and having more choice on
deciding how I can service my clients.â€? And Adroit Melbourne Senior Broker Dave Stott says his first experiences with the new system have been â€œjust fantasticâ€?. â€œItâ€™s new and different,â€? he tells Insurance News. â€œItâ€™s easy to use and the way theyâ€™ve built it makes sense. Itâ€™s simple and easy.â€? Mr Stott says Zurichâ€™s decision to offer ISR from $3 million to $50 million is â€œa real advance for brokersâ€?. â€œI think this is the first time ISR has been offered online. Not having to make a manual submission for ISR is a big step forward. â€œMost underwriters are offering ISR at minimums of $5-$10 million, so this is also more flexible.â€? â€œZ.Stream Commercial has come off the back of the success of the Z.Stream product in the SME market,â€? Mr Riminton says. â€œThe question we had to answer was how to take the lessons weâ€™ve learned from the SME-based system and apply them to the mid-market segment?â€? Z.Stream proved to be a good model for the new platform, having been continually upgraded over the years as technological advances allowed greater functionality. â€œWe are providing greater choice to brokers in terms of how they conduct business with us,â€? he says. â€œBrokers can self-serve a quote, alterations or a renewal, or they can send it to us in the * traditional way.â€?
A range of car go pr oducts to cater to importers, cargo products exporters, distributors and fr eight carriers is available, freight along with ship building and commer cial hull coverage commercial written to curr ent inter national standar ds. Commer cial current international standards. Commercial marine liability exposur es ar e also cater ed for fr om exposures are catered from ship rrepairing epairing and maritime e industries to port, terminal and stevedoring operations. s. Australian underwriting ope erations ar e overseen by operations are + H]PK/VÉˆTHUWPJ[\YLKHX\HSPĂ„LKSVJHSTHYRL[ +H]PK/VÉˆTHUWPJ[\YLKHX\HSPĂ„LKSVJHSTHYRL[ pr ofessional with more mor tha an 20 yearsâ€™ insurance professional than experience. David ear ned h his industry stripes over earned a decade with Associated Marine Insur ers, and after Insurers, N HPUPUNNYHK\H[ JLY JH[PVUPU4HYP[PTL3VNPZ[PJZ NHPUPUNNYHK\H[LJLY[PĂ„JH[PVUPU4HYP[PTL3VNPZ[PJZ & Management with tthe Au ustralian Maritime College, Australian OLQVPULK3 ILY[ 0U[LYU [PVUHS<UKLY^YP[LYZPU OLQVPULK3PILY[`0U[LYUH[PVUHS<UKLY^YP[LYZPU to gain gr e ter insight into inter national commer cial/ greater international commercial/ industrial e posu es and marine arine liability exposures liability.. He also VI[HPULKTHYPULJ HY[LYPUN \HSPĂ„JH[PVUZMYVT[OL VI[HPULKTHYPULJOHY[LYPUNX\HSPĂ„JH[PVUZMYVT[OL 3 SV`KÂťZ4HY PTL( KLT` 3SV`KÂťZ4HYP[PTL(JHKLT` Pr oteus Marine aims to ap ply our combined Proteus apply k knowledge d and experience i e to t help intermediaries di Ă„UKW HJ JHSYPZ ZVS\[PV VHYHUNL THYPUL Ă„UKWYHJ[PJHSYPZRZVS\[PVUZ[VHYHUNLVMTHYPUL exposu es fr om ssimple mpl to c plex exposures, from complex. Pr oteus Marine Mari e Insura ce is a wholly lly owned Proteus Insurance subsid ar of NM Insurance nsura ce e and writes business subsidiary [[OYV\NOV\[(\Z[YHSHZPHHZH3SV`KÂťZJV]LYOVSKLYVU OYV\NOV (\Z SHZPHH 3SV`KÂťZJ OVSKLYVU behalf of W atk ns Syndicate. te. Watkins
proteusinsurance.com.au April/May 2015
INMAG APR 2015_page layouts 1/04/2015 8:10 pm Page 70
Sura 360 offers an all-round solution: Complex development ends with a simple format that brokers and clients really like AUSTAGENCIES SAYS ITS CUTTING EDGE Sura 360 product is just the beginning of a long-term electronic delivery strategy. Offered by Sura Commercial, formerly Latitude SME, Sura 360 targets small to medium commercial and industrial business and is backed by CGU. Coverage includes asset, income, liability and crime protection in a simply structured format. But it is its electronic delivery that sets it apart, according to Sura’s Chief Technology Officer Theo Stevens. “It allows brokers to seamlessly access the product electronically and quote, bind and renew,” he tells Insurance News. “It offers full integration with the broking system and therefore brings massive efficiency savings. “In the past this was a manual process and we’re the first underwriting agency to integrate with a broking system in this way.” Mr Stevens says the concept of delivering products to brokers electronically will soon be rolled out to other areas. “This is part of our long-term strategy. “With technology moving as fast as it is now, we see this as the right platform to deliver our products. “We’re able to use the 360 framework to build on, it has given us a springboard.” Sura 360 is a complex product with complex algorithms, but the ultimate aim is simplicity. “We’ve invested a lot of good thoughts into how this should work,” said Mr Stevens. “Like every major project we’ve had some teething problems but the feedback has been very positive. It’s simple to use.” Trials began in January, and there are now 20 brokers using the product. Chief Executive of Queensland-based Austbrokers Coast to Coast Dale Hansen is impressed with the ease of use, describing it as a “quantum leap forward”. But the key benefit is the product itself, he says. “The market has needed something like this for a number of years. It handles complex issues very simply. 70
