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Looking for better business Reinsurers are continuing to diversify their portfolios as they look to improve underwriting performances, according to a half-year market report from Willis Re. “Due to ongoing pricing pressure, reinsurers continue to moderate their exposure to catastrophe-exposed business, including for their US business,” the report says. Diversification has targeted structured property and casualty, life, health and specialty lines such as cyber and mortgage business. Premium growth for some companies is also supported by the further allocation of capital to primary insurance business.
Net written premium for companies in the Willis Reinsurance Index increased 2% to $US129.8 billion in the half. Shareholder funds totalled $US348.2 billion at the half-year, a 1.2% increase from the end of last year, while alternative capital increased to $US75 billion from $US70 billion at the previous half-year. Insured natural catastrophe losses fell to $US20 billion compared with $US30 billion in the corresponding half last year, and significantly below the 10-year average of $US29 billion. Reinsurers looking for diversity, Willis Re says, 18 September
The high cost of crashing Deaths, injuries and other consequences of road accidents cost the economy almost $30 billion a year, according to the Australian Automobile Association (AAA). The public purse also pays a heavy price, losing $3.7 billion a year through missed tax revenue, income support, and health and emergency services costs, a study commissioned by the association shows. Road trauma deaths, and health and wellbeing payments cost the economy almost $9.3 billion in 2015, by far the biggest cost. Vehicle damage was second at $4.8 billion, followed by disability care ($2 billion). Insurance administration placed sixth at $1.12 billion. Road crashes take $30 billion toll on economy, 18 September
Publisher/editOr: TERRY McMULLAN McMullan Conway Communications Pty Ltd Tel: + 61 3 9499 5538 Fax: +61 3 9499 5535 Email: publisher@insurancenews.com.au AdvertisiNg: NAOMI CONWAY & MADISON SEYMOUR McMullan Conway Communications Pty Ltd Tel: +61 3 9499 5538 Fax: +61 3 9499 5535 Email: advertising@insurancenews.com.au Address: McMullan Conway Communications Pty Ltd PO Box 116, Ivanhoe VIC 3079 Australia or Level 1, 120 Upper Heidelberg Road, Ivanhoe VIC 3079
The online and print versions of Insurance News have been covering for several years the threats and opportunities thrown up by the insurtech revolution. We’ve moved from warning that technology had reached a point where it could change the way people buy insurance, to reporting developments from the so-called disruptors and the industry’s moves to embrace the emerging opportunities. The overarching message throughout this period has been the call for the industry to adapt to continuous change or risk being sidelined by more innovative competitors. The larger insurers in particular have climbed aboard the technology bandwagon and are rapidly learning what they need to do to gain leverage from their databases. They are also investing in new projects and products. Agility is not a common trait of large insurers, but as our cover story in this edition illustrates, IAG is going to give becoming nimble, speedy and innovative a red-hot go. Mark Milliner has been appointed to give the group’s vast Australian businesses a thorough makeover and everything is up for change. The new Australian Division – itself a radical departure from IAG’s previous vertically integrated business structures – has set out to find new ways of doing pretty much everything. As Mr Milliner notes in our interview, the initial internal disruptions that have to happen to open up the organisation to change will happen very quickly as he creates an insurance operation that’s based solely around the wants and needs of the customer. The next year will therefore be a challenging one for IAG and its people. Change can be exciting in its innovation and originality but the journey will not be without its upheavals. What will emerge in time will hopefully be a model that just might turn on its head the way we think about and buy insurance. IAG will be closely watched as it boldly goes where no leading insurer has gone before. Terry McMullan
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 Art directOr: KRISZTINA STRZEBONSKI purple ink creations Email: kris@purpleinkcreations.com.au www.insurancenews.com.au/magazine
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From the
A McMullan Conway production
insuranceNEWS
October/November 2017
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ISSN 1837-4972