INMAG DEC 17_page layouts 1/12/2017 3:17 pm Page 1
WHO’S WHO: OUR ANNUAL TOP 20
SOCIAL MEDIA WATCH: IS CATFISHING FAIR?
MELTING MOMENTS: CLIMATE WORRIES
SELLING CONFIDENCE: Meet NRMA Insurance’s new star as we judge the best TV ads of 2017
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:17 pm Page 2
Issued by Zurich Australian Insurance Limited ABN 13 000 296 640 AFSL 232507. Any advice has been prepared without taking account of your objectives, financial situation or needs. Therefore, before acting on the advice you should consider its appropriateness having regard to your objectives, financial situation and needs. You should obtain and consider relevant Product Disclosure Statement for the financial product, available at www.zurich.com.au, before making any decision about whether to acquire, or continue to hold, that product.
INMAG DEC 17_page layouts 1/12/2017 3:17 pm Page 3
YOU’LL LOVE OUR NEW CLAIMS EXPERIENCE.
We’ve structured our claims team to provide improved technical excellence, fast turnarounds and ensure a superior customer experience. Log in to Z Track to see your claims progess and history, and create reports at your convenience. FOR FURTHER INFORMATION VISIT: zurich.com.au/claims OR CALL: 132 687
ZURICH INSURANCE. FOR THOSE WHO TRULY LOVE THEIR BUSINESS.
ZU32536 V1 09/17 - LWIN-012858-2017
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 4
CERTAINTY At United Insurance Group, we believe authorised reps should know who theyâ€™re dealing with. We want them to be part of a true partnership. UIG is committed to maintaining that partnership and ensuring a clear future for your business. Call Trevor on 03 8676 0344 or 0431 705 660 or you can email firstname.lastname@example.org to discuss why weâ€™re growing so quickly.
At UIG your future is certain
UIG offers: 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
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 8676 867 6 0344 0 34 4 | email@example.com trevor@ u i g .ne t . a u
INMAG DEC 17_page layouts 1/12/2017 3:37 pm Page 5
Contents 6 Newsmakers » 10 Signs of a pulse » The hardening market brings renewed cause for optimism, according to two industry health checks.
68 Turning around workers’ comp » The new claims service model set up by NSW’s icare aims to move five times faster than the system it replaces.
72 Back support »
14 Fanning the flames » Dire predictions of 50-degree days in our cities reinforce the threat man-made climate change poses to the nation’s health and wealth.
16 Rising son » Rob Berkley learned the business at his father’s side. Now he’s taken the reins at the insurance company Bill Berkley founded 50 years ago.
22 The Top 20 influencers in general insurance » Our annual round-up of those who change people’s minds, affect the industry and make things happen.
30 A new strategy in place » Insurance chief Gary Dransfield takes the reins during a time of great change for Suncorp.
Global insurance groups are getting behind a pioneering Australian project to change the way spinal cord injuries are treated.
companyNEWS 70 BHSI product launch » New cover includes multiple industries.
70 Epsilon expansion » Agency unveils new accident and health division.
peopleNEWS 74 An insurance high flyer » Grant Burley will be remembered for his dynamism in building the effectiveness of premium funding.
34 Insurance News 2017 Insurance TV Ad Awards » Marketing experts review the industry’s TV ad campaigns of the past year and come up with the best.
40 Keeping the customer satisfied » QBE’s Bettina Pidcock explains how the insurer is putting customers front and centre.
46 The need for less speed » A biennial report on heavy truck accidents shows speed and driver tiredness remain the major concerns.
48 Flying the flag » New industry body Insurtech Australia aims to raise the profile of innovators and make the market a world leader.
52 Crossing the privacy line » A court decision turns up some difficult ethical issues around insurance fraud investigations and questions the reliability of social media posts.
58 Standing on its own »
77 78 80 83 84 85 86 88 89 90 92 93 94 96
All aboard with HDI » Gallagher’s 2020 vision » NT conference celebrates success » RM Advancer winners applauded » Anything possible for Insurance House » YIPs raise a glass to 2017 » AILA Young Professionals rock the casbah » UAC takes expo to Newcastle » Golf champion tells what keeps him winning » CGU backs local theme at races » CQIB continues long lunch tradition » BHSI takes brokers on cruise » Suncorp celebrates spring racing » IA conference a winner »
98 maglog »
Exposure to the intense North American hurricane season highlights QBE’s unique position as the only Australian global insurer.
64 Running the numbers » Finity’s Colin Brigstock on actuaries breaking into general insurance, lessons from Christchurch, and why Big Data is nothing new.
December 2017/January 2018
Cover: A still from NRMA Insurance’s “Confidence” advertising campaign. Picture supplied by M&C Saatchi
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 6
insuranceNEWS.com.au is a free weekly online news service for the general insurance industry. The website has more than 25,000 subscribers. In October/November we published 467 articles online. These were made up as follows:
77 82 LOCAL
Look out behind “Hit in the rear” collisions have dominated motor claims in Victoria and New South Wales over the past three years, according to new data from Allianz. About 23% of claims in Victoria relate to a vehicle being hit from behind, while in NSW such accidents account for 19%. South Australia has the highest percentage of claims (19%) for vehicles damaged while parked, while glass damage is the top cause in Western Australia (27%) and Queensland (25%). Watch your backs on the road, Allianz warns, 27 November
71 THE PROFESSIONAL
7 BREAKING NEWS More than 25,000 news articles – including 271 breaking news bulletins – have been published since we started in 2001. All articles can be accessed through our archives. Access to news articles and other services provided by insuranceNEWS.com.au is free. 6
Insurance Brokers Network of Australia (IBNA) Chairman Gary Gribbin (right) has been re-elected to serve another term. Members also voted at the annual general meeting to retain David Rogers of Westminster Insurance Brokers in Perth and Daniel Bullock from Safeguard Insurance Brokers in Adelaide as directors. Coverforce Chief Executive Jim Angelis has been appointed as a new director, after the meeting
approved an amendment to the constitution to add two more seats to the board. Gribbin retains IBNA leadership, 23 October
Interim chief executive plugs temporary gap
REGULATORY & GOVERNMENT
Gribbin stays in charge
QBE Insurance has appointed Inder Singh, who is currently Chief Financial Officer of its Australian and New Zealand Operations, as the division’s interim chief executive. The appointment has been made to cover the period between the time Australia and New Zealand Chief Executive Pat Regan takes over from Group Chief Executive John Neal and the appointment of a full-time divisional chief. QBE says the search for a permanent chief executive for the division has commenced, “but given it’s unlikely a replacement will be found before Mr Regan commences his new role, an interim solution has been implemented for the transition period”. QBE names interim Australia-NZ chief, Breaking News, 27 October
General insurers are ready to contribute to the royal commission.
– The Insurance Council of Australia’s gritted-teeth response when informed on November 30 that the Government’s royal commission into the behaviour of the major banks will also look at the full range of financial services, including general insurance
Culture and trust ASIC’s new focus Incoming Australian Securities and Investments Commission (ASIC) Chairman James Shipton intends to work on industry culture and trust when he starts his five-year tenure on February 1. ASIC must be a “strong, proactive, efficient, innovative and strategic regulator” to meet significant challenges facing the financial system, the former Goldman Sachs banker said last week. “Financial markets are, ultimately, built on trust,” he said.
“I see ASIC as a guardian of that trust and as an institution that is there to constantly remind market participants that finance only exists to serve the broader community and the economy.” He also wants a stronger culture – an area that has already received greater scrutiny under outgoing Chairman Greg Medcraft. “Culture is among the greatest challenges for all financial markets globally,” Mr Shipton said. “I’ve been a great advocate of cultural reform in financial December 2017/January 2018
institutions and in the financial markets for a long time… I very much intend to continue this important work.” New ASIC chief flags focus on culture, trust, 23 October
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 7
42 more years of catastrophe the warmest not influenced by El Nino. “The last five-year average global temperature is expected to be the highest on record.” Mr Taalas says the increase in global temperature is accompanied by other far-reaching changes. “Sea surface and ocean temperatures are among the warmest on record. Global sea levels continue to rise, so far by 26cm. “Arctic and more recently Antarctic sea-ice extent continues shrinking. Ocean acidification threatens marine ecosystems and fisheries, and coral reefs are bleaching. “The North Atlantic hurricane season broke records
and led to massive loss and damage in the Caribbean and US. There were major monsoon floods in South Asia and continuing severe drought in east Africa. “These events demonstrate the power of the climate system to affect the wellbeing of people, disrupt natural ecosystems, threaten food security and trigger displacement and migration. “Due to the inertia of the climate system, we expect to see the negative trends with a growing [number] of disasters to continue until the 2060s.” Natural disasters ‘will increase until 2060’, 20 November
Climate change will lead to an increase in natural disasters until at least 2060, according to the World Meteorological Organisation. Its Secretary-General Petteri Taalas told delegates at the United Nations climate change negotiations that emissions are levelling out, “but concentrations – because CO2 remains in the atmosphere – increased at a record pace from 2015 to 2016”. “2016 was the warmest on record – 1.1 degrees above the pre-industrial period, partly due to a strong El Nino event, while 2017 is expected to be one of the three warmest years on record, and
Getting worse: flooding in India in October
Fire risk rises in south While southeast Queensland and northern New South Wales have had their seasonal bushfire risk downgraded to “normal” due to heavy rainfall, southern regions have not been so lucky, according to the Southern Australia Seasonal Bushfire Outlook’s November update. A warmer than average winter, coupled with low rainfall, means a higher than average risk of bushfire, and a possible La Nina is not expected to ease conditions. The Bureau of Meteorology has predicted a late-forming, weak La Nina, but is not expecting the usual accompanying rainfall. No respite for southern regions on fire risk, 27 November
Bushfire potential 2017-2018 Above normal Normal
Day leaves as Suncorp reshuffles Suncorp believes significant changes to its leadership team will enable it to deliver strategic aims more quickly. As reported in a Breaking News bulletin, the “streamlined” team has resulted in the departure of Chief Executive Insurance Anthony Day (above) and Chief Legal Officer Kate Olgers. Mr Day, who was also National Transport Insurance Chairman and President of the Insurance Council of Australia, has been replaced by former chief executive customer platforms Gary Dransfield. Former chief executive strategic innovation Pip Marlow, who was recruited from Microsoft earlier this year, has been appointed Chief Executive Customer Marketplace, combining the customer platforms, customer experience and strategic innovation functions. Managing Director Michael Cameron says he believes the changes will enable “fast-track delivery” of the company’s strategy. “Over the past 12 months, we have embedded a new strategy and operating model,” he said. “A more streamlined senior team will deliver the strategy more efficiently and effectively. Chief Customer Experience Officer Mark Reinke will move into an advisory role reporting to Mr Cameron. Cameron shuffles executive pack to fast-track strategy, 16 October
Tower appeal dropped Suncorp has dropped an appeal against the New Zealand regulator’s decision to block its proposed takeover of insurer Tower. It continues to hold a 19.99% stake in Tower through its Vero Insurance New Zealand subsidiary, but has reconsidered
the appeal due to the risk of proceeding and the lapse of an agreed arrangement. A Suncorp spokesman says the company has now reviewed the full decision by New Zealand’s Commerce Commission. “While we were confident that we have a strong case, there was significant litigainsuranceNEWS
December 2017/January 2018
tion risk to proceeding with an appeal,” he told insuranceNEWS.com.au. “We have decided to act in the best interests of our shareholders and not take the appeal any further.” Suncorp quits Tower takeover appeal, 13 November
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 8
From the The insurance industry has laboured for many years under a general belief that it’s slow to act, reluctant to accept new ideas and somewhat boring to work in. It probably wasn’t true even 50 or 60 years ago, and it’s certainly not the case now. A glance through the Insurance News files for the past 12 months reveals an industry dealing with a range of complex issues that are changing the face of insurance. We might not have noticed it, but this has been a year of revolution. The name on everyone’s lips is “insurtech”, the radical child of technology and insurance. Insurance practitioners have proved remarkably welcoming and embracing of the wave of new ideas and methods insurtech is bringing to the industry. The most successful advances are being made by joint ventures involving the “traditional” insurers and the “revolutionary” technologists. While there’s a great deal of experimentation going on, leading insurers and the larger brokers have their eyes fixed firmly on the horizon, where Big Data and innovation are due to meet. Read the interviews this magazine has conducted in the past year with the people who lead IAG and Suncorp and you’ll see two giant companies reinventing themselves as nimble, innovative, savvy operators focused on customer service. Technology is leading the battle for the consumer. Insurers have worked out that the cost of keeping the customer is far lower than the cost of acquiring them in the first place. They now aim to develop systems that will use Big Data to help them understand as much as they can of their customers’ environments, habits and aspirations, and then use flexible insurance products to meet their needs almost before they knew they had them. The return for the customer will be a closer and more rewarding relationship with the insurer. For the insurer, it’s all about being aware and responsive. It’s interesting that our two largest local insurers are heading for the same destinations but taking quite different routes to arrive there. Both have emphasised the need to move quickly and to embrace change like a long-lost child. The impact on the overall industry – and the people who work in it – is inevitably going to be severe. As has been the case with every industry forced into drastic change, the downside is that traditional roles become redundant, others are outsourced and technology takes up more and more of the slack.
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: MADISON SEYMOUR McMullan Conway Communications Pty Ltd Tel: +61 3 9499 5538 Fax: +61 3 9499 5535 Email: email@example.com ADDress: McMullan Conway Communications Pty Ltd PO Box 116, Ivanhoe VIC 3079 Australia or Level 1, 120 Upper Heidelberg Road, Ivanhoe VIC 3079
At the end of a year where the industry took a deep breath and plunged headlong into transformation, it’s time to take a breather and rest up for 2018, which will be equally challenging. We look forward to keeping our readers in touch with it all. The team at Insurance News extends all our best wishes to you for the festive season. Be happy, stay safe. 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: firstname.lastname@example.org www.insurancenews.com.au/magazine
subscriPtion enquiries: www.insurancenews.com.au/subscribe Email: email@example.com
There is something else that has been a constant issue over the past year – climate change. Insurance News has run dozens, maybe hundreds, of articles on this subject in the past 12 months. Not because we’re determined to shove the issue front and centre as often as we can – although we do believe the science is settled and it’s time for action, not debate – but because climate change continues to impact on the insurance industry. Record temperatures, extreme windstorms, floods and bushfires, along with dying coral, rising sea levels, drought, melting icecaps and species depletion can’t be written off as something to acknowledge and then ignore. Although they’re helpless in the face of earthquakes, humans can do many things to lessen the severity of weather and climaterelated catastrophes. And locally and globally, the insurance industry is moving to the front in urging governments to do more to reduce the severity of weather-related events through long-term programs to lower emissions. Insurance professionals are also pushing for realistic mitigation programs that lessen the impact on communities through better building standards and controls. We’ve reported a wide range of initiatives. Insurers are switching their investments from coal to renewable energy, working with United Nations agencies to provide affordable insurance for poor communities where natural catastrophes are also human catastrophes, and, locally, they are providing material to governments that shows mitigation is the only economically responsible way to go. Climate change and its emerging dangers will become even more prominent for the insurance industry next year. Just as we are all adapting to an environment that’s based on being nimble and people-centric, the realities of risk will force the industry to become more strident in the way it presents its views on the issue of climate change.
A McMullan Conway production
December 2017/January 2018
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.
How ready is your company? Insurers and reinsurers are in the sights of the Royal Commission into Financial Services. How ready is your company if it is subpoenaed? Royal Commissions set immovable deadlines and require vast amounts of information that is often not readily available. Working with expert lawyers who know how Royal Commissions operate, the pressure points and the public interest issues will help you prepare with confidence should your organisation be called before the Commission. Sparke Helmore Lawyers has vast knowledge of the insurance and reinsurance sectors and has assisted clients to prepare for more than 15 Royal Commissions and Commissions of Inquiry. Sparke Helmore was awarded Australian Insurance Specialist Firm of the Year in 2017 and 2016, and has a multi-disciplinary team ready to help your company properly prepareâ€Ś just in case. To arrange a confidential discussion, email firstname.lastname@example.org
www.sparke.com.au adelaide | brisbane | canberra | melbourne | newcastle | perth | sydney | upper hunter
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 10
Signs of a pulse The hardening market brings renewed cause for optimism, according to two industry health checks By Andy Swales IT HAS BEEN A LONG TIME COMING, but after years of debate, doom and gloom, false dawns and forecasts, Australian insurers have finally started reporting premium rate rises in key lines. Now two of the industry’s most in-depth annual “health checks” have added to the weight of evidence: the market is turning and moving up, pulling profits along with it. KPMG’s General Insurance Industry Review hails 2016/17 as “a very positive year… and a year that we believe signifies the start of a long-awaited upswing in the insurance cycle”. And Finity’s Optima report, while a little more guarded, notes “signs of a muchneeded hardening of rates in some commercial lines, commercial property and directors’ and officers’ in particular”. It means the key industry metrics paint a much rosier picture than in previous years. 10
KPMG’s report, based on Australian Prudential Regulation Authority industry figures for 2016/17, says gross written premium was up 5% to almost $43 billion. Claims costs dropped, the loss ratio falling two points to 63.5%, with a Cyclone Debbie-led spike in natural catastrophe claims “largely offset by higher reinsurance recoveries and ongoing reserve releases from prior-year claim provisions”. The expense ratio fell 1.4 points to 24.8%, in part due to pricing increases, while a “progressive move away from a call centre and branch distribution network for retail products (car, home and travel) to a distribution platform that is mobile, digital or online is a significant contributor to this cost reduction”. And the upshot? An industry combined operating ratio of 88.3%, improved from 92.2%; an insurance profit of $4.85 billion, up 24.7%; and an underlying insurance insuranceNEWS
December 2017/January 2018
margin of 16.1%, up from 13.6% and moving towards the 18% area last recorded in 201214, after a recent low of 11.3% in 2014/15. The Finity report’s headline figures put industry premium growth in 2016/17 at 4%, representing “a rebound from the lows of 2% in the previous two years”. That’s good, but not great: “While rates may not have gone backwards, this suggests they have not exactly powered forwards either.” It says the loss ratio was down three points to 66% net of reinsurance, despite Debbie’s $1.5 billion impact. And Finity puts the industry’s reported insurance margin at 14%, with return on equity at the same level – up from single digits in 2015/16. However, the report notes reserve releases were a “major prop” to profits, and the underlying margin was more like 10%. Nevertheless, the platform is there for an industry that is furiously restructuring and repositioning to keep pace with
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 11
Line by line
“You still have some of the upside from that rate hardening to come through, and I guess we are hoping the trend for rates to go up in the classes where they need to will continue.” dizzying technological change and customers’ ever-evolving needs. So what does it all mean for this financial year and beyond? KPMG warns against further price wars. It says rate hardening “is well overdue and has certainly been a key driver in delivering the positive industry results”. “That being said… the underlying insurance margin of 16% is still below the results
achieved by the industry in 2012, 2013 and 2014, so there is still a way to go. It is hoped that insurers maintain their pricing discipline and that their growth is not eroded through short-term market-share competitive forces.” Finity Principal Andy Cohen predicts “modest expansion of margins”. “You still have some of the upside from that rate hardening to come through, and I guess we are hoping the trend for rates to insuranceNEWS
December 2017/January 2018
FINITy’S OPTIMA REPORT PRESENTS A breakdown of recent performance and 2017/18 forecasts by product line, noting that compulsory third party (CTP) is the industry’s “clear fly in the ointment”. CTP premium is tipped to decline 10% after recent 7% gains, amid changes to New South Wales benefits under scheme reforms. Finity also flags a recent 10% increase in fraudulent “claims farming” in Queensland, following a crackdown in NSW. The profitability of CTP may fall below Finity’s 15%-plus return on equity target this year. Private motor will continue to face “margin squeeze”, leaving profitability “well under target” – albeit slightly improved – as claims pressures take a toll. Finity says the difficulties in private motor mean householders’ products are crucial to personal lines insurers’ performance. The class faces “downward pressure on both a growth and profitability front” as weather perils threaten to become more frequent and damaging, but it is expected to remain profitable this year, with return on equity “a little under target”. Business packages are on the up, with rates hardening and profitability improving from a “poor” base, although it will remain below the 15% return on equity (ROE) target this year. Finity expects direct distribution to grow but only gradually, with larger, more complex SMEs continuing to rely on brokers. Corporate property is expected to climb into the black this year after recent losses, driven by a hardening market that could bring 10% premium growth, up from 3% recently. However, Finity says rate rises near 20% would be required to reach target ROE. Premium growth in standalone liability is forecast to be flat, but the class will remain at or above target for profitability. Finity warns a continuing soft market and the development of large class action claims may strain results in future. Professional indemnity will also remain above target for profitability, despite a slight dip in premium, while directors’ and officers’ is expected to remain loss-making, even as rates rise 10-20%, in some cases even doubling or tripling. Further gains – about 30% – are needed to turn a profit, Finity says, while class actions are expected to continue at the same rate as previous years. After an “excellent” 2016/17 – largely thanks to higher discount rates and reserve releases – flat premium performance may see workers’ compensation slip below target ROE under pressure from low wages growth, competition and a trend towards large claims.
