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SPRING BLAZES PROMISE A SUMMER FROM HELL Does 18-month-old Charlotte, pictured in November with her mother Sharnie Moran near Coffs Harbour in NSW, face a future where bushfire seasons will last six months? December 2019/January 2020


Contents 4 Newsmakers 8 Fiery omens

As predicted, this year’s fire season came early and with frightening ferocity. The summer is shaping up to be every bit as bad, and possibly worse

12 Not quite off the rails, but still not great

It’s been another slow 12 months for insurers. Here’s how Finity sees the Australian market performing over the next year

14 Time to grow

QBE has simplified its business and refocused on basics. Now Pat Regan is looking for growth

20 The Top 20 Influencers In Australian Insurance This is the 10th time Insurance News has listed the 20 most influential people in general insurance

30 Does this pool plan hold water?

A cyclone reinsurance pool will once again be explored as a potential solution to high premiums in the north. And this time insurers are on board – sort of

34 Pegged down despite the storm

A major rewrite of the general insurance code of practice is set for release after a difficult journey

38 Laser focused

Testing new technologies to solve real problems is central to Helene Stanway’s digital leadership role at Axa XL

42 On a wing and a prayer

If you see a light plane or helicopter flying overhead, there’s a good chance it’s uninsured. Here’s why

48 The 2019 Insurance TV Ad Oscars

A koala, an opportunistic daughter and a moose: Here’s our pick of this year’s best insurance ads

54 Act of faith

While other Lloyd’s players are pulling back, Canopius is showing confidence in the Australian market

62 Keeping up with the change game

The insurance industry is rapidly adopting new technologies, and consultant Xceedance says it’s there to help companies keep pace

64 A new standard demands new ways of thinking You’ll be hearing a lot about IFRS 17, which will bring teamwork to planning and reporting. Here’s how it does it, and why

companyNEWS 65 Quarter-century celebration Trident aims for more after 25 years

65 Growing airspace 360 Aviation ramps up business presence

peopleNEWS 66 UIG off to the races 69 AILA conference sparks lively debate 70 UAC Adelaide expo enjoys strong turnout 72 icare celebrates excellence in care 74 Convention turns spotlight on claims 76 Axa XL makes an impact 77 Steadfast belongs at Dive In 78 Canopius holds cocktail celebration 80 Risk management excellence on show 83 CQIB convention looks to future 84 Zurich runs bustling Marketplace 86 CGU up for the Cup 88 IA hits Hamilton Island 90 Maglog »

59 Delivering on a global ambition

Chubb has appointed Mike Hooton to build its presence in the small and middle commercial markets

December 2019/January 2020

Pictured: Sharnie Moran and her daughter Charlotte Credit: AAP

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In October/November we published 471 articles online. These were made up as follows:

AIG LEADERSHIP CHANGES AIG Australia CEO Noel Condon, pictured, stepped down from the company in early December after 35 years with the insurer. He has been replaced by former Fairfax Financial executive Nigel Fitzgerald, who will report to Asia Pacific General Insurance CEO Sachin Shah. Mr Shah says

78 Local

62

Corporate

59

Regulatory & Government

62

Life Insurance

48

The Professional

56 8

Analysis

96 Daily

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More than 30,476 news articles – including 333 breaking news bulletins – have been published since we started in 2001. All articles can be accessed through our archives. 0

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Former NSW Fire and Rescue Service Commissioner Greg Mullins speaking during the state’s bushfire crisis about attempts since April by 23 fire and emergency experts to engage Prime Minister Scott Morrison on the need to prepare for rising bushfire risks and deal with their causes

NAMING AND SHAMING: NO SURPRISES performance of individual insurers, in a move designed to “increase transparency and assist consumer education”. Not surprisingly, the insurers that sat close to the top of the financial services complaints table were the insurance giants Suncorp and IAG, with around 2200 complaints each over a seven-month period. Other firms categorised as “very large” insurance businesses include QBE, which accounted for 837 complaints, and Allianz Australia with 714.

And so on down a long list. AFCA CEO and Chief Ombudsman David Locke says the complaints “Datacube” provides a much deeper level of detail about the issues and products that consumers and small businesses are complaining about across financial services. “For financial firms themselves they can clearly see how they are tracking at handling complaints and how this compares with others in the 0 market,” he said.

JOSIE GOES TO JAIL

Breaking News

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insurance NEWS .com.au says Mr Condon “will be retiring from AIG”. But that doesn’t mean he’ll be quitting the Australian insurance industry. The Irishman, who has worked for AIG in Dublin, Hong Kong, Shanghai, Budapest, Auckland, Seoul, Tokyo, London and Brussels, intends to keep working in 0 the local market.

“If it’s not time now to speak about climate change and what’s driving these events, when?”

The Australian Financial Complaints Authority (AFCA), the Federal Government’s super-referee which absorbed the industry-owned Financial Ombudsman Service late last year, is doing things its way. One of the things the old ombudsman service always avoided was publishing the names of erring insurers – a fact that earned it considerable consumer group criticism. In November AFCA launched an online site that provides data on the

International

Australia “presents attractive opportunities for profitable growth”. “Nigel has extensive insurance market experience and a proven track record of managing product mix, strong underwriting discipline and building sustainable profitable businesses,” he said. A note to AIG staff from Mr Shah seen by

The often confusing, always intriguing trial of Josie Gonzalez ended with the former Dual Australia claims manager being sentenced to 9.5 years in jail for defrauding the underwriting agency of $17.4 million. Her husband Alvaro received 7.5 years. County Court of Victoria Judge Paul Lacava described Josie as the mastermind and principal perpetrator of the fraud, which was prolonged and became more audacious as it progressed.

December 2019/January 2020

“What you did had the potential to destroy the business of Dual,” he said. “In my view, most of your evidence was a concoction of lies.” insuranceNEWS.com.au attended the Gonzalez trial every day, with thousands of industry readers reading every Daily bulletin and Breaking News article detailing Josie’s convoluted and sometimes-fantastic defence evidence, the judge’s reaction and the final guilty finding by a jury. Josie will serve a minimum seven years before being eligible for

parole, while her husband will serve a minimum five years. Judge Lacava said he believed Alvaro had been encouraged into the deception by his wife, but had also played an active role in supporting the fraud and had benefitted from the proceeds. The couple began falsely billing Dual a few months after Josie joined the company in November 2010. Some 428 invoices were submitted from a firm they set up to carry 0 out the crime.


ADVICE: NOT AS EASY AS IT MIGHT SEEM The confusing and often debated issue of exactly what constitutes “personal advice” as against “general advice” continues to trip up financial services licensees, and a Federal Court decision insuranceNEWS.com.au reported did little to make it easier. The court found Westpac subsidiaries had breached their licences by offering personal advice to customers during telephone calls aimed at encouraging them to consolidate multiple superannuation funds. “The decision to consolidate superannuation funds into one chosen fund is not a decision suitable for marketing or general advice,” Chief Justice James Allsop said. “It is a decision that requires attention to the personal circumstances of a customer…” Justice Allsop says whether advice is personal or general includes consideration of the communication in its whole relational context, and the Westpac calls were made to existing customers and in a tone exhibiting a desire to help. ASIC says it welcomes the court ruling “which provides clarity and certainty concerning the difference between general and personal advice for consumers and financial services providers”. The National Insurance Brokers Association, which sees implications for its members, isn’t so sure about that. It’s examin0 ing the court decision.

GOODBYES AT AUB Mike Emmett’s drive to turn around AUB Group and restore it to its core role of broking has been the subject of many recent articles by insuranceNEWS.com.au. Adopting a more handson role than his predecessors after taking up the MD role last year, his thinking became clear last month when he announced the departure of two significant managers. First to go was famous rugby hero Phil Kearns, whose four-year tenure as MD at InterRisk came to a sudden end.

“This is part of a renewed and refreshed focus on corporate and middle market across AUB and it will form the cornerstone of what we will be branding as Austbrokers Corporate,” Mr Emmett said. The following day it was the turn of Austbrokers Divisional Chief Executive Nigel Thomas, pictured, whose position was made redundant, reflecting Mr Emmett’s aspiration to “be in close and direct contact with our broking and under0 writing principals”.

NOT FOR SALE Late in October insuranceNEWS.com.au became aware of a rumour that Melbournebased brokerage Insurance House was for sale. That led to a short but intense flurry of comments from the privately owned company, which had found itself at the centre of an alleged effort to force a sale. Chairman Gary Gribbin said a former employee had teamed up with a merger consultant to “spruik to listed entities that they can deliver Insurance House” by claiming to have 51% shareholder support – enough to activate drag-along rights that would force the remainder to join the deal. But Mr Gribbin maintained the Insurance House board had 56% of the shares, and each director had confirmed they had no involvement. “If we did sell, we’d do it in a much more professional manner,” he said. 0 And with that, peace returned.

SHONKY? PET INSURERS BITE BACK Pet insurance is a hot subject in the community. It’s not necessarily cheap, and it’s often the target of consumer critics. The latest to show its claws is consumer group Choice, which recently described pet insurance as “shonky” and “worthless”. But this time the Insurance Council of Australia (ICA) bit back at the criticism, accusing Choice of being overly simplistic and a bit loose with the facts. In a response published by insuranceNEWS.com.au, ICA said pet insurers pay more than 85% of the 500,000 pet insurance claims made each year. And while pet insurance policies make up only about 1% of total customers each year for common insurances like car, motor and home, they account for 12% of

claims processed. Pet insurance was given a “Shonky Award” for being “riddled with exclusions and technicalities” and allegedly poor value for money. Hollard CEO Richard Enthoven, who oversees a number of pet insurance brands, says Choice’s assessment “is not supported by the experiences of most customers, animal care experts or veterinary surgeons”. Hollard says more than 40% of its PetSure customers claim each year, submitting an average 5.6 claims a year. Over the past 12 months PetSure has paid almost $140 million in claims benefits, and has grown from 40,000 policies in 2009 0 to more than 468,000 today.

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ICARE’S COMPO NIGHTMARE Fine-tuning a complex entity like the giant NSW Governmentowned insurer Insurance & Care (icare) to run efficiently takes time and courage. But when it comes to workers’ compensation, there’s never going to be enough time to tinker – it has to work well immediately. Brokers in NSW have been particularly critical of the scheme, with one influential regional brokerage telling a State Insurance Regulatory Authority inquiry in late October that it’s “failing terribly”. The problem? A lack of experienced staff.

From the

PUBLISHER

In late November insuranceNEWS.com.au reported that icare’s workers’ compensation Nominal Insurer scheme had incurred a $876 million net loss for the last financial year, thanks to rising medical costs and falling bond yields. Gross written premium was $2.586 billion while net claims expenses/scheme costs were $4.064 billion. The scheme reported an underwriting loss of $2.391 billion, despite net investment revenue of $1.647 0 billion.

BUILDERS PLEAD FOR HELP OVER PI EXCLUSIONS Building surveyors are scrambling for solutions to the professional indemnity (PI) crisis brought on by insurers’ decision to get tough over the use of non-compliant cladding and other defective works. In November insuranceNEWS.com.au reported demands from the surveyors’ professional associations for the Federal Government to step in with a rescue package. “Costs and excesses are increasing dramatically and new, previously unheard of, exclusions are coming into play,” the Australian Institute of Building Surveyors says. “If nothing is done to stem the tide of deterioration in the availability of viable PI insur-

ance, building surveyors and other consultants are going to struggle to stay in business.” While longer-term reforms have been pledged at state and federal governments, the institute says solutions are needed immediately. But the insurers are holding firm against relaxing their exclusion of cladding from the surveyors’ policies. The Insurance Council of Australia says the crisis could drag on for longer than expected, telling a NSW Government inquiry that broader reforms beyond “ascribing liability to certifiers” will be needed to bring about a long-term fix. It says insurers will need to be convinced the building sector’s problems have been 0 cleaned up.

In the midst of all this uncertainty, December is a time when the insurance industry takes a deep breath after a year of hard work. For many, the likelihood of a torrid summer may well make that breath a short one. Whatever the future brings, the team at Insurance News joins me in wishing our readers a peaceful and safe festive season.

Terry McMullan

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This year’s unseasonably savage spring bushfires should have exposed the futility of an increasingly useless debate about the role of climate change in natural disasters. We must at least accept that this year the bushfires have come early and with devastating force, and that drought and tinder-dry forests are the main cause. Experts’ use of the word “unprecedented” can’t be ignored. While Bernice Han’s cover article in this issue touches briefly on the fact that far too many of our senior politicians continue to question without evidence the increasingly dangerous role climate change is imposing on the Australian environment, she makes the point that for the insurance industry and other stakeholder groups like the firefighters and the affected communities the focus for now must be on the effects rather than the causes. The arguments can wait for another day, when everyone will have time to count the losses and, hopefully, discuss remedies with greater maturity. According to the experts quoted in the article, the bushfires of summer are likely to be even worse than anything we’ve seen so far. And after that? Will the drought break next winter? Will the bush return to an environmental balance? Or is this extended fire season the harbinger of a “new normal” as climate change becomes more fact than theory? Those questions are why we chose the cover illustration of an 18-month-old caught up in the recent bushfires in New South Wales. What does the future in a warming world hold for her generation? We are seeing the reality of what has been predicted by scientists for 40 years in devastating wildfires across the world and thousands of other examples of environmental stress, from coral bleaching to species extinction. For the insurance industry, politicians’ uninformed musings and resistance to committed action over a climate crisis that’s only going to get worse are irrelevant. We have our own long list of climate-related issues to deal with, ranging from affordability to the best ways to protect vulnerable communities.

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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.

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 PEFCTM certified paper stock using vegetable based inks by a printer with ISO14001 Environmental Management System Certification. ISSN 1837-4972


AAP Devastating conditions: the Hillville bushfire burns out of control behind a memorial cross on the Pacific Highway south of Taree, New South Wales

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shes are all that remain of Binna Burra Lodge. Massive bushfires ripped through the eco-retreat in Queensland’s Lamington National Park, which is part of the World Heritage-listed Gondwana Rainforests reserve that extends across the border into New South Wales. Gone forever is the main timber building, an 86-year-old structure accorded cultural heritage status. A number of the rustic cabins that surrounded the lodge have also gone. But the scale of the devastation wasn’t the only thing that shocked Steve Noakes, the chairman of the board that runs the lodge. What disturbs him equally was that the fires even happened there at all. The lush tropical landscape, with its renowned damp and misty flora, has been a reliable shield against threatening bushfires – until that fateful Sunday in September. “We are in a tropical environment,” Mr Noakes tells Insurance News. “We don’t

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normally get the sort of bushfire intensity that you get down south.” He notes that the loss of the lodge on September 8 was just the start of a multitude of bushfires in Queensland and New South Wales. “It hasn’t stopped at all in Australia. It has just gotten worse ever since.” Short of a miraculous change in the weather outlook, this summer’s bushfire season could be the most challenging since the Black Saturday tragedy in Victoria in 2009. The signs have been ominous from as early as August, when the start of the official bushfire danger period in New South Wales and Queensland was brought forward by two months. At that time a significant number of bushfires had already broken out in the two states, well before summer officially starts on December 1. Through November hundreds of bushfires raged through New South Wales and

Queensland. The November 9 period saw a catastrophe area declared for areas in New South Wales that was later extended to Yeppoon and the Sunshine Coast in Queensland. So far more than 500 homes in these areas have been either destroyed or damaged. Insured losses crossed the $150-million mark in a matter of days and are still rising. In New South Wales, a state of emergency was declared in November as conditions reached “catastrophic” levels. For days Sydney was choked in a blanket of haze so thick and hazardous that residents were urged to stay indoors. David Bowman, Professor of Pyrogeography and Fire Science at the University of Tasmania, holds grave fears over what could be in store this summer. He says the significance of the Binna Burra Lodge fire is enormous. Professor Bowman, who is also Director of the university’s Fire Centre Research


Fiery omens As predicted, this year’s fire season came early and with frightening ferocity. The summer is shaping up to be every bit as bad, and possibly worse By Bernice Han

