Insurance Business 2.04

INSURANCEBUSINESSONLINE.COM.AU ISSUE 2.4

EXCLUSIVE INTERVIEW

BRANSON

ON BUSINESS How to turn your business into an empire the Virgin way

POLITE COMPANY WHY CORRECT ETIQUETTE IS YOUR SECRET WEAPON

THE NEXT GENERATION TOMORROW’S INDUSTRY LEADERS TODAY

SAFARI SUITS INSURING AUSTRALIA’S MOST EXTREME MOTOR RACE

INSURANCEBUSINESSONLINE.COM.AU

CONTENTS / 2.4

10

COVER STORY

Virgin territory Sir Richard Branson sets out how to turn a business into an empire

NEWS ROUND-UP 6 | The big three The biggest stories to impact brokers 8 | Talking heads Straight from the horse’s mouth

26

FEATURE

The big interview Mark Searles, Austbrokers

FEATURES

46

BROKING INTELLIGENCE

Why manners matter How minding your Ps and Qs can boost profits

14 | Rising stars Meet the future leaders of the insurance industry 26 | The big interview Austbrokers’ Mark Searles on taking over the cluster group 32 | Placing a premium The big beasts of premium funding speak out 38 | The property cycle Are you making the most of your property insurance book?

BROKING INTELLIGENCE 46 | Why manners matter Why the way you conduct yourself at work can have a huge effect on how successful you are

2 | SEPTEMBER 2013

50 | Stats Tomorrow’s risks according to today’s industry leaders

INSURANCE INSIDERS 24 | Off the beaten track Insuring Australia’s most extreme motor race 52 | Social life Inside the UAC/NIBA Brisbane Expo. Plus the Ride of the Lions 55 | Favourite things Peter ‘The Piranha’ Peirano, Piranha insurance 56 | The final word Why BDMs are more than just ‘free coffee’

DAILY INVESTIGATIONS NOW ONLINE: Supermarkets sweep insurance sales Fraud investigations Cyber risk: the new big issue insurancebusiness online.com.au

EDITOR’S LETTER / 2.4

EMPIRE BUILDING

Kevin Eddy

Running your own business is something that takes more than just passion: it takes blood, sweat and tears.

Those of you reading this who are business owners will already know this, while those of you who are thinking about striking out on your own in future could do worse than take this on board.

It’s interesting, then, that one of the key pieces of advice in our interview with Sir Richard Branson on how to turn a business into an empire is essentially to ‘let go’. Sir Richard admits that he doesn’t get hung up on the detail – instead, he delegates to his managers and trusts them to get the job done.

Letting go isn’t something that business owners are particularly good at, especially when they’ve sunk their time, savings and the house into their livelihood, but it’s potentially the most important thing you can do to help your business grow. By letting go, you enable your employees to develop, which frees you up to work on the bigger picture.

The other piece of advice that the Virgin supremo gives is to exploit your personal brand as much as possible; however, whether you choose to do this in as high-profile a fashion as Sir Richard is entirely up to you.

Elsewhere in this issue, we shine a spotlight on the up-andcoming stars of the insurance industry, take a look at the state of the premium funding market, and ask whether you could be making more of property-related insurances. Add to that the usual mix of news, views, opinions, strategy tips and business insight, and it’s another busy issue.

Kevin Eddy, Editor, Insurance Business

COPY & FEATURES EDITOR Kevin Eddy SENIOR JOURNALIST Chinwe Akomah CONTRIBUTORS Nikki Heald PRODUCTION EDITOR Roslyn Meredith

ART & PRODUCTION DESIGNER Jonathan Phillips

SALES & MARKETING GENERAL MANAGER Peter Smith COMMERCIAL DEVELOPMENT MANAGER Tom Neville COMMUNICATIONS MANAGER Lisa Narroway MARKETING EXECUTIVE Anna Farah TRAFFIC MANAGER Abby Cayanan

CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley MANAGING DIRECTOR Claire Preen CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – AUSTRALIA & NEW ZEALAND Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Kevin Eddy tel: +61 2 8437 4793 kevin.eddy@keymedia.com.au Advertising enquiries Commercial Development Manager Tom Neville tel: +61 2 8437 4766 tom.neville@keymedia.com.au Subscriptions tel: +61 2 8437 4731 • fax: +61 2 9439 4599 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media Pty Ltd, Regional head office, Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 • fax: +61 2 9439 4599 Offices in Singapore, Auckland, Toronto, Denver insurancebusinessonline.com.au Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Insurance Business magazine can accept no responsibility for loss

CONNECT

Contact the editor:

kevin.eddy@keymedia.com.au 4 | SEPTEMBER 2013

Printed on paper produced from 100% sustainable forestry, grown and managed specifically for the paper pulp industry

NEWS / ROUND-UP

THE BIG

THREE The biggest news from insurancebusinessonline.com.au

BY THE NUMBERS

50%

of businesspeople would seek insurance advice from colleagues rather than brokers Source: Aon Risk Solutions

EMPLOYEE FRAUDS HIGHLIGHT INTERNAL CONTROLS The exposure of two massive scams within Australian insurance firms has highlighted the importance of robust internal controls.

Dual Australia was the first firm to announce it had been affected after the underwriter fell victim to a $17m employee fraud. Former senior claims officer Josie and her husband Alvaro Gonzalez allegedly set up a law firm and invoiced the underwriter for $17m in fictional legal charges.

Just over a week later, ASIC permanently banned the former national claims manager of ATC Insurance Solutions, Travers David Loy, from providing financial services after he fraudulently pocketed more than $1.2m. Loy fabricated and submitted 38 false claims for income protection insurance while at ATC.

THE VIEW Both cases – revealed within days of each other – show that it’s critical to not only have effective internal controls in place no matter how big your firm, but also to police them too. Companies would be well advised to review their systems in the light of these scams.

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$150m

The anticipated gross written premium in 2013 for Calliden Agency Services – the division of the insurer mooted to be its growth engine in future Source: Calliden

134%

The sales increase in health insurance policies reported by comparethemarket.com. au from May to June as consumers rushed to avoid tax penalties before June 30 Source: comparethemarket.com.au

$622m

The highest expected market capitalisation of Steadfast after its August IPO concludes Source: Steadfast

MENTAL HEALTH DISCRIMINATION CLASS ACTION LOOMS Insurers could be taken to court by policyholders who believe they have been discriminated against because of mental conditions such as anxiety and depression.

Not-for-profit organisation Beyondblue is preparing a class action in reaction to a “significant” number of cases from people who have, in its view, unfairly been rejected for insurance, charged higher premiums, or whose claims have been declined because of a mental illness which, in several cases, happened some time ago.

Beyondblue had been in discussions with the Insurance Council of Australia (ICA) over the issue but pulled out after “growing tired of waiting” for the ICA to act. The ICA implored Beyondblue to return to negotiations when asked about the situation.

THE VIEW Insurers simply can’t operate without discriminating in some fashion, but the question of mental health is one that must be addressed. With as many as three million Australians suffering from anxiety or depression, according to Beyondblue, and many unaware this could impact on insurance cover, there could be a looming coverage crisis if the situation remains unresolved.

BROKERAGE ON THE BLOCK QBE Australia has revealed plans to dispose of its National Credit Insurance Brokers (NCIB) business and professional indemnity authorised representative Invivo by the end of the year. The insurer will sell NCIB to Steadfast subject to its listing on the Australian Securities Exchange.

The news was revealed at an investor briefing on the progress of the insurer’s transformation program in early July. The insurer also revealed that Australian redundancies had been fewer than expected, with only 39 people made redundant as part of the group’s transformational programme. Around 190 have been redeployed, and 51 have left through natural turnover.

THE VIEW QBE’s controversial restructuring program is continuing apace. While it is still early days, it’s welcome that redundancies are fewer than expected. The sale of NCIB to Steadfast will also help as the cluster group and rival Austbrokers both bolster their offerings.

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SEPTEMBER 2013 | 7

NEWS / FROM THE FORUM

TALKING HEADS Uncensored opinions from Insurance Business TV...

Austbrokers CEO Mark Searles signposts that the cluster group’s buying spree will continue. For more from Searles, see page 26

ProRisk’s Peter Marshall on why it’s important to pick up the phone, even in the age of online lodgement and Twitter

Insurance industry recruiter Ivan Micallef provides some tips on how to blitz that all-important job interview

“Acquisition has always been a core part of our strategy. We’re constantly out there having conversations – we will keep the acquisition path going. Will it be as aggressive as this year? I can’t say right now, because it really depends on what happens in the market.”

“Technology is benefiting the insurance industry in terms of increasing efficiency and speeding transactions. However, it also has a downside: people have the potential to talk less. We’ve found that, when there is more electronic communication and less verbal communication, that’s where problems arise.”

“It’s important to get pre-interview preparation sorted out: study about the company; find out what their challenges are.

The people who do well at interviews are those that can solve problems.“

...and your reactions on the issues of the day “My major concern is what will happen to the share price when tens of millions of shares come off escrow in a year’s time.

With this many shareholders looking to cash out at once, surely the price will plummet.”

AD reacts to Steadfast’s IPO plans and expectations urers “The trouble is, when a BDM works hard to help the broker, he often becomes very unpopular with the underwriter because they have to bend the rules so much. The BDMs that try to keep their own company happy and play by the rules of their underwriters are usually less successful and draw the ire of insurance brokers.”

Robert Cooper on the news that

8 | SEPTEMBER 2013

brokers are unimpressed with BDM service. For more on this, see page 56 “Everyone is watching Calliden because they have proven that it’s not just cats that have nine lives.”

Broker on the news that Calliden’s managing agent model has sparked interest from other insurers n “What a fantastic story and a positive outcome for all.”

Leigh-Anne Byrom on our report about the efforts of Ansvar and broker Morgan Jones to rebuild a community centre destroyed by fire Have your say on the burning issues of the day.

See more at insurancebusinessonline.com.au/tv

COVER STAR / BRANSON ON BUSINESS

VIRGIN TERRITORY

Like him or loathe him, Sir Richard Branson is one of the most successful entrepreneurs in the world. In this exclusive interview, Insurance Business probed the Virgin mastermind about the secrets to his success Insurance Business: Many of our readers run small- to medium-sized businesses. What’s the difference between a business that chugs along at a happy medium and one that develops into a world-leading, global empire? How do you go about building an empire rather than just a business?

Sir Richard Branson: Big or small, I believe that all successful and innovative companies need to have an excellent product or service, they need strong management to execute the plan and a good brand to give it the edge over competitors.

Often entrepreneurs can create a good product and a brand but lack the management to help expand and create a truly great company – people are the core differentiator between a business that just chugs along and one that grows into an empire.

An entrepreneur needs to build up a very strong and capable management team and delegate out the responsibility to run the existing companies to them, so that he or she can focus on new ideas and finding the next business to start up. Just remember that it is impossible to run a business without taking risks. Virgin would not be the company it is today if we had not taken risks. I couldn’t tell you which was the riskiest – there has been quite a few!

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IB: Both Virgin and Sir Richard Branson are names that are known the world over. How important is a strategic approach to branding – personal and/or corporate? Can they be separated?

What are the must-do’s when building a brand?

RB: Brands ultimately belong to the consumer.

While a business can influence its brand by what it does and how it behaves, it is what the customer thinks at the end of the day that is the only important thing. With this in mind, I think that it is important to try and identify early on what attitude you would like your brand to convey, and then go about building it!

Brands need to be constantly nurtured, to be kept fresh and be seen. When I was thinking about setting up my own airline, the late Freddie Laker said to me: “You’ll never have the advertising power to outsell British Airways. You are going to have to get out there and use yourself. Make a fool of yourself. Otherwise you won’t survive”. I’ve been following his advice ever since and used myself to get the Virgin brand in the headlines and become more visible.