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 12
Challenges ahead KPMG’S REPORT SETS OUT 10 emerging industry trends, with a focus on harnessing technology and innovation as they create “a new world of opportunity for individuals, businesses and society”. It says customers, investors and employees “demand innovation. Indeed, they expect it, not only from technology providers and device manufacturers, but also from insurance organisations.” The list is broadly split into three sections: under “new technology” it flags insurtech, digital advances, blockchain and artificial intelligence. KPMG notes that “Australia is increasingly seen as an attractive place to test customer-focused technologies”, and tech-savvy start-ups are not necessarily here to eat incumbents’ lunch. “Australian start-ups need access to distribution channels to scale their businesses, so there is a strong symbiotic relationship between them and the larger market incumbents. “Many start-ups don’t have the time, patience or money to get involved in the more tiresome, regulatory and capitalintensive parts of insurance, so they partner up with established insurers that have the capital and regulatory expertise.” This trend can be seen in Suncorp’s work with the Trov mobile platform for ondemand contents cover, or QBE’s $US50 million insurtech investment “war chest”. Under “new approaches and products”, KPMG cites the development of more sophisticated cyber insurance, implementation of data analytics, improved customer focus, and investment in risk mitigation, such as Suncorp’s Cyclone Resilience Benefit, providing a 20% discount on premiums for homeowners in northern Australia who upgrade their properties. The list is rounded out by two regulatory issues. The new international accounting standard IFRS 17 is effective from 2021. It promises “greater comparability and transparency to the profitability of new and inforce business, and gives users more insight into insurers’ financial health”. Implementing it will require investments in time and capital, the report says. Amid intense public scrutiny over conduct and mis-selling in the financial sector, KPMG also advises established insurers – often “hampered by a silo mentality” – to take a holistic approach to the three Cs: conduct, culture and customer experience. “Streamlining governance helps insurers prune back excessive, overprescriptive compliance, and in so doing increases operational efficiency by avoiding duplication of effort.”
Key ratios Insurance Margin 16.1% 13.6% 11.3% 18.2% 17.8% Combined Ratio
88.3% 92.2% 94.4% 87.9% 89.8%
24.8% 26.2% 25.8% 26.3% 26.4%
63.5% 66.0% 68.6% 61.6% 63.4% 2015/16
Source: APRA Quarterly General Insurance Performance Statistics and KPMG analysis
go up in the classes where they need to will continue,” he tells Insurance News. He expects rate hardening in commercial lines, “an industry response that improves motor profitability and some ongoing reductions in expenses”. “In addition, prior-year reserve releases from long-tail classes will continue to prop up reported margins – although not necessarily at the levels we have seen in the past few years,” he says. This financial year, Finity predicts a broadly unchanged reported insurance margin of 13-15%, or an underlying margin of 10-11% when reserve releases are stripped out. KPMG flags further gains on the cost side, with some insurers pursuing “greater automation onshore with artificial intelligence and robotics, while others continue with ongoing offshoring and outsourcing efforts”. insuranceNEWS
December 2017/January 2018
However, it notes “investment in new product offerings, technology and a focus on client experience” may make short-term cost reductions harder to come by. Google data shows a “dramatic increase” in mobile device searches for personal lines such as car, home and travel cover, opening new “cost-effective digital distribution platforms”. “Customers are becoming more comfortable researching and then purchasing their general insurance products on their mobile phones, while on the train or bus going to work or even while they are waiting for their daily coffee,” KPMG Insurance Sector Leader David Kells says. “While this trend is producing more costeffective distribution platforms for insurers, it does highlight the need for insurers to make sure their mobile websites are easy to use and * tailored for a mobile device.”
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 13
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 14
Fanning the flames Dire predictions of 50-degree days in our cities reinforce the threat man-made climate change poses to the nationâ€™s health and wealth
By Bernice Han
Burning up: Sydney is expected to see 50-degree days by 2040
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 15
AUSTRALIA APPEARS TO BE ON an irreversible march towards a future of extreme heat, as climate change wreaks havoc on weather patterns globally, a study led by the Australian National University has found. Sydney and Melbourne face the high possibility of 50-degree daytime summer temperatures as early as 2040. The peak temperature for Sydney was set on January 18 2013 at 45.8 degrees, and for Melbourne the record of 46.4 occurred on February 7 2009. Daily temperatures in Victoria and New South Wales could rise 2.3 and 3.8 degrees respectively above current records, even if the global community achieves the Paris climate accord’s ambitious target to curb greenhouse gas emissions to two degrees above preindustrial levels. “We were trying to contribute to the literature on understanding the Paris agreement,” the study’s co-researcher, Andrew King from the University of Melbourne, tells Insurance News. “There is this push to understand what a climate at one degree or two degrees [above pre-industrial levels] would look like. “At the moment, we don’t really know. There just hasn’t been enough information about it.” The study investigates future temperature extremes, and bases its findings on observations and general circulation model data sets, assessing how the magnitude of record-breaking events may change. The findings have profound implications for the country, which has faced prolonged droughts, increasing incidence of bushfires and floods, and rising temperatures in the past few decades. “Urgent action on climate change is critical,” the study’s lead researcher, Sophie Lewis from the Australian National University, says. “The severity of possible future temperature extremes simulated by climate models in this study poses serious challenges for our preparedness for climate change in Australia. “The increase in Australian summer temperatures indicates other major cities should also be prepared for unprecedented future extreme heat.” Heatwaves and long periods of abnormally hot weather cause more than just deaths.
The economy pays a heavy price, including through lost productivity, absenteeism, strains on the healthcare system and increased demand for emergency services. Heatwaves trigger bushfires, with which Australians are all too familiar. Recent blazes have charred parts of the Blue Mountains and Victoria’s Great Ocean Road. As temperatures rise – which various scientific studies have predicted due to climate change – the frequency and duration of bushfires are expected to intensify. A report in October by the independent Climate Council suggests what lies ahead after one of the warmest winters on record and 40-degree-plus September days in NSW. “Above-normal” fire potential is expected for the state this bushfire season, it says. The state’s annual bushfire bill is forecast to more than double to $100 million-plus by mid-century, and the estimates do not even factor in the effects of man-made carbon pollution. “Increasing greenhouse gas emissions from the burning of fossil fuels are increasing the amount of heat in the atmosphere,” the Climate Council says. “In turn, the frequency and severity of very hot days are increasing and this is driving up the likelihood of fire danger weather.” The southeast has seen increased fire weather over the past 40 years – likely due to climate change. “A fire needs to be started (ignition), it needs something to burn (fuel) and it needs conditions conducive to its spread (appropriate weather),” the Climate Council says. “Climate change, primarily driven by the burning of fossil fuels – coal, oil and gas – can affect all of these factors in both straightforward and more complex ways.” Bushfire and Natural Hazards Cooperative Research Centre Chief Executive Richard Thornton tells Insurance News the latest study is further confirmation that Australia needs to take the threat of climate change more seriously, and assess what can be done to avoid a possible meltdown in critical services. “Will major critical infrastructure cope with extended heatwaves of this magnitude? It is entirely possible that
electricity services may need to be cut to cope with the peak demands caused by the heat, at exactly the times those services are at their greatest need. “Once we fully understand the impact of actions like this, and their flow-on effects, we can start the crucial task of mitigating the consequences.” Heatwaves are as deadly – if not more so – than cold snaps, contrary to claims by a certain deposed prime minister that global warming could be beneficial to mankind. “They cause more deaths than any other natural hazards in Australia,” Fiona Armstrong, Executive Director of the Climate and Health Alliance, tells Insurance News. “We are seeing a continuation of warming in Australia, not extreme cold. “People who deny it are increasingly irrelevant. We just need to get on with the job of responding to climate change.” A national discussion on this is long overdue, she says. “The fact we are not having an open conversation in Australia on the impact of climate change on health and people means there is poorer awareness than there might otherwise be. “This will affect the extent to which people will take action.” In June the Climate and Health Alliance, a coalition of healthcare stakeholders advocating for prompt policy action, released its Framework for a National Strategy on Climate, Health and Wellbeing. It outlines seven policy recommendations for the federal, state or territory and local level to protect the community. “Climate change is not simply an environmental issue but is also an economic, societal, health and human rights issue,” the framework says. “Effective adaptation and mitigation activities taken today will protect our unique environment and the health and wellbeing of our communities for generations to come, while also ensuring the continued economic prosperity of the nation. “This framework… provides a road map to support the Commonwealth Government in taking a leadership role in protecting the health and wellbeing of Australian communities from climate change, and in fulfilling its international obligations under the * Paris agreement.”
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:52 pm Page 16
Rising son Rob Berkley learned the business at his father’s side. Now he’s taken the reins at the insurance company Bill Berkley founded 50 years ago By Terry McMullan
BILL BERKLEY STARTED BUILDING HIS specialty insurance company from scratch 50 years ago this year, so after all those years at the helm you might have expected the promotion last year of his son Rob to Chief Executive and President would be a traumatic and complex affair. But it wasn’t. This transition has been hailed as a true demonstration of the word “seamless”. The senior Berkley is now Executive Chairman, but he can relax in the knowledge that his successor knows the ins and outs of the company and its global operations every bit as well as he does. As WR Berkley marks 50 years of operation – the Australian operation celebrated the milestone in Sydney on December 7, with Rob Berkley flying in to join the party with staff, brokers and clients – no one is doubting the company will continue to achieve impressive growth (see panel). Aged 42, Rob Berkley has been working in the company for 19 years. Before joining the family firm he had a three-year stint as a New York investment banker, an experience that convinced him insurance is more interesting. Since then he and his father have worked closely together. “We have been working together hand in hand for a long time, and that’s what allowed [the change of management] to be a seamless transition,” he told Insurance News. “I think sometimes when other organisations go through these types of transitions, with the old guys out, the new guys in, the new guy feels a need to put his mark on the business.
“But in this case it has been a team effort for some period of time.” Seamless to the point that, like his father, he sees the job as a “team sport”. As a specialty insurer, this is a company with experienced specialists in the key roles. “Fortunately, I have a lot of good team-mates and I do my best to keep out of their way.” Not that Bill Berkley has retreated from the action. “He is around the office,” Rob Berkley says. “I probably spend more time sitting in his office than in my own. I make sure he is kept abreast of everything that is going on. “He is an executive chairman, and I would highlight the ‘executive’, because this is certainly not a situation where he has sailed off into the sunset and we occasionally drop him a postcard so he knows we’re still here. “He has a wealth of knowledge and experience and he’s a pretty bright guy to boot. So I think we all go out of our way to make sure we benefit from that. He is a terrific resource – and a bit of a character.” When Insurance News first interviewed Bill Berkley in 2009, he was at pains to explain that from the start he and Rob “went out of our way to be sure there were lots of other things in the relationship” beyond work. “But it would be disingenuous to suggest that the whistle blows at five o’clock and there’s no discussion of work after that. We talk about everything, because if you have a really global view of business and what’s around, everything that happens – from human relations to politics – impacts people’s views and your lives.” Such discussions would recently have
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 17
Working together: Rob Berkley (left) and his father Bill
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 18
“The cycle, in spite of all the data and analytics, is still arguably driven by two human emotions: fear and greed.”
included the long-lasting vagaries of global insurance markets, where depressed prices, a glut of capital and low investment earnings have made the going unusually tough. The United States market, which has its own special characteristics, has been no exception. Rob Berkley agrees these are challenging times for the US market. “I think it faces some of the same issues that are faced in many markets around the world, and that is the abundance or surplus of capacity,” he says. “While the demand continues to grow, the competition is pretty fierce. As a result of that, I guess we are reminded that the insurance industry is still somewhat cyclical and the cycle, in spite of all the data and analytics, is still arguably driven by two human emotions: fear and greed. “The greed comes when the profitability is good. Humans being what they are, they want more, and unfortunately the way we get more is by loosening terms and conditions and cutting rates. And we do that until we create pain for ourselves. “That goes on until the fear overshadows the greed, and then you see the market respond by going back the other way. So it’s an interesting time in this part of the world, given the level of natural catastrophes that have been going on recently here.” He says it’s still unclear what impact the spate of hurricanes that hit the Caribbean and several US states, followed by “some pretty severe fires in California”, will have on the market overall, particularly the property market. “I think it’s really bringing into focus that question around risk-adjusted return. When Mother Nature is giving us a break that capped premium can help subsidise or gloss over certain issues, but when the earth shakes and the wind blows it brings it into focus pretty quickly. A lot of people are grappling with whether the industry is really changing enough for these exposures.” Is this because the industry is slow to change, not just in the way it deals with emerging risks such as climate but also with market opportunities? Mr Berkley agrees change is necessary, on many levels. He says regulation has insulated insurance from much of the change that has swept through other sectors of financial services. “It’s gotten to the point where society and consumers are demanding change, and regulation and government are going to have to adapt.” insuranceNEWS
December 2017/January 2018
He cites as an example the so-called shared economy, which insurance regulators globally have been slow to understand and respond to. “It’s really just not geared up to be able to address the exposures that come from that type of business activity,” he tells Insurance News. “I think it goes in some respects beyond that. “The average consumer today is looking to be served in a different way from how it has been done historically. “This is an industry that would tell customers what we would sell them and how we would sell it to them. We sort of stuffed it down their throat. “Consumers today are taking the view, ‘No, I am empowered and I will tell you what I want and I will tell you how I want to be served.’ That is a big change. “The fact is that, as a result of advancements in technology and how that has impacted society and how consumers behave – as individuals as well as institutions – they are looking for something different. That creates an opportunity, from my perspective. “Change is a funny thing, when you think about it. Over a couple of years, it doesn’t feel like anything has changed very much, but if you look back over a 10-year period you would be amazed how much things actually have changed.” Leading much of that change has been the emergence of technology as a service tool with enormous potential, but Mr Berkley says at this point the industry “is only seeing the green shoots of it – we are just scratching the surface”. “We have talked about how it impacts interfacing with a customer, and that will continue to evolve,” he says. “But then there is the internal component as it relates to what some people call artificial intelligence, and others call the work that data scientists do with data analysis and analytics. “Once upon a time, people just thought of this stuff as the kind of activity you leave an actuary in a closet to grapple with, but the fact of the matter is that this has become much more front and centre. “This isn’t just an actuarial tool or an underwriting tool. Data and analytics can be a very powerful tool that can be applied in almost every facet of the business. “Hopefully, data and analytics are going to eventually bring more value to the customer by [insurers] sharing that insider knowledge. Hopefully, that will work to the benefit of all stakeholders.”
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 19
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 20
A 50-year success story
BILL BERKLEy STARTED AN investment management business with $US2500 in 1967 before entering property and casualty insurance in 1972 with the purchase of two small Texas companies. Fifty years later WR Berkley is celebrating its milestone with events at various locations worldwide – including this month in Australia, where it is also marking the 10th anniversary of its establishment in this market. WR Berkley is among the largest commercial lines insurers in the US, and last year reported gross written premium of $US7.54 billion. W.R. Berkley Corporation has operations in the United States, United Kingdom, Continental Europe, Asia, South America, Canada, Scandinavia and Australia. Its reinsurance division, which conducts business on a facultative and treaty basis, operates in Australia, as well as the US, UK, Europe and Asia Pacific. The corporation consists of 55 operating units, 48 of which were developed internally. Only seven have been added through acquisition. Of these units, 26 have been formed since 2006. In February the company recorded a profit of $US601.92 million for calendar 2016, up 19.5% on the previous year. It attributes its rising profit in the face of a string of natural disaster claims in the US to its “financial flexibility and ability to adjust to the underwriting cycle, combined with potential tailwinds from rising interest rates, regulatory reform and tax changes”. Gross written premium rose 4% to $US7.54 billion, while the combined operating ratio deteriorated to 94.9% from 93.7%. Investment income increased by 10% to $US564.16 million. The Australian business contributed gross earned premium of $150 million, gross incurred claims of $104 million and $3 million net profit for the year to December 31.
He says the customer has always been king, “but what we are seeing is that the customer is recognising they are king, and willing to be more demanding and to use that leverage. The industry needs to acknowledge that and address it. “Ultimately, if insurance companies are going to be nothing more than capacity providers and traditional distribution is going to be nothing more than access to that capacity, then we will truly get commoditised by the consumer. What they are looking for is the value-added that you are bringing to me. And if you don’t bring it to me, I will treat you like the commodity that you are.” The evolution of an enhanced customer focus and the opportunities of meeting that through technology are key topics of debate in the global industry, and Mr Berkley comes down firmly on the side of those who see change as an opportunity. In the short term, the opportunity for WR Berkley in particular is to “find ways to do it better” as it continues to expand globally. But as a specialty insurer, he accepts that global expansion requires a discerning eye on where the opportunities actually are. “We are conscious of the fact that other parts of the world will, over the next several decades, in all likelihood provide a disproportionate amount of global economic growth,” he says. “At the same time, we don’t feel a need to be everywhere or, for that matter, to try to be all things to all people. “We remain very committed to the specialty lines for no other reason than that is where we can bring value to knowledge and expertise for our customers. “Long story short, there is no territory that we fall asleep dreaming about, but we are certainly conscious of where the long-term growth is likely to come from. “In the meantime, many businesses have a huge amount of runway in front of them, and we think if market conditions present themselves in the right manner, the growth opportunity is significant.” Mergers and acquisitions (M&A) have become commonplace around the global industry in recent years as insurers have bulked up to take advantage of the easy availability of capacity and the economics of simply being bigger. Asked if he sees any advantage in “scaling up” through buying or being bought, Mr Berkley’s response is succinct – what advantage? “First of all, we are always open for collaboration, but as it relates to scale we have something just shy of $US8 billion worth of insuranceNEWS
December 2017/January 2018
capital,” he says. “We feel we have the scale that is required to compete in any form. So we certainly don’t feel that pressure. “In addition to that, there are very, very few deals that have been done in this industry that, once the deal is done and they look back on it a few years down the road, people will say, ‘Geez, wasn’t that a brilliant decision.’ “Often our egos won’t admit it, but if you wake them up in the middle of the night and put a spotlight in their face, I think the likely answer will be that it wasn’t a great idea. “Buying an insurance business is a pretty tricky thing. Trying to get your head around someone else’s business, let alone their balance sheet or even more specifically their reserves, comes with great complexity and challenge. “Which is one of the reasons why the vast majority of the companies that make up our group [in fact, 44 of its 54 companies] are businesses we started from scratch. We think it is a much more controlled approach. It requires patience, but we think it provides, more often than not, a better risk-adjusted return. “The M&A activity in the insurance industry hasn’t been as significant as some may have anticipated, but certainly over the past 36 months or so the investment coming from Asia into some of the more developed markets like the US has been quite significant. Both China and Japan, in particular, have been driving a lot of that. “But I think it’s very hard to assess the risk and it’s very easy to fall in love and get sucked into the momentum. “Our goal for this organisation is always to be focused on being the best at whatever we do. We are focused on risk-adjusted return and we are focused on bringing value to customers. “We bring value to customers that allows us to achieve their desired risk-adjusted returns, and ultimately the way we bring that value to customers is by having great people with expertise. That’s been our approach for five decades now and I don’t see us deviating from that. “We are in business to make good riskadjusted returns, not to issue insurance policies or to write treaties. And we are very focused on bringing value to customers. It’s worked for a long while. “Of course, we recognise the world is changing and customers are changing, so we need to continue to adapt. The definition of value evolves, but the fundamentals, we believe, are as true today as they ever were.” *
Finalise claims in as little as 15 minutes* with For SME and Home property claims up to $10,000
“Thank you, that was an awesome transition from start to finish!” Insurance Broker, QLD
“Extremely happy with the swift outcome of the claim.” Insurance Broker, VIC
To find out more about Vero’s OneTouch claims, please contact your Vero Representative. The OneTouch claims process only applies to Small to Medium Business and Home Property claims up to $10,000. Insurer is AAI Limited (ABN 48 005 297 807) trading as Vero Insurance. * Timeframes quoted are based on the assumption that all supporting information and payment details are provided at the initial lodgement.
INMAG DEC 17_page layouts 1/12/2017 3:18 pm Page 22
influencers in general insurance
The Insurance News Top 20 Most Influential People in Insurance began as a one-off feature in our December 2009 edition. It doesn’t pretend to be a scientific measurement of the people who either have the most impact on the industry or can potentially do so. The list is compiled each year by the Publisher of Insurance News, Terry McMullan, after some “asking around” of his journalist colleagues and some industry contacts. There are no arguments by a co-opted jury examining masses of paper, and no submissions from potential listees. This list comprises the people who we know matter to the present and future direction of the industry, for good or for ill. That original list was not intended to be repeated, but eight Decembers later here we are again. It’s an eagerly awaited feature in Insurance News, and we have come to the conclusion that while our readers don’t necessarily agree or disagree with our list and our reasons, they do enjoy an annual look at who’s still there and – probably of greater interest – who isn’t. Because this list changes, sometimes quite dramatically (see “gone from last year’s list”). In previous years we’ve included organisations on the list, but this year we’ve decided that rather than list the entity we will list the person at the top of that organisation. We have again encountered an issue that always raises some angst – the small number of women on our list. This year there’s one – the same person as last year. Women are gradually emerging in the higher echelons of the industry and we continue to look forward to the day where at least 10 of the industry’s most influential people are women.