Hub, says the fire shows the extent of the toll the ongoing drought has exacted on the environment. So devastating is the drought gripping the eastern states that regions like the subtropical forest area surrounding the lodge have been sapped to near-dry levels by the parched conditions. And that is a recipe for a potentially terrifying summer fire season. “What we are really worried about is that these fires are very unusual in terms of their geographical locations and their timing,” Professor Bowman tells Insurance News. “These are all really big red warning lights that something significantly bad is happening. We’ve got very high levels of fire activity early in spring and we are not even into summer proper. “Basically, the New South Wales and south Queensland fires that are still burning are, in my opinion, unprecedented.” He uses that word “unprecedented” for

a number of reasons. The drought, one that many farmers have described as the worst they have experienced, has severely reduced moisture to historic lows. “In other words, it’s never been this dry. And that makes sense because it’s a historic drought,” Professor Bowman says. “The entire landscape is in a combustible state. “All you need is an ignition and it’s going to burn, and you get strong winds and it’s going to burn fiercely, and that’s exactly what’s happened. “So now you are trapped in a see-saw where you get this burst of hot weather that’s coming. Those fires are not going to be put out possibly for months, until there is significant rain. Unless we get a massive amount of rain, then February is going to be terrifying.” Based on current weather projections, the chances of heavy downpours in the areas that urgently need them most are looking extremely remote. It may well take a

random event like an east coast low or even precipitation from an ex-cyclone to avert a disaster. “So that’s what would be the best outcome. But until we get that, it’s going to be tough for sure. We could see something very, very bad,” Professor Bowman says. Another disturbing aspect of the fires is the emergence of a phenomenon known as pyrocumulonimbus. This typically occurs when a bushfire is so strong that it creates its own weather system. In such a situation giant clouds and storms are formed. According to the Bureau of Meteorology, when pyrocumulonimbus clouds occur they can cause dangerous and unpredictable changes in fire behaviour, making them more difficult and dangerous to contain. This was what faced New South Wales when the state of emergency was declared in November. Emergency and rescue officials were worried about the likelihood of

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Battle for homes: firefighters work to save a house in the Mid North Coast region of New South Wales

“Unless we get a massive amount of rain, February is going to be terrifying.” – David Bowman, Professor of Pyrogeography and Fire Science at the University of Tasmania

localised weather storms and events. “In Australia, as well as globally, we are seeing more extreme fire conditions, and more bushfires interacting with the atmosphere,” Richard Thornton, the Chief Executive of the Bushfire and Natural Hazards Co-operative Research Centre, tells Insurance News. “These pyrocumulonimbus systems, which are created by the energy released by large fires, have become much more common in the past 20 years. They are extremely dangerous and create their own weather, including lightning. “This can not only start new fires, but also cause erratic winds on the fire ground – winds that may differ to the prevailing wind, rapidly changing the direction of a fire.” The centre is stepping up efforts to deepen its knowledge in this area, Mr Thornton says. “Our research is working to better understand not only how these systems are caused, but also how we can better forecast the conditions that they occur in.

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“Our experts are already working with fire agencies on this. During severe weather, they are often working side by side in the operations centres to provide analysis and advice.” As scientists have been warning for many years, bushfire seasons in Australia are starting earlier and lasting longer. And they are also becoming more intense and severe. The link to global warming is undeniable, scientists say. Rising temperatures, fuelled by man-made carbon emissions, are producing devastating consequences. The bushfires that have been ravaging the eastern states in the middle of winter are not isolated events. A recent IAG report produced in collaboration with the US National Centre for Atmospheric Research reached a similar conclusion. The research is based on the latest climate data and extreme weather event predictions, working on a range of warming temperatures, up to 3 degrees Celsius from

pre-industrial times. Despite the evidence, the nation’s politicians continue to dither and obfuscate. Prime Minister Scott Morrison is one who has expressed personal doubts that climate change and the recent extreme bushfires are in any way linked. Some of his senior ministers have continued their long-standing practice of refusing to discuss the subject at all, and in one notorious case deflected the debate as being an obsession of “raving inner-city lunatics”. For the insurance industry, local governments and emergency workers, the debate over climate change and the catastrophes is now meaningless. No matter what the cause, they have to deal with the fact that bushfires are more dangerous and increasingly common. Major insurers have responded to the scale of recent natural disasters by forming special teams trained to respond quickly and effectively to property losses. IAG Executive Manager Major Events


AAP

Craig Byfield points out that the teams exemplify the whole point of taking out insurance. “When the worst does happen, insurers step in to help families and businesses get back on their feet,” he says. IAG has a dedicated, well-resourced national Major Events Claims response team ready to be activated at any time. “The response team ramps up during a catastrophe, with a focus on having our people on the ground early and then throughout the following months until we are satisfied customers are back up and running,” Mr Byfield says. Suncorp’s post-disaster response plan is similar. It has teams that include assessors and building co-ordinators located in each state and territory, ready to be deployed. Unless weather conditions change dramatically and widespread rainstorms lower the risk, these response teams are going to be stretched as the fire sea0 son moves into summer.

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Not quite off the rails, but still not great It’s been another slow 12 months for insurers. Here’s how Finity sees the Australian market performing over the next year By Bernice Han

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hen it comes to growth, things are probably about to slow down a notch further for the industry in the coming months. An annual “state of the industry” barometer from actuarial consultants Finity points to moderating growth across a number of business lines. While not quite approaching conditions normally found in a bear market, the forward-looking Optima report gives no cause for champagne-popping exuberance, either. Further reductions in reported profitability are on the cards, the report says. It predicts an overall insurance margin of 7% for this financial year, which would mean another consecutive year of decline. In 2018/19, the industry suffered a three percentage-point drop in margin to 9%. “We are coming off a high in terms of profitability,” Andy Cohen, the actuarial and analytics consultancy’s newly appointed Chairman and lead author of the report, tells Insurance News. Insurers are still pushing ahead with premium increases, but the increment has more to do with taming the unwanted and erosive effects of claims inflation on earnings. “We actually do see premium rates still going up in a lot of classes in 2020 and, all things being equal, that would be good for profitability,” Mr Cohen says. “But unfortunately, not all things are equal. Premium rates do still need to go up for a number of reasons. Claims inflation is still there in a number of

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classes, so you have to keep rates up just to match that.” The prevailing low interest rate environment is another factor. Insurers need to compensate for the weaker returns they are getting from their investments. “From a pricing point of view, if interest rates on investments have come down then you can’t earn as much investment return on your new premiums,” Mr Cohen says. “So you need to increase premiums to make up the difference.” The Finity report is predicting a 5% growth in gross written premium (GWP) across the industry, which would be slower than the 6% rise the industry achieved in the previous financial year. Claims inflation, low yields, weather events, regulatory developments, class actions, competition and scope for reserve releases loom as key hurdles confronting the industry. A 15% increase in GWP is projected for financial lines, the highest among the nine business classes analysed in the report. In 2018/19, the premium pool surged 17% to exceed $2.5 billion, spurred mainly by rate increases. But this is where the good news ends for insurers operating in this space. As things stand, a double-digit jump in GWP in itself is not enough to restore financial lines back to profitability. The issues that have dogged the segment in the past few years have not gone away, thanks to prior-year deterioration, reinsurance costs, regulatory tightening


and class actions. To complicate matters further, the fallout from the Hayne royal commission’s scathing findings is far from over. The consequences could be potentially toxic. Royal commission-linked claims will in all likelihood take a number of years to emerge and mature, according to the Optima report. In short, the temperature in the financial lines class remains as hot as ever. The 2018 calendar year stood out for producing the highest number of class action filings. “When things are hot, we are saying it’s kind of in favour of claimants, and when things are cold, it’s in favour of insurers. “So there’s a lot of things bubbling away. It’s been happening for a while in financial lines. Class actions are one of those things, although interestingly the number of actions in 2019 has been the lowest for a while.” The loss-making professional indemnity (PI) and directors’ and officers’ (D&O) product lines in particular will remain a drag on the class. Rates for PI and D&O are set to increase 10-15% and 10-20% respectively this financial year, below what is needed to stem the bleeding. “To get back to target profitability under the current environment, PI rate increases of 15-20% and D&O rate increases of 30-40% are required,” the Optima report says. PI is currently running at a combined operating

ratio of 105% on an underlying basis and D&O is on 120%. For the remaining eight business classes, no standout performances are on the cards. The Optima study says reported profitability for private motor, householders, standalone liability and commercial motor are expected to come in at or just above target, meaning a return on equity (ROE) of 10-15%. Business packages and workers’ compensation can expect earnings to be a little under target, with a ROE of 5-10%. For corporate property, the outlook calls for well below target reported profitability or a 0-5% ROE. Compulsory third party is the only class that can expect ROE to exceed 15%. Overall, the industry is likely to produce a ROE of 10%. This would be lower than the 13% return the industry made in the last financial year. The way Finity sees it, the decline is not entirely bad when the current economic conditions that have forced the central bank to lower interest rates to record low levels are factored in. “While return on equity has come down, one has to consider that interest rates have come down and so has the cost of capital,” Mr Cohen tells Insurance News. “So a lower return might be acceptable given interest rates are so low. Perhaps that could be considered to be on-target in today’s low interest environment. 0 “So it’s not a bad outcome.”

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Time to grow QBE has simplified its business and refocused on basics. Now Pat Regan is looking for growth By John Deex

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n an Insurance News cover story in April 2017, Pat Regan explained how a deep and detailed “cell review” process had led to significant improvements in results across QBE’s Australia and New Zealand division, which he was running at the time. Just a few months later, following the exit of John Neal, Mr Regan was promoted to Group Chief Executive, and his successful strategy for local operations helped form some of his thinking in the top job. The now infamous cell reviews were rolled out across the group, and the “Brilliant Basics” strategy – summarised as “how do we get as good as we can be everywhere we do business at underwriting, pricing and claims” – was born. The strategy was intended to be absorbed into QBE’s DNA, with the company pledging to be customer-centred, technical experts, diverse, fast-paced, courageous, accountable, and a team. On these key planks, Mr Regan tells Insurance News that “we’re all quietly pleased with the progress we’ve made”. But he says that in the early days “Brilliant Basics” was a hard thing to sell to outsiders. “QBE had been a complicated business and had some results surprises over a period of time, and me just saying we are going to focus on underwriting, pricing and claims didn’t feel that special,” he says. “Surely everybody spends all their time focusing on that? But the reality is, having a concerted effort on doing your basics well just makes a tonne of difference, and sometimes the trick in life is to focus on the obvious.” While the “basics” part is broadly in place – there are now standards for underwriting, pricing and claims right across QBE, along with a program to modernise technology – there is much more to do on the “brilliant”. “I’ve said to people we’re halfway through – maybe not even that,” Mr Regan says. “But we’re really pleased with how that’s gone so far, and how it’s been brought to life by our folks across the world.” The cell reviews continue. Mr Regan says that constantly reviewing performance at a granular level means “little mistakes don’t become big mistakes”. But it’s all evolving, too.

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“No doubt as we go into 2020 we’ll do another version that is a bit more automated, a bit more forward-looking, a bit more customer-oriented. “They could be less about how much money we’re making in every sale and more about customer service. Are we delivering good value? What does our claims service look like?” Claims remains a vital focus, and QBE has made significant changes under Mr Regan’s watch. Much work has also been put in to make sure any customer complaints are dealt with quickly and efficiently. “We got a lot of feedback [on claims] when I was running Australia and it wasn’t all good,” Mr Regan says. “If you are working with a broker partner and they can’t recommend you on your claims service, it is kind of hard. “So we had to listen to that feedback and make some changes, certainly around the more complex claims. “Simpler claims you want to pay as quickly as you can, automate as much as possible. More complex claims you need a level of technical expertise. “We just had to adjust to make sure we were driving the best, most efficient outcomes, and actually giving a higher quality claims service. There is not much we do that is more important.” Mr Regan says ultimately longer-term projects – such as defining QBE’s DNA – stand to have greater impact than the quick wins. “Having a culture that feels consistent throughout the world, trying to live and breathe that – it will probably take longer to see immediate benefits but it is probably the most important thing.” He’s happy with the results his strategy is delivering, but that doesn’t mean he is slowing the pace. Mr Regan is already preparing for the next challenge. “Two years ago if I’d thought we’d be where we are today I’d have been reasonably content,” he says. “But naturally you are never content. The moment you are, you’re not doing your job properly. “We’ve made good progress on Brilliant Basics and how people have adopted the QBE DNA. There’s been improvement in our results, and the investor sentiment that goes with that.

Focused on future challenges: QBE’s Pat Regan


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“But you do all of those things and there is a whole raft of other things you decide you want to be better at. “Can we grow at the same time as doing all those things? That will be the next challenge.” Growth will need to be “sensible and disciplined”, Mr Regan says. He wants to grow “nicely, organically”, perhaps with one eye on the mistakes of the past. “We’re conscious there are a few more strings we need to add to our bow,” he says. “We think we’ve got really good capabilities in most places in the world.” QBE sees opportunity “across most sectors” locally, and Mr Regan also picks out North America as a region ripe for growth. “In North America we have a smaller market share than in Europe and Australia, but working with our broker partners there, we have big opportunities. “We have a new chief executive there, and he is very excited and optimistic about what we can do over time to punch a bit above our current weight.” Locally, the priority remains the commercial

market, where QBE has greater market share. While progress is being made on personal lines, there will be no dramatic move, at least in the short term. Mr Regan believes that having already been through a simplification process, QBE is now better placed to grow. “There are big companies around the world that are remediating, re-underwriting, and we are not doing that any more. So that maybe gives us the growth opportunities. “Obviously the pricing environment is a bit more supportive. So I think the next step for us is, can we still do the brilliant basics, cell-review type agenda but add sensible disciplined growth to that as well. “Where you have got better rate adequacy and good capabilities, which we have now, that allows you to grow.” Another continuing challenge is simply evolving to keep pace with a changing world. He says QBE doesn’t want to just keep up, it wants to be at the forefront. “We will wake up one day and the world of

Changing climate, changing risk Insurance News met Pat Regan on a day of “catastrophic” bushfire weather in parts of Sydney and New South Wales – the worst conditions for a decade. While doubters remain, he’s in no doubt at all that the climate is changing – and that insurers can play a key role in helping communities adapt. “Worldwide there are more climate-related incidents and losses than there used to be,” he says. “It is a trend that is pretty clear to see, whether you are looking at QBE data, industry data or other data. “Running a company where you take on risk around the world, you have to acknowledge that. Otherwise you are not doing your job. “There are various things we need to do,” he says. “One is to make sure we are on top of assessing risk as it changes, whether that be areas exposed to things like wildfires or floods, or areas near the coast. “Second is to be aware that the kind of industries that will be prospering five or 10 years from now are different from what they were five or 10 years ago, and obviously we need to be working with growing industries. “The evidence is pretty clear that climate is making a change to extreme weather frequency that impacts communities our customers live in. It’s also changing our business model.” Mr Regan believes it’s important to talk about how climate change could play out, including the possibility that some parts of Australia could become uninsurable. But he’s optimistic that such an outcome can be avoided. “To a certain extent you have to talk about it because it is real and increasingly present. But hopefully nothing will

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be uninsurable if we work together to prevent things. “Clearly as an industry we wouldn’t want parts of the country to feel they can’t get insurance; that’s not a good outcome for anybody.” Insurers’ access to increasing levels of data that allows for property-level pricing could exacerbate affordability issues for at-risk properties, Mr Regan says, and it may be that some level of subsidisation will be required in future. “On one level insurance is all about using the greatest available data to price risk,” he says. “But you don’t want to do that in a way that leaves people vulnerable or uninsurable. “In various places in the world you have the concept of community pricing. We have it with compulsory third party here. People broadly are OK with that. “You need everybody in the community to be insurable, and therefore there is an element of community pricing.” Mr Regan believes companies should “make positive contributions” to the communities they operate in. QBE recently announced a three-year partnership with the Red Cross and Save the Children to provide disaster relief funds after catastrophes. This has already seen a $100,000 donation to support the Red Cross in its bushfire relief and recovery efforts in NSW and Queensland. “The idea is that if they don’t have to fundraise to respond to incidents, they can respond straight away,” Mr Regan says. “Every company has an obligation to contribute positively to communities they operate in. Increasingly, nobody wants to work at a company that doesn’t do that.”


