Insurance Business 4.5

insurancebusinessonline.com.au Issue 4.5

MAKING THE CLAIM

What does a first-class claim experience look like?

SIMPLIFYING SME INSURANCE

Underwriter making life easier for businesses and brokers

EMBRACING A BOLD NEW WORLD Industry legend discusses the changing landscape

MARK SEARLES

Austbrokers’ CEO talks total risk management 2015 S E G A R E K O R B E C N A R TOP 10 INSUing insurance businesses Australia's lead rated and ranked

OCTOBER 2015

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CONTENTS

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UPFRONT 06 Opinion

Broker Robert Cooper discusses the Financial Services Reform Act 2001

TOP 10 BROKERAGES SPECIAL REPORT

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FEATURES

MAKING THE CLAIM

Examining what defines a first-class claim experience

Sydney gets its first FinTech hub

12 News analysis

Helping crop growers protect their most valuable assets

16 Statistics

Premium Funding Industry White Paper and Broker Survey

FEATURES 48 A premium position

The funding market from a smaller player’s perspective

TOP 10 INSURANCE BROKERAGES 2015

The best insurance brokerages in Australia named

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08 News round-up

FEATURES

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ON THE MARINE AGENDA Takeaways from the 2015 International Union of Marine Insurance conference

50 Simplifying SME insurance

The product designed to make insurance easier for small businesses

BROKING INTELLIGENCE 52 The power of the tribe

Building a powerful and diverse network

PEOPLE 56 Favourite things

PEOPLE

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THE BIG INTERVIEW

Austbrokers’ CEO and managing director, Mark Searles

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PEOPLE

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EMBRACING A BOLD NEW WORLD

XL Group’s executive deputy chairman, Stephen Catlin

Liberty International Underwriters’ John McCabe

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UPFRONT

EDITOR’S LETTER

www.insurancebusinessonline.com.au OCTOBER 2O15 EDITORIAL

Singing for the unsung

T

hose who attended September’s NIBA Convention in Melbourne can attest to the immense pride with which CEO Dallas Booth and president Graham Stevens spoke when it came to discussing the current state of the insurance broking industry in Australia.

While a key theme of both leaders’ opening addresses was the impact of the work NIBA has done on behalf of and in the interests of brokers, their genuine appreciation of the high standards of professionalism adhered to by their broker members was clear.

As someone whose background lies outside of insurance, I’ve quickly come to realise precisely how much there is to be proud of in this industry. Brokers work every day to source the best protection for their clients’ greatest and most valuable assets. But despite the enormously positive impact of the industry’s activities, its reputation in the wider community remains far below what it deserves.

It’s for that reason I’m always thrilled to have the opportunity to recognise the outstanding individual and team work consistently going on within the industry.

Despite the enormously positive impact of the industry’s activities, its reputation in the wider community remains far below what it deserves In this issue, we have the pleasure of sharing with you the results of the Insurance Business 2015 Top 10 Insurance Brokerages survey. We received a record number of entries this year in what was, once again, an exceptionally close contest. I encourage you to take the time to read our special report and to find out more about the current goings-on in some of the nation’s top brokerages.

If there’s one person in a position to sing the praises of Australian brokers, it’s Mark Searles, Austbrokers’ CEO. The Austbrokers Group is currently represented by 50 broking businesses across Australia and New Zealand. I had the good fortune of speaking to Searles recently regarding Austbrokers’ FY15 financial performance, its income diversification strategy and the trouble caused when journalists don’t get their facts straight.

Elsewhere, we look at the claims process and highlight what some teams are doing to enhance the claims experience for brokers and their clients. On top of that, we have our news and business strategy content, making for yet another jam-packed issue of Insurance Business. I hope you enjoy it.

Tim Garratt, editor

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Editor Tim Garratt Journalist Jordan Lynn Production Editors Roslyn Meredith, Moira Daniels, Carolin Wun

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SALES & MARKETING General Manager Peter Smith Commercial Development Manager Sophie Knight Marketing & Communications Manager Lisa Narroway

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

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UPFRONT

OPINION

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Direct insurers and insurance brokers:

A LEVEL PLAYING FIELD? Queensland broker Robert Cooper shares his concerns about the practical effects of the Financial Services Reform Act 2001 WHEN POLITICIANS come up with legislation aimed at protecting the consumer from those who do the wrong thing, we tend to accept it as being for the greater good. But there’s one piece of legislation that I believe has sent the general insurance industry backwards and created considerable unfairness. That’s the part of the Financial Services Reform Act 2001 determining what is personal advice on ‘retail’ products.

Don’t get me wrong. Some legislation has been brilliant for our industry. The Insurance Contracts Act 1984 is one example, as is the Insurance (Agents and Brokers) Act 1984, unfortunately largely superseded by the Financial Services Reform Act. The issue of what ‘personal advice’ is and what ‘general advice’ is has played directly into the hands of the direct insurers. In my opinion, all financial services provide advice. Whether you consider it personal or general advice, it’s advice!

When consumers ring an insurer direct, it’s clear the onus is on the consumer to do all their own research. Any question asking, “How does this compare to ‘ABC’ company down the road?” is met only with “It is much better”. But the direct insurer is unable to tell the consumer why this is so, because this would constitute personal advice.

For retail products, personal advice means that a needs analysis has to be done to make sure you’re recommending the right product for the client, followed by a statement of advice setting

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out the actual advice and what this is based on.

And then you must explain why you recommend that product. This creates a considerable timeand-expense issue for intermediaries, who believe in justifying our role as our clients’ insurance advisers. But direct insurers avoid this and tell the consumer to read their 50-page PDS. With advice cut out of the direct insurer’s responsibility, their products are price-driven. If you happen to be the unfortunate person to make a claim, and your claim is denied or limited, the defence from the direct insurers is, “Did you read the PDS we sent you?” As we know, insurance policy wordings have to be read in their total

is there to advise them on these sections?

A small business can also do its BAS and tax direct without using an accountant, though the difference is that if they make a mistake they can be fined. However, if you make a mistake with your insurance, you can lose everything you own.

Never was this clearer than during the Brisbane floods. Most of the disputes were against the direct insurers because, quite simply, the consumers didn’t know what they’d bought. As insurance brokers we’re obligated to discuss all their risk exposures. If not, we can be sued for failing to identify the risk and how it could have been protected.

While we can also act on a ‘general advice only’ basis, this contradicts the reason clients should use insurance brokers. We have to give them advice – even if it’s just on their householder’s insurance or personal accident cover – if we’re going to differentiate ourselves from the direct market. However, why should we have to do all the additional paperwork that the direct insurers don’t? We always owed our clients a duty of care anyway. Why have it legislated? We always act in their best interests.