“The way business interruption is dealt with, for example, makes it so much easier for clients and their accountants to understand. “The intention of the policy is much clearer. We’ve had our first few claims through and the assessors and loss adjusters also like it.” Jason Daniels, Facilities Manager at Victoria’s Adroit Insurance Group, says the language used is key to the product’s success. “The wording is condensed and easy to follow, it’s a lot more user-friendly for clients. “The calculations on sums insured are more straightforward, and there are no underinsurance clauses applied. “There are some really useful selling points for our clients.” Mr Daniels also appreciates the efficiency savings the electronic delivery brings. “It is fantastic, and where we need to be for the SME market. “But the underwriting approach is also flexible. You can still get someone on the telephone if you need to.” Austagencies Managing Director Craig Patterson tells Insurance News all sectors will eventually be rebranded as Sura, having already set up Sura Commercial, Sura Hospitality, Sura Professional Risks and Sura Travel, which is already electronically enabled the same way 360 is. He says Sura 360 sets the standard for the future. “It’s been a two-and-a-half year process – there have been trials and tribulations and we’ve been through a huge amount of technological change. “But we have a product and delivery mechanism that is the best in the market. It resonates with our brand value of being purpose-built backed by industry specialists. “We aim to provide brokers coverage that really meets their clients’ needs. When it comes to a notification of loss brokers and their clients don’t want a product that leaves them less than satisfied. “We don’t believe it will be simple for anyone else to replicate the combined * offering that we’ve achieved.” insuranceNEWS
Setting the standard for the future: Austagencies chief Craig Patterson
INMAG APR 2015_page layouts 1/04/2015 7:52 pm Page 71
INMAG APR 2015_page layouts 1/04/2015 7:53 pm Page 72
peopleNEWS Delegates have a ball at Insight conference Members and delegates had a roaring time at Insight’s Gold Coast conference, as the event was rounded off with a Great Gatsby ball. About 175 people attended the conference, with the theme “Unlock Your Potential”, at the Marriott Surfers Paradise. Speakers included futurist Steve Tighe, IAG marketing manager Grant Pattison, LMI Group’s Allan Manning and Ebix Australia’s Kiersten Lethbridge. Sessions were held on developing the perfect business plan and the protection and pitfalls of social media, while Insurance News Publisher Terry McMullan mediated an industry leaders’ forum. There was an address from BeyondBlue ambassador Greg Barns, and more than $13,000 was raised for the mental health charity. “All of the speakers were good and people will have taken something from each of them,” Insight Chairman David Hosking said. “The conference was a great success. All of the Insight members and delegates had a terrific time and the ball finished things off nicely.”
INMAG APR 2015_page layouts 1/04/2015 7:53 pm Page 73
INMAG APR 2015_page layouts 1/04/2015 7:53 pm Page 74
Business flows at UAC’s Hobart expo A record 42 exhibitors took part in the Underwriting Agencies Council/National Insurance Brokers Association (UAC/NIBA) Tasmania Underwriting Expo in Hobart during March. The expo was held at the Hotel Grand Chancellor, which overlooks Hobart’s historic harbour – picturesque today, but the bleak base for convict hulks 200 years ago. Some 110 brokers took the opportunity to check out the products being offered by the continually growing underwriting agency community. UAC General Manager William Legge says the expos “are a very good way of getting your name across to a vast number of brokers in one spot”. Judging by the pictures of the day, the Hobart expo was a world away from the hard labour of another era.