Tech revolution: Mr Regan believes insurance products will change

commercial insurance will have changed profoundly,” Mr Regan says. “We don’t want to be one of the companies that is left behind; we need to be finding ways of reinventing our business model as we go forward.” At the heart of this evolution is technology, and how QBE uses it to deliver better customer solutions. Mr Regan says this will initially be about helping customers access the right insurance products, but it could develop into “helping people run their business and avoid risks and losses”. “We use data science, robotics, and artificial intelligence in improving underwriting and pricing today, but how we use some of those same tools to provide better customer solutions is an interesting and new challenge.” He believes technology is “changing everything”, including the nature of insurance. “Over time you could have a product that is a combined technology, data sensor and insurance product,” he says. “Not just us feeding off the data to price a property product better, but actually a different type of product. “Maybe what we do is not just sell an insurance product, it’s actually about helping customers avoid risks and run their businesses better. “I would think over time pricing and creating products based on historical claims history will feel like a thing of the past. It will be drawn from all sorts of data. “Quantum computing may be a decade away from being commercially viable, but that is going to fundamentally change things when you assess risk. “Over time we will look back and think ‘gosh did we ever do insurance that way?’. “Maybe there are areas where the partnership between the insurer and the broker changes a little bit

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and blurs and blends over time. “For SMEs it is clearly going to be a fully digital experience. For many SMEs that will be reasonably soon.” QBE has also been working on simplifying policies. As other insurers have found, “it’s tricky”, but Mr Regan insists that change must come. “On the wall we’ve got a one-page policy that used to exist 70 years ago. Now we’ve got these things that are typically 65, 70, 75 pages long, full of definitions and exclusions. “For anybody, even an expert, they are very difficult to understand. They help us decide in extremis what is not covered, but they are not really helpful in giving the industry a good, reliable, trustworthy reputation. “We, as an industry, are going to have to rely less on a five-page definition or a 20-page set of exclusions.” Mr Regan enjoys the strategic nature of his position, and the worldwide travel that comes with it. He says that “getting older” gives him an appreciation for the role. “I really enjoyed running Australia, so I was curious whether I would enjoy this as much; but I really do,” he says. “To do this job well you’ve got to have an appetite to go around the world, touching our businesses, seeing our folks, but also getting in the flow of financial services. “A lot of that happens in London, or New York or Singapore, but they are not the worst places in the world to visit.” It’s a good job he enjoys it, because he’ll likely be carrying on for a while yet. A clear thinker with a steely determination to get things done, Mr Regan looks to have stabilised QBE and is well placed to lead the group into a 0 new era.


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Robert Kelly

Managing Director and Chief Executive, Steadfast Group:

1

Ten years ago, in the very first Insurance News listing of the industry’s 20 influencers, we described Robert Kelly as “personable, tough-minded, witty and often controversial”. While the organisation he ran then has since become a listed company that’s many times larger and more powerful than it was in 2009, Kelly remains securely in the driving seat, his reputation enhanced even further in 2019 by the stunning takeover of major broker group IBNA. Steadfast now commands its own strategic direction, with an independent technology platform and ancillary financial services fed by, and to, its vast broker network. Kelly’s influence, not just on broking but the wider insurance industry, is immense. He can be witheringly blunt at members’ meetings and charming for global investors, but he never forgets he started as a suburban broker and he never stops looking for strategic openings.

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THE TOP 20 INFLUENCERS IN AUSTRALIAN INSURANCE By Terry McMullan

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his is the 10th time Insurance News has listed the 20 most influential people in general insurance. It has evolved to include organisations that also influence the overall industry. The list was conceived in 2009 as a oneoff attempt to define the people who were setting the pace in insurance. We’ve never made any secret about the informal way we compile the list. There is no science involved and submissions from hopeful parties are not considered. We have always relied on our own knowledge to compile this list. Insurance News journalists spend their time deeply immersed in industry affairs, and the insurance movers and shakers become pretty obvious. Industry issues are shaped by the attitudes and opinions of individuals, and we know who can make things happen. At the same time there are organisations impacting on insurance – in good and bad ways – and they also deserve mention as influencers. You might think this list is, by its very nature, a bit static. Nothing much changes at the top, does it? It does, and often rapidly. A comparison with the list for last year and those who didn’t make it this year illustrates that fact. Let’s consider our 2009 list

(page 22). There are some familiar names there. Most are still active participants in business, but few of them are doing now what they were doing then. Only Steadfast’s Robert Kelly and Ebix Australia’s Leon d’Apice have featured on every Top 20 list. As we noted 10 years ago, this industry changes quickly, and so do the issues and opportunities that affect its overall strategic direction. The people on this list are leaders, persuaders and excellent communicators. On top of all that they’re worth listening to. There are many others who deserve to be on this list, of course. We’re a long way from perfect, and this is solely our choice. We could so easily make it a Top 50 and still miss mentioning people who deserve recognition. And as with so many annual commentaries on the Top 20, we have to again note the relative absence of women on this year’s list. It’s deeply regrettable; it shouldn’t be like this, and we look forward to the day – hopefully 12 months from now – when more women are included on this list for no other reason than that they’re among the 20 most influential people in insurance.

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Gary Dransfield

President, Insurance Council of Australia and Chief Executive Insurance, Suncorp Group:

2

His new role as ICA President means Gary Dransfield is staring down the barrels of two significant challenges in 2020: selling the insurer’s new code of practice and getting Suncorp back on track with a new/old approach to selling insurance. Unlike some industry associations, the presidential role at ICA can be time-consuming when insurance is in the headlines. Add to the mix such hot issues as high premiums in northern Australia, mitigation spending, the royal commission’s complicated approach to insurance and a need to start getting noisy about the impacts of climate change. Dransfield has a reputation for getting things done, but his time management skills are going to be at full stretch in 2020.

Peter Harmer

Managing Director and Chief Executive, IAG:

3

Richard Enthoven

Chief Executive, Hollard Insurance:

4

Four years into the job and Peter Harmer is a long way down the road to withdrawing from Asia, placing the insurance giant’s entire focus on the Australian and New Zealand markets where it dominates. IAG is spending big on insurtech as it chases the dream of being a lifelong friend of the customer, which is proving to be an interesting exercise that includes using its knowledge and commercial clout to get involved in community issues – including climate change.

The latest version of the insurance industry code of practice is strong on support for “vulnerable consumers experiencing family violence, financial hardship and mental health conditions”. Long overdue, perhaps, but it’s significant that such measures came to fruition during Enthoven’s stint as Insurance Council of Australia president. A strong believer in diversity and inclusion in the company he founded, Enthoven’s business acumen is fully on display when you look at his insurance business. In gross written premium terms, Hollard is probably now the fifth-largest general insurer in Australia.

7. Robert Kelly, Executive Chairman, Steadfast. 8. David Smith, Chief Executive, Zurich. 9. Kerry Kelly, Chief Executive, Insurance Council of Australia. 10. Heinrich Eder, Managing Director, Munich Re Australia. 11. Russell Higginbotham, Head of Australia & New Zealand, Swiss Re. 12. John Brogden, Chief Executive, Financial Services Council. 13. Graham Samuel, Chairman, Australian Competition and Consumer Commission.

14. Lach McKeough, Chief Executive, Austbrokers. 15. Duncan West, Chief Executive, CGU. 16. Patrick Snowball, Chief Executive, Suncorp. 17. Steve Lardner, Director Broking Operations Aon Risk Services; President, NIBA. 18. Rob Scott, Managing Director, Wesfarmers Insurance. 19. Leon d’Apice, Managing Director, Ebix Australia. 20. Keith Stern, Lloyd’s General Representative for Australia.

2009 list 1. Frank O’Halloran, Chief Executive, QBE Group. 2. John Trowbridge, Executive Member, Australian Prudential Regulation Authority (APRA). 3. Mike Wilkins, Chief Executive, IAG. 4. Terry Ibbotson, Chief Executive, QBE Australia. 5. Chris Bowen, Federal Minister for Financial Services. 6. Terry Towell, Managing Director Allianz Australia and President, Insurance Council of Australia.

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Mark Milliner

Chief Executive Australia, IAG:

5

When Suncorp’s Michael Cameron quit in May after four years as chief executive there was plenty of discussion around the market about what shape Suncorp would be in today if Milliner had got the top job instead and hadn’t jumped ship to IAG. The answer is pretty easy: compare where the country’s two major insurance groups were then and now. As we noted last year, Milliner is the mover to Peter Harmer’s shaker, making some hard decisions on costs, pushing distribution and promoting innovation across his diverse broad family of brands.

Steve Johnston

Managing Director, Suncorp Group:

6

It’s probably not surprising the Suncorp board chose an experienced insider like Johnston to succeed Michael Cameron, whose puzzling Marketplace strategy didn’t last much longer than he did. Since taking up the tangled Suncorp reins permanently in September, Johnston has been out and about talking to staff and key groups like brokers, telling it like it is and reminding everyone of Suncorp’s considerable strengths. His management team’s insurance talent is wide and deep, and he’s doing a good job replacing disenchantment with enthusiasm.

James Shipton

Chairman, the Australian Securities and Investments Commission (ASIC):

7

Last year the Number One spot in our Top 20 was taken by the then-newly appointed James Shipton, whose stated determination to restore trust in financial services was given hefty backup when Kenneth Hayne’s royal commission hearings lifted the lid on dodgy dealings that had taken place ¬on ASIC’s watch. Shipton’s team at ASIC is responsible for the behaviour of industries, companies and individual licensees, and in 2020 it will have more muscle, including higher standards for financial services licensees, enhanced banning powers and a determination to drag wrongdoers into court. In other words, no more Mr Nice Guy.

The Australian Competition and Consumer Commission (ACCC) and the Australian Prudential Regulation Authority (APRA): While ASIC focuses on conduct, the ACCC is all about protecting the rights of consumers. Its role is essential, but it also has the potential to cause collateral damage. For example, ACCC research into the long-running problem of high premiums in northern Australia has resulted in an interim report with suggestions that show little understanding of how insurance actually works. But bad ideas can win votes, and desperate politicians aren’t all that fussed about long-term impacts. Which is where APRA comes in. Put simply, its role is to keep insurers solvent. It “gets” insurance, so it is acting as a bulwark against the loonier ideas of other government agencies, as well as politicians. APRA is powerful, professional and persuasive, and as far as insurance is concerned, a force for good.

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Vivek Bhatia

Chief Executive, QBE Australia Pacific:

9

One of the most experienced insurance industry managers in the country, Bhatia is also one of the smartest. Right now he’s engaged in dragging down costs in his regional empire, having already restructured his local team to move the decision-makers closer to the broker and the end customer. He’s a close observer of industry trends, so expect this well-liked manager to be in the front line when new opportunities arise.

Rob Whelan

Chief Executive, Insurance Council of Australia:

10

With an impressive new code of practice set to be launched, Whelan still can’t afford to relax. The pressures building in the market are many and varied, and the industry’s outward calm disguises some serious internal struggles over issues. After 10 years in the top job, Whelan should be well-versed at balancing divergent views on climate change and extreme weather, mitigation policies for northern Australia, taxes, the rise in funded class actions, and a host of other issues. ICA has become a technically proficient organisation that provides valuable information and support to the industry. Leadership? Not so much.

Dallas Booth

Chief Executive, National Insurance Brokers Association:

12

Professional and polished, this former lawyer oversees an association that’s going to be even more vital to brokers in the years ahead. With a range of regulatory and possible legislative pressures descending on the intermediary sector across financial services, general insurance brokers are going to be grateful they have a representative organisation headed by someone who understands the issues and the driving forces behind them. Booth knows who to speak to and how to frame coherent responses to government actions that all too often aren’t even aimed directly at general insurance brokers.

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Pat Regan

Group Chief Executive, QBE:

11

When we listed Regan in our Top 20 last year we noted all the changes he had already made in his first year running Australia’s only global insurer, and predicted that 2019 would be “even more interesting”. As an interview by John Deex elsewhere in this edition of Insurance News demonstrates, Regan hasn’t slowed down the pace of change as he transforms the once-clunky QBE operation into a sleek and responsive insurer that’s a little less spread out but very much more profitable and predictable (as much as any insurer can be, anyway).


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Chris Mackinnon Lloyd’s General Representative in Australia:

13

As mentioned elsewhere in this article, underwriting agencies are becoming even more important in the Australian insurance landscape. Mackinnon has solidified Lloyd’s presence in the local market and is now ably leading it through what looks like another challenging chapter in its history. Limiting Lloyd’s syndicates’ capacity is a complication he could have done without. As to the need for Lloyd’s to speed up its technology transformation, new Chief Executive (and Top 20 alumnus) John Neal is pushing innovations through the market at an impressive rate. Such developments will eventually result in improved responsiveness for local underwriting agencies.

Senator Jane Hume

Federal Minister for Financial Services:

14

Senator Hume should logically be the go-to person in Canberra for all legislative and regulatory issues involving general insurance – and there will be plenty of those in the next few years. However, Financial Services is one of those ministries where a politician makes a brief stop on the way to another, hopefully more senior, portfolio. With a few notable exceptions – Joe Hockey and Bill Shorten come to mind – these ministers rarely get into the detail of general insurance. Senator Hume was a policy adviser at AustralianSuper before winning a seat in 2016, so unless a major catastrophe prompts her to say something (possibly slanderous) about insurance, the best people in her office to talk to will be her permanent staff.

Mike Emmett

Chief Executive, AUB Group:

15

Emmett joined AUB in March, with the clearly stated intention of returning Austbrokers to its basic focus – insurance broking minus the complementary businesses put in place by his predecessor, Mark Searles. Emmett was less than happy three months after joining AUB when the 90 members of independent broker group IBNA walked away from their joint venture with Austbrokers to join arch-rival Steadfast. That, and complications with a stalled takeover of Coverforce in August, haven’t made for a good start. But Emmett has an impressive business track record, and the strength of AUB in brokerages and underwriting agencies means the company’s strategy for future growth is in good hands.

UAC The Underwriting Agencies Council:

16

With as many as 150 underwriting agencies large and miniscule operating in Australia, UAC isn’t an organisation that can be ignored. It has about 100 corporate members and it’s fairly obvious that even if the significant influence of Lloyd’s were to drop as a result of, say, a massive exposure like asbestos, there’s sufficient sources of alternative capital for the sector to keep growing. As risks in the insurance market become increasingly complex and varied and as insurers refine their marketing strategies, underwriting agencies will continue to be the repository of specialist expertise. The relationship between local insurers and the agencies could well evolve further.

WHO WAS HERE LAST YEAR… The insurtechs: Their ascendancy into insurance was a phenomenon last year, but now the insurtechies are a fixed part of the industry. They have the potential to completely transform insurance, but most change will come in slow and steady stages. Kenneth Hayne – Royal Commissioner: His job is done. He has set some tough standards and controversially brought blackletter law into self-regulation. Michael Cameron – Managing Director Suncorp: Resigned in May after failing to convince the board his strategy was the best way forward.

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Mark Searles – Managing Director AUB Group: Resigned to become a professional director in Australia and the UK. Clare O’Neil – Shadow Minister for Financial Services: She fell at the first hurdle when the ALP lost an “unlosable” election. The reinsurers: Their role is as vital as ever, but nothing much is changing there. Allan Manning – now Chairman of LMI: His passion for insurance is as hot as ever, and his technical expertise is gurulike. But influencing change without a seat at the table isn’t easy.


Richard Feledy

Chief Executive, Allianz Australia:

17

Allianz is Australia’s fourth-largest insurer, and its management style has always been understated. Perhaps that’s a hallmark of its German parent, which is a global powerhouse. Feledy’s aim is, obviously, to grow the company in the highly competitive Australian market. While Allianz has a strong foothold in personal lines, it would need to grow its commercial business considerably to challenge the locally owned Big Three. But Feledy sees his company’s work in 70 markets worldwide as a definite plus, because it gives him a wealth of knowledge. Allianz has always been independently minded – it continues to advocate a reinsurance pool for northern Australia in the face of opposition from most of its counterparts, for example. With a swag of capital available if Allianz finds a significant opportunity in Australia, it’s definitely worth watching.