Just like an accountant has a duty to find all your entitlements and claims on your income before it goes to the taxman, we have a duty to make sure everything our client is entitled to in a claim is paid to the maximum indemnity value.

If we got rid of the requirement to either declare general advice or go through the requirements of personal advice for retail products, and

We always owed our clients a duty of care anyway. Why have it legislated? context, and at 40–50 pages long it’s one of those ‘must get to it sometime’ chores that rarely, if ever, get achieved.

It’s only retail products for which you have to provide personal advice in this way, but it is not that simple. The so-called ‘wholesale’ products are seeing the likes of AAMI, Youi, NRMA and GIO offering insurance to small businesses online and not providing any advice on these products.

You have to do it yourself! So, how many of these businesses have worked out that they need such sections as business interruption cover – and who

returned to the common law duty of care we all owe our clients, the consumer would be much better off. This particular legislation should be abolished or, alternatively, direct insurers should be made to always give personal advice.

Robert Cooper is the director of CPR Insurance Services and has over three decades of industry experience, having worked for major insurers and international insurance brokers. He specialises in professional indemnity and directors’ and officers’ liability insurance.

UPFRONT

NEWS ROUND-UP

Alex Scandurra, CEO, Stone & Chalk

SYDNEY FINTECH HUB OPENS SYDNEY IS now home to a centre that stakeholders hope will establish the harbour city as the innovator of financial technology in the Asia Pacific.

Stone & Chalk officially opened on September 1, representing the culmination of hard work by The Committee for Sydney, a think tank chaired by Lucy Turnbull, wife of Australia’s newly-minted Prime Minister.

Last year was a huge year for growth in the FinTech sector, with some estimates suggesting total global investments into FinTech may have topped the US$7bn (A$9.74bn) mark.

“It’s been quite astonishing the level of growth,” said Martin Blake, KPMG’s NSW chairman and head of insurance in Australia.

Blake also serves on the board of The Committee for Sydney. Talking about the global industry, Blake said, “There are 45,000

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people in the City of London now involved in and around FinTech, which is extraordinary.

That explosive growth is really enabling the City of London to reinvent itself as a financial services centre,” he said.

Discussing the concept, Blake said, “FinTech [involves] marrying technology with core financial services, and it ranges from creating software to processes, to really enable financial services organisations to enhance their customer experience [and] streamline operations. What we’ve seen is a proliferation of FinTech startups, and it’s quite different from other startup markets because… individuals involved in FinTech tend to be well tenured in the industry.”

Blake described the local FinTech industry as “more embryonic” than it is in Europe, adding, “What we do know is there’s not a

boardroom in a financial services company in Australia – whether it be in insurance or banking or investment management – that is not having an off-site board meeting to discuss disruption and innovation.”

He said it’s important to think about how to do things more efficiently in the general insurance space. “General insurance is particularly vulnerable to disruption … because insurers have fewer touch points than other industries,” Blake said. “Customers are going direct at the lower end of the market, particularly the SMEs. This is an issue for general insurance companies because that’s the fastest growing segment of the Australian economy.”

As to advice he’d offer brokerage owners and directors contemplating investment in the FinTech sector, Blake responded, “First… be clear on your strategy. What are you trying to achieve? How much control do you require over technology? What’s your long-term vision for technology and your organisation? What’s the culture that you want to create? Think laterally about … partner organisations that currently have capabilities or technologies that would be complementary to your existing business.”

Blake emphasised the need for decisionmakers to do their due diligence before deciding to invest. “Know exactly what you are investing in and have a good hypothesis in terms of what the returns are likely to be from those investments. Think about some of the key performance indicators that are going to track success because one of the philosophies that organisations are starting to embrace … is this idea of failing fast and cheaply, and doing experiments and actually inverting the organisation … so you actually tap into some of the bright ideas of the people interfacing directly with the customers.

“If you’re going to make an investment, think about what changes are required in your operating model to provide an ecosystem that’s most supportive of either introducing new technology or new ideas in terms of a way of serving your customers, and think about how you can create the environment for quite different cultures to flourish.”

DOES NEW TECHNOLOGY MEAN NEW ROLES FOR INSURANCE COMPANIES? RAPID TECHNOLOGICAL change brings about its fair share of challenges for many industries, but there are also substantial opportunities to be seized upon.

Ravi Malhotra, managing director of Accenture’s insurance strategy practice for the Asia Pacific region, spoke to Insurance Business about the pros and cons of the evolving landscape. “It’s certainly an interesting time for insurance companies,” said Malhotra. “The proliferation of data, the significant advances in technology’s ability to extract and leverage insights from massive amounts of it, and the potential to action these insights through connected devices … represent tremendous potential for insurance companies.”

Malhotra said data will not only allow insurance companies to underwrite and price more effectively and deliver better customer experiences, but it will also provide insight into the development of new consumer propositions and offerings. “If leveraged to its potential, insurance companies will have the insights and

opportunity to expand their roles beyond the traditional model of risk transfer,” Malhotra explained. “They could prevent loss, provide advice and potentially be a platform for other related products and services. They may need to explore these new roles with the help of a partner or through a new brand, but the potential is real.”

Turning to the greatest threats to insurers’ revenue in the next five to 10 years, Malhotra said existing premium pools could decline as a result of smarter, connected cars and homes, the sharing economy and consumption or behaviour-based pricing models. He added, “Competition will intensify, both from companies outside the industry entering the insurance value chain and from entirely new business models. For example, crowdsourcing portions of the claims reserve or excess, providing some of the benefits of group purchasing to individual consumers, and models which allow consumers to create their own ‘risk pool’ of people to be insured with.”

Malhotra noted that digital technologies had reduced many barriers to entry and that consumers are receptive to new entrants. “New entrants will continue to test the traditional value chain and model, and I think this is just the beginning.”

While the new sharing economy continues to take hold and will likely lead to a decline in asset ownership, Malhotra highlighted the opportunities that present in the circumstances.

“Insurers have the potential to become embedded in the new sharing economy by creating products and services which are tailored to the needs of consumers and the subsequent usage of the assets involved.” As an example, he cited UK offerings that provide insurance for consumers who share their car with others as part of a car sharing program. “The consumer pays an insurance premium for coverage only when they use their car. This is a simple example of a product offering which aligns to the targeted consumers’ needs.”