Our annual round-up of those who change people’s minds, affect the industry and make things happen
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:55 pm Page 23
Peter Harmer, Chief Executive and Managing Director, IAG Group General insurance has never been as exciting as it is right now, but for the behemoths at the top end of the local industry it’s also a struggle to balance the twin challenges of massive market change and profit-hungry investors. IAG is the biggest operator in the local market, and Harmer, a canny former Aon broker who earned his stripes in the hurly-burly of the London market, is moving quickly in his mission to turn the group inside-out. He understands consumers’ increasingly restive mood for change and the competitive threats and opportunities available through technology. Having reshaped his management team – most obviously putting all IAG’s Australian businesses under one trusted lieutenant – Harmer has given himself some elbow room so he can focus on the big picture. With so much change happening, it’s wise for the captain of the ship to have his eyes on the horizon rather than buried in the day-to-day stuff.
Robert Kelly, Managing Director and Chief Executive, Steadfast
Leadership is the major quality most sition growth (3%), which is a good people associate with the dynamic cosign. Steadfast now boasts 360 brokers founder of Steadfast. From a small in 1300 offices across Australia, New broker cluster group launched in Zealand and its growing Singapore 1996 to a diversified insurance player operation. This year it’s looking for a that today is listed on the ASX 200, net profit in the region of $70 million. Steadfast’s journey has always been Greatly admired for his business masterminded by the avuncular and nous and his support for the industry shrewd Robert Kelly. The group is and its institutions – he received the now growing at a slightly less frenetic Rainmaker Award from global techpace than formerly, adding 17 brokernology standards non-profit ACORD ages owned, partly owned or linked to for an involvement few knew about – its brand in the past year. Organic Kelly remains plain-speaking and growth at 8% is now outpacing acquiapproachable. Long may he reign.
Mark Milliner, Chief Executive Australian Division, IAG
Big things are happening at IAG at knowledge of the local market and his present, as Mark Milliner moves to own businesses is unusually deep. make its Australian businesses more But that may not count for much nimble, more efficient and more – if he can’t force efficiencies into some well, practically everything. of the more elephantine businesses The Australian Division comprises that make up a big part of his new most of the businesses that make division. People are moving into new up IAG, so Milliner is a bigger player roles or out the door in significant in the local market than he would numbers at present as Milliner have been had he stayed at No.2 reshapes his diverse businesses for a player Suncorp. brave new customer-centric world Having moved across the street to driven by technology. It’s significant IAG in 2016 and spent some 18 that he also has under his command months as chief operating officer IAG’s technology development arms. before being appointed in July this This is a big, bold and brave move by year by Peter Harmer, Milliner’s IAG, so expect some surprises.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:19 pm Page 24
Michael Cameron, Chief Executive and Managing Director, Suncorp
The insurance industry is traditionally viewed as put Suncorp ahead of its rivals if it can be put conservative and cautious, yet the development together fast enough. The extra $100 million was strategies of the country’s two largest insurers needed to complete the three-year strategy 18 are anything but. months earlier. It’s a complex plan that relies on Michael Cameron’s advocacy of the Suncorp leveraging off its wide range of insur“Marketplace” strategy, which will see Suncorp ance, life insurance, investment and banking move to sell more of its diverse financial servservices to provide a single customer experience. ices offerings through digital platforms and Cameron is on record as saying that the day may even via third party companies, required him to come when Suncorp is a platform or marketplace stare down the investment community this year and no longer manufactures products at all. when he pulled out $100 million to speed up Like IAG, Suncorp is moving to meet the the strategy’s implementation. rise in consumer expectations and the chalThinking boldly and acting quickly is the lenges and opportunities brought by name of the game at present, and Cameron, a technology. Service, speed and functionality are former banker who took up the reins at Suncorp Cameron’s bywords as he battles to transform in October 2015, is confident Marketplace will the way Suncorp sells.
Mark Searles, Managing Director and Chief Executive, AUB Group
AUB’s emphasis on providing services to its major player in the broking space. Its joint venbrokers that will help them grow larger as they ture with the Independent Insurance Brokers diversify their offerings to clients continues to Association and its Sura underwriting agency be fascinating. businesses provide AUB with considerable flexiRather than engage in the free-for-all of buying bility, with the emphasis on organic growth brokerages and authorised representative compahelping to push net profit to a predicted $40 nies – AUB now has 135 “partner businesses” in million-plus for the current financial year. 425 locations across Australia and New Zealand – Searles’ handling of AUB is worth watching Mark Searles is focused on building up rather than because in many ways he’s pointing to an alterout. He says the group is no longer an acquisitionnative future for broking, where the range of driven organisation – the mergers and acquisitions services he is building for the use of brokers is role now seems to be mostly carried out by indiexpanding. This means the broker can evolve vidual member companies rather than the parent. as a true risk professional with expert advice But if the pace of acquisitions has slowed to available as back-up. Growth of more than 45% a trickle, the one-time Austbrokers business in use of the group’s risk services by partner that began in 1985 and listed in 2005 remains a brokers indicates it’s a strategy that’s working.
6 Richard Enthoven, Chief Executive, Hollard Australia He might be the newly elected President of the agencies can thank Enthoven for his financial Insurance Council of Australia, but the measure support when they started up. Today he operof Richard Enthoven’s influence in the industry ates across financial services, with powerful doesn’t need the benefit of that position. partner brands such as Woolworths, Australia The super-smart boss of the Hollard organiPost, Medibank and Bupa. On top of that, sation in Australia is a major mover and shaker, there’s the growing Real Insurance operation, with fingers in many insurance pies and a con17 underwriting agencies and a swag of specialtinuously growing portfolio of insurance-related ists. Enthoven is an innovator and an investor businesses. Quite a few successful underwriting who’s always ready to move with the market.
Kelly O’Dwyer, Minister for Revenue and Financial Services In a political environment where she’s wrestling enormous fines and increased intrusion by regwith warring federal government factions, indeulators will have their upside in controlling the pendent crossbenchers and an opposition that’s errant instincts of our banks, but the insurance focused on populist programs, you have to feel industry could find itself caught up in the backsorry for Kelly O’Dwyer. The Liberal Party, wash of any new “get tough” initiatives. The UK founded on a philosophy of small government regulatory regime is an indicator of where and soft-touch business regulation, is being added oversight and control could take insurtwisted in exactly the opposite direction. With ance. O’Dwyer has her work cut out balancing their eyes fixed on the banks, the regulators are demands for a full-on regulatory war against being told by their political masters to stop offenders with the need to give the overall pussy-footing around financial services financial services sector clear air in which to offenders. More emphasis on compliance, operate.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:19 pm Page 25
Gary Dransfield, Chief Executive Insurance, Suncorp
technical background Group Chief Executive Last year Dransfield narrowly missed being included in our Top 20. At that time he was still Michael Cameron was obviously looking for when he sprung his surprise management putting together a new division as chief execureshuffle in October. tive customer platforms as Suncorp made its Suncorp is still adjusting to its new strucfirst moves to a new interdependent customerture and market direction, so Dransfield has to focused structure. continue the day-to-day work started by predeEarlier this year he became Chief Executive cessor Day in a highly competitive insurance Insurance, replacing Anthony Day. Dransfield market while overseeing internal integration of has the experience to hustle along the group’s the Marketplace strategy. Data, forward-looking challenging and time-sensitive Marketplace analytics that spur product innovation and new strategy. Having worked in a series of transforways to market products will keep this enthusimation roles within IAG, St George Bank and astic performer on his toes. Suncorp over the past 25 years, he has the
James Shipton, Chairman, Australian Securities and Investments Commission
Taking over the chairmanship of Australia’s busicomfortably reactive culture to one where it ness regulator in February following Greg grows teeth and uses them. The Government is Medcraft’s departure, Shipton is a bit of an talking tough about promoting confidence in unknown quantity. Formerly the executive Australia's financial system and protecting condirector of studies in international finance syssumer interests. tems at Harvard Law School, he has also served Whether that includes giving the regulator as a commissioner at the Hong Kong Securities the money to use those teeth remains to be and Futures Commission. The organisation he’s seen, however. Shipton has the knowledge and taking over has a close and sensitive relationship experience, but we’ll have to wait and see how with the insurance industry. he manages the politicians and the rapidly What we do know is that there’s a move by developing, technology-driven insurance the Government to shift ASIC away from its environment.
Pat Regan, incoming Group Chief Executive, QBE
QBE is Australia’s only truly global insurer, Taking over from John Neal on January 1, Regan and it has always played a big part in the local has impressed since moving from the group industry’s development and issues-managechief financial officer function and has gained ment. some shop-floor experience fixing up glitches in Regan was poached from UK insurer Aviva the Australia and New Zealand Operations. in 2015 for a reputed $8.5 million sign-on While much of his focus will now be on the bonus, and his accession to the top job has group’s global empire, as it has been with Neal, been relatively swift and assured, as Insurance Regan has a clear idea of the sort of person he News predicted. The investment community is needs for the key local role, and is casting a his immediate challenge, but QBE’s unique wide net to find that person. Making that place in the local industry means he’ll be at the choice, rather than inheriting an incumbent, is forefront. a big advantage.
Vivek Bhatia, Chief Executive and Managing Director, Insurance & Care NSW
business when Bhatia took roles in-house. But An insurance professional with an eye for doing things differently, Bhatia is forging new paths for there’s no resisting the strategy put in place by this former McKinsey restructuring and busistatutory insurance in New South Wales that are ness transformation expert. doubtless being closely watched across Australia. With a $30 billion asset base, he could well Insurance & Care, better known simply as transform the way Australia’s state and territory icare, was formed by joining together NSW’s governments look at their own statutory insurstatutory schemes and shifting the emphasis ance operations. Which could be bad news for from adherence to strict procedures to a new the insurance industry, which is seeing its era based on clients’ needs. recent campaigns for a greater role in statutory His moves haven’t been particularly welbusiness start to fizzle. comed by insurers, some of which lost valued insuranceNEWS
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:19 pm Page 26
Chris Mackinnon, Lloyd’s General Representative in Australia Lloyd’s might be having its difficulties dealing Lloyd’s market still carries enormous cachet with such vexatious issues as Brexit and with local brokers and their business clients. embracing technology, but its Australian repreMackinnon has given the market a physical sentative has brought the market into the presence in Australia with the establishment of a mainstream of the industry. “hub” in Sydney, where business can be done on Underwriting agencies are increasingly the spot. He has also raised the profile of Lloyd’s skimming niche business off mainstream with the annual Dive In festival, promoting diverinsurers, some of which now have stakes in sity and inclusion in an industry that’s willing to agencies and are underwriting others. But the change but sometimes slow to act.
Mark Senkevics, Managing Director and Head of Australia and New Zealand, Swiss Re
Ralph Ronnenberg, Managing Director Australasia, Munich Re
Rob Whelan, Executive Director and Chief Executive, Insurance Council of Australia
In 2017 Corporate Solutions expanded into Times are tougher for reinsurers operating in the primary Australian market for financial the Australian industry, with the global group lines and casualty insurance, to fill gaps left by making a $US468 million net loss for the nine established insurers pulling back. months to September 30, with a significant conSenkevics has been heading up Swiss Re’s local tributor being Cyclone Debbie. Last year the operation since 2010, building strong business relaKaikoura earthquake in New Zealand also tionships. He’s a key player in promoting the benefits caused considerable pain. of technology and the need to build resilience into But the local Swiss Re operation can afford high-risk areas. And now Swiss Re has moved into to shrug off such setbacks thanks to a diversithe primary market, it will be interesting to see fied portfolio that includes life and health, plus where he takes his diversification strategy next. a growing focus on its Corporate Solutions arm.
In the 16 months he’s been running Munich government commitment of $200 million a Re’s local branch, Ronnenberg has established year invested in resilience programs. himself as an influential player in the industry’s Even as his rivals at Swiss Re are diversifying bid to convince governments to concentrate their business portfolio by moving into the local more on natural disaster resilience. That’s not primary insurance market via their Corporate surprising when you consider the beating the Solutions arm, Ronnenberg is dismantling major reinsurers take when cyclones, floods Great Lakes Australia, Munich Re’s ultimately and bushfires impose on their bottom lines. unsuccessful foray into the primary field. He’s a member of the powerful Australian While the operation was profitable, it Business Roundtable for Disaster Resilience & wasn’t profitable enough, and Munich Re Safer Communities, which is pushing for a decided to stick to its knitting in Australia.
Whelan has been running the insurers’ reprecontains some highly effective specialists, and is sentative body since March 2010, taking over the “go-to” organisation for insurance issues. from a chaotic administration and returning While Whelan’s council represents a powerful stability to the organisation. and highly significant industry, its ability to use While he maintains a relatively low perthat weight to influence governments is hardly sonal profile, Whelan has put together an impressive. The New South Wales Government’s organisation that has some significant technical unexpected and sudden backdown on its fire servruns on the board, including national flood ices levy initiative in May is an example of just mapping and a professional approach to posthow little politicians care about the insurance disaster management. The Insurance Council industry’s ability to oppose them.
Dallas Booth, Chief Executive, National Insurance Brokers Association In many ways NIBA is a shadow of its former self, A passionate and dedicated advocate for having moved out of the professional training brokers, Booth and his organisation deserve field and shifted most of its focus to representamore support from the wider broker commution. Booth is the right man for the job. nity. The strong influence of the large A lawyer with considerable experience in the international brokers, increasingly powerful government field, he has downsized the associacluster groups and a growing number of authotion over the past few years but upgraded its rised representative companies mean the ability to push insurance intermediaries’ views industry’s view of NIBA as the cultural centre and aspirations to politicians and regulators. of broking has become a bit blurred.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:19 pm Page 27
INMAG DEC 17_page layouts 1/12/2017 3:19 pm Page 28
Leon d’Apice, Managing Director, Ebix Australia Internecine struggles with Steadfast notwithEbix continues to develop new products standing, the position of Ebix at the centre of and platform refinements to stay ahead of the insurance industry technology remains strong. game, and its leadership in broking systems D’Apice has been at the forefront of the and the continuing popularity of its Sunrise industry’s technology developments for some and iClose platforms show no sign of easing. 25 years, which gives him a strong hand to The urbane d’Apice knows the best way to stay play in an increasingly competitive sector of ahead is to keep developing new and better the industry. solutions. Knowing everyone helps, of course.
Allan Manning, Managing Director, LMI Group
Over the past 10 or so years Manning has built His professional and occasionally public an international loss management company advocacy for claimants makes some industry with remarkable reach, got heavily involved in leaders uncomfortable, and he’s certainly not industry education and has still managed to universally popular. But he is respected for his carve out a reputation as a helpful and often knowledge and his genuine desire to always see acerbic commentator on industry issues. the industry doing the right thing. Helpful because he’s always willing to advise Manning collaborated with Insurance News intermediaries and members of the public on this year to stage the inaugural Mansfield open emails about the best way to approach techAwards, the first industry event aimed solely at nical problems that should be making him money, the claims sector. Its aim, of course, is to and acerbic because he tells it as he sees it. encourage excellence in claims performance.
Lyndon Turner, Chairman, Underwriting Agencies Council
Some of its members are major players in The Chief Executive of NM Insurance runs a comtheir own right – recognition that the council is pany that specialises in pleasurecraft and boating effective in getting specialised products and industry casualty and property lines, commercial expertise in front of the professionals who matter marine insurance, caravans and motorcycles. to them: intermediaries. It also offers a range of As Chairman of UAC he’s also leading an support services to keep agency directors and organisation that can’t be ignored for its lively their staff technically adept and well informed. promotion of members’ interests. As an industry organisation, UAC is relatively With 113 members writing more than $3.5 small and low-key in its approach. It tends to leave billion of premium and enjoying some hefty it to the big players to get involved in the wider strategic partnerships with Lloyd’s, QBE and issues that impact on the industry. But taken as a Hollard, UAC’s growing influence on brokers’ group, it’s a significant part of the industry. buying decisions is clear.
Chris Colahan, President Australasia, Berkshire Hathaway Specialty Insurance
Generation X is emerging in the top ranks of the position where it’s causing competitors significant industry as the Baby Boomers gradually shuffle off pain. In the quarter to September 30 BHSI the scene. No one in the industry better exemplibrought in $30 million in gross earned premium fies the qualities of the Xers than Colahan, a and $4 million net profit. As BHSI continues to buttoned-down, highly professional market player expand its product range Colahan keeps adding who has grown Berkshire Hathaway’s local speinsurance professionals to his team who are every cialty operation from a standing-start in 2015 to a bit as focused and capable as he is.
Gone from last year’s list Colin Fagen, president of the Insurance Council of Australia and QBE’s chief operating officer: Dismissed for an undisclosed reason in February. John Neal, QBE’s Group Chief Executive: Will be replaced by Pat Regan on January 1. Anthony Day, Chief Executive Insurance, Suncorp: Left the company in October after a reshuffle. Niran Peiris, Managing Director, Allianz Australia: His appointment to the German group’s central board was announced in March. His replacement will be Richard Feledy. Mario Greco from Zurich. He was included last year in recognition of his work to change Zurich’s direction, and its impact on the local company. 28
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:19 pm Page 29
INMAG DEC 17_page layouts 1/12/2017 3:19 pm Page 30
A new strategy in place
Insurance chief Gary Dransfield takes the reins during a time of great change for Suncorp By Wendy Pugh
GARY DRANSFIELD HAS RISEN to Suncorp’s top insurance role at a critical moment, as the company accelerates spending on a plan to drive growth in a fast-changing, competitive environment. The “Marketplace” strategy is central to Chief Executive Michael Cameron’s plan to make the group more relevant to consumers as they buy homes and cars, manage businesses and face key life decisions. The pressure is on a revamped and streamlined executive team to deliver on the promise, and there is a lot at stake. Suncorp is accelerating a $100 million investment in the strategy, and Mr Cameron, two years into his tenure at the top, has driven home the rationale and window of opportunity to a sometimes sceptical investor community. Mr Dransfield was named Chief Executive Officer Insurance in October, taking over from Anthony Day, after he was appointed head of customer platforms early last year under changes designed to hone the new approach. insuranceNEWS
“The reality of the strategy is it can help drive better and smarter growth for us in a very competitive marketplace and help us to meet more needs for our customers,” Mr Dransfield tells Insurance News. “It is really about opening up all the products and services we can bring to bear for any of our customer groups. In my previous role I was right in the middle of it all from a distribution, digital point of view. I have been very involved and still will be.” Mr Dransfield says the company was relatively siloed in the way it presented its banking, insurance and life insurance businesses and brands, which include Suncorp, Vero, AAMI, GIO, Apia and Shannons. The Marketplace strategy, which sits within the “One Suncorp” operating model, aims to break down barriers and better capture the potential offered by the group’s 9 millionstrong customer base as technology disrupts traditional ways of doing business and consumer behaviour changes. “As an executive team, even
December 2017/January 2018
before Michael started, we all recognised that we needed to evolve rather than continue to run these distinct, relatively separate end-to-end businesses,” Mr Dransfield says. “Michael has really sharpened the focus around how we do that.” Suncorp says it is making it easier for customers to access its brands, no matter where their starting point. It is also tapping third parties to fill gaps in meeting various financial and insurance needs for customers, including families, retirees, Millennials or businesses, via direct and intermediated channels. Ideally, customers will use Suncorp services more frequently and stay with the group for longer. The company has launched concept stores in Parramatta and the Brisbane suburb of Carindale, created new apps and expanded an alliance with health insurer Nib. It is looking at other partnerships and is investing in a customer rewards and recognition program. Mr Dransfield says the concept stores, which include
INMAG DEC 17_page layouts 1/12/2017 3:19 pm Page 31
“We want to have a very big role with our customers right up the front of the process, not just as product manufacturers and claims handlers.”