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“People are the core differentiator between a business that just chugs along and one that grows into an empire” SEPTEMBER 2013 | 11

COVER STAR / BRANSON ON BUSINESS

BRANSON ON… RELAXING IB: It’s all too easy for an entrepreneur to get stuck dealing with the daily workings of a business. How important is it for an entrepreneur to get out of the office and do other things? What helps you refresh yourself mentally and physically?

RB: I do try to keep fit – anytime I’m near a Virgin Active club I make sure I get in there and work out. I love tennis and kite-surfing and pretty much do some sort of exercise every day, without making it too rigid, as that just doesn’t work for me. I enjoy being outside and being active – keeping fit as a result is almost a by-product of doing something I enjoy! I recently completed the Pick n Pay Cape Argus Cycle Tour, a wonderful 109km ride with 36,000 cyclists, and an extraordinary atmosphere with breathtaking views.

I have always believed that I needed to find good people to run my businesses and to delegate day-to-day management to others. I did this from a very early age and, importantly, that has allowed me to go and set up new ventures, sometimes in a new sector or country.

IB: Our readers’ businesses deal with intangible services in the financial sector. What are your tips for effectively marketing and selling intangibles?

What have you learnt from ventures such as the Virgin Money companies?

RB: Even today, the Virgin brand is not a product like Coca-Cola or McDonald’s; it’s an attitude and a way of life to many. At Virgin Money, we’re building a better kind of bank. A bank that genuinely cares about the customer and provides a better experience and better-value financial products in a straightforward, transparent way. I think that it is important to build up a strong brand when selling an intangible service as it makes your service distinct and different from anyone else’s.

IB: You’re famous for your ‘Screw it, let’s do it’ approach, which has led to missteps as well as successes.

What is your biggest business failure, and why?

How do you pick yourself up from mistakes – both personally and financially?

RB: Whenever I experience any kind of setbacks, I always pick myself up and try again. I prepare myself to have another stab at things with the knowledge I have gained from the previous failure. My parents always taught me never to look back in regret but to move on to the next thing.

The amount of time people waste on failures rather than putting that energy into another project always amazes me. I have fun heading the Virgin group of businesses, so a setback is never a bad experience, just a learning curve.

IB: Part of the skill of a successful entrepreneur is identifying tomorrow’s growth sectors and opportunities – Virgin Galactic being one of the most high-profile examples of this. How do you discover tomorrow’s opportunities today?

RB: There are many different reasons for entering new businesses. It can be as simple as a business sector really interests me or one of our directors at Virgin, and we see areas in that sector where our brand can make a real difference to the consumer.

Sometimes it is as simple as the fact that an existing service has frustrated us and we believe we could do it better.

Having the will to say ‘screw it, let’s do it’ and make things happen is what sets entrepreneurs apart. It takes bravery to start a business, but 12 | SEPTEMBER 2013

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people with enterprising spirit who seize chances when they come along will be the ones who drive the economy and make a difference in the future.

IB: Another aspect of business that every entrepreneur understands is getting the right people around you.

How do you find the best talent for your businesses – and how do you keep them interested and engaged?

RB: We don’t really have a general recruiting process at Virgin – it depends on the type of business and the position we are looking to fill.

However, as a rule we tend to pick out employees who are inquisitive about the bigger picture, and have a ‘can do’ attitude, are positive and enthusiastic and, most importantly, have a strong sense of fun! I have found that choosing enthusiastic, talented and positive people has helped to shape a positive character for our businesses.

IB: Innovation is clearly something that is central to the Virgin ethos. How do you unlock this, both personally and in your business teams? Can you create a culture of innovation and, if so, how?

RB: I believe our culture of innovation is a result of our ability to adapt to changes quickly. We run our companies small; there is very little red tape and certainly no bureaucracy – we make decisions quickly and implement them, before our competitors in the market have held their fifth meeting on the same issue.

Additionally, Virgin has many, many entrepreneurs within the organisation. In business, the picture is constantly moving and changing so I try to employ people who enjoy thinking outside the box and are constantly creative and inspiring.

Our people don’t just think about the numbers but think about how a deal will enhance the whole brand.

IB: You’re a globally recognised philanthropist and supporter of charities. How important is it to devote time and capital to not-for-profit work as a businessperson? Does it matter what size your business is? Is it more important to donate time or capital?

RB: I believe that today’s businesses – regardless of their size – must be prepared to do good in societies around the globe. I am optimistic that we

BRANSON ON… TECHNOLOGY IB: From big data to social media, the digital revolution is disrupting industries across the world, with business models being forced to change, whether they want to or not. As an entrepreneur with a history of disrupting established industries, does the potential of digital excite you? What’s your advice on how to make the most of emerging technologies?

RB: The mobile revolution has allowed entrepreneurs to better talk to their customers, suppliers and staff in real time to determine exactly how each one is responding to particular situations, and determine exactly what they want and need. An entrepreneur who takes full advantage of this is well on the way to making himself a success, because he knows how to approach his consumers and how to deliver his offer in just the right way. I know it’s a cliché, but knowledge is power.

Virgin is a major advocate of social media and the power it can hold for companies. My advice to the businesses of the future would be to improve their social media presence and use it as a way of knowing their customers more intimately. It can act as a wonderful warning system for businesses as well as a cost-effective way to get your message out.

“The amount of time people waste on failures rather than putting that energy into another project always amazes me” can make the world a far better, safer and more equitable place, but business and enterprise must sit at the heart of this process. We need government, business and the social sector to work together for the benefit of everyone.

It should no longer be just about typical ‘corporate social responsibility’ where the ‘responsibility’ bit is usually the realm of a small team buried in a basement office – now it should be about every single person in a business taking responsibility to make a difference in everything they do, at work and in their personal lives.

Virgin Unite, the non-profit arm of the Virgin Group, call this approach ‘Capitalism 24902’ because it’s focused on getting business leaders all over the world — all 24,902 miles of it — to look at how we can do what is right for people and the planet. Virgin Unite also helped incubate a recently launched not-for-profit organisation called ‘The B Team’ which is framing a new approach to business where people and planet are priorities alongside profit.

SEPTEMBER 2013 | 13

FEATURE / THE NEXT GENERATION

RISING Who are the people who will lead the insurance industry into the future? Insurance Business profiles the next generation

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Who: Ross Bethell What: Broking principal Where: Marsh

Ross Bethel is widely recognised for his ability to address the technical aspects of insurance placements

Ross Bethel, 34, joined Marsh through the company’s graduate professional development program in 2003.

In his current role as principal, Ross has extensive experience in servicing some of Marsh’s largest clients and has established strong relationships with key underwriters in the market. He is widely recognised for his ability to address the technical aspects of insurance placements.

Ross’s notable contribution to the industry extends beyond his work at Marsh. His desire to give back to the industry saw him join the National Insurance Brokers Association (NIBA) Young Professionals Committee in 2006, which was soon followed by his appointment the next year as chair of the committee. Ross’s strong leadership skills were also recognised by his peers in 2013 when he was nominated to the WA Divisional Committee of NIBA. He took up this position in July 2013.

In 2010, Ross was engaged as a sessional academic under Curtin University’s Open University program in corporate law, an experience that built upon his detailed understanding of corporate legislation and developed his ability to distill complex topics for presentation to a variety of audiences.

Who: Matt Kuc What: Manager - Professional Risks Where: Austbrokers Countrywide Matt Kuc started working in insurance in 2005 with a 12-month cadetship at Austbrokers. He later moved to the Professional Risks Division at Countrywide as a specialist in professional indemnity and management liability. He also completed a Bachelor of Commerce in 2009 while working at Countrywide.

Matt manages a specialist team of 14 staff and a significant portfolio of broking income, while also taking part in extracurricular activities. He was a guest speaker at a national Austbrokers training event, as well as a panellist at the graduation dinner for the QBE eQuip program. On top of this, he’s also a facilitator of Countrywide’s ‘Under 30s’ development group.

Matt’s achievements haven’t gone unnoticed. In 2010, he received four awards as part of Countrywide’s Staff Reward program, including awards for the greatest amount of new business income written as well as the largest portfolio growth in the company. In 2011, he was the inaugural national winner of the Austbrokers Frank Earl Platinum Award, given for excellence in insurance broking.

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FEATURE / THE NEXT GENERATION

Who: Ryan Grigg What: Senior technical claims specialist Where: Calliden

Who: Alexandra Ferguson What: Account manager Where: Willis

Alex Ferguson, 29, is an account manager in the Outward Global and Complex Risk Managed Team at Willis. However, her path to this position has been far from smooth.

Originally entering the insurance industry in 2006 through Jardine Lloyd Thompson’s graduate program, she soon rose to the role of account executive in the firm’s corporate risk solutions team.

Poached by Willis in April 2010 to work on some of its most highprofile global accounts, Alex faced a baptism of fire when the person she was supposed to be working with quit two days after she started.

“It was stressful, but it was a fantastic opportunity to make my mark and work hard with the clients,” says Alex.

Alex rose to the challenge and was rewarded with the Willis Super Servicer Award later that year after being nominated by not one but three of her clients, and promotion to account manager in 2013. Recognition also came from outside the company, with Alex winning NIBA’s NSW/ACT Warren Tickle Memorial Award in 2012.

Alex is heavily involved in supporting other young insurance professionals, chairing both the Willis NSW and the Willis Australasian Young Professionals Committees, as well as being an active member of NIBA’s NSW Young Professionals Committee and its Mentoring Committee. “It’s a fantastic opportunity to give back to the industry,” she says. “Everyone on these committees wants to see the industry perceived in a better light. I think it’s important to change the perception of brokers and not undervalue what we do.”

Alex recently gained a Master’s of Insurance and Risk Management from Deakin University and was awarded a scholarship to complete the CPIB professional development program. She coaches netball and tennis in her spare time.

Who: Patrick Hunter What: Senior consultant Where: Aon Global Risk Consulting

16 | SEPTEMBER 2013

Patrick Hunter, 33, is a chartered accountant with more than 11 years’ experience in helping corporate clients solve complex compliance and financial problems. Before joining Aon in 2009, Patrick worked primarily in Internal and External Audit at Deloitte in Melbourne, London, Europe, the US and Papua New Guinea, and at PKF. Patrick is currently a senior consultant on Aon’s Risk Accounting team, with a focus on post-loss work. He leads large, complex client engagements in Australia, New Zealand and Asia, within the pre- and post-loss field of business interruption.

After completing four years in the Australian Army in 2007, Ryan Grigg turned to a role on the Home and Contents claims team at Westpac General Insurance to begin a new phase in his career. Within 18 months he had been promoted to team leader.

The potential to branch out into handling other classes of claims encouraged Ryan to join Claims Services Australia, where he looked after a team dealing with farm and commercial property business on behalf of Calliden. When the handling of these claims moved in-house to Calliden in May 2011, Ryan saw this as a new opportunity for his career. Earlier this year Ryan was appointed as senior technical claims specialist at Calliden.

Ryan is passionate about the importance of service delivery to people when they are in times of need, such as supporting customers affected by both the Victorian bushfires in 2009 and the Toowoomba ‘Inland Tsunami’ in 2011. He also appreciates opportunities to deal with the many challenging problems involved in handling claims.

Patrick was actively involved in helping Aon’s clients in the aftermath of the earthquakes in Christchurch, New Zealand. He was at the Aon office in Christchurch when the second event occurred on 22 February 2011, which meant that he also spent many days helping colleagues and locals recover and get back on their feet.