Leon d’Apice

Chief Executive, Ebix Australia:

18

The information s u p e r h i g h w a y, Leon d’Apice said about 10 years ago, is strewn with the corpses of failed companies. He was commenting on the launch of yet another broker system designed to compete with the Ebix stable of systems that dominate the market. The challengers still fail, even if Steadfast has drawn closer with its Insight system, which was itself developed from information superhighway roadkill. Mr d’Apice’s Sunrise Exchange transaction platform, bought from Telstra in December 2007 and improved over time, has formed the basis for a plethora of services that continue to dominate the local insurance market.

Tim Plant

Vocal Critics

Chief Executive, Zurich General Insurance:

19

The consumer advocacy groups:

Running Zurich’s general insurance operations in Australia hasn’t been the happiest of positions over the past 10 years, but all that intrusive oversight from Switzerland has eased since Mario Greco took over the global operation and appointed Tim Plant to lead in Sydney. A friendly and intelligent operator with plenty of experience gained at Elders, QBE and icare, Plant spent his first year restructuring his management team and setting up more responsive systems. Insiders praise the new emphasis on spreading decision-making across the group and Plant’s emphasis on the need to focus on brokers and customers.

20

There’s nothing wrong with a bit of constructive criticism, and as an industry that puts things back together again, it’s only natural that insurance cops so much of it. Of course, not all criticism is constructive or well-meant, but a lot is. Community legal centres, for example, genuinely care about pushing for change to systems, attitudes and policies they see as outdated, unfriendly or simply rubbish. And then there are the organisations that risk losing credibility via crass stunts that raise a cheap laugh. Take a bow, Choice, with your shonky Shonky Awards. We’ve included in this category the Australian Financial Complaints Authority, which took over the industry ombudsman role earlier this year. Its emphasis on naming and shaming erring insurance companies and its willingness to be a vocal critic is going to take some getting used to, but there’s no doubt at all that because of its official role AFCA is already influential. It can only become even more so.

GONE BUT NEVER FORGOTTEN Donna Walker, Chief Technical Officer, Allianz Australia: Admired by professionals of all ages for her professionalism, leadership, insight and her practical support for professional women. Respected and loved throughout the industry. Frank Hoffmann: Broking pioneer who spent his life in insurance, a technical expert, witty raconteur and sharp commentator. Bill de Vos: A professional who helped build several brokerages. Likeable, curious and very able. Bruce Copp: London broker who worked with Australian

underwriting agencies. A constant visitor Down Under, he was the London market link for a legion of brokers and underwriting agents. Harry Dickinson Jnr: Worked at Interruption Underwriting Agency (IUA), which was established by his father, for many years in a variety of roles, including Chairman. Natalie Georgoulas: A popular and much-admired Sydney underwriter and mother of two who died in a road accident in June. Renzo Antidormi: Victorian State Manager at NTI, renowned for his leadership and calm professionalism.

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Does this pool plan hold water? A cyclone reinsurance pool will once again be explored as a potential solution to high premiums in the north. And this time insurers are on board – sort of By John Deex

I

t seemed to come out of nowhere. The insurance industry, after being summoned to Townsville in mid-November for an urgent meeting with Federal Assistant Treasurer Michael Sukkar, agreed to help Treasury investigate the feasibility of a government-funded cyclone reinsurance pool. The agreement marked a significant switch for the insurance industry. The vast majority of major insurers have consistently argued against government intervention in the market. The Insurance Council of Australia (ICA) has maintained that it could skew a still-functioning market and perhaps encourage inappropriate development. It would also be a huge financial burden on the Government. The industry has always favoured mitigation, saying it’s the only way to sustainably reduce the risk posed by extreme weather in northern Australia. Premiums, they have insisted, will fall in line with lower risks. And they have been adamant that a reinsurance pool won’t solve the underlying problem of below-strength buildings and infrastructure. So why change now? And why isn’t the Government waiting for final findings of the Australian Competition and Consumer Commission (ACCC) report into the issue, which aren’t due for another year? The idea that a pool could be the solution to sky-high premiums in exposed areas of northern Australia is

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nothing new. A swag of official reports have considered (and for the most part rejected) the idea, most notably the Northern Australia Insurance Premiums Taskforce in 2015. Back then – in reality just over four years ago – the Government did not take the matter further after modelling showed that while premiums could reduce by 1015%, there was a 10-20% chance the scheme would cost taxpayers more than $2 billion over 10 years. But it seems there is a new political impetus, and the industry is not as united in its views as it used to be. The Federal Government has come under pressure after a recent round of sharp premium increases, with vocal Queensland MPs convincing Prime Minister Scott Morrison that immediate action is needed. These MPs come from electorates that the Government fears losing. They were critical to the coalition’s “against all odds” election win earlier this year, and their voters’ concerns therefore can’t easily be passed off with yet another official inquiry. The Assistant Treasurer was dispatched from Canberra to “sort it out”, and November’s meeting in Townsville with insurance company chief executives was arranged. Mr Sukkar spoke candidly in the run-up to the meeting, confirming there was no way he was going to wait for the ACCC’s final recommendations. Which does beg the question: What’s the point of commissioning a


Men on a mission: Michael Sukkar, with Queensland MPs George Christensen and Phillip Thompson

three-year inquiry you’re not going to listen to? “It’s not an acceptable situation that people [in north Queensland] are unable to get insurance or are effectively priced out of the market,” Mr Sukkar told journalists in Townsville. “That’s my starting point. “I understand that time is of the essence here. I think people are sick of reviews and committees and reports – this sort of endless cycle of navel-gazing at the issue.” That comment may have been an unintentional backhander to the legion of coalition ministers who have commissioned a succession of inquiries into the issue. As the latest to give it a shot, Mr Sukkar made it clear he is focused only on ensuring north Queenslanders have access to affordable insurance, and that anything goes in order to reach this goal. He wants something to announce, and he wants it soon, saying the Government will be “as light-touch or as heavy-handed as we have to be”. ICA prepared for the meeting with a discussion document outlining specific mitigation projects and the premium reductions such work would make possible. It appeared to be heading to the showdown with the Assistant Treasurer with a “mitigation on steroids” plan of attack. But then came an internal twist, leaving its well-rehearsed arguments exposed. The insurers haven’t always been entirely united in their opposition to a reinsurance pool. Allianz has long

argued that while mitigation is vital, a reinsurance pool is needed to bring premiums down in the short term. Just one dissenting insurer could be put aside as an anomaly. But now Allianz has a key ally in personal lines giant IAG. Sources say IAG was quite vocal at the Townsville meeting in its support for a reinsurance pool in northern Australia. IAG declined to put anyone up for interview on the issue, but a spokeswoman has confirmed the insurer “sees merit” in a pool. Suncorp, on the other hand, says its “long-held and well-documented concerns” about a reinsurance pool remain. It is more exposed than any other insurer to extreme weather risks in North Queensland, and largely as a result of its exposures is regarded as the world’s biggest purchaser of reinsurance. Of course, a reinsurance pool might never happen. For all the tough talk, when push comes to shove the Government might not have the stomach for the harsh financial realities of a pool. We’re talking billions of dollars. But could it work? Finity Principal Rade Musulin, who has decades’ of experience in this area, says it’s hard to draw firm conclusions about the effectiveness of any future reinsurance pool scheme without knowing more about how it would operate. He also believes that previous modelling in 2015 may need to be updated.

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“It is hard to see why you would offer this solution to new construction. It may encourage irresponsible development, which arguably has occurred in the US where many pools are open to new development.”

“We obviously haven’t seen yet what the pool would look like, so it’s very hard to say whether it will be fit for purpose,” he says. “At the moment, it’s just an idea. We also don’t know the degree to which the figures prepared in 2015 are applicable.” Mr Musulin says it is important to allow the private insurance market to “do as much as possible. It is better not to disrupt the private market, which is generally doing a very good job.” However, he believes lessons can be learned from other schemes across the world such as Flood Re in the UK, New Zealand’s Earthquake Commission and the Florida Hurricane Catastrophe Fund “There are examples around the world of pools that have helped address problems with extreme weather events, with varying degrees of success,” he tells Insurance News. “It is certainly worthwhile to study these as there are things we can learn, but whether any would be fit for purpose for Australia is another question.” Mr Musulin says an Australian reinsurance pool could focus purely on existing building stock. “You don’t want to do anything to adversely affect future good building practices,” he says. “It is hard to see why you would offer this solution to new construction. It may encourage irresponsible development, which arguably has occurred in the US

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where many pools are open to new development.” Insurance News understands that the insurers’ agreement with Mr Sukkar involves exploring a 100% government-funded pool purely for cyclone risks in northern Australia. No further detail has been released, and neither has a timetable. While the industry has agreed to help, Insurance News understands insurers – Allianz and IAG aside – have done so through gritted teeth. There is also suspicion that the process will become highly political. Mr Sukkar has already taken aim at the Labor-led Queensland Government, demanding that they scrap stamp duty on insurance premiums, while conveniently turning a blind eye to the much higher insurance taxes being charged in coalition-ruled New South Wales. “The timing of this might coincide with elections,” one industry source told Insurance News. There is also a view that the premium savings achieved by a pool could be almost instantly wiped out by costly regulatory changes on the horizon. Whatever the motivations at play, insurers are presumably better to be working on the inside where they are able to influence developments, than have a solution foisted upon them. And meanwhile, the fight for mitigation funds continues in an effort to solve real problems, not just 0 political ones.


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Pegged down despite the storm A major rewrite of the general insurance code of practice is set for release after a difficult journey By Wendy Pugh

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wild weather camping analogy became an Insurance Council of Australia (ICA) favourite as it revised its code of practice amid the turbulence of a royal commission and other regulatory reviews. “I have used the analogy to my staff as they work through this process,” ICA Chief Executive Rob Whelan told a dinner last year as the Hayne inquiry was gathering pace. “Doing this review in the current environment is like pitching a tent in the middle of a cyclone.” ICA’s board approved the seventh version of the code at the end of October, after a complicated journey that took longer than expected, and with the final version still subject to uncertain new regulatory impacts after it takes effect next month. The code review was launched in February 2017 before the Hayne royal commission was a reality. The work continued as insurers sat in the hotseat during hearings, and the new document will be unveiled with the Hayne recommendations affecting enforceable provisions yet to be clarified.

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Other government and regulatory reviews at the same time have looked into areas such as product design and distribution rules and add-on insurance failings, while a three-year Australian Competition and Consumer Commission inquiry into northern Australian insurance was announced and is still underway. This finalised revised document carries the weight of responding to those challenges while also demonstrating the industry’s good standing and shoring up its social licence as community faith in financial services declines and consumer expectations increase. The previous code, which took effect in mid-2014 with a 12-month transition, was also a significant overhaul, but the demands have been even greater this time around. “The new code of practice is the result of more than two and a half years of consultation and development,” ICA President Richard Enthoven said. “It has been one of the most thorough and wide-reaching reviews and revisions of the code undertaken since the first code was developed in 1994.” Focus was sharpened on areas where

the industry has drawn fire, including the treatment of vulnerable consumers, inadequate disclosure, heavy-handed investigations of claims, add-on product sales and the responsibilities of service suppliers. The code review interim report published in November 2017 laid out the initial challenge, seeking responses on more than 40 questions about eight key proposals and highlighting at least another 40 discussion points. Former Australian Securities and Investments Commission (ASIC) general manager Phil Khoury was appointed early on to provide independent oversight. “A robust and ambitious code is vital for the industry to retain its capacity for self-regulation and to build community trust,” Mr Whelan said. “We must conduct business not only by the letter of the code but most importantly by the spirit of the code, placing the customer at the centre of our thinking.” The code review’s final report was released in June last year, with the Hayne inquiry by that stage mid-way through seven rounds of hearings. The document drew on


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Code version 7.0 ICA says the seventh code of practice goes “above and beyond legal requirements and aims to meet and anticipate consumer expectations”. These are some of the key changes: Plain English: A comprehensive plain-English rewrite aims to ensure an “easy-to-read and accessible document”. Vulnerability: Signatories to the code must have a policy in place by July 1 to support customers experiencing family violence. Appropriate employees should be trained to understand if a customer may be vulnerable, and there are provisions regarding mental health. Enhanced financial hardship provisions: Strengthened provisions include ensuring employees and agents involved in debt collection are trained on code hardship requirements. Enhanced sanction powers for the Code Governance Committee: Revisions extend the ability to sanction companies in the event of a breach and streamline the process the committee needs to undertake before imposing a penalty. Community benefit payment: An insurer that has committed a significant breach may be required to make a community benefit payment up to $100,000. The amount will depend on the insurer’s gross written premium and number of customers. Cash settlements and scope of works: Subscribers will need to provide information on cash settlements so consumers are better informed. A provision for scope of works also aims to help consumers understand this process. Investigation standards: Mandatory standards for claims investigators have been introduced. These include timeframes for updating a claimant, obligations regarding requests for information, and requirements as to how the investigation interview should be conducted.

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submissions, workshops and wider feedback. Initially it was planned for the code revisions to be completed later that year. The importance of its focus on vulnerable consumers was underlined as the Hayne inquiry made headlines with case studies showing heavy-handed treatment of people enduring tough circumstances. In the September insurance round of hearings insensitive claims-handling after natural disasters was scrutinised, add-on sales tactics were condemned again and codes of practice came in for criticism for failing to prevent or punish poor practices. Commissioner Kenneth Hayne’s two-volume final report, released in February, made recommendations targeted at areas including claims handling, unfair contract terms and the effectiveness of industry codes in combatting bad behaviour. The former High Court justice took more of a “blackletter” approach to codes, recommending that some provisions should be enforceable by law and emphasising that documents must be more than “public relations puffs”. He proposed that the ICA should take steps on the enforceable provisions by June 30 2021, giving insurers a timing reprieve compared to some other sectors, due to the code review process that was already underway. Commissioner Hayne also recommended the Code Governance Committee take a more punitive approach to sanctions, after a lack of penalties handed down so far – despite more than 13,000 self-reported, conceded or assessed breaches. Code compliance had previously focused on dealing with and correcting breaches, with naming and shaming the preferred deterrent. Mr Whelan told the ICA forum in February, after the release of the royal commission report, that the status of the code under the Hayne proposals would be far more complex. The board received a draft copy of the

new code in May, with Mr Whelan at that evening’s ICA annual dinner highlighting the impact of the regulatory shifts. “Accommodating the needs of a diverse community and the demands for greater accountability through enforcement has put considerable strains on the development of a new code,” he said. “Balancing flexibility and principled intentions that Hayne considered essential in a code with the hard-wired legally enforceable commitments he also required is a challenge.” The final version ticked off by the board reflects royal commission recommendations, the code review final report and input from stakeholders. ICA has acknowledged contributions from its members, consumer representative groups, legal aid services, the Australian Financial Complaints Authority, the Code Governance Committee, National Code Committee, ASIC and the community. The full document is yet to be released, but key features highlighted after the board approval encompass significant measures for customers experiencing vulnerability, including those affected by family violence and mental health conditions, and enhanced financial hardship provisions. “We are seeing more and more vulnerability in our communities through all sorts of reasons,” Mr Whelan said at a Sydney forum recently. “It is an issue that we have to be able to respond to and deal with effectively, so that is why it is such a centrepiece of the code.” And the code now packs a financial punch for breaches. The Code Governance Committee will be able to order an insurer that has committed a significant breach to pay a community benefit payment of up to $100,000, with details of how funds will be paid and distributed still subject to consultations. A 12-month transition period for the mandatory code starts on January 1, but signatories must have a policy in place to


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Specialists in Risk Management & Insurance Solutions About Ansvar support customers affected by family violence by July 1. The Hayne recommendations mean there is still work to be done around specifying which code provisions will be legally enforceable. Criteria for selecting those are being discussed as insurers keep an eye on other regulatory and legislative reforms that may have an impact on that process. “ICA has participated in prior consultations with Treasury and had discussions with the Finance Industry Council of Australia on what possible criteria might look like,” ICA spokesman Campbell Fuller told Insurance News. “For example, whether a breach of an enforceable provision would result in significant harm to the consumer and whether it is a provision that goes over and above the existing law.” The Federal Government’s royal commission response road map requires code-related legislation to be introduced by June 30, and Treasury is expected to release a draft early next year. Talks with ASIC on the enforceable provisions will take place as ICA also seeks for the first time to have the code approved by the regulator, a move it had flagged from the outset. In the meantime, training programs to assist with meeting new obligations will be rolled out from early next year, provided by organisations such as the Australian and New Zealand Institute of Insurance and Finance. Mr Whelan said as the code review was underway that the key ambitions for the project were “to strengthen the code so it more than meets community expectations now and into the future”, and to “ensure the code remains the best-of-breed example of industry self-regulation”. ICA is confident it has achieved its goals. The code review process has come through the storms and the industry now faces the challenges of implementing 0 a substantially rewritten document.