Driving growth: Gary Dransfield
customer workshops and an opportunity to access the range of brands in one place, have driven increased sales at those locations. Expansion plans include a presence in Sydney’s Pitt Street Mall. “They were existing bank branches, so we have got, in effect, a same-stores sales comparison,” he says. “Just in banking products, we are doing more lending from those stores than we were before.” Plans to more effectively deliver services to customers come as insurers, weighed down by legacy systems, face challenges from new rivals and technologies that offer more flexible ways to interact with customers, and which can shake up parts of the industry. Suncorp is not planning to cede ground, as it pursues partnerships and tests its own deployment of innovative technology across the business. The group’s response has included teaming with US-based technology developer Trov to provide instant access to insurance for single items such as cameras, tablets and laptops. It
is also one of the major businesses partnering with recently launched industry association Insurtech Australia. “We want to have a very big role with our customers right up the front of the process, not just as product manufacturers and claims handlers,” Mr Dransfield says. Start-ups also offer advantages to existing players by identifying and trying to solve customer pain points, highlighting to incumbents where they need to improve their performance, and effectively throwing down the gauntlet. “There are those out there, who we need to be wary of, who will try to attack our whole business model, but there are others who want to build businesses and create value by solving problems in our value chains,” Mr Dransfield says. “I would like to see us, through Insurtech Australia, really promote the organisations that are trying to help the insurance value chain run better, and solve customer problems.” Before joining Suncorp in 2009 Mr Dransfield worked for insuranceNEWS
25 years in the retail financial services industry, holding positions in operations, strategy and marketing at companies such as St George Bank, AMP and IAG. He played a key role in the conversion of St George from a building society to a bank, and led the IT team at IAG during the demutualisation of NRMA Insurance. At Suncorp he held positions including executive general manager for personal insurance retail distribution, Vero New Zealand chief executive and then chief executive personal insurance. During his time in the Vero role he commuted on a weekly basis from Australia to New Zealand, returning for weekends in Sydney, where his children were completing their education. “I only realised after I finished doing it for four-and-a-half years that I was pretty tired. But I think you get into a groove. The plane is like a bus with wings.” Mr Dransfield is now based in Sydney, and the travel is mostly up and down the east
December 2017/January 2018
coast, where insurers regularly face major claims from cyclones, floods and bushfires. Suncorp continues to push the case for increased investment in mitigation, highlighting the success of projects such as the Roma levee investment, while also arguing against proposals it sees as unhelpful. Mr Dransfield says the focus by several inquiries on insurance price comparison websites, or aggregators, misses the mark and the sites have less to offer for Australian general insurance compared with other markets. UK demand for aggregators was prompted by a surge in the number of brands inundating consumers in the mid-2000s, with one of the first big successful aggregators there appropriately called Confused.com, he says. “The confusion was not so much around the products, the confusion was just the incredible proliferation of providers. Now there is so much aggregation in the UK you almost need an aggregator to manage the aggregators.” Nevertheless, the general insurance industry recognises it 31
INMAG DEC 17_page layouts 1/12/2017 3:20 pm Page 32
“We have all got to keep working away at our claims processes and costs and keeping the price of insurance affordable and reasonable, because household and business budgets are under pressure.”
needs to do more to improve product disclosure and transparency, so customers are better equipped to make decisions. Trov offers a relatively succinct product disclosure statement, given its focus on a defined and narrow area of risk, but critics argue insurance documents generally remain overly complex. “The challenge in Australia is the range of perils that can affect a home or a car that we need to take account of in a product disclosure statement,” Mr Dransfield says. “Getting the balance right between enough disclosure but enough simplicity for consumers is the ongoing challenge for the industry.” From an underwriting perspective, Suncorp’s strategic drive is taking place against signs of a more positive insurance industry backdrop, as the cycle shows signs of improving. Suncorp gross written premium grew 3.9% last financial year to $8.1 billion, while net incurred claims fell 3.5% to $4.9 billion. General insurance profit after tax grew 40.6% to $689 million. 32
Insurers have pursued price increases to lift profitability in commercial lines, and Suncorp expects the momentum to continue into the current financial year. Chief Financial Officer Steve Johnston told the August results briefing that the June renewals period exceeded expectations, with rate increases of more than 10% in the top-end commercial property market. The impact on rates of global catastrophe losses, which this year could soar to historic levels well above $US100 billion, remains to be seen. Catastrophes included hurricanes Harvey, Irma and Maria, which hit the Caribbean and US from late August to early October during an active Atlantic season. The Suncorp reinsurance program renews at mid-year, but it will keep a close eye on January outcomes for insights into the impact on price and capacity. “We would expect some lift in reinsurance rates as a result of catastrophes in the northern hemisphere,” Mr Dransfield says. “If we had the view that there might be a reasonable insuranceNEWS
movement upwards, it would be responsible to try to factor that into prices as soon as we could.” On the other side of the ledger, the company is pursuing a business improvement program to keep expenses flat amid inflation and expected volume growth, while also reducing claims costs. Suncorp has integrated IBM’s Watson artificial intelligence technology into its online motor claims process following testing earlier this year, allowing it to fast-track handling of simple incidents and augmenting the knowledge and expertise of claims consultants. “We have all got to keep working away at our claims processes and costs and keeping the price of insurance affordable and reasonable, because household and business budgets are under pressure,” Mr Dransfield says. Mr Dransfield’s elevation was among several changes in October as Suncorp pursues its broader corporate strategy. It named Pip Marlow Chief Executive Officer Customer Marketplace, while Mark
December 2017/January 2018
Reinke, previously chief customer experience officer, moved into an advisory role focusing on the Marketplace strategy. Change is also under way at major local rivals as they grapple with the same changing environment. IAG in July created a single Australian division under the leadership of Mark Milliner, previously chief operating officer and a former Suncorp executive. QBE is to appoint a new permanent Australian and New Zealand head next year, following the elevation of Pat Regan to Group Chief Executive in January. Mr Dransfield says the sector is diverse and the Suncorp insurance business must keep improving the customer experiences it delivers within the wider strategy, while also focusing on claims costs, pricing and the overall underwriting performance. “We have got to continue to evolve to be a better and better insurance organisation and all the things that entails, while we take a really fundamental role in being part of the marketplace.” *
INMAG DEC 17_page layouts 1/12/2017 3:20 pm Page 33
Is $150,000 enough for victims of institutional child sexual abuse? The Royal Commission into Institutional Responses to Child Sexual Abuse sat for the final time on 14 December. Having spent the past five years shining a light onto child sexual abuse, the Commonwealth Government has responded by tabling the Commonwealth Redress Scheme for Institutional Child Sexual Abuse Bill 2017 to establish legislation for a Commonwealth Redress Scheme for victims of institutional child abuse.
Overview of Scheme The Bill sets up a process by which victims can apply to the scheme alleging that they were subjected to sexual abuse as a child at a â€œparticipating institutionâ€?. The scheme operator will investigate the claim and, if a participating institution is found to have been responsible, will offer victims: 1. Monetary payment of up to $150,000; 2. Access to counselling or psychological services of choice throughout their lives; and 3. A direct personal response from the institutions responsible, where that is sought by the victim. Victims who are offered a monetary payment must enter into a deed of release under which they release all participating institutions from civil liability.
Scope of scheme Victims must opt into the scheme, which as presently proposed does not alter victimsâ€™ common law rights. The scheme is open to victims of child sexual abuse from Commonwealth and Territory institutions, who are expected to opt in. Liability for the monetary payment will be allocated to the participating institution and administered through a fund by the operator. It is hoped the scheme may provide the framework for an eventual comprehensive national scheme. The monetary payment is determined by the operator with reference to an assessment matrix, which is yet to be published. The payment will have subtracted from it any payments already made by a liable institution to the victim. Significantly, the scheme operator must approve an application if they determine there is a â€œreasonable likelihoodâ€? that the person is eligible for redress. The Minister in his second reading speech confirmed that this test is lower than the â€œbalance of probabilities testâ€? at common law.
Stuart Windybank, Principal Direct Line: +61 2 9265 3217 Email: email@example.com
Amanda Kmetyk, Principal Direct Line: +61 2 9265 3539 Email: firstname.lastname@example.org
Will the scheme be attractive for victims? The success of the scheme will depend on the willingness of state governments and non-government institutions to join. Even if there is participation by a significant number of state governments and non-government institutions, it remains to be seen whether the scheme will be attractive for victims. The maximum payment of $150,000 pales in comparison to some damages that have been awarded by the courts. The scheme is, however, likely to be attractive to the following categories of victims: i Victims attracted to the prospect of obtaining compensation by means of a fast, simple i process, without necessarily obtaining legal representation. i Victims in state jurisdictions where the relevant statute of limitations currently contains no exemption for child sexual abuse and common law causes of actions may be barred. i Victims with claims where the evidence is scant, who may be more likely to recover under a â€œreasonable likelihoodâ€? test than a balance of probabilities test. i Victims who do not allege long-term psychological harm or economic loss, who may be no worse off seeking redress under the scheme.
The risks of litigation As this is an opt-in scheme, victims will still have the option of pursuing compensation through litigation. Although the limitation period in respect of sexual abuse has been abolished in NSW, the need to establish negligence, vicarious liability or assault/battery remain. A finding of assault against a perpetrator may be hollow if the perpetrator is impecunious or long-deceased. To manage the volume of proceedings commenced, the Supreme Court of NSW has set up a dedicated list of sexual abuse claims. Solicitors for both parties require specialist skills to balance the need to investigate and defend claims where appropriate with sensitivity to the trauma already suffered and the need to achieve timely resolution. *SVZMGXMQWXLITSXIRXMEPJSVLMKLIVHEQEKIWQE]FI offset by the risk of litigation. As the High Court in Prince Alfred College Incorporated v ADC  HCA 37 stated: â€œSome plaintiffs will win. Some plaintiffs will loseâ€?.
INMAG DEC 17_page layouts 1/12/2017 3:20 pm Page 34
2017 Insurance TV Ad Awards Marketing experts review the industry’s TV ad campaigns of the past year and come up with the best
THE INSURANCE INDUSTRY ISN’T USUALLY perceived as a leader in creativity or originality when it comes to marketing and advertising. That perception is often upheld by people within the industry itself. Insurers have had a chequered history in TV advertising. QBE took things in a confusing direction with a catastrophic remix of the Blondie hit “Call Me” in 2016, for example. It was promoting the company’s direct marketing, but probably did a better job convincing people to contact an insurance broker. However, even such a significant market leader as QBE couldn’t compete with the car crash that was Budget Direct’s 2013 “Insurance Aliens” campaign. Insurance and aliens… we can only imagine the Mad Men-style boardroom pitch for that one. Disasters aside, the industry can also celebrate some exceptional marketing and advertising campaigns in recent years. We doubt AAMI ever expected the Rhonda and Ketut campaign of 2012-14 to become a soap opera to rival the British love of Neighbours. Can any campaign ever be considered a failure when consumers start a fan club for the characters in the advertisements, and social media comes alive with speculation about the couple’s “sexual tension”? Even with today’s marketing focus on digital advertising kool-aid, TV advertising is still a critical part of any significant marketing campaign in Australia. Sure, one in seven people don’t watch commercial television, according to Roy Morgan Research, but that still leaves an audience of 21 million Australians. Commercial television still has the biggest reach of any medium. Given how important the segment is, Insurance News turned to the team at Melbourne specialist insurance marketing consultants The Lead Agency to compile the 2017 Insurance Industry TV Advertising Awards. We would have called them the Advertising Oscars, but Hollywood lawyers are way too litigious. Here’s the Lead Agency’s report, compiled by Managing Director Andrew Silcox. 34
How to find the ads mentioned in this article on YouTube: QBE’s “Call Me”: www.youtube.com/watch?v=_3iNKQ4reS8 Budget Direct’s “Insurance Aliens”: www.youtube.com/watch?v=FkOyZFuvbvl www.youtube.com/watch?v=85ubtVs5n6A AAMI’s “Woop Woop”: www.youtube.com/watch?v=KFD6iiavcrk NRMA Insurance’s “Betty”: www.youtube.com/watch?v=p6hTfjPJLtE CGU’s “Laura McCusker”: www.youtube.com/watch?v=sTmEQcpKDN4 Youi’s “Who’s In The Car with The Veronicas”: www.youtube.com/watch?v=HeRtaprAHoo QBE’s “Bounce”: www.youtube.com/watch?v=U_HnbmQ02H4 NRMA Insurance’s “Confidence”: www.youtube.com/watch?v=sH7Tsk7BR2c
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:21 pm Page 35
1. AWARD FOR BEST USE OF HUMOUR in order to entertain audiences rather than pitch to them. The key to funny advertising is making sure the humour is appropriate to the company, the product and the customer. In insurance especially, there is no tangible product to advertise, and humour can be an extremely effective marketing tool to emphasise the concept of insurance.
Criteria: Awarded to the ad that applies humour in a way that catches the viewer’s attention and delivers the message. The most memorable ad campaigns are often the funny ones. Humour has long been used as an effective way to communicate and overcome any objections or perceptions. Marketers use this strategy to attract customers to their product
t The winner: AAMI’s “Woop Woop – Roadside Assist”
t Runner-up: NRMA Insurance’s “Betty”
Campaign: Not Very Insurancey.
Campaign: Insurance Confidence
Description: Amy from AAMI comes to the rescue of a family whose car has broken down in the middle of Woop Woop – specifically just up from “Ship’s Creek”. In order to be effective, the balance between funny and obnoxious has to be spot on. This AAMI ad pushes boundaries with a tight script and creative that skirts controversy through perceived bad language. But this is what makes it so entertaining. At the same time the ad articulates a benefit of being with AAMI, by highlighting the company’s roadside assist services.
Description: When a kindly but oblivious female senior citizen knocks over a series of motorbikes, “Confidence” comes to the rescue with online insurance. NRMA Insurance keeps the storyline simple, using an extreme situation to humorous effect and demonstrating an incident in which insurance will come in handy. Humour in advertising improves brand recognition, but it doesn’t always improve product recall, message credibility, or buying intentions. Consumers may be familiar with the NRMA Insurance brand through this ad, but it is unlikely that this communication significantly would change their purchasing behaviour or decision.
What we love about it: The script for this ad is really well written, combining popular and vernacular language while still showing a key consumer benefit. It leverages “family values” and connects with traditional Australian culture, which helps the audience relate to the characters and storyline. What could be improved: The campaign tries to set itself apart with the tagline “Not very insurancey”, which is presumably an attempt to speak to the public’s view about insurance companies. However, self-deprecation like this works against the industry as a whole. It supports an inaccurate stereotype and risks demeaning what insurance companies do. You wouldn’t find Apple saying that users need to spend more than $1000 on an iPhone that breaks even more easily than its previous versions. Unfortunately, the use of language in this advert earned them some trouble with the Advertising Standards Bureau. Although the complaints were ultimately dismissed, some viewers were offended by the content.
What we love about it: The ad is light-hearted, which will leave the audience with a positive feeling, rather than weighing them down with negative motivators such as fear. The “Confidence” character is used throughout the company’s ads, creating consistency in the messaging which is more memorable to the audience. What could be improved: The ad focuses on an extreme rather than a reality – old ladies don’t often drive recreational vehicles, never mind reverse one into a line of motorbikes. Comedy can sometimes offend people, and this ad stereotypes old people as being more likely to cause a road accident – which simply isn’t true.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:21 pm Page 36
2. BEST B2B INSURANCE AD Criteria: Awarded to the best ad targeting business owners. While business insurance products make up one of the most significant segments of the general insurance market, there aren’t many ads targeted directly to business owners. This may be in part due to the fact that B2B purchases are more relationshipdriven. As such, more marketing budget is assigned to relationship-building activities than traditional advertising. However, with less competition in the B2B space, insurers that target business owners with traditional ads are more likely to get the audience’s attention.
t The winner: CGU: “Laura McCusker” Campaign: You Own It Description: Laura McCusker, a small business owner, demonstrates how she builds a piece of furniture. The ad finishes with the tagline “You Own It, We Back It”. This ad from CGU features one of their own customers, which immediately builds authenticity and trust. The ad is subtle in its approach, focusing on the business owner and what she does, rather than the insurance products that CGU provides. However, by placing such a strong focus on the business owner, CGU risks its core message getting lost with viewers who don’t already know who CGU is, or the services it provides. What we love about it: In featuring a real small business owner, CGU cleverly articulates its target market to ensure the ad resonates with them. The “We Back It” tagline positions CGU as a business partner who is there to support its customers. What could be improved: Although the ad does a good job putting the focus on CGU Insurance’s customers, it does little to articulate the value proposition.
3. THE MAKE INSURANCE GREAT AGAIN SOCIAL MEDIA AWARD Criteria: These aren’t really ads designed for television, but this award recognises the most innovative social media campaign.
t The winner: Youi: “Who’s In The Car with The Veronicas” Campaign: Who’s In The Car Description: Up-and-coming comedian Katie Burch drives pop star twins The Veronicas around town, asking them a series of hilarious and unexpected questions. These ads take their inspiration from the likes of James Corden’s Carpool Karaoke in a clever attempt to reach online audiences. In order to be successful on YouTube, videos can’t be overly promotional, which Youi has managed to do extremely well with this entertaining content. This is the most popular video in the series, with a staggering 850,000 views – try getting that from traditional advertising. However, Youi’s challenge comes in converting those views to revenue. On the YouTube network, a “view” is counted after someone has watched a video for 30 seconds. Yet there is no mention of Youi’s products for another four minutes (a “call-to-action” button at the end of the ad inviting the viewer to contact Youi). What we love about it: A great advertising channel to target Millennials, these YouTube ads play on the latest trend within the reality TV segment. The Youi branding is present throughout the video to aid brand recognition when the content doesn’t mention the product, brand or benefits. What could be improved: The ad is entertaining and deliberately avoids mentioning insurance. This is a potential pitfall, as the message could easily get lost.
Runner-up: There are very few businesses that can make social media marketing work. Considering the difficulty of building engagement (marketing-speak for “does social media work and can I bill the client for it?”), no one else makes this level of effort on their social channels, or stood out enough to mention.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:21 pm Page 37
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 38
4. AWARD FOR BEST OVERALL INSURANCE TV AD Criteria: Awarded to the ad that is entertaining and articulates the value proposition of the brand. Insurance is the classic “grudge purchase”, which makes advertising notoriously difficult to get right. The specifics of the policies are impossible to communicate in an entertaining way, and often too difficult for the average person to understand anyway. This
means that the choice between insurers will typically come down to brand – in simple terms, think of that as trust and reputation. Which company does the customer relate to? Which does it remember? And which does it trust? These are the components we considered to come up with the overall winner. Drum roll please …
t Runner-up: QBE: “Bounce”
t The winner: NRMA Insurance: “Confidence”
Campaign: Sydney Swans Sponsorship
Campaign: Insurance Confidence
Description: A stray football escapes a football stadium, almost causing a number of unfortunate incidents. Just before it can damage the screen of a couple’s car a QBE Insurance representative catches it. This ad almost makes us forgive what QBE did to Blondie. Almost. QBE’s advertising features animated characters that have consistently been used in the brand’s communications. These likeable caricatures are instantly recognisable to viewers, which is a very clever way to increase brand recognition and recall. This campaign was particularly relevant as it ran through the footy season, which tied in well with QBE’s other advertising channels. While very well thought out and executed, the main reason this ad didn’t win was its use of the “100% commitment” tagline, which didn’t necessarily fit in with the creative of the ad.
Description: NRMA Insurance members find themselves in a variety of dangerous and unfortunate situations. Luckily, “Confidence” is there to save the day. We’ve long been fans of the USA insurance brand AllState’s “Mayhem” campaign featuring Ryan O'Reily as the ultimate human embodiment of what can go wrong in life. When we’re dealing with an intangible product like insurance, it can be difficult to get the right balance of fear-mongering – sorry to call it that, but that’s what it is – while still demonstrating that a particular brand’s insurance products are essential. These NRMA Insurance ads follow that successful communication formula without being too similar. In addition, the consistent use of the “Confidence” character cleverly articulates one of the main benefits of the product – peace of mind.