More recently, Patrick has been working in Thailand on key global accounts as a result of the Thailand earthquake. He will soon transfer to Aon’s Melbourne office to take on a leadership role.

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Who: Kilmeny Page What: Underwriter manager – SME, Xpress Underwriting Centre Where: General Insurance Division, Zurich After joining Zurich in the Life Company, Kilmeny Page, 31, soon demonstrated her potential as a leader and was promoted to a CTP role at a time when that business was undergoing significant change.

She has repeatedly demonstrated her capabilities by taking on many and varied challenges, managing them all with skill, empathy and composure.

Kilmeny is a perfect example of someone who lives the Zurich values, conducting herself with integrity at all times, delivering excellence in customer service, and promoting teamwork and excellence in work performance. Kilmeny says that during her time at Zurich she has been given opportunities to hone her own skills and knowledge while leading and developing others within her teams.

“I have been fortunate to have worked with exceptional managers and leaders within Zurich who have challenged, motivated, encouraged and supported me.”

Kilmeny is currently participating in Zurich’s Horizon program designed for future leaders. She has eight years of experience in managing people, during which time she has encountered some unique and challenging situations.

“My values as a leader are trustworthiness; to be open, fair and honest, giving recognition and credit to others; and to always reserve judgment until you know the full facts. I find people management highly rewarding and I’m proud of the successful development and progression of employees who I have led.”

Who: Simon McLean What: Manager, Victoria and Key Partners Where: Retail Division – Financial Institutions, Allianz Simon, 32, joined Allianz in 2003 as part of the company’s graduate program. Since then, he has held a variety of sales and distribution roles within the Financial Institutions (FI) division.

He has established a reputation for achieving growth well above market rates though a commitment to working closely with partners, his team and internal stakeholders.

Simon’s career progression with Allianz has included account management, key account management and state management roles in

Who: Lucy Whitehead What: National sales manager Where: Retail Division – Direct, Allianz Lucy, 30, joined Allianz Australia in 2006 through its graduate program, following completion of a degree in commerce/law at the University of NSW. She worked in both the Broker and Agency Division and in liability claims, which gave her an insight into different business units and a solid understanding of insurance. At this time she also completed a Master’s of Insurance and Risk Management at Deakin University.

Lucy gained international experience when she took on a role at Allianz’s headquarters in Germany in 2009. There she formed part of the claims workstream of the Allianz Group Sustainability Program and was responsible for identifying and sharing claims best practices across the group. Lucy enjoyed the opportunity to work with a diverse and experienced group of people and gain insight into the insurance markets in other countries.

On her return to Allianz Australia in 2011, Lucy took on a business improvement role in the Operations Division. Her main focus was to lead process improvement and system implementation in the claims area. Lucy has recently stepped back into distribution, as national sales manager at Allianz Direct. She is responsible for driving the Direct Personal Lines strategy and achieving profitable growth of the portfolio.

NSW, Queensland and Victoria. He is a key member of the FI management team and is currently manager for Victoria and Key Partners.

In addition to Simon’s direct responsibilities, he has held a number of leadership positions in which his ability to collaborate has proven highly effective in cross-functional teams. His roles have included being chair of Victoria’s Leadership and Culture Program, the Business Continuity Committee and the Sales Planning Group.

Simon’s record of high achievement has been recognised with his winning of four consecutive Allianz Sales Club awards, and as a result being inducted into the Allianz Hall of Fame for Outstanding Sales Achievement.

SEPTEMBER 2013 | 17

FEATURE / THE NEXT GENERATION

Who: Ari Bitzilis What: Southern region risk manager Where: OAMPS Insurance Brokers Ari Bitzilis, 33, is the southern region risk manager at OAMPS, based in Melbourne. He is a qualified geotechnical engineer, having graduated with a Bachelor of Engineering degree from RMIT University, and a member of the Institute of Engineers Australia and the Risk Management Institute of Australasia. He is responsible for assisting clients in the development of risk management policies and procedures, to ensure they understand their risks and help position them to financially survive any insurable event.

Recently, Ari was named as runner-up for the 2013 FM Global Scholarship, and he also received the inaugural Lumley Corporate Solutions Property Award (part of the Lumley Insurance Benchmark Awards) for inspiring excellence in risk management.

Prior to joining OAMPS, Ari worked in the mining and civil construction industries, earning valuable project experience throughout Australia, Canada, Indonesia and Africa and consulting to large multinational companies, including BHP Billiton and Rio Tinto.

Ari also worked as a risk engineer at Australian International Insurance, and, following an acquisition, at Lumley General.

During this time Ari provided risk management consulting to a range of industries, including manufacturing, dangerous goods storage, transport and logistics, and power generation.

Who: Khoder Chehade What: Head of motor Where: General Insurance Division, Zurich Khoder Chehade began his insurance career in heavy motor claims recoveries and developed a keen interest in how claims triggered pricing before moving into a heavy motor and CPE specialist underwriting role. This was followed by corporate sedan and light commercial fleet roles, in which his experience and knowledge enabled him to identify suitable market segments within an ultra-soft market.

Khoder joined Zurich in 2010 as underwriting manager for Victoria and Tasmania. He was attracted to the idea of orking for a clear leader that combined everything from high-value mining equipment down to sedans under one product. He then successfully and profitably grew his area of responsibility, particularly following the creation of a solution that now sees Zurich leading the market as one of the biggest fleet insurers for public health.

Khoder was selected for Zurich’s Future Leaders program in 2012, and later promoted to head of motor. He now manages a national fleet portfolio that covers almost anything on wheels under one product. He sees his key drivers as people, and delivering the most sophisticated products to the market.

“My ambition is to place Zurich in a position where an intermediary feels as though they have done their customer a disservice if they have not approached or considered Zurich for fleet insurance and risk engineering,” Khoder says.

Who: Drew Ferns What: Branch manager – Wollongong, NSW Where: OAMPS Insurance Brokers Drew Ferns, 32, joined OAMPS in 2009 as an account executive, and has since worked his way through the organisation, performing in the roles of account manager and senior account manager, and most recently moving into a leadership role as branch manager responsible for the OAMPS team at the Wollongong branch.

Drew has successfully completed the Wesfarmers Insurance Leadership Development program, and was also a member of the NSW team for the Allianz Young Eagle program. He has a Diploma of Financial Services and is a graduate

18 | SEPTEMBER 2013

of the Public Venue Management School.

Drew began his insurance career at his wellestablished, family-owned brokerage, Teamcare Insurance Brokers, working his way from administration and claims responsibilities to managing professional risks and specialty lines.

Drew has also worked as the head of broking operations with Enrizen Insurance Solutions.

Drew is a disciplined and motivated professional and has developed well-rounded broking skills by working with SME and corporate clients in both regional and metro Australia. His leadership skills, performance and values are integral to OAMPS achieving its vision of becoming Australia’s most admired insurance broker.

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Who: Adam Rakowski What: NSW state head of insurance Where: Macquarie Relationship

Having completed a Bachelor of Commerce degree at Sydney UniverBanking, Macquarie Bank sity, Adam Rakowski, 33, joined the Macquarie Relationship Banking (MRB) division of Macquarie Bank in April 2001.

MRB is Macquarie’s business banking division, specialising in lending and deposit services for SMEs, and it focuses on professional service industries, including general insurance, strata and residential real estate.

After working in various roles in operations and risk, Adam moved to sales in May 2005 as the portfolio manager for 20 insurance brokers and underwriting agencies.

Within this portfolio, he was given responsibility for managing the division’s largest and most complex lending exposure and was involved in funding many insurance broker merger and acquisition transactions.

In 2007, Adam’s focus moved from client management to business development and new client acquisition. Between 2008 and 2011, Adam was consistently the division’s number one new business writer, and in May 2011 he was promoted to associate director and the role of NSW state head of insurance for MRB. Since he assumed full responsibility for the state portfolio, client numbers in the insurance space in NSW have grown by around 50% and annual net income from the portfolio has increased twofold.

Adam is widely recognised internally as an industry expert whose opinion is sought on such matters as business valuations, and he has forged strong relationships with key stakeholders in the broader insurance broking and underwriting agency market.

“There are very few industries that provide the diversity that insurance can offer,” says Adam. “I can’t think of too many professions which could see you dealing with the affairs of a logistics company in the morning, a resort operator in the afternoon, and a major retailer in the evening.

“Add to this the fact that a career in insurance provides a real opportunity for people to work in multiple geographic jurisdictions. Above all, what continues to attract me to the industry is its never-ending quest to improve the lives of everyday Australians.”

Who: Helen Lockwood What: Strategic relationship manager – National Broker Distribution Where: Commercial Insurance, Suncorp Helen Lockwood, 33, joined Suncorp in December 2007. With a background in international event management, she joined the company as national events leader, managing Vero’s participation in all national insurance events. She was key to raising the profile of Vero broker events, and found herself developing relationships across the industry.

A particularly strong relationship was developed with the Steadfast office when Helen found herself creating the first Vero Amazing Race to raise money for the Steadfast Convention charity, Youngcare. It was the first time Steadfast had raised over $100,000 for the charity. As a result, Helen won the Suncorp Commercial Insurance 2009 staff award.

Having developed relationships with key stakeholders at Steadfast, AIMS and NIBA, Helen moved into the National Relationship team in 2010, and focused on developing her knowledge within the insurance industry. Quickly assuming responsibility for Steadfast, she proved key to developing a strong head office relationship, which now finds Vero in a prime position, including being the first to develop Steadfast Virtual Underwriter and now base partner for SME cover.

Early this year, Helen assumed responsibility for the Strategic Relationship team, which looks after all national relationships. Traditionally, this has included the international brokerages and key Australian cluster groups. Her current focus is on reassessment of the team’s footprint to determine where further growth could be achieved.

Helen has a passion for study and sport, and recently completed her Master’s in Sport and Exercise Science.

SEPTEMBER 2013 | 19

FEATURE / THE NEXT GENERATION

Who: Andrew Faber What: Account manager Where: MGA Insurance Brokers

Andrew Faber, 32, is one of MGA’s youngest and most productive authorised representatives. Previously a BDM at Vero Insurance, Andrew joined MGA in 2007 and became an authorised representative in 2009. He now oversees MGA’s national Master Painters Insurance program and a portfolio of SME and national accounts from MGA’s Sydney office.

Andrew has also successfully partnered with one of Australia’s fastest-growing accounting and advisory firms and generated business opportunities with established and recognised brands, previously inaccessible by MGA. Financial year 2012/13 was a breakout year for Andrew and MGA Sydney, with the branch growing by 30%. He was also fourth in the inaugural Insurance Business national Elite Broker ranking, validating his commitment to customer service.

Financial year 2012/13 was a breakout year for Andrew and MGA Sydney, with the branch growing by 30% Andrew has been an active member of the NIBA Young Professionals Committee in NSW since 2010. In 2013, in his role as vice-chair of the committee, Andrew co-managed the newly released Vero NIBA Presentation Skills program, which has been built specifically to enhance the industry’s presentation skills.

Andrew’s dedication to the NIBA Young Professionals Committee is a reflection of his passion for his role as an insurance adviser.

Who: Aisha Lala What: Solicitor Where: Wotton + Kearney 20 | SEPTEMBER 2013

Aisha Lala, 29, is a solicitor at Wotton + Kearney’s Melbourne office, having joined the firm in early 2011.

Aisha played a central role in the firm’s participation in the Royal Commission into the Black Saturday bushfires, and Wotton + Kearney’s subsequent representation of Victoria’s largest electricity distributor, Powercor Australia, and its insurers in three large class actions arising out of the fires in the Western District.

The litigation was highly charged and required sensitive and careful handling.