INMAG APR 2015_page layouts 1/04/2015 7:53 pm Page 75
Policy â€“ A984628
Slim built his home over 30 years ago. Our team of experts replaced every broken brick, tile and board just as it was.
Find out more about Slimâ€™s story qbe.com.au/stories
QBE Insurance (Australia) Limited ABN 78 003 191 035 AFSL 239 545
INMAG APR 2015_page layouts 1/04/2015 7:53 pm Page 76
Island retreat for Allianz Muster Allianz Blue Eagle brokers’ sporting prowess was put to the test when they gathered in the Whitsundays for the annual Muster event for the top 25 best performing brokerages. State-based teams opened proceedings with go-karting on Hamilton Island, before attending a black-tie awards ceremony. A special prize was given to two brokerages that have been represented every year since the event’s inception a decade ago. Jeff Proctor from Victoria’s Trickey & Proctor and Brian Fuller from WA-based Rainbow Coast Insurance Brokers accepted the award on behalf of their brokerages. IC Frith & Associates WA won the Muster Hall of Fame award in recognition of its three-time attendance and Adroit received the Muster Legend award given to brokerages that have been represented at least five times. Victorian and NSW teams kicked off the second day with outrigger boat racing off Catseye Beach, which was followed by a bike-building project for needy children.
INMAG APR 2015_page layouts 1/04/2015 7:53 pm Page 77
INMAG APR 2015_page layouts 1/04/2015 7:58 pm Page 78
McLardy McShane moves in Melbourne-based broker McLardy McShane has been growing so rapidly over the past few years, they realised they were running out of room. In March the company moved to new offices in the Melbourne inner suburb of Richmond and held an official opening with a cocktail party for 100 staff and guests. There was a photo booth to record the occasion and everyone particularly enjoyed the view from the large balcony. Managing Director Don McLardy announced the acquisition of King Insurance Brokers, with the deal signed that day and several staff from King present to meet their new colleagues. About 50 people will work in the new office, which has plenty of room for licence-holder Empire Insurance Services, McLardy McShane Insurance & Financial Services and corporate authorised representatives CMIB Insurance Services, Hunt Insurance Services and BIFFS.
INMAG APR 2015_page layouts 1/04/2015 7:58 pm Page 79
$25m capacity ISR , MAP (Mini ISR, Liability and Management Liability) Business Package products Targeting SME business
$50m capacity Targeting low to high hazard occupations Product Recall & Contaminated Product Insurance focused to food and beverage markets
INMAG APR 2015_page layouts 1/04/2015 7:58 pm Page 80
INMAG APR 2015_page layouts 2/04/2015 4:56 pm Page 81
War hero caps off a special Sydney expo It’s not every day that people get to meet a Victoria Cross recipient, but the 270 brokers and underwriters who attended a special lunch held as part of the 16th annual Sydney Underwriting Expo did just that. The annual Underwriting Agencies Council/ National Insurance Brokers Association expo at the Sydney Hilton on March 25 started with a NIBA Young Professionals breakfast, followed by the expo from 10am to noon, and closing with lunch. And what a lunch it was, with Corporal Mark Donaldson VC as the guest speaker – especially as 2015 marks the 100th year since the Gallipoli landing. Corporal Donaldson was awarded the VC – the highest award for bravery in wartime – for saving the lives of fellow soldiers during a September 2008 battle in eastern Afghanistan. He spoke about his service in Afghanistan, and according to UAC General Manager William Legge “you could have heard a pin drop”. The expo featured a record 65 exhibitors, which Mr Legge says is a further indication of the rising influence of underwriting agencies in Australia. “The Sydney Expo is our premier event and is always well attended by exhibitors and brokers alike,” he says. This year the expo also featured a door prize – a $5000 Flight Centre travel voucher – which was won by Stefanie Farrell of Eagle Insurance Brokers in Kempsey, NSW.