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Understanding digital: Axa XL’s Helene Stanway

Laser focused Testing new technologies to solve real problems is central to Helene Stanway’s digital leadership role at Axa XL By Wendy Pugh

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nsuring coffee shipments arrive fit for brewing and maritime risks are priced effectively are among the real-world challenges that Helene Stanway, Digital Leader at Axa XL, is seeing solved by new technologies. And she has high ambitions for future advances. The digital revolution is hailed for its promise to transform insurance, but the London-based Axa XL team led by Ms Stanway has responsibility for cutting through the buzzwords to help deliver practical solutions that assist insurers, brokers, clients and customers. “It is not about playing with shiny new toys,” she tells Insurance News during a recent visit to Australia. “It’s about understanding the technology enough to understand what problems it can solve. We are laser focused on ‘what is the problem’?” Axa XL takes technologies and projects selected for experimentation forward in conjunction with partners to identify the best opportunities. The Internet of Things, blockchain and artificial intelligence are among the key technologies, with a strong focus on the maritime, construction and property sectors.

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In the case of marine cargo, technology is providing a level of information and certainty not previously possible in a sector where hopes of a successful delivery have often come down to “ship and pray”. Companies are also seeking fresh approaches amid significant challenges. “This is an industry that has a $US17 billion premium,” Ms Stanway says. “About 90% of the world’s trade is done by sea, and as an industry the loss ratio is above 100% – so there is a real problem to solve there. “We are getting new data and new insights, and therefore we can provide new risk management advice. So, for example, we took the loss ratio for one of our clients down from 180% to 80% by providing new insights on how to package the cargo as it is being exported.” Work with coffee cargoes has highlighted seasonal risks affecting shipments, with sensors delivering a flow of information monitoring temperature, humidity, light and shock. “These types of technologies are assuring the supply chain by enabling greater levels of data insight,” Ms Stanway says. “We discovered you really shouldn’t transport coffee to northern Europe in January and February because of the high levels of [cold] humidity.” Axa XL is also part of the InsurWave venture using a blockchain platform to support marine hull insurance. EY, Guardtime, Acord, shipping group AP MollerMaersk, Microsoft, Willis Towers Watson and insurer MS Amlin are also participants. Blockchain transparency replaces inefficient multiple reconciliations, and is used in conjunction with the Internet of Things and smart contracts to allow a range of data and information to be included in real-time premium calculations. One current example is the decision around navigating war zones. A ship’s captain could decide between going through a war zone knowing it will lead to a higher premium, or avoiding the area with a longer journey that will require more fuel but incur a lower insurance premium. Where the ship has navigated through a war zone, the higher premium is calculated automatically by virtue of the smart contract. The technology making this possible has been around for about a decade but is yet to become a business-as-usual part of the insurance industry. Ms Stanway says there is generally an increasing appreciation of its worth, and the InsurWave venture is set to expand, with two clients from the Asia-Pacific region likely to join. “Blockchain is a little bit of a paradox because it creates trust, and yet you need trust across the parties to effectively connect. “You trust the data and you trust the process, but

actually you need to trust each other in the first place to go on the journey together to create the blockchain. It’s not something you simply switch on; there is a little bit of effort required.” The venture highlights the partnership path favoured by Axa XL, whether with international organisations in the blockchain context or through participating in technology accelerator programs to team with innovators looking to take ideas to the next level. “We partner with start-ups and learn as much from them as I would like to think they learn from us,” she says. “There does have to be a little bit of a translation of cultures between the two organisations. An incumbent is very different to a start-up and that is good because it gives both energy.” Ms Stanway entered the technology world in a major way herself just three years ago, when she took up the Digital Leader role after leading XL Catlin’s global specialty operations unit. “I would like to think it was sensible that they chose somebody who is a non-technologist to run a technology unit, because I am then able to bring that business lens,” she says. “I don’t have a technology background, but I have a strong team that does.” Both her previous and current positions essentially involve change management, which with new technology means education, fostering a culture that values innovation and bringing people along for the journey. Ms Stanway says the diversity of gender and background within her team ensures ideas are examined and challenged from different perspectives, while various internal business teams including legal and compliance are brought in for their input. For example, a typical approach could involve trialling a potential technology with projects involving a Silicon Valley start-up, a medium-sized company and a major corporation. Trials test intended outcomes and help avoid unintended consequences, with the process of experimenting requiring a level of acceptance that not everything is going to work. Ideas that do progress are channeled into the wider Axa XL global technology area, where they can access larger budgets on the way to becoming a new capability in the normal operating environment. “Even at that point where you want to scale you probably don’t have as defined a return on investment as a traditional project, so again there does have to be an education and a different way of telling the story of the benefits,” Ms Stanway says. The development of these emerging technologies will alter the relationships insurers have with their clients, while employees may face challenges from changing roles and needing to learn new skills.

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Too cold for coffee: new technology can help make sure shipments arrive safely

Clients already using sensors to monitor their operations may not realise the adoption of sensors alters their risk profile, and may not want insurers to know what is happening at all times. They may even fear that more accurate data will drive higher premiums. Yet Ms Stanway says more accurate data actually leads to more accurate risk pricing and protection through new and existing services. Infamous examples of changing risk include an incident where an internet-connected sensor added to a Las Vegas casino fish tank became an unsecured portal into the company for cyber criminals. Insurers must ensure their relevance as they help clients find solutions to new problems and enhance services provided in response. “I would like to see a much greater connection between service, product and technology,” Ms Stanway says. “I’d also like to see some of these technologies solve those big risks out there that at the moment people don’t know how to solve – risks that are currently uninsurable.” Employees sometimes fear the introduction of artificial intelligence (AI) as a cost-cutting trojan horse that will ultimately lead to headcount cuts, and concerns can be fuelled by reports about jobs that won’t exist in the future. But Ms Stanway says AI is much more about augmented intelligence that expands capabilities and includes the ability to rapidly analyse vast volumes of data that generates insights which may otherwise not have become apparent or possible with human skills alone. One project that has now gone live allows AI to “read” 50 risk engineering reports in under five minutes, generating assessments on locations that are

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potentially riskier than others and where time should be focused. “It has been really useful for our risk engineers to be able to get that intelligence more quickly by using this type of capability,” she says. Companies and employees also need to focus on updating their skills to take advantage of new technologies that replace process tasks. Ms Stanway says adaptability is critical, and is starting to be talked about in a similar way to emotional intelligence and IQ. Now it’s “AQ”, representing Adaptability Quotient. “You hear that children at school today will have seven completely different jobs throughout their career,” she tells Insurance News. “They can only do that if they are adaptable. “I like to look at it as needing to be continually open to learning, experimentation and education. There will be some tasks that will be automated, but then there will be a whole raft of other tasks that will need to get done.” Ms Stanway says the insurance industry’s response to new technologies has been more positive than it is often given credit for, and advances have been particularly made in the past couple of years. It may lag the technology giants that are leading the way and reaching out more broadly, but it is well-placed to benefit from insights it gains from working with all industries. There is the opportunity for greater collaboration with clients – and sometimes with competitors – as new technologies tackle insurance problems in new ways. “You are no longer in your own company bubble,” Ms Stanway says. “It is a different operating model and I love that. It is about working with different organisations and different people to really bring togeth0 er all of those ideas to solve a problem.”


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On a wing and a prayer If you see a light plane or helicopter flying overhead, there’s a good chance it’s uninsured. Here’s why By Benjamin Levy

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nsurance in the general aviation industry is in crisis. Over recent months and years insurers AIG, Allianz and Swiss Re have announced they either won’t take on new customers, are raising their premiums or are withdrawing from general aviation insurance altogether. The aviators blame a declining industry, and the insurers blame sloppy underwriting practices. They’re both right. Speak to the general aviation industry and they’ll tell you that a perfect storm of problems has been brewing for some time, and the effects which are now starting to bite are hitting the insurers first. Aircraft Owners and Pilots Association (AOPA) Executive Director Benjamin Morgan points to a number of different issues that are combining to put the future of the industry in jeopardy. They include over-regulation, government imposts, hideously expensive aircraft and repair bills, a shrinking manufacturing base and less pilot experience. Fifty years ago aircraft were reasonably priced, driven by a global critical mass volume of manufacturers and maintained by highly qualified technicians who were trained in World War II. The number of outlets capable of maintaining GA aircraft has halved in the past 15 years, and the cost of building them has skyrocketed to close to $1 million for an average new light aircraft. Mr Morgan tells Insurance News that manufacturers have jacked up the cost of replacement parts to such high levels that insurers will now often write off the aircraft instead of repairing it.

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The withdrawal of insurance coverage has been occurring for the past five years, and it’s getting to a point where premiums are borderline unsustainable. Some AOPA members are already flying uninsured because they can’t get policy renewals. Mr Morgan blames the Civil Aviation and Safety Authority (CASA) for worsening things through over-regulation. “Insurers are the canary in the coalmine,” he says. “When they start falling over, the politicians and CASA need to think hard, because they are driving this.” Aviation broker and Mackenzie Ross authorised representative Geoff Butler says some operators are seeing premium hikes of 200% on renewal. In one recent case he needed three underwriters to fill the slip, because no one insurer would cover the entire policy. The situation is much worse for rotor-wing aircraft. Some 95% of helicopter accidents result in the aircraft being written off, “and there have been a lot of accidents recently”. Now, Mr Butler tells Insurance News, the owners of fixed-wing aircraft are starting to hurt, too. Premiums have risen by 10%-12% in the first round of renewals, and between 10%-20% in the second round. He agrees with Mr Morgan that the cost of repairs is an issue. “The cost of spare parts has been horrendous in the past couple of years, and the weak dollar has just exacerbated the problem.” Until about two years ago, a $100,000 airplane could be repaired after an accident for about 50% of the sum insured. It’s now reaching 80%-90%, making it


Hard to insure: general aviation premiums are soaring as insurers exit the market

uneconomical for insurers. Aircraft made of composite materials rather than aluminium can cost upwards of $800,000. Mr Butler also says over-regulation is causing the industry to shrink and is also pushing up spare parts prices. It didn’t help the situation when several hailstorms on the east coast badly damaged up to 150 aircraft, further prodding insurers to run for the hills. Mr Morgan tells Insurance News that an accident with a new composite fixed wing aircraft typically involves a parachute deployment, and in the vast majority of such cases the plane will be written off by insurers. So insurers aren’t writing off a $60,000 or $100,000 repair bill, but a $1 million whole loss. The cost comes down to the regulatory environment in which these parts can be manufactured, he says. “There’s not a single part on a general aviation aircraft that you can’t just replicate. But the problem is that here, CASA has to approve you to manufacture that part, and the cost of approval is hundreds of thousands of dollars and takes several years. “It’s a perfect storm that has been created for insurers.” Not everyone agrees with this. Jamie Bowes, HDI Global’s Head of Aviation, says Australia is a benign flying environment and well-regulated, and is one of the most competitively priced places in the world to insure aircraft. Brendan Warner, the Director of underwriting agency Catalyst Aviation Insurance, also says that

manufacturing isn’t to blame for the current crisis. He says manufacturing costs are very specific to certain types of aircraft and can vary for a lot of different reasons, including the exchange rate. Mr Bowes tells Insurance News that the market has suffered from years of unsustainable pricing driven by excess capacity, leading to poor results for the overall market. “This has now ultimately resulted in a significant retraction in aviation capacity in the local market as companies look to address their underlying poor performance, and are being more selective…of their line exposures,” he says. Mr Warner agrees. “There’s far too much capacity at the wrong premium.” He says one major insurer in particular “was willing to grow at premium rates that are just unsustainable, and that’s been going on for a while”. He says underwriting agencies like Catalyst haven’t been chasing growth for the sake of growth. “We have the same capacity we’ve had for a number of years, but we haven’t been deploying it indiscriminately. Others have.” The volatile helicopter insurance field is an example of underpricing, he says. “We try to make sure the heli business doesn’t take up too much of our portfolio. We’re not willing to compete at the [prices being offered by some competitors].” Not that aviation insurance pricing isn’t causing problems in other parts of the world. The companies contacted for this article all say this is a global

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phenomenon. Swiss Re Corporate Solutions is reducing its exposure globally, not just in Australia. So has AIG. The London market has suffered particularly badly, and a significant number of insurers have withdrawn from aviation classes. Commercial aviation is being affected as well. A recent Allianz Global and Corporate Specialty report points out the increasing frequency and severity of claims on more expensive aircraft, as well as higher repair bills. But those still in the market generally agree premiums have been unsustainably low for a number of years, and are now moving to more sustainable levels. And that has created an opportunity. Underwriting agency 360 appointed two new aviation underwriters in October to support brokers trying to find aviation cover, having secured the rights to review Swiss Re Corporate Solution’s expiring business. Executive Director Craig Davie says they are committed to delivering solutions in the shrinking domestic marketplace, and will help brokers find renewal policies. HDI Global has also hired two senior underwriters with the aim of becoming a major aviation provider to the local market. Catalyst’s Mr Warner says there is always a possibility for new entrants to come into the market, particularly if they do their underwriting properly. “It depends on how disciplined the current players in the market are at any given time,” he says. “Underwriting discipline is very hard to predict.” Catalyst writes all kinds of aviation business for

Lloyd’s, but only if the premium is deemed to be appropriate. But this is cold comfort for Mr Morgan, who is questioning whether it’s even sustainable for some insurers to remain in the market. “This industry has its arms tied behind its back through excessive regulation, and it’s killing it, and unfortunately the insurance companies are reflective of it,” he says. But Mr Warner has little sympathy for such arguments. He says insurance isn’t compulsory for those who don’t want to pay. Mr Butler says much the same thing. His clients, and the general aviation bodies, are up in arms over premium hikes, and he suggests that if you own your aircraft outright, have good experience and fly sensibly then self-insurance may be a good idea for the plane itself. There’s no telling how bad this situation is going to get. AOPA believes the situation is at crisis point, if not past it, but for brokers and insurers there’s no end in sight. The trend for now is ongoing premium increases because of accidents, lack of pilot experience and a reduction in insurance capacity. “How long that will continue is very hard to say,” Mr Warner says. “Premiums are a very fluid situation at the moment.” Mr Bowes tells Insurance News premium corrections are likely to continue for the foreseeable future. “It will hopefully ensure that over time profitability returns to the market, resulting in a more sustain0 able market for all concerned.”

Crisis point: accidents are pushing up aviation premiums

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The 2019 Insurance TV Ad Oscars A koala, an opportunistic daughter and a moose: Here’s our pick of this year’s best insurance ads By Kim McNeil, Marketing Consultant at The Lead Agency

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ver the past couple of years we’ve critiqued what the insurance industry has to offer in terms of the classic insurance TV commercial. While the advertising industry has been predicting the demise of TV advertising for a decade, research from RTL AdConnect suggests that far from being dead, TV advertising is very much alive and still evolving. The medium continues to be a critical part of any successful marketing campaign in Australia. You may have heard reports that 1 in 7 people don’t watch commercial television (according to Roy Morgan), but that still leaves an audience of 21 million Australians. There’s no denying that digital is growing, and at a quicker rate than TV. However, TV has unique advantages that businesses still can’t seem to get through digital advertising. Take social media, for example. While it may seem like everyone is on social media and every business should be as well, with the rise in “fake news” and publicity stunts across social media, use of the channel is actually declining. Australians are starting to question the authenticity of the channel.