What we love about it: The animated style has universal appeal, which is particularly effective for a company like QBE Insurance, which has a fairly wide target audience. By tying its advertising to its long-running sponsorship of the Sydney Swans and broadcasting the ads during televised games, QBE has found a way to maximise exposure and impact. What could be improved: Although the animation is beautiful, the issue of running a series of ads requires crafting unique messages every time – without steering away from the visual and conceptual themes. Pass me the envelope, please. The winner of the Award for Best Overall Insurance Ad of 2017 is…
What we love about it: This ad’s charm comes from its poetic narrative and use of situational humour. The outlandish characters bring the story out of the realm of the ordinary for greater impact on viewers, while delivering a concise and relevant insurance message. What could be improved: All the ads featured in this awards ceremony show a distinct lack of diversity. Most of the humorous scenarios are unrealistic – not many drag queens experience car trouble in the outback, for example. An outlandish situation is more likely to stand out and be funny, but the danger is we won’t believe the situation will ever happen to us. Diversity is also seriously lacking in the casting and writing. If you watch all the ads we’ve mentioned (see the panel on page 34 for their YouTube details), there’s more aliens featured than all the ethnic minorities prevalent in Australia combined. * That’s something to deal with in 2018.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 39
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 40
Keeping the customer satisfied QBE’s Bettina Pidcock explains how the insurer is putting customers front and centre By John Deex
THEY SAY THE CUSTOMER IS ALWAYS right, and in the insurance industry this has apparently never been more true. With insurtechs popping up here, there and everywhere, if consumers want something, they tend to get it. Incumbent insurers need to realise this and respond accordingly, or face a slow deterioration and inevitable death. If they don’t do it, someone else will. QBE is taking forthright action, sending a clear message with the appointment of Bettina Pidcock as its first Chief Customer Officer in June. Not that this was the beginning of the journey. Ms Pidcock joined the insurer as executive general manager of marketing in February 2016, and had already instilled a “persistent focus” on customers. She tells Insurance News her marketing role was groundbreaking in itself, because it was the first time marketing and communications had a seat at the leadership table. “There was a real recognition that we needed communications and marketing to be more strategic in nature,” she says. “We had talked very extensively about being customer-focused, and yet I noticed that we didn’t really have a lot of data we could bring to the leadership conversation about customers, so we started a few interesting green shoots around the business.” 40
These green shoots continued to grow after Ms Pidcock moved into the chief customer officer role. Several elements, including the customer experience team, digital team and “net promoter score” program, were brought together. This in turn enabled creation of a “single voice” customer report. “We use that report every month to have a look at how we are travelling in the eyes of our customers and brokers,” Ms Pidcock says. “We measure three levels of net promoter score: the relationship level, the strategic level and then the transactional level. “We brought all of that together in one report that we share at the leadership table every month, together with social media listening and complaints data, and we have a look at how we’re travelling across the whole business. It has been a really valuable tool.” Listening was the first step, then evaluation. But there is a long way still to go. “There are lots of little niggles, but there are some bigger themes that we identify as well. How we act on those bigger themes is quite a critical component of becoming more customer-focused. “It’s a build. Although we have definitely started to get far greater insight into the customers, that is the first step on a long journey.” The key is having a customer-level view, she says. It’s one thing to have great insight into your channels and products, but seeing these from the customer’s perspective is the next big challenge. Ms Pidcock says “immersive research” is the only way to gain this level of understanding. “That is our next big leap forward, to start to get that customer-level view and to insuranceNEWS
December 2017/January 2018
look at why customers come to us and why customers leave us. “Really, you need to understand the journey the customer is going on. What drives them to recognise they have an insurance need? What sort of research do they do, what are the sorts of things they are looking for? What is the level of understanding they have and how can we help them with that? At what point do they seek the assistance of a broker? “Those more immersive pieces are what we have brought to the table now with the customer experience team. “You need that level, I think, to design great customer pathways and experiences, which is ultimately what customers are looking for from you these days.” Ms Pidcock’s role encompasses the full array of services and offerings at QBE, both commercial and personal. However, the SME sector stands out as a strategic priority. “We are really seeking to excel in that area. We have a very solid and good market share, but it is a rapidly growing part of the economy and certainly very highly contested among other insurers. “It is an interesting segment because you get everything from your micro-SMEs, which almost behave like personal customers, through to when they are growing and becoming more complex and edging up into that commercial segment. It’s quite a broad range of customer types and behaviours.” Ms Pidcock believes the days of insurers dictating to their customers are well and truly gone. If customers want to access insurance in a certain way, then you’d better provide it. “As a business, you can have a belief that only an intermediated style is going to suit a customer’s needs, or you can have a
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 41
Understanding customers: Bettina Pidcock
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 42
“Customers cover the full spectrum, and rather than spending time telling either end of the spectrum they’re not correct, you need to think about how you can cater for those different needs.” A scientific approach BETTINA PIDCOCK DIDN’T SET OUT to work in insurance, completing a science degree with a double major in chemistry. However, she quickly realised that “chemistry in the real world was probably not as exciting as it was at university”. She got into financial services by joining the Westpac graduate program. “I stayed at Westpac for 13 years,” she says. “I really loved working there and did everything from very junior roles in the early days through to corporate affairs roles, client management, marketing, across all the different segments, consumer, institutional bank and corporate head office. “It was a really great foundation for financial services. I was at Westpac when it made what was then the biggest corporate loss in Australian history, and what was fascinating about that was that we really had to earn our way back into our customers’ good graces, so that was a really big learning experience in terms of thinking about customers. “It had a very transformative effect on my thinking about how business works and what our obligations are.” After Westpac she held a series of roles, mostly marketing, at organisations including your Prosperity, MLC, TAL Direct and ANZ Wealth. From there she was approached by QBE. “[At ANZ] we had the QBE relationship, so I thought I understood QBE, but it wasn’t until I started to research the role more closely that I realised what an incredible organisation QBE is. “Global, established, an incredible depth and array of offerings to different types of customers – I thought this was a company with enormous potential and I was really excited to join.”
belief that only a direct style is going to meet a customer’s needs. “But actually, customers cover the full spectrum, and rather than spending time telling either end of the spectrum they’re not correct, you need to think about how you can cater for those different needs. Some businesses might start low-cost and do things themselves, but as they grow in complexity they start wanting to get some advice. “We have a really good opportunity to refer some of that business to brokers when they get to that level of complexity. But if we didn’t engage with them in their early phases we wouldn’t even be able to have that conversation.” Insurtech companies succeed because there are gaps in service, Ms Pidcock says, but they are rarely able to provide everything the customer needs, and this throws up obvious partnership opportunities. “Very few of them give the customer the full package. What they are very good at is a part of it. So we actually see it as a really great opportunity to partner with insurtech companies, combining the bits they can do really well with the bits we can do really well. “We have got an insurtech fund that we are using to invest when we find companies that meet those characteristics.” The insurer’s $US50 million global insurtech fund has been well documented, with October’s investment in machine learning company RiskGenius the first outlay. In Australia, a recently announced sixmonth trial with “digital broker” iSelect has marked a change in direction. iSelect will sell QBE’s home and contents products as part of a broader push into general insurance, but the insurer has been careful to emphasise that the deal insuranceNEWS
December 2017/January 2018
does not extend to including the price of QBE products on iSelect’s aggregator website. Ms Pidcock says it is all about giving customers more options. “What you have to acknowledge is that a lot of customers’ impressions of insurance are that it is complex and they don’t know how to navigate through, and iSelect as a brand has positioned itself as being able to solve that conundrum for customers. “We haven’t traditionally had a great deal to do with sites like that, but it has established effectively a broking capability, and so it enables us to do what we do best, which is support a broker-led proposition and at the same time satisfy a customer’s desire to engage with a brand they feel is going to help them navigate the complex world of insurance.” QBE is working on other aspects to help its customers feel more confident in arranging cover. The customer experience team has helped redesign many of the insurer’s product disclosure statements (PDSs) to make them more accessible. “We recognise that is a barrier to people engaging with insurers, investigating what they need and feeling confident that they know what they’ve got. “Certainly, there is a role for brokers in that explanation, but some insurance needs are small and perhaps for brokers that is a high overhead for them to be dealing with. “Whether you use a broker or not, I think it is a really positive development for us to think, ‘How do we help customers feel confident with what they have?’ And we can do that by giving PDSs and other documentation in clear English.” QBEs customer base is becoming ever more diverse, and Ms Pidcock believes the insurer’s workforce must reflect that.
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 43
Specialised knowledge that runs deep. Strength and expertise. It’s why we’re the region’s new marine insurance specialist. It’s why we’re the new market leader.
Covers your world
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 44
“We now have to compare ourselves not just to other insurers but to other companies that enable great customer experiences.” “We look at diversity on a number of different levels. Making things as accessible as possible and as unintimidating as possible is one of our objectives, and we’ve done quite a few things on that front. “We are redeveloping our website to meet much higher visual impairment standards. We’ve removed general exclusions for mental health. We are using our customer experience team to think about how we make the customer journey accessible to everybody. “We seek to mirror the broader society in our own workforce, and we’ve made some quite significant strides towards greater diversity and inclusion.” Another strategic priority for QBE is claims, with significant investment in improving customer experience and outcomes. “You have to constantly invest and reinvent and rework those processes, because customers’ expectations, particularly with the technology that’s available these days, are constantly increasing,” Ms Pidcock says. “We are working very hard at building a world-class claims service.” Ms Pidcock says a bad claims experience taints the whole organisation, and the customer experience needs to be viewed holistically. “The customer doesn’t think, ‘I had a great experience with the claims department or the underwriting department.’ The customer thinks about QBE as a whole. “So when we are looking at designing a customer-focused organisation, we look end to end at the total experience the customer will have. “Getting into understanding what a customer’s daily life is like – what drives them, what motivates them, what they understand – and building end-to-end experiences based on those insights is absolutely critical.” 44
Ms Pidcock says thanks to customers’ increasing access to information, and the emergence of companies such as Uber and Airbnb, expectations are huge. “We now have to compare ourselves not just to other insurers but to other companies that enable great customer experiences. “It’s not just a technology solution, it’s a whole cultural piece around what your organisation stands for, how you embed an outside-in mentality around customers to help inform every time you do things like create a new product offering or refine a service or offer a new channel. “All those sorts of things need to be informed by customer expectations that they have out in the real world, not just with their insurance company.” Data is playing an increasingly important role in reshaping QBE as a customer-focused organisation. Ms Pidcock says the data and analytics capability developed over the past two years goes well beyond what the organisation had available previously. She says using data to help drive actions is crucial, but it’s not the whole picture. “You can go on your own judgements, of course, and people have very good judgement, particularly those who have been in the insurance industry for a long time. “But customer data gives you that bigpicture view on what is going on, particularly as things change and emerge. “Data is just a critical input to our decision-making and understanding, but it is not the whole story. Talking to customers and looking out at the world and seeing what the other developments are, those things work together with our own data to help us build our roadmap.” As the market hardens, focusing on customers becomes even more important. insuranceNEWS
December 2017/January 2018
And that is where the company’s history and culture, and experience of its individuals, can be vital. “The nature of insurance is interesting, because some things only happen on very long cycles, and what’s great is you’ve got a lot of experience here and people who’ve seen some things that only come up every 10 or 15 years. “You need to think about the new, and the customer experience and the evolution of your business and everything like that, but keeping some corporate memory and understanding how things work is also a really valuable asset we have that can’t be underestimated. “When customers choose on price alone, that’s when you can see there are probably some gaps in their cover. “What is important is value, and also trust, so that again is why often the broker relationship is critical, because that helps a customer understand what their cover is – they get genuine advice.” Ms Pidcock believes the next few years will see complex change within the industry. But her target for this period is refreshingly simple. “What I’d like to find in five years’ time is that if you asked people in the street about their risks and their worries, that they feel they have a company like QBE, or an industry even, that they feel they can get insurance from, and be confident that they know they are protected against risks. “I’d love for people who have had real experiences with us to say, ‘We were treated with compassion and fairness and we actually thought that was a great outcome.’ “Obviously, when you’re in a situation with a loss it’s very hard to feel great about it, but certainly if you feel like you’ve been helped and listened to and treated fairly, all those things contribute overall to the best possible outcome. I’d love people to say * that’s been their experience.”
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 45
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 46
The need for less speed
A biennial report on heavy truck accidents shows speed and driver tiredness remain the major concerns By Andy Swales On a roll: inappropriate speed is the leading cause of heavy truck crashes
SPEEDING CONTINUES TO TAKE A TOLL ON HEAVY TRUCKS, according to the latest Major Accident Investigation Report from the National Truck Accident Research Centre, which examines crashes from two years previously. “Inappropriate speed” accounted for 21.4% of large accident claims registered with market-leading insurer – and the research centre’s founder – National Transport Insurance (NTI) in 2015. Of these, more than 68% ended with trucks rolling over. While this marks an improvement on the previous biennial report – in 2013 speed inappropriate for the prevailing conditions caused 27% of major crashes – it continues a trend dating back more than 10 years: speed dominates over other crash causes such as fatigue, fire, mechanical issues and theft. “This is both a training and management issue, with Monday consistently being the worst day [for crashes] across most of the centre’s studies,” the report says. “This result follows the trend of major losses occurring early in the week. Employed drivers working in fleet operations are over-represented in this accident type, with 59.2% of speed-related losses.” Fatigue is the next most common crash cause, accounting for 12.2% – a figure that has held relatively steady in recent reports following marked improvements since 2005 and 2007. “Fatigue still remains an issue of concern,” the report says. The previous report had noted that since the September 2008 introduc46
tion of new legislation for heavy vehicle driving hours, and consequent fatigue reform, the insurer had seen considerable improvement in losses related to operator fatigue. “With this current finding of 12.2% we have seen neither an improvement nor deterioration in the fatigue result since the last report. “The question is: with this result and similar findings since 2009, are we prepared to tolerate this outcome as the new acceptable standard for fatigue-related major accidents?” The report notes a shift in the location of incidents caused by fatigue. Western Australia “shows encouraging signs of improvement”, accounting for only 6.75% of all fatigue crashes, down from 30% in the 2015 report based on 2013 data. In the latest report, 82% of such crashes occurred in the eastern states. “The rate of fatigue incidents in Queensland and Victoria has risen noticeably, while the New South Wales result continues to worsen from 2009, when a vast improvement was noted. The Newell and Pacific highways recorded the greater majority of NSW losses.” NTI says 43.6% of all large losses reported between midnight and 6am related to transporters of general freight. “Given the regulatory focus that has been placed on driving hours compliance and fatigue management since the introduction of driver fatigue reform in 2008, this result is concerning.” December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 47
Accident Cause - Investigation Pending 0.35
2005 2007 2009 2011 2013 2015
0.30 0.25 0.20 0.15 0.10 0.05 0
At fault – driver error
Not at fault
“There has been some research into the causes of fatigue at a personal level, such as sleep apnoea, which we believe can be taken to the next level.” It says efforts to tackle driver tiredness should be maintained, and it calls on governments “to invest in heavy vehicle rest areas and further resources to contribute to fatigue management, driver training and a better understanding of the science of sleep”. NTI Chief Underwriting Officer Chris Hogarty wants to see more research on tiredness. “There is a desire to understand the effectiveness of current fatigue management programs and the adherence to these standards before considering the creation of more reform,” he tells Insurance News. “The whole of industry needs to be involved in this, including regulators, operators and industry bodies. There has been some research into the causes of fatigue at a personal level, such as sleep apnoea, which we believe can be taken to the next level.” The report covers major truck crashes in Australia where NTI was the underwriter and the loss exceeded $50,000. It features 606 incidents reported to NTI in 2015, accounting for $85.4 million in settlements and about 7.5% of all claims by number. “Since the previous report released in 2015, the number of large losses recorded has increased by 10.3%, while the NTI portfolio of units insured has increased through organic growth and acquisition,” the report says. “The incident rate remained constant, with 3.2 major accidents per 1000 units insured. This indicated there was no worsening in major collisions over the past two years. However, the average cost per major incident claim was $140,828, which was a 7.8% cost increase.” insuranceNEWS
The report notes that in 2015 “industry and government agencies continued the evolution of microeconomic reform seeking further uniformity and consistency with road transport law and road regulation. “There was a continuing focus on heavy vehicle accreditation, vehicle roadworthiness, mass, dimensions and loading, fatigue management and consistent on-road enforcement. “As the road freight task continues to expand, opportunities emerge for safer, longer vehicles, with higher productivity and less emissions, as well as a continued emphasis on safer workplaces.” Looking ahead, the report notes that, given national and global economic trends, “we can expect a growth in demand for [road freight] services, although that may not directly translate to profit growth within the transport sector”. “The growth in the task will demand more proficient utilisation of goods-carrying vehicles, and an expansion of the improved efficiencies that will impact on the movement of domestic freight. In a nutshell, more freight on fewer, more efficient and safer vehicles.” Report author Owen Driscoll, previously NTI’s national manager of industry and government relations, announced his retirement soon after this year’s report was published. He has hailed establishing the NTARC in 2002 as one of his key achievements across 43 years with the business. “Ultimately, we realised you can’t fix a problem if you don’t * know where it starts,” he says.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 48
Leading the way: Insurtech Australia’s Brenton Charnley
Flying the flag New industry body Insurtech Australia aims to raise the profile of innovators and make the market a world leader By Wendy Pugh
INSURTECH AUSTRALIA IS HIGHLIGHTING the role it can play in enabling, rather than disrupting, as the recently established group promotes innovation and the potential to build the sector’s national and international profile. “In the early stages of fintech we saw the word disruption used a lot and there was a fear from the incumbent banks that they were going to be disintermediated out of their own customer network,” Insurtech Australia co-founder Brenton Charnley tells Insurance News. “Most of the insurtechs, at least 60%, are enabling the insurer, so they are actually pro48
viding technology solutions to provide a better customer experience and build efficiencies.” The Australian insurtech scene is still at an early stage compared with fintech, which captured the initial wave of investment here and overseas. But Mr Charnley says the momentum is shifting and the time is right for the sector to have a more visible, separate identity. Insurtech Australia was launched as a standalone division of Fintech Australia in Sydney in October to provide that focus. “Insurtech is a rapidly growing sector worldwide and Australia has the ideas and skills to compete,” he says. “We want to encourage people to work together and to create an ecosystem of supportive partners and networks to help insurtech thrive and grow.” On a global basis, insurtech start-ups attracted about $US1.69 billion in 2016, with only 1% of the investment coming to Australia, according to CB Insights data quoted by the group. Mr Charnley says banking and payment systems provided “easier” targets for early innovation investments, compared with insurance complexities. Diverging approaches towards risk by insurance and insuranceNEWS
December 2017/January 2018
start-up communities also meant they were not always obvious partners. Insurance will benefit from work done in the broader fintech realm, but the sector also has its own agenda in areas such as underwriting and claims-handling systems, products and distribution. “A number of insurers haven’t engaged with the fintech agenda because it hasn’t been specific to their needs as insurers – they are very different businesses,” Mr Charnley says. More recently the flow of venture capital into fintech has cooled a little as that sector becomes more mature, and insurance innovation is becoming an increasing investment focus. Traditional insurance players have also made innovation more of a priority as customers, now used to dealing with Amazon, Apple and eBay, expect easily accessible digital services, and a range of processes and products attract attention from new players. Insurtech Australia, which operates as a non-profit organisation with capital provided by partners, has gathered a highprofile group of early participants from a broad range of areas. Suncorp, QBE, IAG,
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 49
“We want to make Australia one of the world’s leading markets for insurance innovation.”
Munich Re, AUB Group, EY and Macquarie Bank are among the partners. Other organisations include RAC Insurance, Oliver Wyman, TAS, the Australian and New Zealand Institute of Insurance and Finance, Tank Stream Labs, York Butter Factory, The Fold Legal and Stone & Chalk. Founding insurtech members include Cover Genius, Swarm, Flamingo, Audeamus Risk, Friendsurance, Evari, Inside Mind and Insured By Us, and the launch has spurred further enquiries. Mr Charnley says the insurance industry is conducive to partnerships, particularly given regulatory challenges and financial services licensing requirements. It also makes sense for corporates with legacy systems to look outside their own operations for fresh ideas, with Insurtech Australia well placed to facilitate opportunities. Major Australian insurers are already embracing tech partnerships and looking more broadly to build their capabilities. In October QBE chose RiskGenius to receive its first investment from a $US50 million insurtech fund. IAG has opened Firemark Labs innovation hubs in Australia and Singapore, and
told its annual general meeting it is supporting five start-ups in Sydney. Suncorp has teamed with technology developer Trov to offer on-demand insurance for individual items and is working with Spanish innovator Traity. Mr Charnley says the insurtech community has a different profile to the stereotypical T-shirts-and-sneakers scene associated with start-ups. But it is also more chinos and blazers than suits and ties, and draws on existing industry expertise. “Most insurtechs are actually run by exinsurance people. The average age is well over 30-35.” Fintech Australia Chief Executive Danielle Szetho describes the standalone group as a logical next step for an industry that has “massive potential” for new ideas and technologies. “By creating a clear focus point for insurtech policy and bringing together people from the start-up and corporate sectors to collaborate, Insurtech Australia will play a vital role in creating the insurance industry of tomorrow,” she says. Insurtech Australia has approached the Australian Securities and Investments insuranceNEWS
December 2017/January 2018
Commission, seeking “regulatory sandbox” improvements, as part of its policy and advocacy role. Currently, the sandbox offers a licensing exemption to facilitate fintech testing for eligible products, including general insurance for personal property and home contents up to $50,000. Mr Charnley says opportunities offered under the arrangement should be broadened to allow greater insurance involvement. “We have already put forward a submission through our working group and we have requested some changes that would help our members drive more innovation in the sector,” he says. Insurtech Australia’s agenda will be guided by the views of member and partner advisory and working groups. The group expects to build participation, and plans to develop an “ecosystem map” to gain a broader picture of the sector and its potential. “Launching was all about us putting up a flag and saying: look, we are here,” Mr Charnley says. “We want to make Australia one of the world’s leading markets for * insurance innovation.” 49
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 50
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 51
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 52
Crossing the privacy line A court decision turns up some difficult ethical issues around insurance fraud investigations and questions the reliability of social media posts By Kate Hanley
PEOPLE SEEM INCLINED THESE days to post anything online, from what they’re eating to what they are thinking, to pictures of themselves bungyjumping in the nude. Privacy, it seems, is no longer an issue with people. Such openness has become a weapon for insurers in their ongoing battle against fraudulent claims. For claims investigators, Facebook is a valuable source of information about – well, practically anyone. QBE North America recently compiled a report extolling social media as a vital tool. And why not? The estimated annual cost of global insurance fraud is estimated at $US80 billion. In Australia alone it’s estimated at $2 billion a year. The report points out that nearly two-thirds of adults use social media, and their posts over a week run into the tens of billions. “All these posts leave a trail, sometimes revealing what deceitful insurance claimants have said and done, where, and with whom – and so much of it is voluntarily shared in the public, just sitting there on the web.” But how far should e-surveillance be allowed to go? How reliable is it? On social media, what you see is not always what you get. The internet is full of would-be romeos posting pictures of themselves from 20 years before (or even of someone more handsome) on dating sites; women spend hours getting the lighting right for that seductively casual selfie; and is the Ferrari in the picture really owned by that pimply-faced 22-year-old? Social media may be public, but people present themselves how they want to be seen, not always as they are. No matter how unhappy you are, you want that picture being posted 52
on Facebook to show you smiling and happy, and in a happy environment. Misery isn’t cool online. If a person claiming workers’ compensation for a bad back is silly enough to be pictured pouring concrete, he deserves everything the law can hurl at him. But, particularly in the case of work-related mental health claims, there’s a subtlety involved that needs to be understood and factored into any investigation centred around social media. In October the New South Wales Supreme Court made a finding that highlighted just how badly astray an investigation can go when social media is relied on as a major source of evidence. The court ordered Metlife to pay former NSW policewoman Bernadette Hellessey at least $788,753, plus interest, after finding the life insurer had ignored the opinion of her treating psychiatrist and placed too much weight on her Facebook activity to deny her claim for a total and permanent disability benefit. Ms Hellessey retired from the police force in 2010 with posttraumatic stress disorder and a major depressive disorder as a result of events that occurred in the course of her duties. The court heard that during her nine-year police career Ms Hellessey experienced the sight of dead and abused children, dismembered car crash victims, violent crime scenes and other traumatic incidents. These had led to the diagnosis of post-traumatic stress syndrome. Metlife rejected her claim, specifically on the grounds that her Facebook posts following her retirement were evidence that she didn’t have a social phobia as claimed. insuranceNEWS
Instead, the insurer preferred the opinions of its own experts that she “may, with time, be able to work” to that of her own treating psychiatrist. The Facebook evidence was not, taken in everyday context, damning. Ms Hellessey was identified as having 667 Facebook “friends”. She posted 28 pages of status updates over a seven-month period that indicated she was participating in local pony clubs and regional horse shows. NSW Supreme Court Justice Stephen Robb agreed that some of the posts cited by Metlife, if taken at
“All these posts leave a trail, sometimes revealing what deceitful insurance claimants have said and done, where, and with whom.” face value and in isolation, did suggest she “had a wonderful time at various horse shows, and that her participation was something in the nature of a party”. But the court heard that in reality Ms Hellessey had few friends and that the horse-related activities and expert medical opinion suggested her Facebook posts were therapeutic. Nothing she had done excluded a diagnosis of posttraumatic stress disorder.