Malhotra suggested insurance companies could go one step further and provide the car sharing platform themselves. “They have an installed base of customers at hand and ample risk data,” he said. “In theory, insurers could provide a car sharing ‘matching service’ for consumers who don’t drive that often and would be better off not owning a car.”

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UPFRONT

Dallas Booth, NIBA

Graham Stevens, NIBA

BROKERS MEET IN MELBOURNE FOR NIBA BROKERS RECENTLY descended on the banks of the Yarra River for the annual NIBA Convention.

This year’s event included keynote presentations from 2011 Australian of the Year, Simon McKeon, and former federal politician, Dr Brendan Nelson. And almost 50 underwriting agencies and 30 major insurers were on hand to discuss product offerings with brokers in the expo hall.

In his opening address, NIBA president Graham Stevens stressed how work undertaken by the NIBA board meant current concerns about professionalism and ethics in financial services in Australia didn’t apply to brokers.

“Whilst I’m sure most of us don’t think of it often, I’d like you to take time to ponder what legislative interference we might’ve had, had it not been for NIBA,” Stevens asked the room.

CEO Dallas Booth told attendees it had been an honour to continue serving members in 2015 and expressed gratitude for support received from individual brokers and firms.

Like Stevens, Booth took the opportunity to discuss recent government inquiries into the provision of financial advice. “Last year, government and parliament lost faith in

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financial advice in Australia,” he said. “It’s been an honour and a pleasure for me to be able to tell the story of what brokers do, how the intermediated insurance process works and the role that brokers play in providing advice, looking after customers … [and] acting in their best interests.”

Research that attracted attention throughout the convention was the recent Roy Morgan Image of Professions Survey, which asked almost 600 Australians to rate 30 different occupations for honesty and ethical standards. Insurance brokers finished at number 27, below bank managers (14), financial planners (17), talk-back radio announcers (21) and TV reporters (22).

The three professions below brokers on the list were real estate agents, advertising people and car salesmen.

Booth told attendees he had no regard for the research. “I actually think it’s rubbish because it is not talking to people who use insurance brokers. The SME Report is a brilliant piece of work because they actually talk to people who use insurance brokers and they get their views.”

Booth also spoke about the possibility of membership of a professional association

becoming mandatory in the general insurance space. “There’s a big question out there at the moment as to whether we should have a full-on mandatory association right across the sectors for people who give financial advice,” Booth explained.

While stating it was NIBA’s view a mandatory association was unnecessary, Booth said the concept was one that may well be imposed on the industry. “What might a professional association for insurance broking in Australia look like, and how would that affect NIBA, how would that affect our relationship with our members, our relationship with ASIC and the ongoing work that you do? It’s a very challenging topic. We’re working through this very, very carefully.”

Other convention highlights included Allianz’s Sascha Hunt discussing wearable technology and its implications for insurance, and Rachel Botsman, a global thought leader on the collaborative economy, sharing her thoughts on how collaborative consumption – facilitated through services such as Airbnb and Uber – has made trust the currency of the new economy.

NIBA also announced the winners of its annual broker and industry awards. Among them was CGU, named NIBA’s general insurer of the year. That win follows on from the insurer receiving Insurance Business’ ‘Brokers on insurers Insurer of the Year’ award in June.

NIBA/Nigel Welch

NEWS ROUND-UP

UPFRONT

FORUM

TAXI ASSOCIATION CLAIMS INSURER IS MISLEADING CONSUMERS The Australian Taxi Industry Association (ATIA) reported the Insurance Australia Group (IAG) to the Australian Competition and Consumer Commission (ACCC) alleging that NRMA Insurance, an IAG brand, was misleading consumers by claiming its motor insurance policies covered uberX drivers.

NRMA Insurance offers coverage to drivers who “occasionally use” their cars to provide uberX services.

ATIA said it wrote to IAG asking how

FORUM COMMENTS

NRMA Insurance could claim to cover drivers supplying illegal uberX services when its Product Disclosure Statement specifically excluded cover for vehicles when ‘used for illegal purposes’. uberX services remain illegal in every Australian state and territory.

“NRMA Insurance’s position appears completely conflicted,” said Blair Davies, ATIA’s CEO. “NRMA Insurance is saying to consumers that ‘she’ll be right mate, we’ve got you covered for uberX services’, but then

in the actual insurance contract they supply them with, they have a clause that in effect says cover is excluded, ‘you’re on your own buddy’.”

ATIA also asked IAG what NRMA Insurance meant when it used the words ‘occasional use’ to qualify the extent to which its policies covered uberX drivers.

“We think that’s downright confusing and that’s why the ATIA has lodged a complaint with the ACCC,” Davies said.

In response, NRMA Insurance said in a statement, “This is a campaign of selfinterest by a taxi industry that has not stayed abreast of changing customer preferences and the adoption of sharing economy services like Uber … We believe as an insurer that we should protect our customers as these changes occur.

“Our first priority is to protect our customers when they need us, so we have made the decision to cover them if they choose to use their car this way. We have robust processes and we will keep paying claims, as we do today. Any allegation to the contrary is patently untrue.”

Have your say on insurancebusinessonline.com.au

“If the ‘occasional’ Uber use is not against IAG/NRMA’s underwriting guidelines, then I don’t see the problem – ATIA seem to be forgetting section 54 of the Insurance Contracts Act, in that NRMA would be unlikely to succeed in denying a claim for ‘illegal use’ unless it can establish that the act of being an Uber driver directly contributed to the loss.

Insurance policies are full of contradictory clauses like this, seems ATIA have never read their own PDS.”

“Uber is far better than Australia’s taxi service and an undeniable trend around the world. The taxi association is just clutching at straws trying [to] stem the bleeding Uber is causing which will inevitably take over an aging, dated taxi system. What the taxi association should do is focus their energy into improving their services to take us where we need to go, when we need to go there and let consumers make up our own minds [about] which service we want to use.”

“UberX is a great model, and a modern take on what David Friedman described in his 1973 book as jitney transit. The taxi industry is a protected monopoly and is resisting Uber because of the disruption it is

MICHAEL ON 19/08/2015 9:54:31 AM

SB BROKER ON 20/08/2015 10:17:47 AM

STEVE CLANCY ON 26/08/2015 8:04:56 AM

causing.

Having said that, … to indemnify acts that are illegal is against public policy. The law needs to change to reflect changing consumer preferences.”

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UPFRONT

NEWS ANALYSIS

PROTECTING THE HARVEST Underinsurance and non-insurance of agricultural crops remains a prevalent issue in rural Australia.

What’s the solution?