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You only need to look at the 2019 Logies to see how easy it is to manipulate the power of social media, with comedian Tom Gleeson somewhat ironically taking the Gold Logie after using his Twitter account to get votes. Commercial television can’t be manipulated in the same way, and as such it is arguably the most dependable way to get your message to the masses. Given how important the segment is, Insurance News, with advice from specialist insurance marketing consultants The Lead Agency, presents the 2019 Insurance TV Ad Oscars. As usual, all judges’ decisions are final, largely because no one has yet tried to bribe us. Contact details are on Page 6. So, inspired by Tom Gleeson, we introduce: The Critically Ambivalent 2019 Insurance Ad Oscars (sound of trumpets).

Best Use of Emotion in Advertising Criteria: Awarded to the ad that best taps into the emotions of consumers to drive meaningful action for the brand. Winner: NRMA Insurance: Every Home Is Worth Protecting (youtube.com/watch?v=grpNHlhX5A) People don’t typically buy for logical reasons; they buy for emotional reasons. NRMA Insurance has tapped into this perfectly with its ‘Every Home is Worth Protecting’ campaign. With previous success as our 2017 Winner of Best Overall Insurance TV Ad with ‘Insurance Confidence,’ NRMA Insurance certainly has again demonstrated how to create an effective advertising campaign. The integrated ‘Every Home is Worth Protecting’ brand campaign launched across New South Wales and Queensland stars Arlo the koala, who has lost his home and is rescued by a young boy. The campaign spanned TV, outdoor, radio, partnerships, PR and digital, and the company even had a koala


chatbot on its site for the duration of the campaign. To show just how serious they were about the cause, NRMA Insurance also pledged to plant a tree for every new home insurance policy it sold until the end of 2019.

WHAT WE LOVE: • Using the much-loved koala, the ad tugged at the heartstrings in a way that is likely to resonate with the Australian public, making it more likely that people would take notice of the message. • The ad tackles a very real issue in society today – the environment. Greta Thunberg has shot to international fame for her opinions on the climate crisis, so perhaps NRMA Insurance is hoping for the same result.

WHAT CAN BE IMPROVED A comment from a member of the public on the company’s website says NRMA “should be planting trees regardless of using these ads to make profit”. While the campaign benefits the environment by the addition of one tree per policy sold, it also benefits the business. Using an environmental aspect to advertise in this way can seem disingenuous and make people question the motives of the business.

The Longevity Award Criteria: Awarded to a company that has stuck to a consistent brand message across advertising campaigns and channels. Winner: GIO: Linda & Lindsay (youtube.com/ watch?v=vhJj3sEoVhU) To see why GIO is the champion at carrying a theme, have a look at its 1983 ad, ‘Oh My Goodness, the chips!” youtube.com/watch?v=0mduR6SOcdY The message is – if it ain’t broke don’t fix it. Someone in the marketing department at GIO must have read our article last year, as the insurer was named the runner-up for Best Product-Focused Advertising with their campaign “Linda and Lindsay”. This year they’ve used the same ad, which features

a couple going out for a night organised by their teenage daughter, who coincidentally is left home alone, with a voiceover pointing out that she’s probably going to have a party. We’ve decided that perseverance pays off and GIO deserves recognition this year for its ability to stick to its messaging. GIO’s campaign agency says: “We focus on the moments before a potential accident, because that’s when knowing what you’re insured for counts.” This has been GIO’s tactic for decades, since 1983 in fact, as the “Oh my goodness the chips!” ad was built around the same format.

WHAT WE LOVE: • The ads use light humour to highlight a real-life scenario where a client’s insurance policy had better cover the situation • While other ads all too often skip over the actual product they are selling, GIO highlights a situation that their Home Insurance policy would cover – in the case of Linda and Lindsay, Accidental Damage.

WHAT CAN BE IMPROVED: While this ad format is undoubtedly working for GIO, it will be interesting to see how it is developed going forward, how its messaging will translate across other channels such as digital, and how it will keep it interesting with the use of different scenarios.

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Business-Focused Insurance Advertising Criteria: Awarded to the best business-focused advertising campaign. Special Mention: MGA: Insurance Rural TV Ad (youtube.com/watch?v=iyQim4Rn--8) An ad for an insurance broker has never made it into these awards, largely because we’ve previously struggled to find one. So Akubras off to MGA, whose simple ad ran on TV spots in rural areas, using very real circumstances to demonstrate the value an insurance broker can add to Australian businesses.

WHAT WE LOVE: • The ad shows business owners situations that could happen to them, such as fire or an electricity outage, which is likely to get them to think about ensuring their business is covered.

WHAT CAN BE IMPROVED: What makes the ad good has the potential to also be its downfall. One of the biggest challenges in marketing insurance is educating the public about the value of an intangible purchase like insurance. That’s why so many insurance ads demonstrate the tangible benefit of insurance. This one is a great profile-builder, but it struggles to demonstrate the importance of having the right type and level of insurance coverage.

Winner: CGU ‘Ambition Wanted’ / ABN Rescue Campaign (youtube.com/watch?v=JkfPA8yxJz8) After discovering that almost half a million ABNs were cancelled in 2018, CGU designed its “ABN Rescue” campaign to help ignite the ambitions of small business owners across Australia. The cross-channel campaign promoted the “Ambition Wanted” messaging, and featured custom-built installations in empty shopfronts around Sydney that projected images of potential businesses that could transform the forgotten spaces. CGU then asked for applications from struggling small business owners, offering a $40,000 grant to the chosen company. Using a lapsed small business called DOMUTS – donuts for dogs – as an example, the insurer told the audience how it supported this small business by gifting DOMUTS with an ad spot during the AFL Grand Final spot, as well as providing wider business and insurance advice.

WHAT WE LOVE: • This is a new and interesting idea from CGU that really positions the brand in a positive light in the minds of its target audience – Australian business owners. • Australia has one of the highest percentages of small businesses in the world. Ambition and entrepreneurial spirit is the backbone of the Australian economy, which this campaign has tapped into perfectly.

WHAT CAN BE IMPROVED: • We’re left wondering whether they chose DOMUTS because it was the best idea? Or just the most likely to get people’s attention (perhaps with an unfortunate spelling or pronunciation mishap…). • While this is undoubtedly a great idea, some businesses will fail no matter what insurance they have. CGU can’t safeguard every single element that goes into making a successful business.

Watch all the winning ads: www.youtube.com/watch?v=grpNHlhX5A www.youtube.com/watch?v=vhJj3sEoVhU www.youtube.com/watch?v=iyQim4Rn--8 www.youtube.com/watch?v=JkfPA8yxJz8 www.vimeo.com/359714322

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We’re growing in size and in strength Merging of Canopius & AmTrust at Lloyd’s

We’re excited about what this merger represents and what it makes possible Everything in our business hinges on relationships; we love that, it’s our life blood At the heart of the Canopius and AmTrust merger is the newly combined talent and this is what excites us the most Our new combined group of people will now be able to offer you access to more underwriting expertise across more lines of business

Grow with us canopius.com


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sings that all too familiar jingle.

Criteria: The ad that is most entertaining, engaging, and best articulates the business’ product offering. Winner: AAMI ‘Boomya’ (vimeo.com/359714322) AAMI is a regular on our Insurance Ads award winners list with its ever-entertaining ‘Not very Insurancey’ campaign. These ads have featured everything from drag queens to neighbourhood cat burglars (who are literally cats), and now … a talking moose. The moose took us back to Budweiser’s WHASSUUUUUP ads of the early 2000s. While it may not achieve the same level of international success (we’re still talking about Budweiser almost two decades later), Boomya is right on the mark for an insurance ad. The concept is simple: a couple showing their friend around their new apartment, highlighting their valuables (including a talking moose). After returning from a gig, they find they have been burgled. There’s no over-the-top situation that is used all too often in insurance advertising – see Budget Direct’s “Sarge and Jac” campaign for the perfect example of that. (youtube.com/watch?v=m_J5hgiSCso). And at the end of the ad, AAMI ensures all of their things are replaced including the talking moose, who

WHAT WE LOVE

December 2019/January 2020

• The ad follows the typical format of an insurance ad – showing when insurance comes in handy. It uses humour in the form of the talking moose to make a very plausible scenario entertaining and memorable for the audience. • The ad highlights the New for Old Replacement feature of AAMI’s cover by showing all of the couple’s things being replaced, with the added tagline ‘if it’s important to you, it’s important to us’.

WHAT COULD BE IMPROVED • There are always two constants with AAMI’s advertising campaigns: the model-esque call centre girls, and the tagline that they are “Not Very Insurancey”. While at this point both of these things have become synonymous with the AAMI brand, it might be time for a bit of a refresh. First off, some diversity in their staff member of choice (a male perhaps, or an ethnic minority) would be nice. • Secondly, they may find better ways of articulating the features and benefits of what they offer rather than just insisting that they’re ‘not insurancey’ – 0 strange for an insurance company.


DETAILS CHANGE, RELATIONSHIPS ARE CONSTANT.

Every client has different needs. And they change all the time. What doesn’t change is the need for dedicated relationships. You can’t share a coffee with an algorithm. As a mutual we are wholly devoted to our policyholders and partners: providing continuity and assurance in an unpredictable world.

For Mutual Advantage libertyspecialtymarkets.com.au

Liberty Specialty Markets is a trading name of Liberty Mutual Insurance Company, Australia Branch (ABN 61 086 083 605) incorporated in Massachusetts, USA (the liability of members is limited).


Act of faith While other Lloyd’s players are pulling back, Canopius is showing confidence in the Australian market By John Deex

I

t’s no secret that Lloyd’s syndicates have had their capacity limited as the marketplace tries to improve profitability and cut loose bad business. This has had a significant impact in Australia, with some risks previously placed with Lloyd’s now struggling to find a home. But Canopius, a major and growing Lloyd’s (re)insurer, has demonstrated its faith in the local market with the opening of a new office in Sydney. Led by Country Manager Claudio Saita, formerly of Tokio Marine, the office at present has about half a dozen recruits and ambitions to grow. Visiting London-based Chairman Michael Watson, who sees Canopius “like a child” having led two management buyouts, tells Insurance News it’s all about getting closer to partners and customers. “London is, and I hope will remain, a very important insurance centre, but it is not the only place in the world where business is done, and it is certainly not the only place where the customers of Lloyd’s businesses are to be found,” he says. “I do think that proximity to distribution partners and end clients is increasingly important. “To properly understand local markets, to understand what our distribution partners value, to understand what our end clients actually want, it’s best to have appropriately equipped operations in a particular location.” Within Asia Pacific, Australia is “one of the larger, most mature, and advanced” insurance marketplaces, Mr Watson says. The focus, at least initially, will be on SMEs – a group that’s particularly hard to service from the other side of the world. “To start with we have identified two particular areas we Looking for growth: Canopius Chairman Michael Watson

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will support. One is in property and casualty business, the other is accident and health, where we have significant expertise and there is significant demand and opportunity.” Larger corporations and risks will continue to be dealt with primarily through Canopius’ hub in Singapore, or in London – but there are no hard and fast rules. “To some extent I don’t think it’s our job to tell our distribution partners where to show us the business,” Mr Watson says. “For certain types of business, there is no question they will be best served by getting to know and engaging with the team that we have established here in Australia. “But for certain specialist types of risk the best option might be Singapore, and there is still a significant amount of Australian business that goes to London either through client choice or broker direction.” Mr Watson believes the Australian insurance market is ahead of the game when it comes to technology, data and analytics, and the Sydney office will look to tap into those capabilities. “In order to support the local SME-focused strategy here, being suitably equipped from a technology and data analytics point of view is going to be incredibly important.” It’s not all in place yet, but an efficient platform to support clients and distribution partners is high on the agenda.

Mr Watson says Canopius writes about $US50 million in Australian business today – which out of a total of $US2.3 billion is “not huge”. But there’s capacity to grow, with ambitions for the Asia Pacific region to represent 10% of the group’s top and bottom lines within five years. “Australia would represent an important part of that,” Mr Watson says. “It is a transparent marketplace. It has a good regulatory regime, and good regulation is good business. “It is yet to be seen exactly how the Hayne royal commission plays out, but it would be very hard to argue against the general aims of what the commission is getting at. “It imposes some extra cost and discipline for insurers, but you could argue that whatever you spend on compliance you save by preventing bad practice over time.” Canopius is still looking for a couple more recruits, and the Sydney team will grow further depending on its success. Based on the reception in the local market so far Mr Watson has every reason to be optimistic. “A lot will depend on how successful we are at executing our strategy but I’m very confident. “Brokers have genuinely welcomed a Lloyd’s business to the marketplace which is committed and giving them people that they can talk to locally, with considerable expertise and resources throughout the group.” So can Canopius offer a pathway for business which

Great expectations Michael Watson began his career as a chartered accountant in 1976, working primarily in banking and stockbroking. Then, about 25 years ago, “like so many people” he stumbled into the world of insurance, particularly London market insurance and reinsurance, and in 2001 he became chairman and chief executive of the Lloyd’s operations of Chartwell, which was owned by the Trenwick Group. The business was “seriously troubled” having lost about $US500 million over five years and “needed a complete and radical overhaul”, and in 2003 Mr Watson was asked to sell the company. His response was to suggest that management “might be brave enough or mad enough” to buy it. “Fortunately we were allowed to have a go and we were successful,” Mr Watson says. “Canopius launched on January 1, 2004, and 15 and a bit years later, here we are.”

During that first phase the reputation of the business was turned around and it went from the 20th to the 10th largest business at Lloyd’s through organic growth, acquisitions and geographical expansion. In 2013 it was sold to Sompo Japan, but three years later a “surprised and thrilled” Mr Watson was asked to lead another management buyout. Backed by private equity, the transaction closed 18 months ago. Earlier this year an agreement was reached for Canopius to acquire the Lloyd’s business of AmTrust Financial Services, a major deal that provided significant diversification and $US750 million new business. “We have been able to create growth momentum and now we want to improve the overall level of performance of the business,” Mr Watson says. “I would say it’s a good business, but we cannot yet claim to be great. That is my mantra for the next few years – how do we turn Canopius into a truly great underwriting franchise?”

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Investing in Australia: Mr Watson believes the local market has positive long-term prospects

has recently found all avenues blocked? Mr Watson backs Lloyd’s recent push to “shed underperforming business”, but thinks Australia may have suffered collateral damage. The focus on remediating portfolios and limiting capacity has caused some to cut back on their smaller markets, sometimes without justification. “There’s not a total ban on growth, but if the premium capacity of individual syndicates is limited then you have got to ration your appetite,” he says. “And I think that some businesses have perhaps said ‘our operation in Australia is not very big, and even if it’s profitable it’s not making a big difference to us as a group, so we’ll close that or scale back, and we’ll keep the good stuff in London’. “I’m not sure that’s a terribly sustainable strategy for the longer term.” While Canopius has a different approach, it

certainly isn’t offering a blank cheque. But it has made a conscious choice to support a market that it believes has strong long-term prospects. Lloyd’s recently allowed Canopius an extra $US100 million capacity, with some of that being directed to Australia. “We have ring-fenced within our plans a certain amount of capacity for Australian business,” Mr Watson says. “If we don’t see enough good opportunities we might redirect some of that in the short run. “Similarly, if we see an abundance of opportunities we would be willing to redirect capacity here from elsewhere in our group.” Mr Watson says while Lloyd’s has cut back in certain areas, it is not closed for business. As Canopius has proved, it remains willing to support new initiatives in what remains an attractive 0 market full of opportunity.