December 2017/January 2018
The judge found for Ms Hellessey, saying the Facebook posts did not reflect her overall situation. The Hellessey-Metlife case raises some serious questions about the accuracy of information that can be obtained by examining someone’s Facebook profile and posts. Senior Lecturer at the Faculty of Information Technology at Monash University Yen Cheung is currently leading a study into the issue of mental well-being and the use of social media as an indicator. “What people present on social media may not be a true reflection of their mental state,” she told Insurance News. “There isn't any work as far as we know regarding how to ascertain someone’s mental well-being [via social media]. “In fact, some research says people go on social media because they need support.” Lawyer Andrew Sharpe says Justice Robb’s decision is “really just the court saying what we all know already – you have to take with a grain of salt what you read on social media. A person’s life is rarely as perfect as the one they choose to depict on Facebook.” Mr Sharpe, a partner at leading law firm McCabes, says the Metlife case has reaffirmed the admissibility and potential value of information obtained by insurers from social media investigations. “However, that clearly comes with a firm caution that the weight to be attached to such evidence is subject to some question.” Does Mr Sharpe think the use of social media to investigate claimants poses any ethical dilemmas with regards to invasion of privacy? Not at all. He says the whole concept of “privacy” is under threat as soon as a person chooses to post on social insuranceNEWS
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:22 pm Page 54
media forums such as Facebook, Instagram and Twitter. “By definition the person is making a deliberate choice to put their information into a public forum. If the person does not protect that information by adopting privacy settings on their account then the information is no longer private.” He points out even adopting privacy settings doesn’t guarantee that information will not end up in a public forum. If a friend likes, comments or shares your post the information can suddenly find a very much wider audience. And that’s where the questions about investigators’ methods begin. For example, Ms Hellessey condemned Metlife for disguising its identity to gain access to family and friends’ profiles. This method is commonly known as “catfishing”. Mr Sharpe says it’s common practice for investigators to infiltrate the target’s social media community by “friending” the target or others close to the target. “Once they’ve been accepted as a friend by a few of the target’s friends, the target is much more likely to accept a direct friend request.” Shane Johnson, the General Manager of insurance fraud investigation firm Triumph Australia, says investigators use social media “a lot” to gather information on suspects in insurance investigations. “You’d be surprised at the number of people who say they can’t work because of an injury but they are posting themselves out and about being active, or they’re being ‘tagged’ by a friend,” he told Insurance News. Investigators also get a break from Facebook’s regular changes to settings, providing a window of 54
opportunity to more easily access posts that aren’t up to date with the latest privacy settings. They use social media in all sorts of claims, including investigations into people claiming the sort of psychological impairment Bernadette Hellessey claimed. Mr Johnson says it is about using social media to ascertain “quantifiable facts”. For example, a claimant might say they are unable to drive or cannot go outside, yet their Facebook and Instagram entries tell another story. “We look for any inconsistencies for what they’re telling the insurer or medical practitioner. We just report the facts.” As claims fraud is a major problem that is ultimately paid by honest policyholders, investigators and insurers have strong grounds to argue that catching out fraudulent claimants justifies such methods as catfishing. But for many people who routinely use Facebook such intrusive and deceptive practices must stir a feeling of queasiness. Mr Sharpe agrees “there are definitely ethical concerns about how these investigations can be carried out by some practitioners – just as there are ethical concerns about a physical investigator invading private spaces”. He says such concerns should be addressed through amendments to the respective general insurance and life insurance codes of practice. “The life insurance code currently has some excellent provisions placing restrictions on how insurers undertake physical surveillance,” he told Insurance News. “There’s a good case to be made for similar protections to be introduced in respect of ‘virtual surveillance’ on social media.” insuranceNEWS
Financial Ombudsman Service General Manager Code Compliance and Monitoring Sally Davis says the current general insurance and life insurance codes don’t specifically reference the use of social media. However, they do refer to an obligation to comply with the Privacy Act and require insurers to “be honest, fair, respectful and transparent”, and she is confident that “both codes cover the specific activity in question”. Others are not so confident, however.
“There are definitely ethical concerns about how these investigations can be carried out by some practitioners.” Principal Solicitor at the Financial Rights Legal Centre Alexandra Kelly says it’s “quite unethical for investigators to catfish people” and claims insurers “are not very transparent about how they go about it”. “Private investigators shouldn’t be able to use subterfuge, but it isn’t regulated or is in no law.” Code compliance also becomes trickier given most fraud investigations are outsourced to service suppliers, who may not be subject to
December 2017/January 2018
industry people prioritising
We believe injured workers and employers deserve insurance that treats them with respect, empathy and fairness. Thatâ€™s why weâ€™re introducing a new claims service model from January 1, 2018 that will put better health and business outcomes for our customers at its core. To learn more visit icare.nsw.gov.au/workers-insurance-claims
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 56
The upside of social media WHILE THE HELLESSEy CASE has thrown a negative light on the use of social media in fraud investigations, QBE North America’s report has also pointed to the ways social media could be used for more dynamic underwriting. “Eventually, social media may help transform underwriting into a dynamic, real-time process that adjusts to a customer’s needs as they change – even to a point of creating personalised coverage and pricing.” Lawyer Andrew Sharpe says using social media analytics to improve the efficiencies of the insurance transaction is “totally consistent with its theoretical underpinnings”. “Allowing the insurer to cut through the imperfect disclosure regime and obtain information directly reduces transaction costs and avoids a lot of the issues which could otherwise lead to coverage disputes,” Mr Sharpe, a partner at McCabes says. The report says online posts “can reveal whether a personal auto insurance applicant sidelines as a ridesharing driver, a carpenter is suddenly taking on a dangerous roofing job, or a business has improperly installed equipment”. Mr Sharpe says that viewed through the prism of underwriting efficiency, using social media to be able to instantly ascertain and measure risk “is just seamlessly sharing risk data to provide a more tailored, suitable insurance solution”. New players in the insurtech field are already coming up with innovative ways of streamlining this process through such advances as data-mining, data-sharing and telematics, he says.
the provisions of the industry codes. But it is an issue the general insurance industry is well aware of. In May the General Insurance Code Governance Committee’s report on claims investigation and outsourced services made 30 recommendations to insurers. They included maintaining a register of external investigators’ licences and compliance with privacy obligations, and the need for proactive monitoring of service suppliers. So how do insurers see the issue? Insurance Council of Australia spokesman Campbell Fuller says each insurer has its own guidelines on how investigators may legally use social media. He says fraudulent and exaggerated claims cost the Australian general insurance industry more than $2 billion a year. “Social media is one of many tools that fraud investigators may use to examine the validity of a claim,” he says. “It tends to be used when a claim appears unusual or when the insurer already has a reason to suspect the claim is exaggerated or fraudulent.” IAG, for example, says it doesn’t engage in unethical behaviour when investigating fraud. “The use of social media is only one avenue we consider during an investigation and any information found on social media would need to be validated by other evidence,” a spokesman told Insurance News. “We have very strict ethical investigation practices that we and any investigation contractors are required to abide by. We also do not support, or participate in, any investigation activity that compromises our ethics policies.” QBE Australia says it uses surveillance activity as a claims insuranceNEWS
management tool “within the strict professional guidelines” of the regulators and any relevant legislation. “QBE does not tolerate the use of social media monitoring of claimants for any other purpose, and this is explicitly stated in our policies and procedures,” a spokesman said. “Surveillance may involve desktop review, including social media, but only where information is publicly available and pertinent to the management of a claim.”
“Social media is one of many tools that fraud investigators may use to examine the validity of a claim.” She says surveillance alone is not sufficient to make a decision on a claim “and is only used to validate other evidence or inconsistent information that has been received”. Social media will continue to develop, and around it the concept of “privacy” will be stretched and compromised. And there’s always that massive cost of fraud to be considered, too. Despite insurers’ insistence that claims will always be investigated ethically and that social media is only one part of the puzzle, the issues of privacy and ethics will continue to be a niggling problem for the industry. *
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 57
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 58
Standing on its own
Exposure to the intense North American hurricane season highlights QBEâ€™s unique position as the only Australian global insurer By Wendy Pugh WHEN QBE ANNOUNCED ITS EARNINGS would take a hit from US hurricanes and earthquakes in Mexico, it prompted head-shaking over the risks faced by Australian companies that broaden their horizons overseas. Crown Resorts director James Packer reflected recently that various Australian companies have headed offshore only to return with their tails between their legs. The casino group, which has sold out of gambling destination Macau, notes it at least made billions of dollars from the exercise. For IAG and Suncorp, the Australianowned insurers which dominate the local market, profitability begins and ends at home. Suncorp has a negligible interest in expanding into foreign markets, but IAG has some significant investments in several Asian markets, including India. However, the sensitivity of local investors to any substantial move into key foreign markets was sharply pointed out in October 2015 when IAG research to build a national footprint in the Chinese market was brought to a halt. 58
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 59
QBE, the third-largest player in the Australian market, belongs in a different category entirely. Exposure to offshore risks is part of its reason for being. This company is not a recent adventurer in foreign markets. It has been pursuing overseas growth since its beginnings. QBE’s approach makes it unique among Australian-listed insurers, and sometimes that means it assumes a high profile when overseas disasters strike. Its more homely domestic rivals, by contrast, are sheltered from the storm. What is sometimes buried in the media and analyst hyperbole is the fact that QBE is a respected player in the global insurance industry and it knows what it’s doing. For example, the recent devastating Atlantic hurricanes that hit the southern United States after many benign seasons led to financial commentators such as Terry McCrann of News Corp questioning why QBE was operating in such a disasterprone region. S&P Global Ratings director Craig Bennett says QBE – which had its A+ financial strength rating reaffirmed after the hurricanes – is a “bit different” to the other Australian-based insurers. It competes on the international stage with the bigger multiline players and has also long been operating in North America. “It has been global and in these markets for many years,” he says. “In some places it is more than 100 years, so it is not a new entrant by any stretch. With QBE, we feel it does have a good sense of the risks in that [US] geographic segment and does appropriately reinsure for those risks.”
QBE’s origins date back to 1886, when Scotsmen James Burns and Robert Philp established The North Queensland Insurance Company (QI). By 1890 it had more than 36 agencies for destinations including London, Hong Kong, Singapore, New Zealand and the Pacific Islands. The insurer opened offices on Fenchurch Street, London, in 1904 and set up shop in New York during the 1920s. Mr Burns also founded the Bankers’ and Traders’ Insurance Company in the 1920s, with QI the largest shareholder. The groups merged in 1973 and became QBE Insurance. The last letter of the new name reflected the purchase of Equitable Probate and General Insurance Company. By late 1998 QBE was operating in 26 countries with more than 3150 staff in 155 offices, and chief executive Frank O’Halloran had put the overseas growth strategy into overdrive. During 14 years at the helm, Mr O’Halloran oversaw about 140 acquisitions, ultimately creating a business that spanned the globe. But it had also become unwieldy and overly complex. By the 2012 financial results, Mr O’Halloran’s successor, John Neal, had put pursuit of acquisitions on hold and was trying to turn around a lagging performance. The company reported an amortisation charge of $US407 million, largely related to goodwill writedowns. In December 2013 it warned of a full-year loss due to further writedowns on goodwill and tangibles, totalling about $US930 million. That revelation, after analysts had forecast a profit, helped give the company a reputation for unwelcome surprise announcements. insuranceNEWS
December 2017/January 2018
Other surprises since then have included a 2014 warning on its Argentina workers’ compensation claims and a blowout this year in the emerging markets combined operating ratio. QBE isn’t slow to address developments that upset its financial predictions and unsettle – to put it mildly – analysts and investors. But it operates in a risk environment that’s sometimes difficult for a layman to understand. What hasn’t changed since QBE’s beginnings is the commitment to an international strategy rather than one focused solely on the local market. This year – one of the worst on record for global insurance industry catastrophe losses – does not alter that focus, and it won't change when Australian and New Zealand Chief Executive Pat Regan takes over the top job from Mr Neal in January. “For a global insurer there’s no reason to withdraw from a geographic region simply because it’s had a tough year,” Mr Regan tells Insurance News. “The most important thing for us is to be paid a sufficient premium in the good years to cover the bad years. “Tokyo is a good example here. The city is naturally prone to a high frequency of earthquakes, but that does not necessarily make it an unprofitable insurance market, due to a combination of price and the fact the consumer takes a relatively large deductible compared to, say, the equivalent home or commercial policy in Sydney.” In the most recent half-year result, North America provided 35% of QBE’s adjusted group gross written premium of $US8.04 billion. 59
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 60
“For a global insurer there’s no reason to withdraw from a geographic region simply because it’s had a tough year.” – Pat Regan
Europe provided about 30%, Australia and New Zealand 25% and emerging markets the remainder. The group also has its in-house Equator Re reinsurance arm. Clime Asset Management Insurance Analyst David Walker says QBE probably lacks global critical mass and has made some missteps, but the group is continuing with its international approach and the incoming chief executive is likely to focus on improving management and performance. “It thinks it has advantages in being global: better access to insights, lower cost of capital, better access to Lloyd’s, the ability to have a captive reinsurer,” he tells Insurance News. “There is no plan to pull back.” He says the emerging markets issue this year was a bad blow, while it remains to be seen how the company performs relative to the wider industry on North American catastrophes. The impact of international catastrophes, surprise announcements and shorter-term perspectives have driven volatility in the insurer’s share price. QBE was trading above $13 a share on the Australian Securities Exchange before the emerging markets warning caused a 10% one-day price plunge in June. The October announcement of a $US600 million pre-tax impact from hurricanes and quakes caused a 3.5% drop, with the shares recovering in following days. Wilson Asset Management Portfolio Manager Matthew Haupt says that QBE ideally should focus on developed markets such as Australia, the US and Europe, but agrees its challenges mainly relate to the 60
insurance cycle rather than catastrophes such as the hurricane losses. “People see the headline numbers and get really worried, but for us they are generally good buying opportunities,” he tells Insurance News. “I don’t think its exposures are the issue.” Overseas, some insurers issued hurricane impact advice for the third quarter only, leaving the potential for further earnings result warnings for the final three months. QBE delivered its bad news for the period through to the end of the year. Munich Re said in late October it anticipated €2.7 billion in losses after retrocession from hurricanes Harvey, Irma and Maria, while Swiss Re, Chubb, Zurich, WR Berkley, Talanx and XL Group are among companies to report impacts. Lloyd’s slightly reduced its estimate for claims from Harvey and Irma, while warning the final impact remained uncertain. “We must remember the Lloyd’s market is built for moments like this, with governments, businesses and communities all relying on us to help them rebuild,” Performance Management Director Jon Hancock said. Damage scenarios from US hurricanes are generally well understood across the industry, while exposure from the affected region represents only a small part of the QBE North American portfolio, according to analysts. “The insurance and reinsurance market in particular recognises Florida as an area that has higher risk and, as a result, if you want to participate in those regions you do so for a different price and then you undertake different risk management deciinsuranceNEWS
December 2017/January 2018
sions on the back of that risk,” S&P’s Mr Bennett says. QBE’s financial strength rating is supported by solid underwriting and risk management capabilities, high-quality capital and its reinsurance. While domesticfocused insurers are diversified by product lines, QBE also has risk spread across regions. “When you look at different geographies you bring a different layer of diversification into that, so it is a different business model,” Mr Bennett says. This year’s global catastrophe losses also include claims from wildfires in California and Cyclone Debbie, but the string of disasters is likely to lead to some longer-term benefits for companies such as QBE, as the insurance cycle turns. The high level of claims may soak up some of the excess capital that has weighed on global markets, and underwriting conditions are expected to improve in some areas. “What is likely to happen now is that in certain lines – and it is not clear which ones yet – premium rates will pivot higher,” Mr Walker says. QBE says it is well placed to withstand any adverse impact from a rise in reinsurance rates, with much of its cover already bought for next year, and it remains positive about its international approach. Mr Regan says it is “one of only a handful of truly global insurers, with operations in each of the world’s major insurance markets”. “This is a tremendous advantage in our ability to service multinational clients, as well as providing the benefits of diversification * for our investors.”
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 61
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 62
LET’S TALK ABOUT VALUE FOR MONEY… Some insurance industry magazines charge less for advertising than insuranceNEWS. That’s fair enough if you believe, as we do, that cost should be based on value. Take a look at these two graphs from a recent insuranceNEWS reader survey:* What print publications do you receive to obtain information about insurance issues?
Which one do you value more in terms of the content of each of these print publications?
Other Other Mainstream newspapers Mainstream newspapers
insuranceNEWS (the magazine)
Insurance Business NIBA’s Insurance Adviser
insuranceNEWS (the magazine)
Insurance Business NIBA’s Insurance Adviser
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 63
Not only do far more insurance professionals read insuranceNEWS than any other industry publication – they also place far greater value on its content. If people are reading a magazine’s articles rather than idly flipping through the pages, your advertisement stands a much greater chance of being seen and acted on. So next time a magazine offers your company an amazingly low ad rate, ask yourself why. You’ll find it’s because they offer little value to the readers you’re trying to reach. And then consider this: insuranceNEWS is the most cost-effective print publication for advertisers to reach the largest possible industry audience. Nothing else comes close.
Insight. Trust. Value.
*The above information was drawn from a reader survey conducted by insuranceNEWS in October and November 2016, with 2534 respondents. insuranceNEWS (the magazine) has a bimonthly print run of nearly 9000, and is circulated free across the industry in Australia. It is seen by more general insurance intermediaries in Australia than any other insurance news publication.
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 64
Running the numbers Finity’s Colin Brigstock on actuaries breaking into general insurance, lessons from Christchurch, and why Big Data is nothing new By John Deex
FINITY CONSULTING CO-FOUNDER AND former chairman Colin Brigstock is retiring after a long and distinguished career. It’s a career that has helped forge personal lines pricing as we know it, and bring Big Data to the fore long before the phrase was even coined. He says at last he’ll have a break from “having to reinvent myself every 18 months” to keep pace with a rapidly changing industry. Some 42 years ago, when he was completing his studies, actuaries were all about life insurance and had very little to do with general insurance. “When I joined NRMA in January 1976 I was their first actuarially trained employee, and one of only a handful of actuaries in Australia who were working in general insurance at the time,” he tells Insurance News. Shortly after starting with NRMA Insurance, Mr Brigstock was selected as one of a small group brought together by the Institute of Actuaries to develop a strategy to expand the role of actuaries in general insurance. “This was achieved fairly successfully over the years,” he says. “We have a legislated role in general insurance now, but back then it was far from that. [Pricing the risk] was done in a very unsophisticated way. “General insurance hadn’t been seen as a natural place for actuaries to play, but that has certainly changed over the past 40 years.” Mr Brigstock believes NRMA Insurance was ahead of its time, and he was fortunate to start at such a forward-thinking organisation. “John Lamble and Des Liddy had come together in that organisation in the late 1960s and they had done their research on best practice across the world, and seen that an investment in data and in sound pricing would just be absolutely fundamental to the business. “When I walked into the place in ’76 there was already a pretty good infrastructure for me to work with in terms of data and access to computer facilities.” Mr Brigstock says when he joined NRMA Insurance it covered about one-third of New 64
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 65
“Insurance has always been a Big Data game. Big Data is about knowing your customers and knowing them more intimately than your competitors.”