There were numerous interlocutory applications and two appeals, and significant litigation was conducted under an urgent interlocutory timetable. Two

of the three class actions ran to trial, involving almost 10 weeks’ hearing time.

Under the supervision of partner Robin Shute, Aisha was the lead solicitor on the Wotton + Kearney team, which undertook all preparatory work themselves, only involving counsel in contested hearings and at trial. Aisha spent extended periods of time away from the office, when preparing the cases and during the trials.

Liability issues in all three Powercor class actions were settled in June 2013.

Aisha was also a member of the Wotton + Kearney team that travelled to Cambodia in 2012 to build 13 houses in two days for impoverished families.

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Who: Amanda Marinis What: Senior account manager Where: Marsh

Amanda Marinis, 29, joined Marsh in 2003 as part of its graduate development program. In 2007, she was promoted to senior account executive, and since then she has achieved much. Not only has she participated on and led client service teams at the client’s request on a number of occasions, but she has also driven various internal and external projects at Marsh. She is currently acting as the national benchmarking co-ordinator and the 3D project manager and leader for Australia. 3D is Marsh’s client service framework and is designed as a standard of excellence for client service, driving client engagement and focusing on risk-based solutions.

Last year, Amanda was one of only 30 Marsh employees worldwide selected to participate in a global financial acumen training pilot program; she subsequently assisted in the facilitation of this program in Australia. She was also awarded the title of assistant vice president as part of Marsh’s Global Officer nominations in recognition of outstanding performance, sustained contribution, and for raising the standard of excellence and collaboration within the firm. Amanda is currently on client secondment, helping to meet her client’s internal insurance-related targets and objectives for 2013.

Outside of Marsh, she was Victorian State Finalist and National Winner of NIBA’s Warren Tickle Memorial Award in 2012, takes part in various Young Insurance Professional events, and assisted in the Victorian launch of the NIBA Mentoring Program in 2013. She is married with two young children.

Who: Preston Ipkendanz What: Senior financial lines underwriter, SA Where: ACE Insurance As an enthusiastic voluntary work experience participant at ACE in 2009, Preston Ipkendanz impressed so much that he was offered a job. Following completion of his studies in January 2010, ACE recruited him as a financial lines underwriter for NSW, a position he held for three years.

Preston quickly accelerated through the various levels of underwriting authority at ACE, developing expertise in directors and officers (D&O) liability, professional indemnity, and commercial crime insurance. One of many highlights of his work was in relation to multinational insurance programs, including a D&O placement on an account spanning 36 countries.

Another achievement was winning the inaugural London Scholarship in 2012. Preston wrote an impressive 3000-word analysis on how the insurance industry would evolve over the next three years. His reward was a five-day educational trip to London, including visits to the ACE, Marsh and Lloyd’s offices.

In April 2013, Preston was promoted to the position of senior financial lines underwriter and relocated to Adelaide, where he now has sole responsibility for the entire South Australian financial lines portfolio.

At just 26 years of age, Preston is an insurance professional committed to continued success in the industry. He is well positioned to benefit from ACE’s culture of employee development and internal talent promotion throughout its global network.

SEPTEMBER 2013 | 21

FEATURE / THE NEXT GENERATION

Who: Luke Goss What: State manager (WA) Where: Blue Broking

Who: Kristine Vale What: Senior associate Where: Wotton + Kearney Kristine Vale, 33, is a senior associate at the Sydney office of Wotton + Kearney, specialising in property and ISR insurance.

Under the supervision of partner Adam Chylek, Kristine is the lead solicitor on a team of 10 Wotton + Kearney lawyers advising insurers on complex indemnity claims arising from the 2010 and 2011 earthquakes in Christchurch, New Zealand. The total value of the losses exceeds $1.5bn.

This is the largest catastrophe response project in Wotton + Kearney’s history, and Kristine’s role is multifaceted. It includes advising on complex and unique material damage and business interruption policy response issues, and ensuring consistent application across individual claim files; overarching policy response issues that inform strategic decisions; working with one of the firm’s largest clients as part of its specialist catastrophe response team; monitoring and advising on market and legal developments on policy issues; and facilitating engagement with lead and co-insurers on major multibuilding/location losses.

This work has generated a range of issues that the industry has never experienced before, including complicated material damage questions relating to liquefaction of land, differential settlement, the effect on structural steel in buildings, and related business interruption problems arising out of the inaccessible Red Zone in Christchurch’s CBD.

Who: Con Anasta What: Regional sales manager Where: Calliden 22 | SEPTEMBER 2013

Starting from a door-to-door job selling mobile phones in 2001, Con Anasta, 32, has built a career in insurance founded on a diverse range of experience.

Building on his first job, Con moved into motor vehicle sales, winning the Highest Sales Achiever award in two consecutive years. Upon completing a Certificate in Financial Services, he was promoted into the motor finance department and introduced to the delivery of insurance solutions to his clients.

Leveraging his experience in the motor industry, Con moved to Allianz where he managed

Luke Goss, 31, is not only a successful insurance broker but also highly regarded by his peers as someone who does a great job and who is an all-round ‘great bloke’.

Luke’s insurance career began at Willis in 2003, where he worked in Mergers, Acquisitions and Reconstruction. He stayed at Willis for five years, working in various roles and eventually becoming WA state manager.

His career took a leap forward in 2009 when he was accepted by ASIC to be a responsible manager on an AFSL, and set up IDC Pty Ltd, offering insurance broking and consultation as well as property management services. Luke was then the youngest person to be issued an AFSL in Australia. A year later, the insurance arm of IDC was merged with Blue Broking to set up Blue Broking’s WA branch.

Luke hasn’t sat on his laurels since then: he has doubled his portfolio every year and continues to establish Blue Broking’s brand and business in the WA market. In 2011 he received NIBA’s Warren Tickle Memorial Award. He is also chairman of the WA NIBA Young Professionals Committee.

motor/CTP dealership relationships across the Sydney metropolitan area. He joined Calliden at the beginning of 2009 to take on a broader development manager role, and in 2012 was promoted to regional sales manager for ACT, NSW, and QLD. Con firmly believes that insurance is all about people. “Whether you are in sales, claims, underwriting or any other area in the insurance industry, you are constantly building relationships with both internal and external stakeholders, whilst servicing intermediaries to provide them with solutions for their clients’ needs,” he says.

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Who: Criselle Magayanes What: Team leader – Warranty Where: Calliden Criselle Magayanes, 25, joined the Calliden Group in 2008 as a casual employee while studying for a Bachelor’s degree in Health Science. She originally expected to move into community health once she had completed the qualification, but after being offered a permanent role at Calliden she decided to continue a career in the insurance industry.

Continuing her professional development, Criselle undertook a Diploma of Financial Services, specialising in risk management, which she completed in 2010. In late 2011 she was elevated to her first leadership role overseeing the Operations team. Earlier this year Criselle took on the challenge of overseeing Calliden’s Builders Warranty team and guiding everyone in it through a period of rapid change.

Criselle strives to create a proactive team culture and is dedicated to increasing staff engagement and making their jobs more rewarding. She cites her greatest achievements as improving team dynamics and being able to support a team through challenges and in times of high pressure while meeting business goals and satisfying team expectations.

Who: Tyson Vickery What: Broking executive Where: Marsh Since entering the insurance industry in 2003, Tyson Vickery, 33, has worked across a number of Marsh’s business areas and quickly progressed in both client-facing and insurer-facing roles.

As a broking executive in Marsh’s placement team, Tyson works closely with many of the firm’s largest clients (including ASX 100 companies) to negotiate and implement local and global property placements. Based in Sydney, he also looks after the Canberra, Brisbane, Darwin and Fiji offices.

In 2008, Tyson was responsible for the successful establishment of the Marsh & McLennan Agency in Perth, which saw the company benefit from significantly increased account throughput and associated revenue.

During his time at Marsh, Tyson has managed a portfolio of key accounts in WA

Who: Jane Harwood What: Claims consultant Where: Aon Risk Solutions Jane Harwood joined Aon as an administration assistant in 2010 after arriving in Australia from New Zealand and working in the retail industry. She showed great interest in developing herself: in addition to her administrative role, Jane took on the management of some small enterprisebased claims.

Within a short period of time, Jane was promoted to the position of claims handler, managing a portfolio of claims for SME clients. She continued to push and educate herself and sought management of professional indemnity losses – some of the most complex claims within the team.

Today, Jane manages a full professional indemnity book of claims and educates junior members of the claims team in claims management. She also regularly visits the Parramatta office to take part in the orientation of new brokers and talk to them about the role the claims team plays at Aon.

and SA, ensuring the delivery of high-quality customer service as well as managing and developing junior staff through clear and effective communication, delegation and performance management. His performance drew praise from senior management as he focused on expanded and new business opportunities, consistently delivering 17% to 36% over targeted revenues.

In 2012, Tyson was awarded the inaugural Affiliated FM Engineering Scholarship for his winning essay on the benefits of loss prevention. This award followed a steady history of academic achievements, including the 2012 Deakin University Faculty of Law Business Merit List and admission to the Golden Key International Honour Society. He has also held directorships with the Football Federation of SA and Cystic Fibrosis SA. In 2014, Tyson intends to undertake further studies at the Australian Institute of Company Directors, followed by a Master’s of Business Administration.

SEPTEMBER 2013 | 23

REAL LIFE / AUSTRALASIAN SAFARI

OFF THE BEATEN TRACK Insuring Australia’s answer to the Paris to Dakar rally is no easy task.

Kevin Eddy finds out how the Australasian Safari ensures that the event goes off without a hitch

This September, more than 100 people will climb into four-wheel drives or onto motorcycles and quad bikes to take on one of Australia’s most challenging motorsport races – the Australasian Safari.

The Safari is Australia’s answer to the Paris to Dakar off-road rally, and sees riders and drivers cover a 3,500km course throughout the wilds of Western Australia’s midwest region over seven days. This year, the race sees competitors tackle challenges as diverse as limestone gorges, rough scrubby hills, treacherous creek beds, rocky outcrops and sandy beaches as it makes its way from Perth to Geraldton via Kalbarri, Upper Gascoyne and the Kennedy Ranges.

Current event director Justin Hunt has been leading the race since 2007, and he inherited a relatively complex jigsaw of insurance requirements when he bought the rights to the event from then-owner Octagon Management in 2011.

“We have about five or six policies with multiple stakeholders,” explains Hunt. “The big ones are held by the Confederation of Australian Motor Sport (CAMS) and Motorcycling Australia (MA). That’s our public liability insurance and so on. We also have a contract

24 | SEPTEMBER 2013

with Tourism Western Australia, which includes a number of insurance requirements. Finally, we have to ensure Justin Hunt Management is covered to a suitable level throughout the year.”

Balancing the interests of Justin Hunt Management, stakeholders like Tourism WA, and the motorsport bodies means that insuring the Australasian Safari is a juggling act. That’s where insurance broker Cathi Deany of Unity Insurance Brokers comes in.

“I review the overall insurance requirements for both entities to ensure that the CAMS and MA policies satisfactorily cover the event, those involved in the event, and the interests of applicable interested parties,” says Cathi.

LINES IN THE SAND Both Hunt and Deany stress that the Australasian Safari is an event for which thorough risk management is critical.

“Motorsport is dangerous and always will be, but we put everything we can in place to bring the risk down,” says Hunt. He highlights, as an example, that the rolling caravan that will accompany the Safari is completely self-sufficient when it comes to medical support.

“It would be a very rare thing if one of my competitors

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“Motorsport is dangerous and always will be, but we put everything we can in place to bring the risk down” Justin Hunt is not 20 minutes away from a MICA [Mobile Intensive Care Ambulance]-trained paramedic. We’ve got more medical coverage than you would have in the suburbs.”