Culture challenge Attracting the next generation of talent is one of the insurance industry’s greatest challenges, according to Michael Watson. “A lot of people think insurance is boring,” he says. “But it absolutely isn’t, or at least that hasn’t been my experience.” Getting highly skilled younger people into the industry is vital as the pace of technological change accelerates, he says. And to achieve this, the industry needs “a more positive culture”. “Many of those people won’t necessarily think of insurance as the place they want to go. So we have to create an attractive environment and culture for appropriately skilled people to come into our industry.” This includes responding to recent survey results indicating concerning levels of sexual harassment within

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the Lloyd’s market. “I haven’t witnessed the sort of behaviour identified in that survey, but that doesn’t mean it isn’t happening,” Mr Watson says. “[Lloyd’s Chief Executive] John Neal and the Chairman [Bruce Carnegie-Brown] have said that the market has to face up to the fact that we can do better, and we very much support that.” Environmental issues could also play a key role in attracting the next generation. “There are societal changes going on,” Mr Watson says. “There is some sort of shift about individuals and corporations being held to account to be socially and environmentally responsible. “If younger people think the corporation or the industry is socially responsible then they’re more likely to want to go and work for it.”


Creating value by structuring the unstructured Across the globe, unstructured data is one of the hottest topics for insurers. Many are realising the value locked away in billions of datapoints that their systems could not previously access. One of the global leaders in the transformation of unstructured data is 360Globalnet, who have recently set up in Australia. We took the opportunity to catch up with Jason Peto, the Manager for the company’s 360Retrieve unstructured data platform, and hear his thoughts on how insurers can pull competitive value from the data hidden away in their systems.

What is unstructured data, and why is it an issue for insurers? In most insurers, only 15% to 20% of claim information is captured by Case Management Systems and held in a structured data format where it can be easily accessed. The remaining 80% to 85% might be in pdfs, scans, office documents, emails or free text and can’t be accessed or analysed. As insurance is ultimately all about using data to make decisions, this is like having one hand tied behind your back!

How does 360Retrieve help? 360Retrieve can munch through all those inaccessible document types and unstructured data, and then make it available for access and analysis. With known format documents, 360Retrieve extracts all the properties and entities and then transforms this ocean of unstructured information into structured, valuable data. 360Retrieve incorporates powerful search technology including Boolean rules, proximity searching, fuzzy matches and phrases, related terms and meta-data searches, as well as sophisticated analytics.

Daniel Lukich

Business Development Director - Australia

We can set up standard rules to automate manual processes and run analyses on all documents as they come in. Through 360Retrieve’s Analytics platform, patterns and trends previously locked up in unstructured data can be visualised.

How do insurers use 360Retrieve? Insurers can use 360Retrieve anywhere there is a requirement to release information and intelligence from documents and unstructured data. Leading insurers use it for issues such as Fraud detection and investigation, claims profiling including Personal Injury, reserving of large claims, and passing data to underwriting.

What are the benefits? Fraud deployments, on average, see a 30% increase of red flagged personal injury claims over incumbent systems and processes. In terms of personal injury deployment, identification of between 10% and 23% of large loss claims not previously referred as well as an increase in early identification and flagging of potentially serious claims.

daniel.lukich@360globalnet.com

www.360globalnet.com/au


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Experienced operator: Chubb’s Mike Hooton

Delivering on a global ambition Chubb has appointed Mike Hooton to build its presence in the small and middle commercial markets By Wendy Pugh

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hubb’s expansion into small and middle-market commercial business is gathering pace after the insurer identified the area as a growth engine globally, and gave experienced executive Mike Hooton the keys to drive the plan forward in Australia. After almost a year consulting to Chubb, Mr Hooton in July became Head of Chubb’s Small Commercial and Middle Market Division, taking responsibility for implementing the strategy locally as the insurer takes on long-established incumbents to build its position in these segments. Chubb defines “small commercial” as clients that turn over up to $10 million, while the “middle market” extends all the way from $10 million to $500 million. “When I joined, I certainly had a sense of an organisation that had ambition and that was prepared to invest in this space, and Chubb has been doing this on a grander scale across the world, particularly in North America,” he tells Insurance News. “It was encouraging to see that Chubb was ambitious and wanted to be not just another market participant, but a significant presence.” Mr Hooton was previously chief executive of Calibre Commercial Insurance, which focused on providing cover to SMEs through brokers, and which was acquired by Hollard. Earlier he held various roles with predecessor group Calliden. Across a career spanning three decades he has seen a lot of changes in the market and the rising role of technology. “There are a lot of things I have seen that have been tried, some that worked, others that did not,” he says. “So for me it is about bringing those learnings to Chubb so it can benefit from that experience, particularly in the small commercial segment.” The Chubb role presents the opportunity to oversee a broad product range supported by significant analytics and digital technology investments that can be applied in the small commercial arena and progressively into the mid-market segments. New York-listed Chubb, which lays claim to

being the world’s largest publicly traded property and casualty insurer, already has a strong reputation as an underwriter for large accounts and is leveraging that to take on competitors in the important and growing small business market. Chairman and Chief Executive Evan Greenberg says Chubb made significant progress on the initiative globally last year, after starting from a relatively small base in 2017. “In the US this is a highly automated digital experience, where 80% or more of the submissions are not touched by humans after they leave the agent’s office. Technology is a competitive weapon,” he says in the most recent annual report. Globally, small businesses can quite quickly find they have complex insurance needs and that they need specialist advice, and Chubb’s focus in that sector remains on distribution through brokers. The company has strong relationships with brokers in Australia and says the decision to extend its reach and become more active in the small and medium end of the market has been encouraged. “The sense I got, both from not working at Chubb as a competitor, and now working at Chubb, is that brokers have wanted this company to enter the digital commercial space,” Mr Hooton says. “Chubb is responding to demand from brokers to offer its strong claims servicing capabilities to a new segment of customers.” Chubb is investing in both people and technology as it enhances its products and analytical ability while building the digital distribution layers. That includes work by project teams on Chubb-owned platforms and developing products that are transacted through wider market broker platforms. An example is inclusion on the Steadfast Client Trading Platform, which offers a contestable marketplace where insurers compete for business. Chubb has entered the field against well-established rivals, highlighting the importance of having the right products and systems.

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“Chubb has a great reputation in claims. We want to bring that to small commercial customers in an effective and efficient way.”

“If you are transacting business package on an electronic trading platform you’ve got to be easy and efficient to deal with, but you also have got to have quite a sophisticated approach,” Mr Hooton says. “Where I think Chubb will have advantages going forward is our ability to utilise quite sophisticated data and analytics to help inform our underwriting and pricing, plus our ability to tap into what Chubb is already doing very successfully in other parts of the world, particularly North America.” In the US various types of external data sources are providing more information on businesses and risk exposures. Additional tools include “web-scraping”, which helps assemble a picture of a firm’s activities from information it provides online. The data and analytics allow high-volume low-premium business to be handled as effectively and efficiently as possible without compromising underwriting and pricing integrity. “Without sounding too idealistic, we want to know as much about a client as the client does, if not more, so we can provide a very informed response to the information they present to us,” Mr Hooton says. “It is about really learning from the quite sophisticated approach you see in personal lines, particularly home insurance, and applying that into small commercial business.” Chubb has centralised a small commercial team of 27 people in Melbourne who can handle matters needing additional attention, such as predetermined referrals or issues flagged at renewal. Additionally, Chubb employs dedicated broker distribution teams in Sydney, Melbourne, Perth, Adelaide, Brisbane and Auckland. Underwriters freed from many simple administration tasks can focus on high-value work related to portfolio management and the analysis of performance in various industries or business segments. “The other element is the claims systems and infrastructure,” Mr Hooton says. “Chubb has a great reputation in claims. We want to bring that to small commercial customers in an effective and efficient way as well, which requires, in itself, investment in technology.”

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The middle market, where business has been historically transacted through the state branch network, is a focus for Mr Hooton and his team, especially at the lower end of that segment. “While retaining our branch distribution, we are looking to take some of the lessons from small commercial, particularly around automation and making it efficient to deal with Chubb, into that lower middle market space, initially risks up to $100 million turnover,” he says. This would see brokers having access to the best of both worlds as they choose between traditional ways of transacting this business with Chubb or a more automated fashion. “We want to be in a situation where we can present the broker with options and alternatives,” Mr Hooton says. Chubb’s expansion into the small and medium market arena comes amid a relatively favourable pricing environment for growth, with rates increasing overall and insurers taking a more considered stance on some classes such as property risks and financial lines. Business packages, which are a cornerstone of the SME market, have also become less volatile A number of commentators have suggested the insurance cycle is still in an upswing, while increased use of data and increased automation in verifying and assessing claims augurs well for greater pricing stability. “Insurers are backing their intelligence and pricing sophistication,” Mr Hooton says. “This inevitably brings more discipline to the market.” Chubb has shown it can respond quickly to market demand in developing products and systems, such as its cyber portal, to realise the opportunity it sees in the Australian market, but has not outlined specific targets for the segments it is pursuing. Mr Hooton says scale is important in setting up an effective digital business and the days are gone when there may have been several small niche players writing sub-standard books of business. But he says the pursuit of scale will not come at the expense of profitability, and Chubb retains a strong focus on the “craftsmanship” of insurance underwriting. “It is about blending what Chubb has been historically good at, which is excellence in claims, crafting policies, creating solutions and combining that with the new skills required to compete in a variety of different digital marketplaces,” he says. “Particularly in the small commercial lines, brokers have wanted to trade with Chubb for a number of years, and now we can deliver across a 0 range of products.”


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Our Team and Services Stuart Blake 0411 012 701 stuart.blake@thebridgeinternational.com.au

The Bridge International is led by Stuart Blake and David McDonald as founding partners. The Bridge is made up of executives and senior leaders who have specific expertise across the value chain. Our team offers services across strategy, business transformation, customer insights, operations, white labelling, partnering, commercial management, pricing, underwriting, sales, service, digital, marketing, claims, risk, compliance and quality assurance.

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Keeping up with the change game The insurance industry is rapidly adopting new technologies, and consultant Xceedance says it’s there to help companies keep pace By John Deex Insurance specialists: Steve Browne (left) and Travis MacMillian

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he digital revolution in insurance is accelerating, and can sometimes be overwhelming. Often it seems like that shiny new project, once implemented, is already out of date. Travis MacMillian, the Chief Business Officer at insurance consultancy and managed services and technology provider Xceedance, says that after decades of minimal change, the past few years have seen an explosion of activity. “Really, in my experience as an insurance executive over the past 25 years, the industry has been very slow to adopt change, but there has been this huge ramp-up in the past five years,” he tells Insurance News. The transformation is being driven primarily by customer expectation and technology. “Clearly the millennial generations are rising in the population and becoming buyers of insurance products,” he says. “Their expectations and interactions for insurance products and services are among the key factors pushing insurers to do things differently. “Technology has created this runway for evolving insurance operations to be more efficient and responsive. “The revolution of insurtech is more prevalent and constructive today, and I think we are going to see continued and rapid development over the next three to five years, as the tools get even better and as more insurers continue to adopt intelligent technologies.” Xceedance was set up in 2013 to help insurers, underwriting agencies and brokers – large and small – through this period of rapid change. The company was formed by former Berkshire Hathaway India Chief Executive, and current Xceedance Chief Executive, Arun Balakrishnan.

December 2019/January 2020

A large insurer was launched shortly after it started, and Xceedance was selected to handle all of its middle and back office operations, including IT infrastructure. It has grown to take on a huge variety of capabilities focused on insurance. “There are not many things that I can think of that we can’t do,” Mr MacMillian says. “When we say we support end-to-end insurance processes across all functions such as claims, finance and accounting, insurance operations, underwriting, catastrophe modelling, actuarial services, policy services, insurance data sciences, it’s a realistic description of our capabilities.” Xceedance today has about 50 customers globally, with six in Australia, and clients range from tier-one insurers to start-ups. The company describes itself as operating “just like an insurance company except we don’t take the risks or expose the capital”. Xceedance employs about 1475 people globally, with a growing team in Australia of about a dozen, supported by 50 or 60 offshore resources. Target customers cross all insurance sectors worldwide, apart from health, ranging from large incumbent insurers to insurtechs. One early Australian success story is the work Xceedance carried out developing and setting up systems for start-up underwriting agency Blue Zebra. “Clearly we help enable insurtechs, and Blue Zebra is a great example of the power of partnership in the realisation and deployment of productive insurance technology,” Mr MacMillian says. “Blue Zebra had a unique and smart go-to-market idea. We basically enabled their approach, and they are executing it very successfully.


“Our people are insurance people, they get it. They speak the language and know the business.”

“But we are also looking at traditional insurers because they have pain points as well, and we want to help the various distribution networks in the Australian marketplace drive efficiencies, profitability and scalability.” While insurtechs can be customers, they can also be competitors. But Xceedance relies on its dedicated and laser-like focus on insurance to set it apart. “An insurtech will have a good idea, but when they lift up the hood and look to truly understand insurance operations and co-ordinate technology to transform legacy environments, a lot of times they will stub their toe,” Mr MacMillian says. “Is there competition? Absolutely, and that is healthy for the industry, but the main differentiator for us as a managed services consultancy and technology company is our deep insurance acumen and the fact that we only focus on the insurance industry. “Our people are insurance people, they get it. They speak the language and know the business.” Xceedance regional head for Australia and New Zealand Steve Browne says the key to modernising systems is pinning down core outcomes. He says that regardless of when and what is implemented, “there will always be legacies”. “That’s a fact of life,” he tells Insurance News. “The key is, how do you deal with that legacy? “Some organisations can’t afford to rip out and replace [during] a modernisation process. You don’t really want to throw the baby out with the bathwater. There are four key factors behind successful insurance operations, and we are very focused on those areas. “Are companies going to gain an increase in gross written premium, produce profit, are they going to be closer to their customer, and do they have better

access to the data? “Once those areas are identified and diagnosed, the appropriate technology strategy and deployment follows and gives a pathway to the future.” Mr Browne says the Australian insurance market “is calling out for this type of approach to optimising operations”. Xceedance has been active in Australia for about five years and is proud of its record – but where does it hope to be in another five years? For Mr Browne, it’s about building a solid reputation of service and value delivery and taking advantage of new opportunities. “There are now about 220 underwriting agencies in Australia,” he says. “There’s a new market there that is blossoming now. We are servicing that entire market and it’s a good environment for us to support insurance organisation growth and productivity.” But Xceedance sees several distinct and strategic value propositions it can deliver for larger insurers as well. “At the end of the day it’s about gaining trust,” Mr Browne says. “We can do almost everything in insurance – that’s the big differentiator for us. Other technology and consultancy companies might have insurance divisions, but it’s typically not their core business.” Mr MacMillian wants the Australian insurance industry to see Xceedance as “the go-to company”. “That’s how I would measure our success five years from now. Insurance organisations will come to Xceedance because we have the industry knowledge and proficiency to share with them, and we can help drive the needed change to accomplish their 0 evolving business goals.”

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A new standard demands new ways of thinking You’ll be hearing a lot about IFRS 17, which will bring teamwork to planning and reporting. Here’s how it does it, and why By Henri Wajsblat, Head of Financial Services Solutions at Anaplan, and Tony Trewhella, Partner at Deloitte Australia

“A new international accounting standard, set to come into force in January 2022, will completely overhaul financial management for insurers.”