South Wales motor vehicles, and when he left 15 years later it had almost half. “NRMA made a huge investment in data, and relying on what that data was telling them to price the business appropriately, and we were just doing that better than anybody else in the marketplace. “It was a key driver of NRMA’s growth. We had consistently good growth and very good underwriting profits, largely through superior risk selection.” Mr Brigstock even has the honour of having an actuarial method named after him. He explains that he “wrote a very simple paper” about NRMA Insurance’s modelling and pricing approach. “A year or so after I wrote it, a group of general insurance actuaries wrote a textbook for general insurance, and the technique I explained in this paper got written up as the Brigstock Method in that textbook, and so I have had that attached to me ever since.” Towards the end of his time with NRMA Insurance, Mr Brigstock was involved in the push to get the NSW Government to privatise the compulsory third party motor insurance system. “That was largely an NRMA-driven initiative and there was a small team of us within NRMA that designed what that would all look like and put together all the arguments that eventually the Government accepted. As a result, in 1989, the NSW scheme went into private underwriting, and it has been private ever since.” In 1990 Mr Brigstock joined Trowbridge Consulting because he “wanted to try his hand at the consulting game, rather than internal management in a big organisation”. In 2000 Trowbridge merged with Deloitte, to become Deloitte’s local actuarial arm, and about three years later Mr Brigstock became the managing partner of that business. “However, it became very difficult for an actuarial business like ours to reside inside a big auditing firm, so in 2005 the general insurance actuarial part of the old Trowbridge
exited the relationship we had with Deloitte, and that’s when Finity was created. “I was the managing director for the first couple of years, then I stepped back from that role to focus on client relationships and I have been chairman of the firm for the past 10 years. Really, I’ve only had two jobs in my whole career, because Trowbridge, Deloitte and Finity has largely been working with the same group of people.” Mr Brigstock says one of the biggest actuarial challenges of his career has been understanding and assessing liabilities arising from the Christchurch earthquakes in 2010/11. He was the actuarial adviser to AMI Insurance, which insured one-third of the houses in Christchurch and which became insolvent after the February 2011 quake. “I have been working with the governmentowned entity that took over those liabilities ever since,” he says. “It still amazes me that, all these years later, we have still got quite a way to go before all of the claims will be settled, and it has been a very challenging and tricky piece of work.” Mr Brigstock says a couple of crucial lessons were learned from the quakes. Firstly, they showed up limitations in models used to assess earthquake risk. “Christchurch was always seen as somewhere that could suffer earthquake risk, but from a major earthquake happening in the Southern Alps and reverberating down. “What wasn’t appreciated was that there was actually a fault line under Christchurch. Most of the insurers ended up exceeding their reinsurance covers in that market. “My client had bought what it thought was a very adequate level of cover, and well in advance of what any of the prudential standards suggested, but the event was even much larger than that.” Secondly, insurance product design was not good. “More than 90% of the policies over there were full-replacement policies without insuranceNEWS
December 2017/January 2018
a sum-insured limit. That meant that whatever it was going to cost to rebuild those houses, the insurer was up for it. That has now changed as a result of the earthquakes.” Looking ahead, Mr Brigstock feels insurtech and Big Data will have an impact on the industry, but they may not be as disruptive as some would lead you to believe. And Big Data, while a recent term, is not necessarily a new concept. “I’ve been dealing with Big Data my whole working life. It just happens to be that I can deal with a lot more of it now because of the technology environment available to process data so quickly, and the techniques that can find the patterns in the data. Previously, it was a much more laborious process. “Insurance has always been a Big Data game. Big Data is about knowing your customers and knowing them more intimately than your competitors. What risk they represent, what their insurance needs are and what their behaviours might be. That’s where all the value is in Big Data. It’s not the data itself, it’s how you can actually harness that data to understand a lot more about your customers and potential customers.” Mr Brigstock accepts that technology has brought, and will continue to bring, huge changes. “The overall objective is the same, but the techniques, the data and the technology that’s available to us these days, just makes it quicker to get to the point where you can actually start making decisions about what you might do about the pricing. “Going back to when I first started in the industry, when we were going to do a pricing review, the amount of computer processing time that was needed meant we could only ever do the job twice a year, at Easter and Christmas time. “We needed about 72 hours of constant computer processing time just to churn through all the data. Today, I can do that on my laptop, sitting at my desk in 10 minutes. It just shows what technology has done for 65
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 66
the ability of the actuary to get to the nub of what the underlying experience is… A lot more focus now goes on designing what your response is going to be.” Mr Brigstock does not shy away from the fact increasing amounts of data and analysis will leave some high-risk insureds exposed to potentially unaffordable premiums. Address-level household pricing is already common, he says, and it is a natural and financially prudent outcome that insurers charge premiums that reflect the “true” level of risk. “On the models we have built here, we put a risk rating for every peril at address level and the price falls out of that. One of the things this leads to is a more explicit understanding of the true cost associated with living in areas with very high peril exposures – areas that also tend to be the more attractive lifestyle choices.” Mr Brigstock sees insurtech as having a gradual, not revolutionary, impact on the industry. “The bits and pieces I see emerging are aimed at taking individual pieces of the customer experience and finding ways to use technology to enhance those. “I don’t necessarily see that being overly disruptive in that one day the industry looks like this, and the next day is it completely different. I can see a lot of incremental changes coming in different aspects of how insurers interact with their customers. “Most insurers have got big investments in older-world processing systems, and the challenge is, how do you actually integrate these more flexible dynamic customer interfaces into some of these older systems? “A number of insurers are working on that, but it appears to be quite a struggle.” Mr Brigstock focused on motor insurance for a large part of his career, and is fascinated by the disruptive potential of incar technology. He describes autonomous vehicles as one of the big “elephants in the room”. 66
“I suspect within a short period of time, within the next year or two, we will see telematics play a bigger role.” “As cars get the technology that will eventually see them become autonomous, we are likely to see reductions in claims frequency. But while there is a big mix of cars with that technology and cars without [it] on the road, then it is going to put a brake on how much that frequency will reduce, and it is going to be offset by a higher average claim size. “What we are finding is that the cost of repairing damaged vehicles is rising. Reinstating all the technology back to its preaccident state is the expensive thing. Where all the vehicle detection technology is embedded in the windscreens, the cost of replacing windscreens can be as high as $5000 and sometimes more. “Longer term, the development of autonomous vehicles could potentially change the whole structure of the motor insurance market. It’s not clear to me whether individuals will buy motor cars in 20 or 30 years’ time, or whether they have a more flexible, long-term arrangement with the supplier of a motor vehicle.” Telematics has yet to take off in Australia, and Mr Brigstock believes this is partly due to the way the physical damage and bodily injury components in the Australian motor insurance market are separated into two distinct covers. “The markets where telematics has taken off are where all the risk is underwritten in the one product. In Australia, because of the separation, the economics of it are not quite there yet for it to work just on the physical damage part of it. insuranceNEWS
December 2017/January 2018
“But that is changing. I suspect within a short period of time, within the next year or two, we will see telematics play a bigger role. “Once the economics work, in terms of assessing the risk of an individual for motor insurance, you are not going to need to ask a customer many questions. “Once they have put a couple of hundred kilometres behind them and shown what their driving behaviours are, telematics has the ability to really modernise the way a motor insurance product and the relationship with the customer is managed. “Most of that data is already being recorded inside the car – you won’t need an app or a box. It is a matter of that being unlocked for use by the insurer.” For now, aged 62, Mr Brigstock’s long and intriguing career has reached a turning point. His wife, three dogs, golf game and passion for photography will become his focus. But he’s not ruling out getting back behind the wheel at some point, and he’ll stay on top of industry issues. “I’m planning to have a pretty complete break to start with, but I imagine I will stay in touch with the industry in some way,” he says. “I’ve had a couple of approaches about whether I might be interested in joining some boards. I expect that will come down the track at some point.” With his industry knowledge and experience, you have to imagine he won’t be too short of offers, and there may be a few more reinventions of Colin Brigstock yet to come. *
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 68
Turning around workers’ comp The new claims service model set up by NSW’s icare aims to move five times faster than the system it replaces By John Nagle, icare Group Executive, Workers’ Insurance
WORKERS’ COMPENSATION ISN’T something people think about much until they need it after a workplace injury – unless you work in the system as an employer, insurance agent or broker, or care provider. In that case, the merits and demerits of workers’ comp are hotly debated, loaded with everyone’s own interpretation not only of the system but also of the people seeking assistance. In New South Wales at least, all that is about to undergo a 180-degree change. Insurance & Care NSW (icare) is focused on developing solutions to the most common problems in the system that are holding back improvements in return to work and embedding higher costs. Our job is to establish a new model that ensures everyone has the best opportunity to return to work and to life – a model that will deliver a radically higher quality of cus68
tomer experience to injured workers and their employers. In April we announced our new workers’ compensation claims service model. We took on the ambitious task of providing the level of care and support injured workers need, irrespective of the injury, based on international medical best practice. After extensive review, research and consultation, the new service model will be rolling out in January. We are seeing a shift in focus, under which the injured worker will be supported on a journey that will hopefully see them returning to work. They won’t be dealing with an adversary on the other side of the desk or phone, but rather with someone who is listening with empathy, options and ideas to simplify processes and find solutions to navigate the health system. It’s not a revolutionary approach, but a insuranceNEWS
December 2017/January 2018
commonsense one, where the injured worker is positioned at the centre of the system. Studies universally show that when each worker is treated with dignity and care and is supported to get the treatment they deserve, they are far more likely to transition back to work much faster (depending, of course, on the severity of the injury). From January, injured workers can expect to see a complete turnaround in how they experience the system, which we guarantee will move five times faster than their current experience. Why? Because we’ll be abandoning the cookie-cutter, standardised approach. We’ll be supporting each individual based on their specific needs, tailored around five key scenarios determined by the severity of their injury and their own requirements. We’ll be asking a few critical questions up front. The individual’s answers will
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 69
We know workers with psychological injuries are particularly vulnerable when treatment or the payment of entitlements is delayed.
ensure the support they receive is tailored to their needs. In our experience there are some people who, even though they have high medical needs, seek only limited interaction. And there are others whose medical needs may be minor but they prefer hightouch support in their recovery. By using stakeholder feedback, we’re already moving mountains. Rolling out our new claims model in January is only the start. We have a customer-centric service ethos at the heart of our mission, so we’ll be using input from our partners to revolutionise the way people think about insurance and care, and become a leading social insurer globally. For the past two years since icare was formed, we have been on a journey to establish a truly world-class workers’ compensation claims model. To ensure we get this right, we have been using two different and critical feedback tools to identify the most common problems in the current system. Firstly, the Net Promoter Score (NPS) is a global benchmark used to measure the satisfaction of the injured workers and motorists. We’ve seen our score lift from -10 to +17 – an extremely strong turnaround in 12 months considering most insurers sit within the range of -20 to +10. It has changed the way our people think and assess feedback (almost in real time), and allows them to action necessary changes and then monitor their impact through the next feedback loop. Numerous issues were highlighted in the NPS feedback. For example, by intro-
ducing pre-authorisation of some medical treatments and fast reimbursement of medical claims, the new model can reduce the time taken for injured workers to receive benefits. Feedback also indicated that many employers feel ignored in the current claims assessment process. So, with the new model, employers will be provided timely and regular feedback on a claim’s progress that will better convey the impacts of a “no-fault” scheme. Our second feedback tool is an ongoing series of independent reviews of claims case files managed by our insurance agents on issues raised by the NPS feedback. This is helping icare identify and address recurring problems in decision-making and timeframes for managing claims. A prominent emerging theme is poor communication in the initial phase of a claim between case managers and employers or workers. The timeframe for contacting a customer once a claim is lodged can be delayed unnecessarily. Sometimes, where the first attempt to contact an injured worker is unsuccessful, subsequent attempts to connect may be limited. The need for more discussion of recovery at work and treatment options was also revealed, demonstrating a lack of understanding of relevant legislation and complex guidelines. This could lead to misapplication and unnecessary delays in paying income replacement benefits and approving treatment. We know workers with psychological injuries are particularly vulnerable when insuranceNEWS
December 2017/January 2018
treatment or the payment of entitlements is delayed. The timeframes for decisionmaking in these cases need to be improved. Furthermore, one of the barriers to early treatment is often a defensive or emotive response from employers or brokers to claims of psychological injury, which serves only to reinforce the underlying health issues. By focusing specifically on these injuries, the new model will provide greater certainty for all parties. icare’s new claims model will prioritise early and empathic communication with all injured workers. We will use world-class online systems to empower injured workers and claims managers by promoting the timely approval of interventions and treatment requests that are considered reasonably necessary, as part of clinical best practice. icare has selected EML as its partner to manage new claims from January, while GIO and Allianz will provide services for existing claims beyond 2017. Together, we want to ensure case managers are empowered to deliver within appropriate timeframes, and to help shift the transactional approach to case management – currently prevalent in the system – to a focus on care, recovery and communication. It is everyone’s responsibility to improve return-to-work outcomes. We know there is still much more work to do. Ongoing feedback from our stakeholders has been rich and valuable, and we will use this to define how we continuously improve the business processes, delivery services and the overall human experience for the people and businesses we serve. * 69
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 70
BHSI product launch: New cover includes multiple industries
Epsilon expansion: Agency unveils new accident and health division
BERKSHIRE HATHAWAY SPECIALTY INSURANCE (BHSI) says it is delighted with market response to its contractors’ plant and equipment policy, which was launched in November. The single package policy is designed to provide flexibility to respond to the specific needs of customers from a wide spectrum of industries such as farming and agriculture, builders and construction, plant hire companies and earthmoving and excavation contractors. Policyholders can expect cover for material damage, hired-in plant, financial protection for plant and interruption, road risk, general liability and replacement value for plant after total loss. “The product has been in development for a number of months as we identified an opportunity to round out and complement BHSI’s current suite of products in the construction, mining and property lines,” Australasia Head of Marine Dimitry Zilberud tells Insurance News. “Since launching [in November], we’ve been very pleased with the response we’ve received. This reinforces our belief that there is a receptive broker market wanting to do business with BHSI’s experienced team.” A roadshow will take place in the first quarter of next year with Senior Underwriter Niall O’Connell engaging directly with brokers to demonstrate the insurer’s capabilities in this sector, Mr Zilberud says. BHSI intends to build on the success it has enjoyed since entering the Australian market in 2015 by expanding its product team, product offerings and geographical presence next year. The insurer now offers a full suite of products including property, casualty, executive and professional, healthcare, accident and health, and marine. “Brokers and customers have responded well to our highly responsive approach to underwriting and claims handling and we’ll be bringing that approach to the [contractors’ plant and equipment] market,” * Mr Zilberud said.
EPSILON UNDERWRITING AGENCIES HAS ADDED ACCIDENT and health insurance to its range of offerings as the group sets its sights on further growth. Former Beazley underwriter Tim Curling, who has more than 16 years’ experience in the sector in Australia, has joined the group to oversee the division. “We are looking to expand the business into classes that work for us and accident and health is the first of a number of opportunities we are going to roll out over the next couple of years,” Chairman Paul Lynam tells Insurance News. The Lloyd’s-underwritten product mainly focuses on tailoring flexible, competitive and sustainable outcomes within mediumto-large group accident and sickness schemes. Business travel insurance is set to be added to the mix early next year. Mr Lynam says the resources and labour hire sectors are among areas of opportunity, particularly in Queensland and Western Australia, where Epsilon already writes a lot of business. The group is also active in union and non-union enterprise bargaining agreement income protection covers. Areas on the radar generally include construction, mining, energy, transport, manufacturing and electrical and plumbing, as well as industry association schemes and amateur sports personal accident insurance. Epsilon, owned by London-based global wholesale insurance and reinsurance broker Ed, was founded in 2001 specialising in liability insurance. It also offers policies in property, where it focuses on high hazard risks, and provides cover for cyber risks. The group says it is the only international player in the underwriting agency space with no retail broking conflict, providing it with a key point of difference in the market as it develops more facilities and pursues its expansion plans. Mr Curling takes the helm at the accident and health division after building insurance experience in a variety of positions. He became Beazley Australia Accident and Health Underwriter after holding positions at SRS in Brisbane and Booker International. “We are delighted to have secured Tim to lead our efforts in the class, he is renowned in the Australian market and brings an unparalleled level of expertise,” Epsilon Chief Underwriting Officer Paul * O’Leary says.
December 2017/January 2018
When the world is calling, know youâ€™re Good2Go.
CHOICE Recommended for Single Trip Travel Insurance 2017
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 72
Back support Global insurance groups are getting behind a pioneering Australian project to change the way spinal cord injuries are treated
Key supporters: Lloyd’s Chris Mackinnon (left) and Swiss Re’s Mark Senkevics
By Bernice Han SWISS RE AND LLOYD’S HAVE PLEDGED their support to Project Edge, an ambitious first effort outside the US to treat spinal cord injury using a technique called neuromodulation. They jointly hosted events to raise awareness of the project in October, and Lloyd’s has raised more than $75,000 for one of the initiative’s founding members, SpinalCure Australia. The project aims to advance research and transform spinal injury outcomes, and is working with the insurance industry to meet a $15 million fundraising target. Swiss Re and Lloyd’s hope their peers will follow suit and support the initiative, which has the potential not only to improve patients’ lives but also to reduce the heavy cost burden on the industry. Spinal cord injury costs the Australian economy about $2 billion a year, with the insurance industry, state and federal governments and individuals sharing the responsibility. For insurers, individual claims could easily reach tens of millions of dollars, costing hundreds of millions annually on an industry-wide basis. Swiss Re had no hesitation in supporting the push to introduce next-generation neurostimulation therapy, which uses electrical currents to “reawaken the spinal cord” in paralysed people. “There is potential for the Australian insurance industry to come together and support further investment into risk mitiga72
tion, and showcase the positive impact we can make on people’s lives,” Australia and New Zealand Managing Director Mark Senkevics tells Insurance News. “Such an advancement in medical technology could change the face of the industry in so many ways, in particular from a claims management perspective. I would love to see as many insurance companies getting engaged as possible.” Established in September last year, Project Edge is the brainchild of Bryce Vissel, Director of the Centre for Neuroscience and Regenerative Medicine at the University of Technology Sydney, together with SpinalCure Australia and its partner, Spinal Cord Injuries Australia. The project also involves Reggie Edgerton, who invented the technology, and his team from the University of California. They are joining the University of Technology Sydney to take their technology and discoveries to the next level. The Sydney university is investing heavily in the project, in the belief it will be transformative. “For the first time in human history we are faced with the opportunity to recover physiological function and movement after a catastrophic spinal cord injury,” Professor Vissel tells Insurance News. “This will completely change the recovery prospects for people with spinal cord injury, and the implications for cost reductions to the insurance industry are extraordinary.” insuranceNEWS
December 2017/January 2018
The project, initially planned for five years, intends to develop a technology and treatment package that could be rolled out across rehabilitation centres nationwide. It aims to raise $15 million to fund the research, which Lloyd’s Australia General Representative Chris Mackinnon says “is a small ask” compared with the burden to the industry. “Improved quality of life can lead to reduced hospitalisation, and therefore reduced costs of lifetime care,” Mr Mackinnon tells Insurance News. “Our visible support of Project Edge gives the insurance industry an opportunity to be associated with an innovative, groundbreaking research project that will significantly improve the quality of life for patients, and at the same time result in significant potential reductions in the cost of lifetime care that is often borne by the insurance industry.” Swiss Re and Lloyd’s have earned praise from Duncan Wallace, Chief Executive of SpinalCure Australia. “With more than 15,000 Australians suffering from a spinal cord injury and a new injury occurring each day, if you do the maths, these figures represent an enormous financial burden to the insurers,” Mr Wallace tells Insurance News. “Mr Mackinnon and Mr Senkevics recognise not only the human cost of spinal cord injury – that goes without saying – but the huge cost it represents to the insurance industry and the opportunity neuromodula* tion offers to alleviate that burden.”