IN JULY, the Australian government released its Agricultural Competitiveness White Paper, outlining a $4b package aimed at growing the nation’s agricultural sector and strengthening the economy.

Of $3b allocated to a new drought and risk management package, $29.9m (over four years) was set aside for farm insurance advice and assessment grants. These grants are designed to assist farmers in choosing appropriate insurance.

The white paper acknowledges the impact

in several reviews over the last two decades on this, trying to get this up and running. It’s become clear though through all those reviews that it couldn’t be done without very significant government subsidies, exactly the way it is in other jurisdictions.

“The government and the broader community see a great need for this to work properly because of the amount of money we spend on drought relief every year and the impact that has on tax holders.”

“The government and the broader community see a great need for this to work properly because of the amount of money we spend on drought relief every year” Karl Sullivan, Insurance Council of Australia insurance can have in reducing farmers’ financial risk from production losses. It also recognises the current availability of a greater range of products targeted at protecting farmers’ assets, including multi-peril crop insurance.

Talking to Insurance Business about multiperil crop insurance, Karl Sullivan, the Insurance Council of Australia’s general manager for policy, risk and disaster, says, “The ICA has participated

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Sullivan says the allocation of almost $30m for farm insurance advice and assessment grants is a very significant commitment.

“Ultimately, in a mature system when most farmers are accessing these things, it might require more money than that. But in terms of a first step and the principles being applied, it’s almost revolutionary in terms of how effective it could be in the Australian market.”

John van der Vegt is the managing director of specialist rural insurance broker, AgriRisk.

He agrees that government input in multi-peril crop insurance is critical. “I think, if we look worldwide, there haven’t been many, if any, multi-peril crop insurance programs that have worked without government subsidisation,” he says.

Discussing overseas markets where MPCI is available, he says, “The rates to purchase or cost of coverage overseas is very expensive, but the government assistance is hidden in that, so it’s relatively cost-effective for them, whereas we don’t have that level of government assistance.”

The market Van der Vegt says it’s his understanding that MPCI products sold a combined total of less than 200 policies last year in Australia.

“I guess my concern, from a broker’s perspective, is are growers really interested in this, or have they just gotten used to having production variability and the only people interested are those growers that are really sailing close to the wind?”

Van der Vegt also thinks the premium costs will concern many growers. “We’ve got highly variable production and the costs are going to be very high. They’re going to be in the order of six to 15 percent of production. That’s very expensive.”

Perhaps the player who holds the most viable solution for crop protection is a disruptor – an insurance outsider. Uber has profoundly disrupted the taxi industry, and Apple has achieved similar results in the mobile technology space. Is it possible that Latevo International will have a similar impact on the crop insurance market?

“Latevo is not an insurance company.

We’re a managing general agent,” says CEO Andrew Trotter. “We’re more of an agricultural company that’s using insurance as a solution to the problem.”

Latevo’s product provides coverage for effectively all natural perils and is available Australia-wide. “We offer what we call comprehensive crop insurance,” Trotter explains.

“We offer comprehensive cover. We’re able to do basically all the natural perils with no exclusions, and that’s a really important signature part of our program.”

Trotter says the ability to offer a no-exclusions solution is possible because of a requirement that a risk assessment (at a fee of $5,500) is undertaken upfront. “This is an incredibly risky space, and if you don’t do the correct due diligence upfront, you can’t offer the coverage that you would like to offer the grower, and secondly, you can’t offer

them enough coverage. If you don’t accurately understand the risk of the enterprise, you can’t tailor the right insurance contract.

“The reason why the Latevo model works, quite frankly, is we individually assess, so we reward good farm management. The program is based on protecting your income and aimed to protect what it costs to grow a crop. And then we insure on revenue, rather than yield, which has less volatility. Latevo, as a model, goes back to the foundation of what insurance was: if you lose it, you get paid. It doesn’t matter why you lost it or how you lost it, you get your claim back and there’s no funny exclusions in between.”

Trotter himself is a farmer, who founded Latevo because of his frustration at the absence of a product in the market that could protect the family farm in north-western Victoria from times of insufficient rain. “There was no way a farmer could manage a catastrophic risk with an

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UPFRONT

NEWS ANALYSIS insurance tool prior to Latevo. There was no way to deal with the variability of climate change.

“I just said, ‘Well I’ll go build it’. I travelled the world, found the product, found the people and created the solution.” Latevo’s coverage is modelled on a program that’s successfully operated in Canada over the past six years.

This year, 66 farmers nationwide signed up for Latevo’s offering. On the market response, Trotter says, “It’s like any new technology. The early adopters have picked it up, and it takes a year or two for it to step into the mainstream.

Firstly, Latevo had to prove to everybody that the model worked because there was a large degree of scepticism because of the failure of previous concepts in Australia.

“Latevo’s been around two years now, so we’ve passed that test. We’ve paid our claims, we’ve been in the marketplace.”

Last year, farmer Alistair Mace from southern Queensland became the first insured to claim on Latevo’s policy due to drought. He received a cheque from Latevo for $944,000. “No one bothers to work out how expensive is that $944,000 if he had to go to the bank to get it,” Trotter says. “And if you have another bad season in five years’ time, you’ve got to borrow more money. The reality is that buying catastrophic insurance is cheaper than debt funding. And this is a message that’s just not understood.”

The farmer and the broker Trotter wants brokers to understand their crucial role in helping farmers to understand the importance of this coverage. “It’s a product that probably suits, at least, three-quarters of the farmers, if not more. In short, if you borrow money from the bank as a farmer, you should basically have this insurance policy.

“By nature, farmers don’t want to buy this.

It’s more money that they’ve got to spend. It’s a product that has to be sold to them. And the people that have the ability to do that are the insurance brokers because they’re very trusted by the clients. And they have a responsibility to make sure they’re providing the right advice, insuring the things that you can’t afford to lose.

The truth is, for a farmer, they can afford to lose a $30,000 or $40,000 vehicle, but they insure it. So why would you be insuring that when you

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haven’t got your million-dollar crop comprehensively insured?”

Trotter also says that Latevo’s product assists farmers in maximising their productivity. He explains that farmers, in doing without insurance, adopt risk averse behaviours that may help them minimise losses, but lessen their volume of productive activity. “I can categorically say every farmer that doesn’t have this comprehensive insurance is actually losing money. They’re not optimising their profit.

cost in excess of $4b from 2000 to 2011. The concept is to help farmers to be more resilient to the challenges of climate change.”

