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Ben Bessell timeline 1993 w Joined CGU in Hobart

2005 w NSW Claims Manager Workers’ Compensation

2007 w NSW State Manager Workers’ Compensation

2009 w General Manager Claims, based in Melbourne 2011 w General Manager Workers’ Compensation

2012 w General Manager Broker and Agency

2014 w Chief Commercial Officer, IAG

2014 w Acting Chief Executive Commercial Insurance 2015 w Chief Executive Australian Business Division

“I don’t necessarily think there needs to be too many people involved in those sorts of transactions. It’s automated, low touch, low complexity. “But as you go up the value chain, there’s a role for collaboration with more parties. So we could, for example, present data that would be observations around certain characteristics of a business, that might actually call out also some areas that require clarification that we can’t obtain. “That’s what we could package up to our partners and say, ‘Look, we’ve observed this, there’s a few things here to do, how about you take that to your customer?’ “That would [mean] the customer would be getting a proposition I think would make sense to them.” Research has shown a trend for younger insurance-buyers to be more comfortable dealing directly with the end supplier rather than using intermediaries, and Mr Bessell acknowledges there has been “a bit of tension around this issue in the market”. But while his division does deal with direct insurance products, he says there is no drive towards disintermediation. “I’m not doing that; I’m responding to the needs of our customers. “Over time, consumers will work out where they’re going to get the best value, and they’ll make that decision for themselves. “So yes, we might test some things and generate some ideas, but to suggest that we’re deliberately doing things to disintermediate the market isn’t the right way to look at it. We’re responding to what we see are the needs and demands of customers. “A new competitor might come out of left field and challenge our whole business model. I’m not going to ring them up and say, ‘Hey, you’re wrecking our business model’. They’ve designed something that’s based on customer need. “It gets back to that point around being flexible around business models. I think we need to look at them and adapt.” He says many traditional business models will continue to work. “I think the difference is we’re seeing this exponential change in customer demand, such that the changes required of us are a lot different and more frequent than they were 10 years ago. And that’s driven by data, customer needs and general information.” Much of the movement in commercial customer sentiment is

coming through the crucial SME sector, which Mr Bessell believes needs to be better understood. He says lumping all SMEs into one generic sector isn’t practical. “SME is often a descriptor for a premium size as well as an industry type. Where brokers and insurers will win is if you break that down into the complexity of the business model of the SME itself. We shouldn’t just look at turnover and an occupation description to understand the business.” He says IAG has customers with relatively low turnovers and few employees which are nevertheless quite complex. He offers the example of a small import-export business. “Then we have another business that employs 25 and has a higher turnover. It’s a family-owned construction business, it’s been operating for a long time and its insurance needs aren’t as complex. “Yet we’re used to a view where the importance of the customer is linked to turnover rather than the nature and complexity of the business. “That’s where I think the SME market is still ripe for genuine intervention to provide great advice,” he tells Insurance News. “Understanding the complexity of the individual business is important. Don’t just heap them all into a bucket and call them SMEs.” He says brokers and insurers should be doing more to provide information that’s relevant to individual businesses – “things like risk mitigation”. “Pushing out information from the market that’s relevant to the business means we’re all helping them and at the same time reminding them you’re there. If the customer isn’t getting any value they’ll look somewhere else.” He agrees there are customers who don’t want extra information and only want an annual phone call, “which is fair enough. But we should know what level of information the customer wants.” But he says there are many examples of smaller customers which are being under-serviced. “In our data we see numbers of SME and mid-market customers who don’t have changes in sums insured over long periods of time. I don’t think that is an accurate reflection of any business. “There’s a huge opportunity to address underinsurance in things like property covers. I understand cost is sometimes a major

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June/July 2016

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