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 73
BEYOND BROKING, A NEW MODEL
• Improve profitability
• Enjoy unique equity/ profit share opportunities • Future proof your business
Confidential enquiries to Tremayne West on:
1300 239 234 www.australianbrokernetwork.com.au
ABN 89 062 882 080
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 74
An insurance high flyer Grant Burley will be remembered for his dynamism in building the effectiveness of premium funding By Terry McMullan
Pioneer: Grant Burley
AN AIRCRAFT ACCIDENT IN late October brought to an end the remarkable life of Grant Burley. What wasn’t extinguished is the memory of a man with enormous determination who achieved an extraordinary amount in the insurance industry. Yet when he left the industry with full financial independence, he was only 43. Mr Burley, a highly experienced pilot who flew helicopters, circumnavigated the globe in a single-engined aircraft and was qualified to fly in marginal conditions, was piloting his own twin-engined aircraft from Toowoomba to his home near Port Macquarie in northern New South Wales when he crashed close to his private airstrip. He and his companion on the flight, his fiancée Suzanne Rohleder, 50, were killed. Mr Burley joined the insurance industry in Melbourne in 1983 direct from high school, getting a job with a brokerage owned by Westpac Bank. In his early 20s he joined Custom Credit to develop a premium funding product. When Custom Credit lost interest he took the product with him to a small company called Insurance Funding, which he ended up running at the age of 24. Manufacturers Mutual Insurance (MMI), one of the 74
forerunners of Allianz Australia, took an interest in the business, which evolved into Hunter Premium Funding. He was its chief executive at 26. Seven years later Mr Burley became a chief general manager at MMI, with responsibility for Hunter, Club Marine and the company’s compulsory third party insurance businesses. Allianz bought MMI in 1998, and two years later, aged 35, he left and bought a small premium funder named Focus, which he developed into Pacific Premium Funding.
Few who experienced Mr Burley’s competitive approach will forget it easily. He wasn’t ruthless, but he was protective and inclined to say exactly what he thought needed to be said. An onstage debate with Robert Kelly at the Steadfast Convention after the broker cluster formed a premium funding joint venture with Macquarie Bank will be longremembered. Mr White said in a eulogy at Mr Burley’s funeral that his friend moved on from insurance to building a wide range
“If he was born 300 years ago Grant would have been a voyager discovering distant lands.” By 2004, when Pacific was the Australian market leader in premium funding, it formed a joint venture with GE Capital. Four years later Mr Burley and long-time business partner and friend Stuart White sold Pacific to GE Capital, with Mr Burley becoming its nonexecutive chairman. He left the industry in 2010 after Macquarie Bank bought the operation. insuranceNEWS
of business ventures, continuing to display the character of “a restless adventurer, an explorer always yearning for the next discovery”. “I’m of the view that if he was born 300 years ago Grant would have been a voyager discovering distant lands – [but] only if he was given the fastest boat.” Mr White says Mr Burley’s business methods were simple but effective. “He surrounded
December 2017/January 2018
himself with capable people. He sought counsel widely, respected other people’s views and yes, he did actually listen. “This was a hallmark of his approach to taking huge business risks and even major life decisions. He always calculated the downside.” In recent years there were devastating personal downsides in Mr Burley’s life, the worst of which was the sudden death in March 2014 of his wife Kym. They had met when she was an employee of Pacific Premium Funding, and were popular figures at social and business events. After their retirement from insurance they maintained contact with many of their former colleagues and business friends. Mr White says that of all his business achievements, Mr Burley was most proud of his pioneering work in insurance premium funding “and of course, the people in his extended Pacific family”. “Grant should be remembered as the ‘founding father’ of premium funding in Australia. He was there when it started and he played a major role in its transformation into the $5 billion market it is today. “However, of all that he achieved it is the way he quietly and without fanfare helped so many people in their careers, their businesses and their big decisions in impactful ways that * is his true legacy.”
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 75
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 76
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 77
All aboard with HDI HDI Global executive board member Joachim ten Eicken was one of three international guests speaking at an event hosted by the group at Darling Harbour in Sydney. Brokers were invited to attend the HDI Global Risk Forum, addressed by Dr ten Eicken, followed by refreshments aboard the restored 1874 James Craig sailing ship. Other speakers at the November forum were HDI Risk Consulting Head of Central Services Verena Brenner and Gray Page London Operations Director Joe Corless. Topics covered included large area losses, business interruption versus business continuity and misappropriation risks. After the formal part of the proceedings, guests strolled across for food and drinks aboard the James Craig, a three-masted barque representative of the great sailing vessels from the 19th century. The Pyrmont-berthed ship made its first landfall in Australia in 1879 and rounded Cape Horn 23 times while plying global trade routes.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 78
Gallagher’s 2020 vision Brokerage Gallagher gave a glimpse of where the business will be in three years’ time at its leadership conference in October. Australia Chief Executive Sarah Lyons shared plans with almost 200 Gallagher leaders, who had flown to Sydney for the three-day event at the Hyatt Regency. Managing Director Australia and New Zealand Steve Lockwood and Managing Director Corporate Paul Harvey were also in attendance. The conference centred around what Gallagher called a “game changing vision” for the Australian business with the focus on growth, innovation and change shaping the corporate landscape. Gallagher organised several breakout sessions to discuss various topics of interest including broking in a hard market, drawing top talent and providing differentiating client experiences.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:23 pm Page 79
INMAG DEC 17_page layouts 1/12/2017 3:24 pm Page 80
NT conference celebrates success The sixth annual Northern Territory Insurance Conference drew more than 300 delegates, with the packed program providing an opportunity to celebrate achievements and hone expertise. Winners of the Territory Insurance Awards were announced at a gala dinner at the Darwin Convention Centre following the conference, capping a successful event that also included a range of presentations on key industry issues. Attendance at the conference is free and speakers volunteer their time, with education a primary focus. Michelle Johnson of Allianz was named senior sales and underwriting professional of the year, and Stewart Cox of Gallagher senior broker professional. Alana Brown, from MGA, was presented with the young insurance professional (broker and insurer) award. TIOâ€™s Tim Graham won the claims professional title, while Michael Buckley from M&J Builders took the honours for the service provider professional category. The conference was run for the first time this year by the young Insurance Professionals NT committee, led by President Katie McGettigan and Vice-President John Vanarey.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:24 pm Page 81
INMAG DEC 17_page layouts 1/12/2017 3:24 pm Page 82
INMAG DEC 17_page layouts 1/12/2017 3:24 pm Page 83
RM Advancer winners applauded Excellence and innovation in risk management were celebrated at the 12th Vero RM Advancer Awards, held at the Australian National Maritime Museum in Sydney. This year’s event featured a new category for workers’ compensation risk management, with the top honours taken out by mineral drilling contractor Swick Mining. Metcash won the property risk management category for its business continuity plan following severe hailstorm damage in 2015. The wholesaler and distributor has also introduced an early warning system for events such as ammonia leaks and ventilation failure at its Huntingwood facility. Shaw’s Darwin Transport was presented with the enterprise-wide award for plans that focused on the health, safety and the wellbeing of truckers, and the management of the vehicles. Agribusiness firm Elders took the honours for liability risk management, while facilities management and engineering support company City Holdings won the motor risk management award. The RM Advancer Awards were started in 2005 to reward and promote risk management achievements by Vero customers during the previous 12 months. Award winners this year each received 200,000 Qantas Aquire points. Next year’s event will take place in Melbourne.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:24 pm Page 84
peopleNEWS Anything possible for Insurance House Brokerage Insurance House headed to Queensland for this year’s annual authorised representatives national conference, celebrating the theme “breaking barriers – anything is possible”. More than 100 delegates attended the event, which included an award ceremony and dinner at the RACV Noosa Resort. David Stott was judged outstanding authorised partner for the past year, winning a trip to London. Commitment to operational excellence awards were given to Insurance House 360 – Newcastle, Dennis Maw Insurance Broker in Victoria and Queensland’s Wide Bay Insurance Brokers. Business growth achievement winners were GippsInsure, Insure Today, Insurance House 360 – Newcastle, Commercial Insurance Group, RMA Insurance Brokers, Peacock Insurance and Prasidium Trade Credit. Rookie of the year was Imperium Insurance & Financial Solutions. A $10,000 donation for the Susan Alberti Medical Research Foundation was presented to Ms Alberti, a well-known philanthropist and speaker at the conference. Other keynote speakers included Paul de Gelder, a navy clearance diver who lost his right leg and hand during an attack by a bull shark in Sydney Harbour in February 2009.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:24 pm Page 85
YIPs raise a glass to 2017 young Insurance Professionals (yIPs) celebrated the end of the year at functions around Australia and in Auckland. New South Wales members enjoyed drinks and canapes at the Bavarian Bier Café in york Street, Sydney, while Queensland celebrations were held at Brisbane’s Garden Bar. In Victoria, the venue was Fargo and Co, which has opened in Richmond following the restoration of a former Commonwealth Bank heritage building. Nearly $500 was raised for Movember by the Victorian group while NSW also supported the men’s health foundation with a raffle. Auckland members cruised the harbour aboard the Ocean Eagle, once owned by US billionaire Bill Koch and used as an America’s Cup chase boat. yIPs, which has expanded to more than 6700 members, also held year-end festivities at the Royal Hobart Bowling Club, while award-winning bar and Spanish restaurant Udaberri was the venue in Adelaide. In Perth, tickets for an event at The Lounge Bar included a donation for Moving Mountains for Mitch, a campaign for Mitch Cleary who suffered devastating injuries following a coward punch in 2013.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:25 pm Page 86
AILA Young Professionals rock the casbah About 350 members of the Australian Insurance Law Association young Professionals had a ball at their October themed networking event Arabian Nights held at Sydneyâ€™s GPO. Guests were treated to oysters on arrival amid palm trees and Persian carpets and enjoyed flitting between a DJ-pumped dance floor, a tarot reader and the photobooth. Countless fez and scarves were available for those wanting to play dress-ups. Already well and truly dressed in theme were Senior Associate at Minter Ellison James Stanton, who was dressed as Aladdin, and Gen Re Senior Claims Executive Nick Zambetti looking trĂ¨s sheikh.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:25 pm Page 87
INMAG DEC 17_page layouts 1/12/2017 3:25 pm Page 88
UAC takes expo to Newcastle The Underwriting Agencies Councilâ€™s (UAC) expo in Newcastle was an all-round success, drawing in about 100 brokers and 42 exhibitors. Brokers at the October event enjoyed the informal setting and appreciated UACâ€™s ongoing effort to include Newcastle in its expo calendar, giving them the opportunity to network and catch up with industry developments. They particularly appreciated the chance to have a first-hand explanation on the various niche products on offer.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:25 pm Page 89
Golf champion tells what keeps him winning Golf champion Jason Day shared insights at a Zurich-hosted event in Sydney ranging from how he prepares for a tournament to the challenges of juggling playing and parenting. Zurich Australia Chief Executive General Insurance Raj Nanra introduced Mr Day, who is a Zurich Golf Ambassador. The question and answer session with the champion golfer provided plenty of advice on the mental and physical approach needed to perform at the elite level. Later he signed autographs and posed for photographs with participants. Mr Day, who was born in Queensland, finished last year as the worldâ€™s top-ranked golfer after first breaking into the top 10 in 2011. Inspired by Tiger Woods, he turned professional in 2006 and was honoured with the Sport Australia Hall of Fame The Don Award after a stellar 2015. The event was attended by 70 of Zurichâ€™s broker partners, clients and employees and was held at the Darling Harbour Sofitel on the eve of the last day of the Australian Open golf championship.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 90
CGU backs local theme at races It was all about the home nation for the CGU Winning Post marquee at the Melbourne Cup Carnival, as guests were treated to all things â€œAustralianaâ€?. CGU says its time to adopt a home theme after taking the Winning Post to Morocco, Europe and Kentucky in previous years. It is one of the star attractions at the annual carnival and guests included brokers, business partners, claims services and government officials. IAG Managing Director Peter Harmer and his team of senior executives took time out from their busy schedules to enjoy the spring festivities. Joining them were celebrities including TV presenters Gorgi Coghlan and Stephanie Brantz, former surfer Layne Beachley and former swimmer Giaan Rooney. Special guests from the racing fraternity including Martin Mills and Mick Hurry were invited by CGU, adding more star power to the gathering.
December 2017/January 2018
All your clients are different
At GT Insurance, we’ve got them all covered GT Insurance work with you providing:
Flexible programs to suit your clients’ business; Knowledgeable people who provide you with carefully designed options for your clients’ business;
To find out more and get quick and easy quotes online, visit gtins.com.au or contact your local GT Insurance Relationship and Development Manager.
Claims reporting to support risk management; Professional assessors and efficient claims recovery team;
Access to GT Accident Assist - immediate and effective response to accidents
Insurance products are issued by Global Transport & Automotive Insurance Solutions Pty Ltd ABN 93 069 048 255 AFS Licence No 240714, trading as GT Insurance, as agent for the insurer Allianz Australia Insurance Limited ABN 15 000 122 850 AFS Licence 234708. Neither we nor the insurer provide any advice on this insurance based on any consideration of your objectives, financial situation or needs. Before making a decision about it please refer to the relevant Product Disclosure Statement or policy wording which can be obtained from www.gtins.com.au
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 92
CQIB continues long lunch tradition The Council of Queensland Insurance Brokers (CQIB) held its second long lunch of the year at the Tattersallâ€™s Club in Brisbane. General Manager David Duncalfe says the November event was a great success, with 170 brokers and business partners attending. He says the networking gatherings continue a long tradition at the group, which was formed by five brokers discussing shared concerns over lunch.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 93
peopleNEWS BHSI takes brokers on a cruise Perfect spring weather greeted guests for the Berkshire Hathaway Specialty Insurance (BHSI) Sydney Harbour cruise. More than 40 brokers attended the event, hosted by the marine team, claims team and representatives from each of BHSIâ€™s lines of business. The cruise departed from the Man oâ€™ War Steps beside the Sydney Opera House in the early afternoon, with guests enjoying a BBQ lunch and drinks in sunny, warm conditions. The 90-foot catamaran explored the sights of the inner harbour from Clifton Gardens to Pyrmont, including a surprise close-up view of an oceangoing ship, before returning guests ashore in the late afternoon. The marine cruise was the second held by BHSI to thank brokers for their continued support as the insurer continues to build its marine presence and capabilities across Australia.
Leading independent Loss Adjusting group
service when it counts insuranceNEWS
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 94
Suncorp celebrates spring racing Guests hosted by Suncorp cheered on horses including Melbourne Cup winner Rekindling at this yearâ€™s Spring Racing Carnival at Flemington. More than 100 Suncorp customers, intermediaries and partners enjoyed cocktail-style lunches at The Birdcage on Cup Day, Oaks Day, Derby Day and Stakes Day, with the Melbourne weather warming as the week progressed. Guests were entertained by an acoustic duet on Oaks Day as they also toasted the success of filly Pinot in the main event. Festivities during the week also included a Fashions on the Field competition on Stakes Day for both ladies and gentlemen, while a guest tipster also entertained the crowds. Suncorp Chief Executive Insurance Gary Dransfield and Customer Marketplace Chief Executive Pip Marlow were among company representatives welcoming guests.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 95
O ONE NE SSOLUTION O O ONE NE A ALLIANZ LLIANZ A Allianz l l i a nz A Australia u s t ral i a p provides rovides ccover over for for a wide wide rrange ange of of general g e n e ral iinsurance n s uran c e n needs. eeds. If If yyour our client c l i e nt h has as specialist specialist rrequirements equirements b best es t managed managed by by a niche niche provider, provider, o our ur O One ne A Allianz llianz group gro up o off ccompanies o m p an i e s are are u uniquely niquely p placed laced to to offer of fer a ffull ull ssuite u i te o off p products, roduc ts, all all b backed acked by by the the sstrength t re n g t h o off tthe he A Allianz l l i a nz b brand. ran d . T These hese iinclude nclude Strata, St r a t a , H Heavy eav y Motor, Motor, M Marine arine Cargo, Cargo, P Pleasure leasure Craft, Cr a f t , A Accident ccident and and Sickness, Sic k n e s s , Corporate Co r p o r a te T Travel, ravel, T Trade rade Credit, Credit, Plant Plant and an d E Equipment, quipment, Global G lo b a l Specialty, Specialt y, H High i gh P Performance er formance and and Prestige Prestige Vehicles, Vehicles, Crop Cro p a and nd Farming, Farming, a ass w well ell as as P Premium remium F Funding. un din g . To T o ffind ind out out more m ore v visit isit a allianzengage.com.au. ll i a n ze n g a g e . c o m . a u .
Allianz Marine & Transit Underwriting Agency
A Allianz ll ianz A Australia us tralia Insurance Insurance Limited L i m i te d A ABN BN 15 15 000 0 0 0 122 12 2 850 850 A AFS FS LLicence icen ce 2 234708. 3470 8 .
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 96
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 97
IA conference a winner The annual Insurance Advisernet (IA) conference is about more than just business and networking. Fundraising for charities is very much a part of the agenda and this year’s chapter at the Sheraton Mirage Resort in the Gold Coast was no exception. The 500 delegates in attendance opened their hearts and wallets in support of the Insurance Advisernet Foundation, which raised about $205,000 during the three-day event including $25,000 from an 18-hole golf outing. Key speakers at the conference included Olympian Anna Meares and former Victorian premier Jeff Kennett, who spoke on the opening day of the conference. In-depth discussions about the challenges and trends shaking up the industry were also shared with delegates. On the awards front, Chubb took out the network’s inaugural insurer of the year prize. Astute Insurance Services from South Australia and James Wilson Risk Solutions from Victoria were dual winners of the IA authorised representative practice of the year award. Canberra will host next year’s IA conference in late October.
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 98
sam Pentecost Contributor
IT’S THAT TIME OF YEAR AGAIN, WHERE INSURANCE nerds can pit their wits against each other in the annual Insurance News holiday quiz. Do your eyes sparkle every time an insuranceNEWS.com.au Breaking News update lands in your inbox? Do you scour the total news read every Monday? Do you religiously file away each and every carefully crafted magazine? If so, you stand a chance of impressing (or depressing) your colleagues this festive season with a stunning score. If you get five or less answers correct, we sentence you to insuranceNEWS.com.au every week for an entire year; 6-15 you’re doing ok but should apply yourself more; 16-20 you’re executive material or possibly already there; 21-30 you’re either cheating or you know far more about the industry than is altogether good for you. The answers will be published on the insuranceNEWS.com.au website from December 11 on www.insurancenews.com.au/ quiz-answers. Good luck. ONE POINT PER ANSWER 1. iSelect joined a broker network in February, causing some controversy. Name the network. 2. AIG’s new global chief executive used to run Marsh. Name him. 3. Cyclone Debbie, which struck in March, is considered the second most destructive cyclone in Australian history. What were insured losses reported by the Insurance Council in November – $1 billion, $1.5 billion or $2 billion? 4. What was the most destructive cyclone in Australian history? 5. Which Queensland island group containing several resorts suffered extensive damage from Cyclone Debbie? 6. Four hurricanes in the US during this year were even more destructive. Name two of them. 7. Friendsurance launched Australia’s first peer-to-peer insurance product this year. What was it? 8. Allianz Australia named Richard Feledy as its new Managing Director. Who is he replacing?
13. Can you name the team that company sponsored before the All Blacks? And which company sponsors that team now? 14. What bombshell was announced by NSW Premier Gladys Berejiklian in May? 15. Which insurer bought Calibre Commercial Insurance in September? 16. Who was appointed Chief Executive of IAG’s new Australian Division in July? 17. What is the full name of FEMA, the US agency responsible for disaster management? 18. According to the latest report from the Australian Business Roundtable for Disaster Resilience & Safer Communities, what will the annual cost of natural disasters be by 2050? 19. How many people were killed in London’s Grenfell Tower disaster in June? 20. Who replaces outgoing JLT Australia and New Zealand Chief Executive Leo Demer on January 1? 21. Which MP claimed in October that rising premiums in north Queensland “cannot be actuarially justified”, but then used incorrect figures to back up his argument? 22. Name the following types of insurance: PI, PL, CTP, D&O, E&O. 23. Who is the President of the Insurance Council of Australia? 24. Name the two previous insurance company executives to hold the ICA presidency, and who had to quit the position in the past year. 25. Why did these two executives not complete their presidential terms? 26. “This is a pretty big beast now.” Who said that in August, and to what was he referring?
9. Name the incoming ASIC chairman who will start his five-year term in February.
27. In September a liquidator said a Perth authorised representative company “appears to have misappropriated” $8.69 million. Name the company.
10. Whose initiative is the Dive In festival for diversity and inclusion in insurance?
28. Who takes over from John Neal as QBE Group Chief Executive in January?
11. CGU in March extended its sponsorship of which football team?
29. What is the acronym for technology developed specifically for the insurance industry?
12. Which global insurer is the principal sponsor of the New Zealand All Blacks rugby union team?
30. What is the full name of the Australian regulator which oversees insurers’ financial affairs?
December 2017/January 2018
INMAG DEC 17_page layouts 1/12/2017 3:26 pm Page 99
from the pride at Lion
Find us on
(02) 8042 8200 LIONUNDERWRITING.COM.AU
LION Underwriting offices will be closing on dEC 23 and reopening on Jan 3 ABN 33 604 597 467 | AFSL 491793
Moving full speed ahead. Expanding our presence, capabilities and products in Australasia.
WE CAN TAILOR THAT COVERAGE FOR YOU. Brisbane | Melbourne | Sydney | Auckland Canada | Germany | Hong Kong | Ireland | Macau | Malaysia | Singapore | UK | USA
When your products are so similar to your competitors’, how do you “sell” insurance in a TV ad? The December/January edition of Insurance Ne...
Published on Dec 1, 2017
When your products are so similar to your competitors’, how do you “sell” insurance in a TV ad? The December/January edition of Insurance Ne...