Hunt adds that his thorough approach to risk management doesn’t end when the event does.

“The Australasian Safari is an epic adventure, but we also need to operate as a normal business for the rest of the year,” says Hunt. “For example, people might go out for a field trip, which is essentially no different to having a sales rep on the road, apart from the fact that my guys are in four-wheel drives in the middle of nowhere!

“We put measures in place to control the risks – check-in policies, satellite tracking and phones, longrange fuel tanks, and so on. We can take that to the insurance companies and show we’re already managing the risk. In fact, some of the policies and procedures we operate are now being copied by mining companies.”

Hunt’s comprehensive approach to minimising risk is complemented by Deany’s expert insight; that means obtaining insurance is generally straightforward.

“Justin’s thoroughness has ensured that the risk management is extremely well documented and managed,” adds Deany. “I also review all the documents from the risk management plan, OH&S policy, safety plan and budget to ensure that all aspects are addressed. This ensures that while negotiating cover with insurers that they are aware of the proactive and detailed nature of my client when they are rating the risk.”

Deany’s expertise has been critical in ensuring the continued success of the Safari both during the race and behind the scenes, says Hunt.

“I’m good at running car rallies – I’m not good at insurance. I need to protect myself, my business and my brand,” he concludes. “Cathi’s been able to come in, learn my business, and fill any potential insurance gaps.”

The Australasian Safari begins on Thursday 19 September at Wanneroo Showgrounds. Competitors will cross the finish line in Geraldton on Friday 27 September.

Visit www.australasiansafari.com.au for more event information.

SEPTEMBER 2013 | 25

THE BIG INTERVIEW / MARK SEARLES

GLASS

HALF FULL Austbrokers CEO Mark Searles has been in the hot seat for just over six months. He sat down with Insurance Business to discuss acquisitions, the impact of the Steadfast IPO, and why the insurance industry needs to be ‘loud and proud’ Insurance Business: How are you settling in at Austbrokers?

Mark Searles: It’s been incredibly full on. In fact, an analyst recently made the comment that he’d expected that I had probably spent the first three months putting my feet up and taking stock of things. That’s not the case at all. It’s really been about getting out there and talking to our broking and underwriting partners. We have interests in 46 broking firms across Australia and 15 underwriting agencies as well. I have a really strong view that I can’t sit in an ivory tower talking or thinking about great strategy, or putting together three-to-five-year plans unless I’ve really connected with the principals and understood what it is like out in the field.

Equally, the network have to be able to trust me as the figurehead of Austbroker Holdings and be sure whatever we do – in terms of providing the network, the infrastructure, support and services – is actually going to benefit them. So being out there is very important.

26 | SEPTEMBER 2013

I’ve also been meeting with the investment community; I’ve met more than 35 analysts and investors. As the CEO of an ASX 300 company, one of my core roles is maintaining good connections with the investment community and ensuring that I keep telling the Austbrokers story. We’ve got 26 years’ worth of fabulous story, which has continued to build in the seven years since we floated. Our growth record has been phenomenal over the last seven years – we’ve seen double-digit growth year after year. It is my job now to underpin that growth for the next five to 10 years.

IB: What are the big challenges facing broking principals?

MS: The current economic climate is clearly a challenge. A lot of people talk about the SME market doing it tough, and when you talk to the principals you find that there is a uniformity of view.

We’re not seeing it come through in the financial performance, and our growth and retention

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“Our growth record has been phenomenal over the last seven years – we’ve seen double-digit growth year after year”

THE BIG INTERVIEW / MARK SEARLES

“There is an education job to be done by the industry as a whole ... to ensure that the message around insurance and what it provides is absolutely understood” rates remain high; however, we remain vigilant.

But there is negative sentiment out there. What that means for us is that we have to work with our broker principals and partner firms to ensure that their value propositions are highly relevant. We have to ensure that anything that is being done for clients or on their behalf is absolutely appropriate to ensure that the role of insurance is clearly understood, and reducing cover to save money is not a sensible option.

Saving money by cutting on insurance may not be the best decision, especially in the commercial lines area. If something bad happens, that business pays for the proprietor’s mortgage, the kids’ school fees and food on the table at the end of the day. If they’re not adequately insured, then that’s a significant problem. Helping our

28 | SEPTEMBER 2013

insurance partners and broking firms get that message across is incredibly important.

IB: Do you think that’s a difficult message to get across to Australians, especially in the current environment?

MS: I saw research very recently that suggested 50% of Australians are underinsured. If that’s true, that’s a significant problem. There is an education job to be done by the industry as a whole, not just

by Austbrokers, to ensure that the message around insurance and what it provides is absolutely understood.

IB: To look on the bright side, what are the opportunities for brokers?

MS: Looking at Austbrokers specifically,

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our market share as a group is about about 10% of the Australian intermediated marketplace. Well, I see that as ‘glass half full’: it means there’s 90% still to go for. We have to make sure that our value propositions as Austbroker Holdings – the services, the infrastructure, the products that we provide – are highly attractive. We are in the process of optimising our operating model, so that anyone who is thinking about going into partnership on a joint venture basis would naturally choose Austbrokers. Not only because they can reduce their level of investment now and take cash but also because the services and the infrastructure we provide ensures that they’ve got an improved business in five, 10 or 15 years’ time as we work with them to grow the value of their businesses.

To me, the opportunity is very much around how Austbrokers can support our existing partners and then become incredibly attractive to potential partners going forward.

IB: What’s on the cards in terms of developing those support networks?

What’s next for Austbrokers?

MS: One of the first things I did when I came into the role was to bring the executive table of Austbrokers together to really understand the pillars of our historic growth. Unsurprisingly, we identified a number of things that we provide and are very good at – industry best practice. A lot of those were related to the back office, whether it be having the brokers on the same broking system, or

“We’re also working to increase the ‘bench strength’ of the holding company by recruiting for a number of new roles” the way we provide bureau services to a number of our broking houses, running their accounts or providing HR support and payroll.

But knowing what we do well wasn’t really the question I was asking. I wanted to know what things we weren’t doing so well, so that we could optimise our operating model to be as attractive as possible for future acquisitions, and to ensure we can help our existing partners grow their businesses.

We found there were a number of different areas, especially around the front office, that we could develop. I’m talking about services that help create new business, that help provide new insight into new opportunities. That’s an area that we’re really focused on at the moment.

As a result, we’re also working to increase the ‘bench strength’ of the holding company by recruiting for a number of new roles. To me, the underpinning of future growth is about capability, it’s about people, and it’s about bringing relevant skills into this organisation that we can leverage

MARK SEARLES: A TIMELINE 1980–2001: Held a number of senior roles in the UK, including five years as marketing manager at American Express Europe, managing director at MyBusiness (a 3i venture capital backed software company) and managing director of Sag’s Software Division in the UK (part of Sage Group PLC), head of marketing at HSBC, and managing director of Goldfish.

2001–2005: Worked for Lloyds TSB Group in the positions of managing director of Goldfish, and marketing and group brands director.

2005–2009: Mark joined Zurich Financial Services where he was managing director, direct and partnerships, and also chief marketing officer for Zurich UK. During this period Mark was also non-exec at Endsleigh Insurance Brokers, one of the UK’s leading independent insurance intermediaries.

2009–2012: Employed as chief commercial officer and general manager of retail at CGU, followed by the role of general manager, broker and agent at CGU.

2013: Appointed as CEO of Austbrokers Holdings, taking over from previous CEO Lach McKeough.

SEPTEMBER 2013 | 29

THE BIG INTERVIEW / MARK SEARLES

“We will keep the acquisition path going. Will it be as aggressive as this year?

I can’t say right now” to help our existing partners or to help build our propositions that will make us more attractive for future acquisitions.

IB: To pick up on your point of acquisitions, you’re quite an acquisitive company generally and you’ve made some big acquisitions recently.

Could you give us a rundown of the rationale behind this and whether this will continue?

MS: Acquisition has always been a core part of our strategy. It continues to be a core part because it’s one of our three major pillars of growth – organic growth, acquisition, and what I euphemistically call “other” (principally the underwriting side of the business). This year has been pretty active, and I believe in terms of spend it’s probably the most active year we’ve ever had. That’s because the opportunities are out there.

From our point of view, though, there are a number of possibilities that we look at which we let go ‘through to the keeper’, so to speak, because we want to ensure that the acquisitions we make fit the Austbroker family, both culturally and from a growth perspective as well.

We will keep talking to the market: we’re constantly out there having conversations. We will keep the acquisition path going. Will it be as aggressive as this year? I can’t say right now, because it really depends on what happens in the marketplace. But yes, it’s a core pillar of our future strategy.

IB: That’s an interesting point about the marketplace, because the big elephant of the room is one called Steadfast and its IPO. What impact is that likely to have on Austbrokers?

MS: Well, we welcome a new competitor into the listed marketplace and we recognise that we have to up our game. It ensures that, whatever we do, we are the best at providing that particular aspect of service proposition or infrastructure.

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TAKING AIMS The AIMS network is a joint intiative between Austbrokers and IBNA, the Insurance Brokers Network Australia. It provides a number of services and benefits to IBNA members, and is a project close to Mark Searles’ heart.

“When I first came into the business, I recognised that the AIMS joint venture is incredibly important for us,” explains Searles.

“The Austbroker model is based very much around an equity model, so by definition we will only attract the people who want to go into a joint venture with us.”

Partnering with IBNA, Australia’s leading non-equity membership organisation, provides great benefit to both groups.

“I’m very keen to work with IBNA to ensure that we can help build the AIMS value proposition and attract as many members as possible. That’s why Gary [Gribbin, IBNA chairman] and myself stood up and opened May’s AIMS conference by talking about this.”

It also provides a potential future pipeline of acquisition targets, adds Searles.

“It helps us with our future acquisitions strategy as well, because if we have a close relationship then it’s highly likely that the brokers going into the IBNA structure are going to be more predisposed to coming to Austbrokers if they choose to equitise at a later point in time. So there’s a logic to working within the AIMS structure.”

IB: Is there anything else you’d like to say to the readers of Insurance Business?

MS: I think the only point I’d make goes back to the question you asked in the beginning of the interview, which was about the future.

I think the future of this industry is incredibly bright. But I think that the one thing we, as an industry, have to be far better at doing is creating a value proposition around insurance as a career.

We are particularly poor – and this is true when I was in the UK as well – at promoting ourselves.

So, I’d basically put a call out to all stakeholders to get together and really improve the opportunities for young people out there, to make this a career of choice. This is just a fantastic industry. I mean, I fell into it 10 years ago and it’s something I’ve never regretted. I love working in insurance and it’s something we should be loud and proud about.

Pla ci n ga

FEATURE / PREMIUM FUNDING

PREMIUM 32 | SEPTEMBER 2013

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Premium funders play a critical, if sometimes underrated role in providing insurance.

Insurance Business canvassed the big beasts of the sector on the state of the market and their future plans

The premium funding landscape has undergone significant changes in recent months. The most high-profile of these has been the merger between two mainstays of the sector, Macquarie Premium Funding and Pacific Premium Funding, in the first half of 2013. The integration of the two businesses under former Pacific boss Stuart White is expected to take the best part of the year, but it’s likely that the combined business will be a powerhouse once it is firing on all cylinders.

The premium funding market is also seeing structural changes. Brad Bartlem, CEO of Hunter Premium Funding, highlights regulation as a challenge: “Increasing regulation in the lending space (consumer and business), combined with the continued reality of uncertain financial conditions, certainly present challenges for the funding industry,” he says. “The real challenge is adapting to these issues without overengineering solutions which may complicate product and distribution.”