INMAG APR 2015_page layouts 1/04/2015 8:03 pm Page 82
maglog » IT’S CONFERENCE SEASON, AND WOW, it’s sure different from where it was at 10 years ago. For starters, the insurance industry’s conference season now seems to begin in March and end around November. For another, they now range from three-day get-togethers at country hotels with 20 staff and their bosses to giant extravaganzas with thousands of attendees. Everyone’s conferencing, and the insurance industry is obviously supporting a large number of professional organisers, entertainers, audiovisual technicians, venue managers, marketing people, graphic designers, exhibition builders, speakers and other assorted hangers-on. And you have to wonder how many thousands of working hours are spent organising these events, because they don’t just happen. Once upon a time – not all that long ago, actually – the big event was the NIBA Convention, which everybody who was anybody in the industry seemed to go to. It was usually based around the Conrad on the Gold Coast, it was always fun and the shenanigans following the grand finale dinner were whispered about for months after. Today the annual NIBA do is less of a must-attend, overshadowed by the spectacularly huge events staged by Steadfast, the classy global soirees of AIMS and the myriad warm and cosy get-togethers organised by who knows how many brokerages and insurers who want to build workforce unity. Where NIBA was – and still is, to a lesser extent – the industry centerpiece, the cluster groups have taken over, giving their members the opportunity to network with suppliers and each other, catch up with the bosses and get a professional recharge courtesy of inspirational speakers and commercial presenters.
Sam Pentecost Contributor
Where once the convention was a big money-spinner for NIBA, today it’s mostly just a good networking opportunity, where all parts of the insurance industry can come together. Times have changed.
The first event this year seems to have been the Insight conference, which was held in the Marriott on the Gold Coast last month and ticked all the boxes for usefulness, networking, knowledge-building and entertainment. At the other end of the spectrum – and the other side of the world – is the AIMS Conference this month in Barcelona. That’s Barcelona in Spain (just in case you thought it might be a Gold Coast suburb). The annual combined meeting of the Austbrokers and IBNA broker networks is one of the industry’s most footloose, combining heavy-hitting speakers and presentations along with amazing scenery and a chance to sink into the local culture. This year the Austbrokers contingent is meeting first in London, where the activities include a day spent at Lloyd’s learning about the market preceded by a cocktail party and dinner on the trading floor. For anyone with insurance in their blood, that would be an amazing event. Speakers at AIMS’ Barcelona conference include the remarkable Baroness Eliza Manningham-Buller, who headed Britain’s MI5 during the years following the September 11 attacks. On a more insuranceish note will be people like cyber crime expert Alastair MacGibbon, Google Europe’s Head of Innovation Neils-Christian Kruger, and – in keeping with the AIMS aim to promote understanding about different markets – a panel of Spanish insurance brokers.
Two days after the Barcelona bash finishes, the Steadfast behemoth starts in Adelaide. With a couple of thousand delegates likely to turn up, Steadfast chooses to delve into culture and professional enlightenment closer to home. In fact, its annual shindig is so large there’s only a few venues in Australia big enough to accommodate everyone who wants to attend. But Greg Stewart, who’s been organising the thing forever – well, 17 years – and still manages to hold down a full-time job running a brokerage, keeps things tight and effective with the aid of an army of assistants. The entertainment is always first class, the food is always plentiful and the convention speakers are always on-message and impressive. Despite Steadfast’s bulk, rapid growth and the added gravitas that comes with being a listed company, its “Kelly Gang” persona remains intact. There’s still a family feel about the place, even if most of the activities take place in a vast exhibition hall. Front and centre always is the Big Man himself, Robert Kelly, who still delights in telling it like it is. And then there’s the rest of the conferences – a veritable smorgasbord of the international brokers, smaller authorised rep companies, brokerages with branches, NIBA and so many others. How many? Well, a bunch of insurance marketing people I sat with recently managed – without stretching the brain cells – to name 20 insurance organisations that hold conferences each year. That’s a lot of talking, a lot of hotels, a lot of organisation and a lot of money. We’re all doing our bit to keep the economy chugging along, Joe!
INMAG APR 2015_page layouts 1/04/2015 7:54 pm Page 83
GL BAL INSURANCE FORUM WALDORF ASTORIA, NEW YORK CITY | JUNE 14 TH - 17 TH , 2015
The IIS Annual Seminar will reconvene as the Global Insurance Forum, reflecting our stature as the leading forum for ALL stakeholders of the industry. The IIS Global Insurance Forum will continue to deliver quality programs as we have done for more than 50 years. Senior executives, regulatory authorities and prominent academics from around the globe will assemble to explore the challenges and opportunities of the current and future industry landscape.