He strongly believes in government’s role in accelerating the uptake of insurance products. “Why did the government have to mandate superannuation? If it’s so obvious that we’re all going to retire, why is superannuation mandatory and paid for by the employer? Why was Medibank Private fully governmentowned? Because there was market failure, the

“We need agriculture today more than ever before. How do we get a boom? You get wide scale adoption of a safety net” Andrew Trotter, Latevo “Farmers currently are under-investing in their crops and not able to take advantage of early pricing opportunities due to a fear of a failed spring, and their risk aversion is impacting regional Australia. When the income is reduced or the crop fails from, say, a heatwave, farmers tighten their belts, they stop spending. This downstream effect starves the rural community of its essential revenue or cash flow because regional Australia is a one-horse town, it’s all agriculture.”

Trotter is clear on where he sees the coverage ranking in farmers’ insurance priorities. “When you sit down with a farmer and look at what insurances [they] should have, number one should be public liability, number two should be comprehensive insurance for crop because that’s the single biggest item [they] can’t afford to lose.”

Government support On the subject of government assistance for crop insurance, Trotter says, “Latevo is very supportive of the government’s change in approach to drought assistance. The $29.9m risk assessment grants are a step in the right direction. We are fully supportive of further nudge polices that give the farmers a hand up, not a hand out. We can’t afford to go down the same path as the last drought package, which

government had to intervene and set up its own private health insurance to start weaning people off the public system.

“If you ever want to see broad-base adoption of insurance concepts, you have to be supported by either the government or the banks...”

For Trotter, supporting MPCI will assist in achieving the government’s key aim of strengthening the economy. “At the moment, we’re on the cusp of recession in Australia. If we strengthen agriculture, we can carry some of the economic burden left by the mining and manufacturing sectors, assisting in holding the Australian economy out of recession. We need agriculture today more than ever before. How do we get a boom? You get wide scale adoption of a safety net.”

On the ICA’s hopes for precise allocation of the $29.9m provided for grants, Sullivan says, “We’re working with the department on that at the moment, and things have got a little way to go in terms of defining the mechanism and what is the process for a farmer being able to access that rebate. I think they’ve hit the sweet spot in terms of identifying that this entire scheme is about assisting farmers, who are increasingly very clever at risk management, to go that next step and get that extra bit of data that will help them get into a scheme that will help them further offset their risks.”

UPFRONT

STATISTICS

THE IMPORTANCE OF PREMIUM FUNDING Some consider premium funding a niche product, but its importance to the industry has been underlined by recently released research PREMIUM FUNDING may appear to be a smaller product within the insurance industry, but its importance is ever-increasing. Approximately one-third of commercial premiums across the industry are funded, as premium funding offers brokers a key market for growth.

Whether brokers are looking to increase clien t count in their home state or, as more businesses are doing, across state lines, premium funding offers a solution. Research by Premium Funding, one of the

country’s largest premium finance companies, gives brokers an insight into this key industry and offers advice on what to look for when seeking funding contracts.

Like many aspects of the industry, technology is a key driver of success both at home and interstate, as more in the industry look for faster turnaround times. To ignore premium funding is to ignore almost $4bn worth of business, an opportunity brokers can ill afford to miss.

THE SCOPE OF PREMIUM FUNDING

25–33%

$4bn

it is estimated that 25–33% of all commercial premiums in Australia are premium funded

the premium funding market is worth an estimated $4bn

PREMIUM FUNDING A GROWTH TOOL

BUSINESS BOOMS FOR GWP WITH FUNDING

More than half of surveyed brokers saw premium funding as a strategic tool for income growth

More and more brokers are placing business with premium funders as figures continue to rise in terms of gross written premium (GWP)

A strategic tool to grow income and retain business Just an additional service to clients A valuable source of income It is only necessary for clients that cannot afford their premiums 0%

57%

64%

of brokers surveyed described the BDM of their chosen premium funder as a “trusted partner who adds value to our business”

Amount of business placed with premium funding – % of GWP Less than 10% of GWP: 16%

24%

10–30% of GWP: 40%

12%

30–50% of GWP: 29% 50%+ of GWP: 16%

7% 20%

40%

60% Source: Premium Funding Industry White Paper and Broker Survey

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270,000

the estimated number of premium funding contracts in Australia

BUSINESS PLACED IN HOME STATES AND TERRITORIES Northern Territory

90%

Queensland

78% Western Australia

87% South Australia

81%

New South Wales

81%

Victoria

69%

VICTORIAN BROKERS SPREADING THEIR WINGS

Tasmania

85%

Victorian brokers lead the charge in placing business outside their home state, while the Northern Territory keeps the majority of business up north.

EFFICIENT SYSTEM MOST IMPORTANT BROKER FACTOR When asked the most important factor for choosing a premium funding partner, surveyed brokers saw system and process efficiency as the most important attributes 25%

22% 19%

20%

13%

50%

12%

40%

9%

10%

5%

5% 0%

System efficiency

Process efficiency

Product innovation

Brokers are seeking faster turnaround time from their premium funding partners as same-day settlement becomes the norm 60% 57%

16% 15%

SETTLEMENT TIMES KEY FOR BROKERS

Frequency of BDM contact

Cost to client

Technical, insurance expertise of BDM

Financial incentive with premium funder

29%

30%

4%

Cluster group AR network affiliation/ panel

20% 10% 0%

8% Same day

15 days

30 days

3%

2%

1%

45 days

60 days

90 days

Source: Premium Funding Industry White Paper and Broker Survey

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PEOPLE

THE BIG INTERVIEW

SURVIVING AND THRIVING IN CHALLENGING TIMES Mark Searles, CEO and managing director of Austbrokers, talks income diversification and shares his frustrations at inaccurate media reporting IF THERE’S one thing that irritates Mark Searles, it’s journalists who don’t check their facts.

In July, an investment analyst authored a piece published in a major metropolitan newspaper.

In that piece, the analyst opined that Austbrokers could be threatened by a Berkshire Hathaway decision to sell commercial insurance online, specifically targeting SME businesses.

“That [article] was full of factual inaccuracies and assumptions that were based on erroneous information,” Searles tells Insurance Business.

“I’ve been in contact with the author and I’ve provided him with a balanced view, because it’s an area that always frustrates me.

“When you’re running a listed company, the right of reply is sometimes limited, and it doesn’t help when people don’t get a balanced view or come to you for your side of it. In that particular instance, had the author contacted Berkshire Hathaway, had they spoken to [Berkshire Hathaway Specialty Insurance’s Australasian president] Chris Colahan like I’ve done, they would’ve found very quickly that they have no plans whatsoever to launch any direct commercial operation.”