Stuart White also flags adjustments to distribution channels due to the insurance industry consolidation as a challenge for funders.

“One key market shift in the past few years has been the rapid expansion and use of the Authorised Representative (AR) model by insurance intermediaries and insurers,” he says. “The AR model, by its very nature, requires premium funders to equip for the provision of a different service and sales model.

“Another evolution requiring premium funders to respond and adapt has been the rising strength of the

SEPTEMBER 2013 | 33

FEATURE / PREMIUM FUNDING

“The core opportunity for the industry is to decipher how to capitalise on the 60% of the market that is not currently funded” Stuart White

insurance broker cluster groups. Their varied business models are driving consolidation across the spectrum of insurance intermediaries.”

Both men are upbeat about the future, however.

“Today, the premium funding market in Australia finances around $5bn of commercial insurance premiums per annum. This represents approximately 40% of the total pool of commercial general insurance handled via insurance intermediaries,” says White. “The core opportunity for the industry is to decipher how to capitalise on the 60% of the market that is currently not funded.”

Bartlem adds: “The key opportunity for premium funders and brokers is primarily the same, which is making it even easier for customers to fund their insurance premiums. On average, Australian and New Zealand funding take-up rates still trail more established international funding markets, so the opportunities for growth are very real.”

BY THE NUMBERS In 2011/12, the 13 members of the Insurance Premium Financiers of Australia (IPFA) association: wrote

375,123

contracts in total with an average value per contract of

and a total annual volume of

34 | SEPTEMBER 2013

What will be the gamechanger issue for funders in the next three years?

The main change in the industry over the past five years has been the reduction in complexity for brokers and customers through systems innovation. It wasn’t that long ago funders required original application contracts and financial statements for nearly all transactions that meant more cost for everyone. This theme of reducing complexity and making funding easier for customers through innovation will continue for the foreseeable future and will be a critical factor in funders remaining relevant and ultimately profitable.

What are the key factors brokers should consider when seeking premium funding for their clients?

The number one consideration should be security. In some cases a customer may pay multiple instalments to a funder before an underwriter is paid, so brokers should conduct due diligence on funders the way they do underwriters.

What are your stand-out product and features?

Our overarching goal is to make funding easier for brokers and ultimately our end customers, and that’s reflected in our new mobile app, paperless loans, and endorsements approved online; all supported by our great team of people who are really the stand-out reason Hunter meets customers’ expectations.

What are your plans for the year ahead?

To continue making incremental improvements in all aspects of our sales and service offering, and attracting and retaining the best people in the market.

Why should brokers come to you?

Stability and strength. Hunter has demonstrated over 20 years that we have the stability, expertise and support to meet and exceed customer expectations through good and bad financial conditions. Hunter is committed to brokers. We want to assist them in growing their funding income, while exploring new ways to improve our systems and service.

$12,655 $4.75m

BRAD BARTLEM, CEO, HUNTER PREMIUM FUNDING

Source: IPFA, February 2013

INSURANCEBUSINESSONLINE.COM.AU

SEPTEMBER 2013 | 35

FEATURE / PREMIUM FUNDING

STUART WHITE, CEO, MACQUARIE PREMIUM FUNDING

 Answers to these questions will help to determine how easy

What are the biggest challenges facing premium funders at present?

As well as shifts in insurance industry structures, there is an increasing emphasis on technology by insurance intermediaries. Funders and brokers are becoming more reliant on technology for the efficient delivery of premium funding products. Across the industry, premium funders integrate with most, if not all, insurance broker platforms and have bespoke arrangements at individual broker level. Funders who are not heavily investing in their technology linkages and alignment with broker technology investments will to a degree struggle to remain competitive.

technology with the broker’s platforms, in turn facilitating a better funding experience for clients.  The tools to assist brokers’ account executives’ levels of understanding, in order to discuss with clients the benefits of premium funding.  Access to industry expertise and the ability to help the broker improve the efficiency of their premium collection activities.

What will be the game-changer issue for funders in the next three years?

The premium funding market is relatively mature and stable.

Game changers are going to be ‘unknown unknowns’. That is not to say the industry is standing still with innovation – quite the opposite. It is a highly competitive market and by its nature is driving evolutionary innovation.

What are the likely influences shaping the future of the industry? Government regulation would be one of them, or more accurately the potential for further regulation. For a large part of our history the premium funding industry has been unregulated. That has been changing over the past three years and we expect that trend to continue.

Insurers’ appetite for expanding the provision of their own instalment options would be another. We have seen this creep into the micro end of the small-to-medium market and reduce the available premium funding market over the past five years.

What are the key factors brokers should consider when seeking premium funding for their clients?

The key factors brokers should consider include:  The funder’s capital strength and corporate governance framework. In today’s business environment, these are attributes that are growing in importance when considering strategic partners.  The funder’s service model. Is it locally driven? Are they responsive and are the decision-makers accessible?

36 | SEPTEMBER 2013

it will be to work with them.  The ease of use, and extent of integration of the funder’s

What are your stand-out product and features?

We provide short-term loans for small-to-medium businesses to finance their commercial general insurance policies. We deliver this via sophisticated platforms which link directly with insurance intermediary systems. Our products and systems are also linked with the broader Macquarie Relationship Banking (MRB) product suite to provide further premium collection and cash reconciliation efficiencies.

What are your plans for the year ahead?

For the next 12 months, we are focused on two core areas:  Rapidly and seamlessly integrating both of the businesses – Macquarie Premium Funding and Pacific Premium Funding – following the acquisition in March of this year.

We expect to complete the integration within 12 months.  Extending our offering to brokers and borrowers via our combined product suite derived from bringing together the best of both businesses. This will include product enhancements to aid both the process and service for intermediaries and borrowers.

Why should brokers come to you?

Macquarie Premium Funding and Pacific Premium Funding have one of the broadest ranges of premium funding products and services for intermediaries and clients available in the market.

This allows us to tailor how an intermediary integrates the funding option into their own business and adapt our offering to the needs of intermediaries across Australia and New Zealand.

We understand that funding is just one part of a very broad cash management process that both intermediaries and their clients have. We take a broader view of this and can work with intermediaries in a very integrated way, offering value beyond just providing a premium funding solution. We are positioned to combine small business flexibility and agility with corporate strength as well as premium funding product and expertise with the banking suite of MRB. Through the MRB offering, our clients benefit from our broader network capabilities, including premium collection and cash reconciliation efficiencies.

INSURANCEBUSINESSONLINE.COM.AU

SEPTEMBER 2013 | 37

FEATURE / PROPERTY

The PROPERTY

General property insurance is the mainstay of many brokers’ portfolios – but could you be doing more to bolster your book? Kevin Eddy reports From the smallest studio unit to the largest industrial development, insurance is at the heart of property. The consequences of malicious or accidental damage can be disastrous for domestic property owners and businesses alike, and can reverberate through the economy.

The seriousness of such damage has only been magnified by the natural disasters that have plagued Australia and New Zealand over recent years, with clients increasingly keen to ensure that their premises are covered. However, the cost of the natural disasters has also had the effect of seeing premiums increase, and cover – particularly flood cover – withdrawn for some clients.

All the evidence suggests that catastrophic events are likely to continue, if not become more brutal. As the insurance industry adjusts to this new normal, however, there’s also a drive to effectively assess and cover risks where possible. This has led to some significant shifts in the general property and construction markets in particular.

Other structural changes are opening up new opportunities. Flat residential property markets mean that homeowners are spending more on structural renovations, creating a new wave of owner-builders who need insurance to gain finance for their grand designs. Equally, the shift from quarter-acre blocks to urban unit and townhouse living is seeing interest in strata insurance reach a peak: however, this complex area of insurance hides many traps for the unwary.

We canvassed some of Australia’s largest insurers and specialist underwriters to find out just what’s going on in property circles – and how brokers can profit.

38 | SEPTEMBER 2013

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CYCLE

SEPTEMBER 2013 | 39

FEATURE / PROPERTY

HARD-TO-PLACE RISKS: WARNING SIGNS Risks featuring these elements could be considered hard to place:  ‘Hazardous’ industries such as hospitality  Bushfire-exposed properties  Older buildings or heritage buildings  Buildings with problematic claims records  Businesses in remote locations  Properties not built to current code standards

reducing in many instances. For some businesses, this can make insurance seem an undesirable expense.

“Premium rates have increased over a number of years, mainly on the back of several significant natural catastrophes. These have now stabilised. There is now a strong emphasis on risk management as a means of reducing premiums.”

David Hoffmann, chief underwriting and portfolio manager, Corporate, Vero

SAFE AS HOUSES Increased competition has seen premiums and cover improve for low-risk clients – but property that doesn’t fit the criteria can be left out in the cold STATE OF THE MARKET “The marketscape is still changing after the natural catastrophes of the last few years.

There’s a lot of capacity in the market, which is finally putting downward pressure on rates after several years of increases.

“The very top end of the market – the Fortune 1000 companies – are seeing considerable savings due to new competitive pressures, particularly due to increased appetite from one of the large American insurers. There have been significant rate movements downwards in that sector – as much as 30%.”

Tim Higgins, CEO, Mobius Underwriting Australasia “Overall, there has been a slowdown in market activity during the past six months. There are many businesses struggling at the moment. Property values are reasonably flat, but gross profit values are 40 | SEPTEMBER 2013

“The Australian market for property-based insurance is very competitive in most geographical locations.

However, there are unique factors for each location.

For example, capacity in northern Australia may prove a challenge in the current market due to insurers re-evaluating the environmental exposure and reducing capacity. Large properties not built to cyclone standards may be difficult to insure.”

Andrew Norris, acting national product manager, Intermediary Distribution, QBE Australia “Insurers are scrutinising renewals more carefully and taking a more stringent line. We write hard-toplace and hazardous risks, and we’re seeing an increase in business that doesn’t look ‘that hard’: brokers say they want to talk to people because there are aspects which mean they’re not comfortable putting it through system-underwritten models.”

Gary Dawson, managing director, Axis Underwriting

OPPORTUNITIES AND CHALLENGES “There is a real opportunity to increase the level of risk information shared with insurers, which would improve the turnaround of quotes and the adequacy of cover, as well as ensuring the right price is

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“The very top end of the market – the Fortune 1000 companies – are seeing considerable savings due to new competitive pressures” Tim Higgins, Mobius Underwriting

KEY CONSIDERATIONS FOR BROKERS  The market is competitive for good-quality risks, especially at the larger end of the market. There is scope to negotiate.  High-quality information is critical, such as risk management detail, engineering information, claims history and survey reports.  Take a proactive approach to risk management with your clients.  Flood cover is creeping back in, but you may need to provide evidence of mitigation measures in affected areas.

charged. It really is a case of the more information shared, the better for all concerned.”

Andrew Norris, QBE

 Consider an insurer’s record in claims management and risk management when choosing an insurer.

“Flood cover is sneaking back into commercial insurance. It you’re in a flood area but have been unaffected, or if you can demonstrate mitigation efforts, you may be able to buy supplementary cover.”

Tim Higgins, Mobius

 Mainstream underwriting guidelines for riskier properties seem to be tightening: ensure you have an alternative provider for potentially hard-to-place risks.

SEPTEMBER 2013 | 41

FEATURE / PROPERTY

IF YOU BUILD IT… Australian construction may still be in the doldrums, but opportunities exist for creative brokers STATE OF THE MARKET “There has been a downturn in construction activity and investment since the global financial crisis in 2008. More recently, there has also been a decline in mining investment, which has compounded the downturn in the construction industry. Overall, this means there are fewer construction projects to insure.