F

or decades the insurance industry has faced many challenges in its financial management. These challenges include a lack of synergy between business units, the absence of an integrated data model, complex reporting requirements to various stakeholders and regulators, and time-consuming, manually intensive and error-prone reporting processes. But a new international accounting standard, set to come into force in January 2022, will completely overhaul financial management for insurers. IFRS 17 is the culmination of more than 20 years of increasing industry regulation. The new standard requires closer collaboration between actuaries, risk managers and finance professionals in order to achieve greater granularity, comparability, and transparency in financial reporting. At its core, IFRS 17 will break down the siloed operations of an insurance company’s actuaries and finance teams. The new standard requires insurance entities to identify portfolios of insurance contracts that are of similar risk and manage them together. Each portfolio will then be measured by the amount of fulfilment cashflows (the present value of probability-weighted expected future cashflows plus a risk adjustment) and the contractual service margin. This new measurement will change the profit emergence patterns while also facilitating an earlier recognition of loss. Previously actuaries assessed risk, profitability and pricing and passed this information on to the finance professionals for input into the balance sheet. With IFRS 17, the two business functions

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will be brought together, blurring the lines between actuaries and finance, as calculations made across both business units must be based on the comparison of expected and actual cash flows. Critically, IFRS 17 is also adding a new layer of pressure on data, systems, and processes (DSP). With the walls between the teams coming down, DSP has taken centre stage. Insurance organisations have large legacy systems, with some that have been in place for decades. While these may have served each function well in the “old world”, it is missing the flexibility and level of collaboration required to handle IFRS 17 requirements. The new standard demands data governance, linage and transparency across the entire reporting chain. From historical data to forward-looking data, insurers must understand the current data flows and where the gaps lie in their data management processes. This means the content and flow of data must be viewed in the context of “entire system architecture” to fully understand the functionality and capabilities of the current system architecture and where the technology gaps are. Once these “back-end” systems are assessed, insurers must recognise the significant impact IFRS 17 will have on “front-end” processes, with changes to IT systems, actuarial models, sub-ledgers and other accounting processes required. Such internal reviews will prove no mean feat for insurers. Beyond IFRS 17, Australian insurers are facing other regulatory changes following the Royal Commission into Financial Services. All of these changes call

for a mindset shift on compliance as no longer a web of red tape but as a real opportunity to re-evaluate and renew insurance business models in the long term. Reporting is traditionally historical and is often seen as not providing much value to businesses beyond giving credibility that what was reported is what happened. With backwards-looking reporting information, insurers may understand the trends they’re on, but this data does not provide a solid foundation for accurate planning and forecasting. IFRS 17 introduces the concept of a forward-looking view of financial data. As such, a number of functionalities are going to become key contributors in every affected business’ targeted technology architecture. This will include the likes of cashflow modelling and forecasting, consistency of planning and forecasting models with the new external reporting basis, and the ability to simulate the impact of a new product or a change in pricing in the IFRS 17 financial statements. Insurance is a dynamic industry with new standards set to shake up the industry once again. In future-proofing their businesses, insurers should no longer look at new standards as a regulatory point in time, but as a turning point for how businesses will be run in the future. The solutions put in place should drive value beyond compliance, providing greater analysis on the present and future performance of the company’s insurance contracts and allowing the company to benchmark its performance with 0 industry peers.


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Fantastic journey: Trident marks a key milestone

Quarter-century celebration: Trident aims for more after 25 years Perth-based Trident Insurance Group aims to grow bigger and better as the business works to build on the success it has achieved over the last 25 years. The broker and underwriting agency celebrated its silver jubilee in October with employees, authorised representatives, long-term clients and services providers at the award-winning Fraser’s restaurant. “It’s been a fantastic journey and amazing to think that 25 years of Trident has now

been achieved,” founder and Managing Director Rick Wolozny tells Insurance News. “The success of the business was due to innovation and drive but the main success was achieved due to excellent staff, many that have been with the business for many years. Additionally the clients, underwriters and service providers have all made the journey possible. “As far as the future is concerned, the broking business will continue to service its client base and continue the focus on its

niches and new opportunities.” Mr Wolozny says the underwriting agency expects to continue achieving significant growth as plans to expand the range of products on offer take root. “The Trident team are motivated and excited about the next phase of the journey,” he says. Trident offers a wide range of insurance solutions including medical, marine, construction, workers’ compensation and 0 business pack.

Growing airspace: 360 Aviation ramps up business presence 360 Aviation has significantly expanded its presence in the general aviation market after securing the rights to review Swiss Re Corporate Solutions’ expiring business in Australia. The deal applies to risks due for renewal from November, and follows the Swiss Re subsidiary’s decision to reduce its exposure to aviation globally. “This is a very exciting step for 360 Aviation,” Craig Davie, Executive Director of the underwriting agency, says. “We are committed to delivering solutions to the insureds in the shrinking domestic marketplace, and we look forward to providing protection to insureds

wherever possible.” The agency, which is part of 360 Underwriting Solutions, has recruited two executives from the Swiss Re team to further support the growth of its aviation business. Peter Freeman, previously Swiss Re’s Head of Aviation Australia and New Zealand, took up his role in November as National Underwriting Development Manager. Sharyn Gough joined as Senior Underwriter. They are both based in Brisbane, where the aviation team is located. 360 Aviation says by hiring them, the agency is sending an important message to the market. “Quality delivery of a focused product

is still our ethos and we have expanded our team with two key experienced underwriters…in order to maintain our service standards to support our brokers,” Mr Davie says. Denis Morrissey, co-founder and Director of 360 Underwriting Solutions, is excited about the prospects of the aviation business following the deal. “The exit of [Swiss Re Corporate Solutions] has provided 360 with an opportunity to further expand our aviation portfolio, and we are delighted to be able to complement our growing list of products, to be more relevant to our broker 0 partners,” he says.

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UIG off to the races The Mitchelton Winery, located by the picturesque banks of the Goulburn River near Nagambie provided a relaxed setting for the United Insurance Group (UIG) conference. The theme for the inaugural event was “connect” and the program offered plenty of opportunities for authorised representatives and insurers to engage while enjoying hospitality at the popular country Victorian destination. After kicking off with a full-day’s

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conference activity and discussion, delegates moved to networking drinks and a gala dinner. Buses departed the next day for the Seymour Racecourse, where the program began with the United Insurance Group Maiden Plate, won by Chris Waller-trained Little Phoenix. A casual BBQ and entertainment back at the winery concluded the day, and the conference wrapped up proceedings after the following morning’s program.

December 2019/January 2020


Our subscriber numbers are so big, they won’t fit on this page. At Insurance News, we’re proud of the industry we’re part of and delighted that we continue to get overwhelming support from you. We work hard to make sure that the important events and issues we all face are reported quickly, accurately and in depth. More insurance professionals turn to Insurance News than any other source.


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AILA conference sparks lively debate Members of the Australian Insurance Law Association (AILA) enjoyed another national conference, held this year at Hobart’s waterfront Hotel Grand Chancellor from October 30 to November 1. The conference has been running every year since 1987 and brings together national and international representatives of the insurance and insurance law industry for an extended educational and networking opportunity. AILA President Cameron Roberts presented AILA Life Member Awards to Stephen Williams, partner at Kott

Gunning Lawyers in Perth, and retired Adelaide-based industry veteran Barrie Datson. Events included an ethical debate entitled “You can show them the wording, but you can’t make them read it” and Victorian Bar QC David Gilbertson’s speech “Two politicians, two actors and two barristers: defamation decisions from Joe Hockey to Geoffrey Rush”. There were also lively sessions on cladding, cyber risk, class actions, driverless cars, climate change, Lloyd’s restructure and corporate culture in a post-Royal Commission world.

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UAC Adelaide expo enjoys strong turnout A record 80 exhibitors took part in this year’s Underwriting Agencies Council (UAC) Adelaide Expo in September. The event at the Adelaide Hilton hosted about 300 brokers, who were there to check out products and services, and also network with the agencies. UAC General Manager William Legge says the expo was extremely well supported with some brokers still at the booths up to closing time. During the event UAC donated a $2000 cheque to the Royal Flying Doctor Service.

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s y a w l a e r a e W t u o b a g n i k n i h t . s r e k o our br We would like to thank you all for your support in 2019. We wish you a safe and happy festive season, and a prosperous 2020.

Contact P: 07 3624 9400 F: 07 3624 9433 255 Sandgate Road Albion QLD 4010 PO Box 324 Clayfield QLD 4011 www.sua.com.au • info@sua.com.au


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icare celebrates excellence in care The Care and Service Excellence (CASE) Awards, presented by New South Wales state insurer icare, were attended by more than 700 claims management partners, providers, insurance brokers and employers. NSW Treasurer Dominic Perrottet delivered the opening address and journalist Annabel Crabb acted as master of ceremonies for the celebration, held at the International Convention Centre in Sydney. The awards debuted in 2015 and have been held annually to recognise and reward outstanding contributions by individuals and teams. New categories this year included the excellence in social impact

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award, won by Associate Professor Samuel Harvey and the Workplace Mental Health Research Program at the Black Dog Institute. Firms on the winners list included Allianz, Gallagher, Pinnacle Rehab and Beneco, which also gained the overall CASE Award, selected through popular vote by those attending the evening. WorkFocus Australia rehabilitation consultant Ellen Watson received the outstanding individual award, Allianz’s Alexandra Galassi was named Young Professional of the Year and EML’s Michele Cesci was honoured with the lifetime achievement award.


Aircraft Hull +

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Taxying

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Ground (or moored) Risks

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Liability arising from Bodily Injury or Property Damage to Third Parties or Passengers

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Liability for loss of or damage to passenger baggage

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Liability for loss of or damage to cargo and mail if applicable

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Convention turns spotlight on claims Disasters, disruption and regulation provided the theme for the 13th Claims Convention, held in September at the Four Seasons Hotel in Sydney. The topical program included a review of the Townsville floods and discussions on building and construction issues following the Lacrosse apartment tower fire and other development failures. A panel discussion looked at implications for claims from the Hayne royal commission and also

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from the next iteration of the General Insurance Code of Practice. Climate change, fraud detection and cyber insurance were among topics on the agenda, while mental health and wellbeing was also covered. The Claims Convention, a collaboration between the Australasian Institute of Chartered Loss Adjusters and the Australian and New Zealand Institute of Insurance and Finance, concluded with networking drinks and a gala dinner.


united ~ [yoo-nahy-tid] adjective

joined together for a common purpose. At United Insurance Group, we believe authorised reps should know who they’re dealing with. We want you to be part of a true partnership: that’s what being united is all about. UIG offers: • 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.

Call Trevor on 03 8676 0344 or 0431 705 660 or email: trevor@uig.net.au www.uig.net.au


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Axa XL makes an impact Brokers, lawyers and carriers were among 275 industry representatives who attended the Axa XL-sponsored Impact for Life event in September. The session in Sydney was one of many held across the country and globally as part of the Lloyd’s annual Dive In Festival, an initiative launched in 2015 to promote diversity and inclusion. Law firm Norton Rose Fulbright and Gallagher co-sponsored the event, which was supported by the NSW Young Insurance Professionals Australia and New Zealand. Attendees heard from Gallagher Chief Executive Sarah Lyons, Women in Banking and Finance Chief Executive Jen Dalitz and other speakers. The interactive session at Doltone House Hyde Park was followed by networking cocktails.

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Steadfast belongs at Dive In The Steadfast-backed Belonging for Impact event was a key part of this year’s Dive In inclusion festival. Steadfast Chief Executive Robert Kelly and his senior team joined almost 90 guests for the two-hour long session at the Western Sydney hotel in September. Diversity consultant Jane Counsel facilitated the event, which aimed to empower participants to understand the importance of belonging and driving more positive outcomes for diversity in the insurance industry. Participants were asked at the end of the session to pledge an action that would promote a greater sense of belonging in their workplaces.

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Canopius holds cocktail celebration Lloyd’s (re)insurer Canopius was joined by 140 clients at a cocktail party in October to mark the official launch of its new Sydney office. Many overseas colleagues attended the event including Chairman Michael Watson, and Asia Pacific, Middle East and North Africa Chief Executive Mark Newman. The Australian operation is headed by former Tokio Marine Management Australasia chief executive Claudio Saita.

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For all insurance enquiries, please email the Trident team at referrals@tridentinsurance.com.au For drycleaner’s cover, you can contact Belinda Caunt direct on belindac@tridentinsurance.com.au


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Risk management excellence on show This year’s RM Advancer Awards, hosted by GIO and Vero at the Ovolo Hotel in Woolloomooloo on October 24, once again recognised fantastic risk management achievements. Now in their 14th year, the prestigious awards named AKD Softwoods, Collins Foods, Aurizon and Rapid Plas as winners on the night, taking home 200,000 Virgin Velocity points each. Organisers say this year’s entries indicate increased awareness of the importance of mental and physical health in the workplace.

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CQIB convention looks to future More than 380 people attended the Council of Queensland Insurance Brokers (CQIB) 27th annual convention at the RACV Royal Pines Resort on the Gold Coast in September, exploring the theme “Navigating the Future”. Highlights included QBE’s “80s style” dinner in the ballroom and “a night on the green with CGU,” although this had to be held in the foyer rather than the lawns due to 50kmh winds. General Manager David Duncalfe says $36,950 was raised for the Mater Foundation at the event.

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Zurich runs bustling Marketplace More than 500 brokers turned up for Zurich’s 1872 Marketplace events held in Adelaide, Sydney, Brisbane, Melbourne and Perth over August and September. Zurich Australia’s General Insurance Chief Executive Tim Plant attended, joined by Chief Distribution and Deal Management Officer Giles Crowley, Chief Underwriting Officer Sean Walker as well as Chief Claims and Operations Officer Hilary Bates. This is the second year running Zurich has held the broker-focused event. The insurer says it’s designed for brokers to learn about Zurich’s risk appetite for all lines of business. Brokers at the forum are able to interact with local underwriters, broker relationship leaders, and the Zurich leadership team. Keynote speaker Andrew Kirk, who is a former TV journalist, provided advice to brokers on how they can deepen engagement with clients. A social networking session was also held at the end of each Marketplace event.

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CGU up for the Cup Hashtag du jour on the first Tuesday of November was #cguwinningpost, as CGU hosted 100 guests at its spring racing carnival marquee at The Winning Post Enclosure, Flemington Racecourse. Attendees watched as Vow and Declare and jockey Craig Williams narrowly won this year’s dramatic Melbourne Cup. Bubbles flowed among the mix of broker, claims and business partners attending the fashionable

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affair, now in its 10th year, which had an “ethereal oriental” theme and featured Seven Network TV presenter Emma Vosti on Master of Ceremonies duties. Special guest Stevie Payne, brother of 2015 Cup winning jockey Michelle Payne, was in attendance, along with senior CGU managers Ben Bessell, Phuong Ly, Nick Hawkins, Darren Maher, David Harrington, Garry Taylor, Brad Robson, Damien Gallagher and Tim Rafton.


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IA hits Hamilton Island About 460 delegates descended on Hamilton Island in November for the sold-out annual Insurance Advisernet (IA) conference and awards, where Chubb was crowned Insurer of the Year and NTI took out Underwriting Agency of the Year. Rugby league legend Wally Lewis and Naomi Simson, celebrity founder of Big Red Group, inspired the attendees, which included authorised representatives (ARs) from Australia, brokers from New Zealand, and insurer and service partners. Futurist Steve Sammartino was a keynote speaker, and IA Managing Director Shaun Standfield conducted a closed session outlining initiatives to grow adviser businesses, including new technology and marketing innovations. Golf was enjoyed by about 120 attendees in ideal weather while another 120 participated in the “IAthlon” walking and running event. Ian Carr provided an update on the IA Foundation and more than $200,000 was raised. During the awards ceremony, Chubb’s Stephen Carey was named Business Development Manager of the Year, Priscilla Feehelly took out Employee of the Year and Steve Dymond won the Chairman’s Award. Astute and Clear Insurance were joint “Overall Practice of the Year” winners, the IA Region of the Year award went to the Southern Region led by Andrew Borden, while BurMac Financial Services took the prize for Central Region Practice of the Year. 88

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maglog > W

e salute the hundreds of insurance professionals for whom the festive season will be secondary to bringing hope and support to people who lost so much in the bushfires. The team at Insurance News extends to all our readers our very best wishes for the Christmas-New Year period, no matter where you are and what you’re doing. 0 Stay safe, be happy.

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ProfessionalEdge Professional Indemnity Insurance ... giving you the EDGE.

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Profile for Insurance News (the magazine)

DEC/JAN 2019/20 - Insurance News (the magazine)  

The NSW and Queensland spring bushfires caught everyone by surprise, and now the states – and insurers – are bracing for a summer like no ot...

DEC/JAN 2019/20 - Insurance News (the magazine)  

The NSW and Queensland spring bushfires caught everyone by surprise, and now the states – and insurers – are bracing for a summer like no ot...

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