Vice Presiden Presidentt and Chie nternet Ev angelist, Google Chieff IInternet Evangelist,
William Berkle Berkley y CEO, Chairman and CEO, W y Corporation Corporation W.. R. Berkle Berkley
TOPICS T OPIC S
KEYNOTE KEYNO TE Vintt Cerf Vin
Chief, Social Finance Programme, Programme, Chief, International Labour Organization Organization International
Shawn Shawn C Cole ole
ïOvercoming ïOvercoming Barriers to to Micro-Insurance Micro-Insurance Adoption
Pe Peter ter Hancock Hancock
ï.SXZWFSHJ.S[JXYRJSYKTW7JXNQNJSHJFSI ï.SXZWFSHJ.S[JXYRJSYKTW7JXNQNJSHJFSI Sustainable Sustainable Development Development
Presidentt and CEO, Presiden CEO, AIG
Ho Howard ward Kunreuther Kunreuther
ïExtending ïExtending Risk Modelling and Disaster Insurance Insurance
Professor and C o-Director o Professor Co-Director off the Risk Management Management Center, Center, Wharton Wharton School, University of of Pennsylvania Pennsylvania University
Presidentt and CEO, Presiden CEO, Guy Carpenter Carpenter
John J ohn Strangfeld Strangfeld Chairman and CEO, CEO, Prudential Prudential Financial
Greig Woodring Woodring
ï.SXZWNSL&LFNSXY*]YWJRJ*[JSYX9MJ3JJIKTW ï.SXZWNSL&LFNSXY*]YWJRJ*[JSYX9MJ3JJIKTW Public-Private Public-Private Partnerships Partnerships
CEO, CE O, Validus Validus Re
Ale Alexander xander Moczarski
*S[NWTSRJSYFSI5TQQZYNTS8TQZYNTSXKTWF ïï*S[NWTSRJSYFSI5TQQZYNTS8TQZYNTSXKTWF Changing Landscape Landscape
ïThe ïThe Growing Growing Role Role of of Insurance Insurance in a Post Post 2015 World World
Kean Driscoll Driscoll
CEO, CE O, XL Group Group
ï2NHWTNSXZWFSHJ'ZNQINSL8ZXYFNSFGQJ2FWPJYX ï2NHWTNSXZWFSHJ'ZNQINSL8ZXYFNSFGQJ2FWPJYX Through Through Financial Inclusion Inclusion
Pr ofessor of of Business Administration, Administration, Professor Unit, Harv Finance Unit, ard Business School Harvard
Michael McGavick McGavick
-JFQYMHFWJFSIYMJ.RUFHYTKFS&LNSL ïï-JFQYMHFWJFSIYMJ.RUFHYTKFS&LNSL Population Population
Cr Craig aig Churchill
FILLING THE PRO PROTECTION TECTION G GAP AP
ïïPertinent Pertinent T Topics opics and Candid Discussions ïï&HYN[J&ZINJSHJ5FWYNHNUFYNTS &HYN[J&ZINJSHJ5FWYNHNUFYNTS ïïIndustry Industry Survey Survey of of the Issues Issues ïïOriginal, Original, Applied Research by Leading Ac Academics ademics ïïIndustry Industry Focus Focus Sessions ïïAwards Awards Gala Dinner Honoring Industry Industry Giants Giants ïïUnparalleled Unparalleled Networking Networking Among Global Peers
Presidentt and CEO, Presiden CEO, RGA RGA
Forum Forum Hosts:
INMAG APR 2015_page layouts 1/04/2015 7:54 pm Page 84
AN ADVISER CAN GET JUST AS MUCH OUT OF A CLAIM AS A CUSTOMER.
Leo Di Paolo has been an insurance adviser for 39 years, 13 of them to Sonter’s Fern Nursery. So when the nursery was destroyed in the 2013 Blue Mountains’ bushfires, Leo knew he could rely on CGU to help its owner, David Sonter, see it through. As Leo said, “Seeing a claim settled - that’s the most important and rewarding part of my job.” To find out how CGU can help you with your customers, speak to your CGU Business Development Manager today or visit www.cgu.com.au Insurance issued by CGU Insurance Limited ABN 27 004 478 371 AFSL 23829. This is general advice only and your client should consider their personal circumstances and the relevant Product Disclosure Statement available from www.cgu.com.au before purchasing any insurance product.
What happens in reinsurance over the next year or two is likely to change the face of general insurance. So Insurance News (the magazine) ha...
Published on Apr 1, 2015
What happens in reinsurance over the next year or two is likely to change the face of general insurance. So Insurance News (the magazine) ha...