“Even in boom times, construction companies typically operate with low levels of cash flow, so when a downturn occurs the difficulties in securing capital to build new projects and remain solvent can be crippling. This, of course, means that there is less demand for insurance, and numerous insolvencies.

“In addition to the drop in demand, there has been an increase in competition in construction underwriting over the past couple of years. A lot of smaller underwriting agencies have entered the market recently, while several international (re)insurance companies have been taking on Australian construction risks from overseas. This means it is increasingly important to retain existing clients.”

Paul Hiser, senior technical specialist, Construction, Vero “The construction market is quite competitive at the moment, with several new entrants. As a result, we’re seeing pressure on pricing, leading to better premiums and coverage, but that’s typical of soft market conditions like this.

“There’s also some market segmentation taking place: we’re seeing increased development of online quoters for smaller risks, especially at the SME end.

In contrast, larger risks are continuing to go the traditional ‘slip and negotiation’ path.”

Jim Wiechman, engineering underwriting manager, Latitude Underwriting

OPPORTUNITIES AND CHALLENGES “There are still a number of opportunities in the Australian construction sector. The energy and gas sector is still buoyant and there is substantial investment in transport, water and electricity infrastructure. A large amount of residential

42 | SEPTEMBER 2013

apartment construction is underway as well.

“The Australian Government has indicated that it would like to reinvigorate the manufacturing industry.

Any increase in construction activity and investment in the industry would be welcomed by the insurance industry. The construction industry is cyclical, so there will be a return to higher levels of activity and investment eventually.”

Paul Hiser, Vero “I think we’re going to have to wait to see the economy recover a bit to see significant growth and money spent on construction again. I’m not the first person to say this, but the upcoming election could have a bearing on construction spend. Even so, at this point it’s hard to say where most of the growth will be.”

Jim Wiechman, Latitude Underwriting

KEY CONSIDERATIONS FOR BROKERS  The competitiveness of the construction market means that it’s important to listen to clients’ needs.

If you can work with your clients through these lean times, you will both reap the benefits when more positive conditions return.  Coverage can also be negotiated, especially around additional benefits such as claims preparation costs or material damage.  Ensure policies are matched to the requirements of the insurance and indemnity clauses of your client’s construction contract.  As with other aspects of property insurance, ensure information quality is high: this is especially important due to the risk-specific nature of construction insurances.

INSURANCEBUSINESSONLINE.COM.AU

GRAND DESIGNS Australia’s stagnant property market may not be good news for real estate agents, but this is opening up potential new insurance markets, including a burgeoning population of owner-builders.

Rather than sell their houses and move into new properties, homeowners are increasingly turning to upgrading their existing properties to cater for growing families and other lifestyle needs. These works are often more than just installing a new carpet or retiling the bathroom: new rooms or floors, swimming pools and other structural renovations can result in a bill of anything up to half-a-million dollars.

“We’re seeing a new wave of residential owner-builders,” says Sam Greco, general manager of Australian Owner Builders Insurance Services, “and they need insurance.

Typically, owner-builders will use their money to begin works, then borrow from the bank to complete projects.

If the bank agrees to lend the money, it may demand insurance. Due to the value of these kind of works, it’s not something that’s usually provided by direct insurers, so there’s an opportunity here for a broker to do retail business.”

Greco says that the best time to talk to owner-builders is before they’ve put spade to ground. He adds that brokers can use their existing client base to access this market.

“Brokers are already writing professional indemnity insurance for the people that come into contact with owner-builders at an early stage: certifiers, draftsmen,

engineers, designers and architects,” he comments. “You can use these professionals as a referral source, and it also allows them to offer additional services to their clients.”

The sales process is also different to what brokers may be used to with professional clients.

“Owner-builders aren’t professional buyers, so the

“The best time to talk to owner-builders is before they’ve put spade to ground” question of premiums will come up very quickly,” says Greco. “You should steer the conversation to talk about coverage. Owner-builders are also rather impulsive at the buy, and they value responsiveness and proactiveness.

The first person that can give them comfort is likely to seal the deal.”

Greco adds that, while this can be a recurring source of revenue, it’s unlikely that the same clients will come back to drink at the well.

“The downside of this segment is that, once a project is completed, owner-builders won’t embark on another one for a long time, if ever. But there are always new projects being started – currently 100,000 new projects worth over $25,000 every year. Therefore, having your referral sources lined up is essential.”

SEPTEMBER 2013 | 43

FEATURE / PROPERTY

SHARED ACCOMMODATION Mooted as the next big growth area for property insurance in both residential and commercial spheres, strata looks simple from the outside but holds hidden risks STATE OF THE MARKET “We’ve seen an emergence of new strata underwriters. Historically, the market’s concentrated on residential, but we’re seeing mixeduse strata coming up more and more. We will see strata insurance grow significantly as the population shifts from living in houses to units.”

Tim Higgins, CEO, Mobius Underwriting Australasia

“Strata has been an under-the-radar insurance, but the market is bright and healthy. Around 50% of new dwellings are expected to be strata dwellings – it’s the fastest-growing form of residential property.

Additionally, while the market is served by two main channels of distribution – strata managers and brokers – there’s a shift towards using brokers. That’s partly down to increased competition but also because of the professional service provided by brokers.

“It’s a very broad base, however, with in excess of 400,000 individual entities across Australia. They vary from simple residential duplexes to whole suburbs in strata programs. On the commercial side, they can vary from small two-unit developments to industrial estates and shopping centres.

“From the outside, it looks simple in respect of underwriting, but there are a huge number of factors that come into play – not least legislation. Experience is critical; you do need to know the market to appropriately price the risk. It may look like you can make a quick buck, but it can be deceiving. It can come back to bite you if you don’t fully understand what you’re writing.”

Jesse Borthwick, general manager, Longitude Underwriting

OPPORTUNITIES AND CHALLENGES “Everything around strata is driven by legislative requirements. Strata insurance is a statutory requirement through state legislation.

“That legislation is subject to change: in fact, additional requirements will soon be introduced in NSW – increases to liability limits, changes to how valuations need to be done. We see that as a precursor to other states also making similar changes. Therefore, brokers need to deal with multiple forms of legislations in different states. As a result, very few strata insurers will do length and breadth of country or all market segments.

“There are also legislative requirements around product features: for example, strata doesn’t have a co-insurance clause, similar to domestic insurance.

There typically aren’t indemnity periods built in, and residential strata is also an unlimited liability environment. That requires additional diligence from an underwriting perspective.”

Jesse Borthwick, Longitude Underwriting “Understanding and dealing with mixed-tenancy business is important. You need to understand that 44 | SEPTEMBER 2013

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“Strata has been an underthe-radar insurance, but the market is bright and healthy” Jesse Borthwick, Longitude Underwriting

the risk may not be the same on day 365 as it is on day one.

While the overall character risks aren’t likely to change, if the risk is a retail strip of low-risk properties, it’s not going to turn into high-risk nightclubs and takeaways, for example, but tenants may change.

“Getting accurate and full information about each tenancy is important, but this can be difficult due to tenant turnover. Also, strata managers who manage properties administratively may not be the property managers who are letting each unit, which also creates complications.”

Gary Dawson, managing director, Axis Underwriting

KEY CONSIDERATIONS FOR BROKERS  Strata insurance is an area of significant opportunity, especially as demographic changes mean that more properties are classed as strata. Increased competition among providers means brokers can add major value.  Make sure you understand the intricacies of residential, commercial and mixed-use strata, as well as state law requirements, before arranging cover (or recruit experts in each area).  Treat strata differently to other insurance products – to some extent it contains elements of commoditised (home and content) and non-commoditised (business pack) insurances.  Make sure the provider you are using is appropriate for the cover you are seeking.  Provide as much information as possible: tenant and lot owner information, claims history, construction information, details around by-laws and so on.  Be prepared to provide extra advice to strata committees that do not employ a manager: they may be unaware of their responsibilities.

SEPTEMBER 2013 | 45

BUSINESS STRATEGY / ETIQUETTE

Why manners matter Business etiquette is still a vital consideration for 21st century brokers, and the way you conduct yourself at work can have a huge effect on how successful you are, argues Nikki Heald

H

Have you ever been in a business situation and witnessed an event that was so cringe-worthy it left you saying “Really?” If so, think about the impression that behaviour left on you and the negative connotation attached to it.

Perhaps you think that the way you conduct yourself at work doesn’t really matter too much.

Well, think again! Understanding correct etiquette (or protocols) not only provides you with an edge over competitors but also influences whether or not you eventually make the sale. Your conduct can also mean the difference between whether you stand in line to receive a promotion or not. Savvy business-

46 | SEPTEMBER 2013

INSURANCEBUSINESSONLINE.COM.AU

people appreciate this and incorporate business etiquette into their daily interactions to ensure success.

While the word ‘etiquette’ may seem out of date or even old-fashioned, the simple fact is that common courtesies still prevail. Etiquette is about respect, good manners, and good behaviour. It is not just about one of these but a combination of all of them rolled into one. Clients and colleagues have an expectation that you will conduct yourself professionally, civilly and appropriately. Bad manners leave an unfavourable impression and this can often be difficult to shake.

MAKE TIME FOR MANNERS Unfortunately, in today’s high-tech, fast-paced world, our belief may be that we are too busy or have more pressing things to do than practise correct protocol.

Sending a simple ‘thank you’, replying on time, exchanging business cards correctly or returning a call appear to have gone by the wayside.

You might assume that manners are automatic or ingrained in us by the time we become adults, but that may not always be the case. Some do not place a high priority on implementing common courtesies.

Of course, we all know to use ‘please’ and ‘thank you’; however, people in the business world need to appreciate that there’s more to business protocol than that.

During the first few seconds of meeting someone, perceptions are formed, and first impressions can be long lasting. Presentation, body language, and behaviour are critical as there’s only a small window of opportunity in which to impress. Do you have confidence and integrity? Are you friendly and selfassured? Are you capable and knowledgeable? Do you appear trustworthy and ethical? These are just some of the assumptions clients and colleagues will form about you.

Indeed, Sir Richard Branson (interviewed on page 10) in his book Losing My Virginity says: “I tend to make up my mind about people within thirty seconds of meeting them”. Interestingly, a lot of research has been conducted that supports Sir Richard’s proposition.

Etiquette is also essential at work functions. From a management perspective, employees are profes-

While the word ‘etiquette’ may seem out of date or even old-fashioned, the simple fact is that common courtesies still prevail sionally on display when they are networking, attending client meetings and conferences. Senior managers often observe the way staff conduct themselves at these gatherings, as behaviour may reveal true character.

In this day and age, many business functions are surrounded in social occasion; however, they are not social events. For those seeking career progression,

Business etiquette tips Let others speak, and don’t monopolise conversations. No one appreciates a whinger, whiner or bragger.

Stick to appropriate eye contact.

Flirtatious and intimate glances may lead to trouble!

Avoid getting intoxicated at business functions – it can be career limiting!

No one likes a bone-crusher or wet fish. A firm, professional handshake will do!

Avoid brandishing cutlery when speaking during a meal. Your companions may become scared of where it might end up!

SEPTEMBER 2013 | 47

BUSINESS STRATEGY / ETIQUETTE

Professional conduct is by no means limited to face-to-face transactions but also extends to your online behaviour or ‘netiquette’ be mindful that work functions are strictly business and not the time to gain a reputation as the office stripper or party animal.

Nikki Heald is a corporate trainer, presenter, businesswoman, founder of Corptraining, and co-author of “Views on the Way to the Top”. Head to corptraining.com.au for more information.