Searles draws attention to the fact that the article in question was based on a piece originally published in an American publication, discussing Berkshire Hathaway’s activities in respect of the US market. “It had nothing to do with Australia at all,” he says. “I get particularly annoyed

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because, at the end of the day, articles like that get picked up by the national press … When you don’t have a right of reply or a balanced view, it’s one person’s view that gets published … And you think, ‘Hang on a minute. If someone had bothered to ring us up and ask for our view of that, we could’ve completely … put it right.”

rest on your laurels. If you can commoditise something, as I said before, there’s always the opportunity of putting things online, but we won’t stand back and just allow that to happen.

Every day you … hear [about] big insurers with their … offerings online. That’s fine. Let the client choose. We have to be pretty confident that the

“Everyone talks about Austbrokers versus Steadfast but, at the end of the day, the similarity is we’re listed companies” How does Searles feel about the notion that broking is, or soon will be, dead in the SME space?

“Absolutely ridiculous” is his unequivocal response. “This is a relationship industry … At the micro end of SMEs, can you commoditise the risk? Absolutely, the client has a choice. We recognise that and, equally, we have answers to that. But, more importantly, it costs nothing to use a broker … The client can be getting professional advice from a broker; he is licensed

by ASIC to advocate for the client. So why wouldn’t you use one? This whole concept of everything’s going to hell in a handbasket and going direct [is] absolutely ridiculous.”

Asked for a broker’s best defence against digital disruptors, Searles says, “One word – relationships.” But he adds, “Clearly, you can’t

quality of relationships is strong enough to protect against just saving a few dollars.”

Diversifying In August, Austbrokers announced an equity partnership with Allied Health Australia, an occupational health and safety rehabilitation service provider. Consistent with Austbrokers’ Owner-Driver partnership business model, the deal involves the group acquiring 60% of the equity of Allied Health Australia. This is a further example of Austbrokers executing its risk management diversification strategy, which it initiated two years ago.

“Our whole strategic intent is to become the provider of choice for clients and business partners across Australia and New Zealand in

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PEOPLE

THE BIG INTERVIEW CAREER HISTORY

JOINING AUSTBROKERS Searles started at Austbrokers as CEO and managing director on 1 January 2013

the total risk management space,” Searles says.

“The acquisition … basically gives us a really good position in the return to work services marketplace.”

Searles says there are two parts to the group’s strategy. “One is to diversify our income generation. So, if you go back five years, the vast majority [of income] would’ve been derived out of broking. Effectively, I’ve been keen in my time here to diversify some of that income to become less exposed to the insurance cycle. But secondly, the more important point is if we think about the concept of our clients, and predominantly they’re commercial clients, then how do we ensure that we provide risk services, including the provision of risk assessments: people risk, physical risk and financial risk in all those areas … how do we ensure that we provide relevant solutions? So this is part of that strategy.”

Execution of that diversification strategy means that 23% of Austbrokers’ net operating profits now come from non-broking business.

That’s virtually doubled since FY12, when the figure was 12%.

The end of August saw the group announce its full-year results for FY15, reporting its 10th consecutive year of underlying profit growth since listing. It reported a 2.5% increase in net profit after tax of $36.3m, which was in the middle of the guidance range it indicated back in January. Risk services were reported as already outperforming plan, delivering over $2m in profit

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before tax. Searles described the results as “solid performance in a challenging market” that reflected the group’s “continuing focus on its sustainable growth strategy”.

Additionally, the group announced it had committed over $70m to acquisitions over the previous year, making it Austbrokers’ biggest year to date for acquisitions.

So is Austbrokers focused on very specific business types to partner with in pursuit of its risk management diversification strategy?

“If we can see areas of potential growth and opportunity to the strategy, we’ll focus on it,” Searles says. “We’ve got … a number of partners operating in the return to work services market who are at the top of their game. Our ambition is to partner with businesses that are best in class, and [the Allied Health Australia transaction] is another example where we’ve done that. It doesn’t mean to say we go out there and acquire things willy-nilly, because we won’t do that. We just want to partner with companies and people who are delivering the requisite metrics for the clients …”

And does risk management specialisation serve as an important differentiator between Austbrokers and competitor broking network Steadfast?

Searles says it’s a differentiator from Austbrokers’ point of view, but that the two business models are fundamentally different.

“Everyone talks about Austbrokers versus Steadfast but, at the end of the day, the similarity

BEFORE AUSTBROKERS Searles was general manager, broker and agent at CGU. Prior to that role he was CGU’s chief commercial officer and general manager for retail

INTERNATIONAL EXPERIENCE Searles has undertaken senior management roles in the UK at Zurich Financial Services, Sage Group plc and Lloyds TSB Group

EDUCATION Searles holds a Diploma in Market Research, a Diploma in Marketing and Advertising, and a Postgraduate Diploma in Marketing Studies.

He’s also completed the Executive Development Program at the Institutional Institute for Management Development in Lausanne, Switzerland, and the Australian Institute of Company Directors’ Advanced Board Ready Program

is we’re listed companies. We have different strategies, different approaches and business models.

“If we look at what Steadfast have been doing recently, they’ve been really looking at acquiring 100% shares of underwriting agencies. Our core business model is an Owner-Driver model. It’s an equity partnership model. Effectively, we see the end client as critical to basically ensuring we drive the strategy.”

On the subject of underwriting agencies, Searles cites the growth of the group’s agencies as a highlight of the year, alongside its diversification strategy. Those underwriting agencies have enjoyed “strong progression”, according to Searles, with 29% growth in revenue and profit contribution before tax of 35% in FY15.

He says the group’s strategy here is to build

specialist agencies that are top-three players, if not the market leaders, in chosen segments. And investment in these start-up agencies certainly seems to be paying off. “Longitude [Insurance] is now the third-largest strata insurer in Australia,” Searles tells Insurance Business. “That grew from a start-up three years ago. And New Surety is … a top-three player in the surety bonds market.

“I think it’s great to see when strategy is executed well, and you stick to your principles and your disciplines, and you start to see some of these things delivering for you.”

On the horizon Contemplating times ahead, Searles says the greatest challenge for Austbrokers in the short to medium term is managing its business opportunities. “It’s to ensure we choose the right

priorities and, being a listed company, [that] we’re deploying shareholders’ funds in the correct way. A lot of opportunities we get presented with, sometimes, we have to prioritise out of the way because we have to ensure we’re doing the right thing at the right speed to grow our business, because our view is this is all about creating a growth trajectory for the medium and long term … It’s not just about tomorrow.