48 | SEPTEMBER 2013

What about workplace etiquette? Perhaps you have a team member who likes to shout across partitions, talk loudly on the phone or constantly interrupt others. Alternatively, you might know of the serial CC’er – the team member who likes to copy all staff into their emails? Thankfully, such behaviours can be fine-tuned and refined.

Professional conduct is by no means limited to face-to-face transactions but also extends to your online behaviour or ‘netiquette’. The use of social media in business is ever-increasing, so knowing the correct rules in this arena is just as crucial. Websites, Twitter, blogs and LinkedIn are an extension of your brand, and again, any content

CHECKLIST

FROM WORKPLACE ETIQUETTE TO ‘NETIQUETTE’

or comments must be appropriate.

Unfortunately, most behaviour that is perceived as disrespectful is actually unintentional, and the person who practised it didn’t quite understand the rules for that situation. I really believe that most people don’t purposely set out to embarrass themselves or others.

Implementing the correct rules for networking, client entertainment, meet and greet, handshaking and distributing business cards may seem a little daunting if you’re not sure what to do.

However, the great news is that business protocol can be learned and, with practice, will become second nature.

Good manners costs you nothing; however, the value is that you will gain in credibility, confidence, and ultimately your bottom line.

Nikki Heald’s to p 10 tips for correct busine ss protocol:  1. De liver a well-exe cu

 2. Ensure you

ted, firm handsh

introduce yours

ake

elf and others  3. Be well groo for your rolemed, and dress suitably  4. Learn the a

rt of conversati

on and small ta lk  5. Carry suffici e n t, cl e a n looking business ca rds  6. Be mindful of your table m anners  7. In business , if you invite, yo u pay  8. Switch off m during meetiobile phones and put away ngs  9. Keep emails short and to th e point  10. Avoid the h ard-sell or bein g too pushy

INSURANCEBUSINESSONLINE.COM.AU

SEPTEMBER 2013 | 49

BROKING INDUSTRY

INSURANCE

STATS

RELATIONSHIP MATTERS

Aon Risk Solutions recently canvassed mid-market firms and shone a light on the relationship between companies and their brokers RESPONDENT PROFILE  100 COMPANIES SURVEYED  ALL AUSTRALIAN  TURNOVER BETWEEN $15M AND $100M

Top risk concerns 0%

10%

20%

30%

40% 46%

1. ECONOMIC CONDITIONS

29%

2. BRAND AND REPUTATION

27%

3. PEOPLE

24%

4. DAMAGE PHYSICAL ASSETS

19%

5. IMPACT OF LARGE LOSS

16%

6. TECHNOLOGY/SYSTEMS

10%

7. REGULATORY CONDITIONS 8. UNDERINSURANCE

6%

9. BAD DEBT

5%

10. OTHER

5%

46%

of firms said economic conditions were their biggest concern

50%

29%

were concerned about brand damage

ONLY

6%

thought underinsurance was a major concern

CONCLUSION: THE ECONOMY WEIGHS HEAVY ON COMPANIES’ MINDS, BUT INSURANCE IS SOME WAY DOWN THE SCALE

INSURANCEBUSINESSONLINE.COM.AU

1/2

Where would you go to gather information on insurance?

0%

10%

20%

30%

40%

50% 50%

1. COLLEAGUE RECOMMENDATION

34%

2. INDUSTRY ASSOCIATION

Brokers were only ranked 3rd as a source of advice – behind industry associations

33%

3. BROKER RECOMMENDATION

13%

4. I WOULD NOT CONSIDER AN ALTERNATIVE

10%

5. GOOGLE SEARCH

5%

6. INDUSTRY EVENT 7. BANK REFERRAL

4%

8. TRADE PUBLICATION

1%

9. CHAMBER OF COMMERCE

1%

0%

10%

20%

30%

40%

Only

16%

wanted a dedicated claims service from their broker

28%

3. RISK AUDIT/REVIEW

21%

4. ADDITIONAL RM SERVICES/ADVICE

20%

5. INDUSTRY-SPECIFIC POLICY

CONCLUSION: BROKERS SHOULD ENSURE BENCHMARKING SERVICES ARE ROBUST AND HEAVILY PROMOTED. THEY SHOULD ALSO ENSURE THEY ARE EXPERTS ON THEIR CLIENTS’ INDUSTRIES

16%

6. DEDICATED CLAIMS SERVICE

8%

7. LOW-COST, PHONE-BASED PROPOSITION

6%

8. VALUATION SERVICE

3%

How would you describe the complexity of your insurance needs?

When was the last time your broker benchmarked your insurance programme?

 Very complex  A little complex  Not complex

38%

55%

1% 1% 5%

 Within last year  Within 1-3 years  Within 3-5 years  5+ years  Never

SEPTEMBER 2013 | 51

Source: Aon Risk Solutions

52%

47%

of respondents prized benchmarking services highest

30%

2. LOCAL BROKER WHO UNDERSTANDS ME

19%

50% 47%

1. BENCHMARK MY PROGRAMME

29%

10%

of businesspeople would use Google to find information about company insurance

CONCLUSION: BROKERS NEED TO DO MORE TO SHOW THEIR VALUE AS ADVISERS TO THEIR CLIENTS

Broker service: what’s most important

9. OTHER

of businesspeople would ask their colleagues for insurance advice

SOCIAL LIFE

The annual UAC-NIBA Brisbane expo took place in late July, with 59 exhibitors and 305 lunch guests.

Lunch speaker was former commando Damien Thomlinson. Damien joined the Australian Defence Force (ADF) and became a commando at 24 years of age. In April 2009, while serving in Afghanistan, he suffered horrendous injuries when his unit drove over an improvised Taliban bomb. Both his legs were amputated.

Damien threw himself into rehabilitation and taught himself to walk on prosthetic legs. A keen surfer before his injuries, he took up snowboarding and, in 2011, competed with four other ADF members in the US Marine Corps Paralympic Trials. He now aims to represent the nation at the 2014 Winter Paralympics in Russia. Damien was sponsored by Lloyd’s Australia.

ICA ANNUAL DINNER 2013 / SOCIAL

SEPTEMBER 2013 | 53

SOCIAL LIFE

After seven days and 1,000km it was a weary but triumphant group of cyclists who rode into Sydney on 6 July, flying the flag for Ride of the Lions. Former Wallabies Simon Poidevin, Warwick Waugh and Andrew Heath were joined by past British and Irish Lions players Roger Uttley OBE, Mike Teague, Peter Winterbottom and Tyrone Howe on a gruelling ride from Melbourne between the second and third tests of the Lions Rugby Tour of Australia. The Ride of the Lions was supported by the QBE Foundation and has raised ÂŁ110,000.

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Favourite things...

Peter ‘The Legend’ Peirano, Piranha Insurance Industry stalwart Peter Peirano – also known as ‘The Legend’, ‘The Penguin’ and ‘The Chequebook’ – reveals what gets his engine running. (It’s mainly a nitromethane injection, as far as we can tell) Sport: Peirano likes to go faster: “I love any motor racing, particularly drag racing – and I don’t mean dressing in women’s clothes, driving mum’s car fast.”

In fact, Peirano’s so passionate about motor racing he runs his own hot-rod and dragster racing team, Piranha Racing. Team cars include the Lexus Piranha Hot Rod, the Lexus Piranha-Penguin FED drag racer, and the recently added Nitro Nostalgia Funny Car (pictured at right). In addition, Peirano organises a number of motorsport events from his base in Rockhampton, Queensland, and specialises in motorsport insurance. He also enjoys horse racing.

Peter Peirano

Book: Unsurprisingly, Peter plumped for “any motor racing book”. He highlighted autobiographies as a particular favourite, such as those written by racing legends Roger Penske, Mick Doohan and Jack Brabham.

Music: Peirano has eclectic taste, with his music collection ranging “from country to rock to gospel, from Pink to Johnny Cash”. However, he reserves pride of place for ‘the King’, Elvis Presley.

He also adds that he “would have loved to have seen Liberace in concert”.

Drink: Peirano’s a fan of the sweet stuff, choosing vodka and sparkling cranberry juice as his top tipple.

He also likes to follow this up with

“a bottle of Noble One dessert wine and half a bottle of cleansing Tokay or Muscat”.

Vacation spot: If there’s a whiff of gasoline, The Legend is there.

“My favourite holiday spot is any drag strip in the USA, but especially the annual Hot Rod Reunion at Bakersfield.”

Movie: Animation makes Peirano a happy man. He seems to prefer Dreamworks to Pixar, though, selecting Madagascar, Shrek and Happy Feet as favourites.

We’d wager that he’s also looking forward to Rush, the forthcoming biopic of Formula One driver James Hunt, featuring Aussie star Chris Hemsworth.

Food: Vegetarians aren’t welcome in Peirano’s house: his favoured tucker includes “trips, lamb fry brains, chook-feet and offal”.

If that’s a bit strong for you, he’s also partial to Peking duck.

Best thing about working in insurance: “Bringing a cheque to the funeral!”

SEPTEMBER 2013 | 55

THE LAST WORD / IN DEFENCE OF BDM’S

MORE THAN JUST

FREE COFFEE

Denver Van Gramberg explains why business development managers are crucial in insurance

Denver Van Gramberg is marketing and distribution manager at Brooklyn Underwriting

In the fast-paced environment that is the modern insurance industry, it’s easy to lose focus on what our profession is really about.

The nature of our business is different from many, not least because it has been built on a firm foundation of interaction between people. After all, the birthplace of the insurance industry was a coffee shop in London around 1688. Even though the industry has changed in so many ways, we still find ourselves in a position where relationships have never been more important.

This makes it especially concerning that the role of the ‘front person’ in business relationships – the sales and marketing managers (SMMs), the relationship managers (RMs) and the business development managers (BDMs) – is regarded with cynicism or even outright disdain. Indeed, I’ve heard my colleagues described as ‘postboxes’, ‘brochure delivery managers’ or even just ‘free coffee’. Frankly, I’m not surprised that brokers are disgruntled.

I believe their disdain is a symptom of a wider issue.

Put simply, too many BDMs are uninformed, poorly trained, and do not have the power to improve or even maintain key relationships – and therefore the importance of their roles has been in question.

Given that these roles are the keeper of broker business relationships, ensuring that BDMs, RMs and SMMs are able to make a difference is pivotal to brokerages and insurers alike.

At the very least, brokers should be able to expect that individuals in these roles can provide: comprehensive information on the product suite of an organisation without puffery

I’ve heard my colleagues described as ‘postboxes’, ’brochure delivery managers’ or even just ‘free coffee’ 56 | JULY 2013

a clear understanding of the appetite for the risks that their organisation is prepared to write a clear understanding of what does not fall within appetite and why thoughtful questions regarding your own business growth model and sales initiatives, as well as the assistance, support and service that will enable you to reach these goals solutions to any difficulties you have encountered as a result of working with your insurance provider access to online systems, as well as training and tips for using this technology effectively claims examples and policy comparisons for complex areas of insurance CPD points for presentations support for executing any ideas for new products that you or your clients have identified the need for fun, engaging and creative ways of building a rapport with you and your staff.

However, it is imperative that the ‘relationship people’ have the proper support from their employers.

First and foremost, employers need to provide sufficient training, particularly on relationship management and business development. They need to provide effective guidance on product suites and technical issues. Most importantly, relationship managers need to be given the power to have a real impact, so that brokers can be sure that concerns are being dealt with and managed, not just flicked onto an underwriter or claims manager.

Only a select few employers have successfully embraced the marketing and development model.

I can attest, from my own employer, the enormous benefit to a company and its broking community when this model is truly embraced. If the industry as a whole can make this leap, then I believe we’ll see a major change in attitude for our profession – one that puts people firmly back at the centre of doing business.