“So it’s all about making sure we put the right bets in place which, from my point of view, if we look at a lot of the work that we’re doing in the underwriting agency space, it’s all been around how do we seek start-ups rather than going and spending shareholders’ money on buying things.

We find it far more effective to actually create a very strong value proposition than just going and buying something in the marketplace.”

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SPECIAL REPORT

TOP 10 BROKERAGES 2015

TOP 10 BROKE For the fourth year running, Insurance Business has ranked Australia’s top performing insurance brokerages. Who came out on top as best of the best for 2015?

WELCOME TO the 2015 Insurance Business Top 10 Brokerages special report.

For the fourth consecutive year, Insurance Business has rated and ranked Australia’s independent brokerages to establish who can lay claim to being Australia’s Top Brokerage.

Competition was as tough as ever, with brokerages increasingly throwing their hats in the ring to take part in our Top 10 Brokerages special report. Not only does our entrant list continue to grow, but also some of the country’s leading brokerages now rate the Top 10 Brokerages report as an important metric with which to measure their progress against competitors.

The approach Insurance Business takes in its ranking of brokerages – using a range of criteria and adopting a ‘handicap’ method of scoring – ensures that even smaller players find themselves on a level playing field against larger businesses, allowing us to determine the truly best in the nation.

I’d like to sincerely congratulate all of our entrants for their ongoing hard work, as well as the Top 10 Brokerages named in the pages that follow. Your work is ongoing testament to just how much there is to be proud of within the general insurance industry in Australia. I wish you the very best for the year to come.

Tim Garratt, editor, Insurance Business

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A WORD FROM OUR PARTNER We are proud to sponsor the 2015 Insurance Business Top 10 Brokerages for the third consecutive year.

Congratulations to all the brokerages that made it into the Top 10 this year and well done to everyone else who entered the competition.

At Calibre Insurance, we are focused on the commercial insurance needs of businesses that have chosen to use an intermediary to manage their business. We value the role you play and we will continue to provide the products, service and support you need to make an informed choice for your clients.

Mike Hooton CEO Calibre Insurance

RAGES www.insurancebusinessonline.com.au

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SPECIAL REPORT

TOP 10 BROKERAGES 2015

10 BEST CRITERIA RANKINGS: Client retention Policies written Policies per broker

IPS INSURANCE BROKERS

Frank Cusmano, founder and managing director

The Western Australia-based IPS Insurance Brokers kicks off our top 10 for 2015.

IPS has been sourcing insurance protection for Australian businesses for almost three decades.

In addition to the success the team has experienced in the past year that’s seen them join the ranks of their top 10 counterparts, IPS also supports a number of organisations in its local community. These include the

Perth Soccer Club, Balcatta Soccer Club, Bayswater Soccer Club, Cockburn City Soccer Club, WA Italian Club, Monte Motorsport, Priolo Motorsport, Noranda Hawks Football Club, Maria CC. Annunziata (Inc), 6PR WA Special Needs Childrens Party, South Midland Pony Club and Princess Margaret Hospital.

Congratulations to IPS Insurance Brokers, the first cab off the rank in our Top 10 Brokerages for 2015.

TOP 10 BROKERAGES

THE METHODOLOGY

OVERALL RANK BROKERAGE

Insurance Business’ Top 10 Brokerages ranking is an objective means of ranking the top performing brokerages in the country across eight business-critical criteria, covering:

24

1

allinsure - IAA

2

Mega Capital & BizCover

3

Westcourt General Insurance Brokers

REVENUE PER BROKER

4

Your Risk Adviser/Truckers Insurance HQ

POLICIES PER BROKER

5

Simplex Insurance Solutions

6

Gibbscorp Insurance & Risk Pty Ltd

COMPANY GROWTH

7

NAS Insurance Brokers

CLIENT RETENTION

8

North Queensland Insurance Brokers

8

Apollo Risk Services

10

IPS Insurance Brokers

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TOTAL REVENUE POLICIES WRITTEN

NEW CLIENTS PER BROKER NEW REVENUE PER BROKER

As in previous years, each brokerage this year was required to supply their own details for the 2014-15 financial year to Insurance Business. Brokerages were ranked in each of these criteria categories, and the sum of all of their rankings were then added together. Just like a golf score, brokerages were placed in order of who had the lowest overall sore.

The Insurance Business ranking system ensures businesses are rewarded for business per broker rather than pure critical mass, to ensure the very best brokerages are singled out.

=8 BEST CRITERIA RANKINGS: Client retention Policies written Policies per broker

APOLLO RISK SERVICES Carl King, director

How do you feel about making it into the Top 10 Brokerages list in 2015?

What are the essential attributes for a top-performing brokerage?

We were delighted at making the top brokerages list!

We work hard to help our clients in every way possible, always adding that personal touch. It’s great to get recognised for all the hard work we do!

Having standout service, going above and beyond for our clients and prospects, in-depth knowledge of our clients’ business risks and the available insurance solutions, and forming lasting relationships.

What is one thing you did differently this year, and why?

How do you think brokers will best be educated for the world of tomorrow?

This year we enhanced communication within our office and Authorised Representative network. The valuable opinions and recommendations of all staff create a stronger, more efficient working environment. We continuously review our practices to ensure opportunities for improvements are identified and completed.

As always, formal on-the-job training is the best education for young brokers. There is quite a big difference between university study and real world experience and employers need to ensure that there is a minimum standard of education for all staff members.

There also needs to be new and exciting incentives for brokers that set a clear and achievable career plan. There is more to business than insurance. In order for brokers to empathise with their clients and be motivated to go above and beyond, they need to experience how tough the SME and midsized companies are doing it.

Experience is everything!

Are there any highlights of which you’re particularly proud?

One thing we are incredibly proud of is the strong retention rate from loyal clients and continuous growth, along with our expanding Authorised Representative network.

BEST CRITERIA RANKINGS: Client retention Revenue per broker

NORTH QUEENSLAND INSURANCE BROKERS John McKaig and Ron Bellert, principals

New revenue per broker NQIB on… what’s ahead in 2016 A strong emphasis on improvement in our IT and internet capabilities.

30% of our new business opportunities now come via our online presence and this is increasing at a great rate of knots. We will have to move with the times and hopefully come up with something that is different.

What would you cite as the biggest challenge of the last year?

What are the essential attributes for a top-performing brokerage?

The biggest challenge last year was last year. Things such as the high cost of insurance, the insurer’s lack of willingness to write business, reduction in commissions, reduction in capacities as well as the general state of the economy in North Queensland all combined to make last year the most difficult in memory. The fact that we were able to come through relatively unscathed and move the business forward is testament to the quality of the NQIB staff.

Staff, staff and staff. The more time spent on the development, training and wellbeing of the employees, the more successful the business will be.

Is there an approach or practice you think sets your brokerage apart from others?

We do not set any sales targets, growth targets or budgets.

The business is managed by responsibilities and not tasks.

If everyone is doing the right thing, in the right way and at the right time, the results will follow.

Where do you think growth opportunities lie for brokers in the years ahead?

There are always new products, new risks and emerging markets, and as long as a broker moves with the times, remains flexible and keeps up to date, there will be growth opportunities to capitalise on. One area that is relatively untouched and presents a tremendous opportunity for brokers – particularly in regional areas – are claims management and assessment services, not just for your own clients, but also for those people who choose to deal direct with insurers.

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SPECIAL REPORT

TOP 10 BROKERAGES 2015

07

NAS INSURANCE BROKERS James How, managing director

How do you feel about making it into the Top 10 Brokerages list in 2015?

BEST CRITERIA RANKINGS: Client retention Company growth Total revenue

We are obviously delighted to be named in the Top 10 Brokerages. NAS has never been one for capturing the publicity or marketing our achievements, rather our energy and focus has been on the development of our business model to meet the changing needs of the market and brokers.

What is one thing you did differently this year, and why?

The last year has been more of a culmination of a number of years of investment in our services to brokers, supplier relationships and systems. We really couldn’t differentiate in the establishment of our broking services division (which supports our brokers in a range of support and placement areas) and the establishment of our first underwriting agency (Lion Underwriting).

Both have been enormously successful and embraced by the network at large.

“Where we are today shows the foresight of the pioneers of our business” Is there an approach or practice you think sets your brokerage apart from the others?

If we were to define it in one word, it would be ‘flexibility’. We have an enormous diversity of skills, business maturity and size. Ranging from large corporates to individual start-ups, and a range of backgrounds which service too many community groups to count! To service the diverse needs of all these groups takes a flexible approach to business models, broker skills, systems and communication.

Our base systems have always been built with a wide range of scalability and flexibility. Where we are today shows the foresight of the pioneers of our business.

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NAS INSURANCE BROKERS ON… WHAT MAKES A TOP-PERFORMING BROKERAGE FOCUS. Have a clear plan of what is going to make you successful and what is fundamental to building a successful business. Being able to communicate this to those around you is equally valuable.

RESILIENCE. Building a successful business won’t be achieved without some setbacks along the way.

SKILL-BUILDING. As you grow, you always need to adapt to the next phase of your development. At times, this requires discarding what has made you successful to this point.

TEAMING. Relationships and creating a strong network, which will survive through the good and troubled times, is vital.

How do you think the industry needs to change in order to prepare for the world of tomorrow?

The industry has been largely resistant to change and most true innovations have been imposed by insurers, legislators or customers. Whilst debates and talk occurs on key topics of generational leadership change, new business models and the future relevance of brokers, there is little substantive action on these fronts from within the industry.

We have embarked on a key initiative to identify and develop future principals and are actively investing in succession management rather than waiting until the debate moves on to an action phase.

It is easy for us as an industry to turn to our traditional sources of debate, product and technical policy debate, when the truth is that we need to be adaptable to the pace of change across all facets of our businesses. Our role should be focused on ensuring that the next generation of industry leaders are equipped and ready for these challenges.

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SPECIAL REPORT

TOP 10 BROKERAGES 2015

06 BEST CRITERIA RANKINGS: Policies written Policies per broker Total revenue

GIBBSCORP INSURANCE & RISK PTY LTD

Robert Gibbs, sales and marketing director What would you cite as the biggest challenge of the last year?

Are there any highlights of which you’re particularly proud?

A change at top line management saw Gibbscorp get back to its core values. Our core value is to work as a team to ensure that the best possible service is given to our clients 24/7. This change in direction to focus on the best possible service which we could provide saw Gibbscorp walk away from the price war and focus on gaining new business from organisations who were tired of second rate service. It was tough to re-evaluate our direction, but we’re now feeling great to be putting ourselves out of the price war to purely focus on going above and beyond our clients’ expectations.

We were fortunate enough to win many large and prestigious accounts for 2015, which we’re extremely proud of. We’re also very proud of our retention rate for 2015, which saw us not lose a client. This emphasises that our clients are obviously enjoying the job we’re doing for them.

What’s in the pipeline for your business in the next year?

We have three large initiatives on the horizon which we’ll be launching first quarter of 2016 – stay tuned!!

SIMPLEX INSURANCE SOLUTIONS

05 BEST CRITERIA RANKINGS: Client retention Company growth New revenue per broker

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Kay Jackson, director

How do you feel about making it into the Top 10 Brokerages list in 2015?

We are really excited to be in the Top 10. Our entire team work very hard to go the extra mile for our clients and this is such wonderful recognition and an achievement for our entire team.

Simplex Insurance Solutions on… what makes a top-performing brokerage

Is there an approach or practice you think sets your brokerage apart from others?

Your team. If you do not have a professional, engaged and passionate team you cannot be the best you can be for your clients. A strong brand is also needed. A brokerage sells trust, so your brand needs to constantly show trust in all that you do. And last but not least, your clients must sit at the top of your organisation chart. Your product innovation should be driven by your clients’ feedback and needs, not just your own thoughts on what they need.

We give ownership and accountability to our business development managers for their budgets and growth; we are a true relationship-based brokerage; we are not trying to cut costs and make a greater margin by selling online; and we believe brokers can only truly know the needs of their clients by engaging with them in dialogue, preferably in person but can be via phone or email where more

convenient for the client. We also rate our client satisfaction on our clients’ claims service; if we get it right at the quote and new business/renewal stage, then claims should flow easily. In the past two years, ALL our clients have been surveyed after a claim and 100% are satisfied with our claims services and over 97% rate our service as excellent.

What would you cite as the biggest challenge of the last year?

Keeping focused on business whilst moving our head office to a new building to cope with our growth. We have had such amazing growth over the last five years that we had to move. To do this and keep focused and committed to our clients was quite a juggling act.

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YOUR RISK ADVISER/TRUCKERS INSURANCE HQ Adam Pile, principal

How do you feel about making it into the Top 10 Brokerages list in 2015?

BEST CRITERIA RANKINGS: Client retention Company growth New clients per broker

“This year we have had a 100% success rate with getting claims paid… and have retained every client we have managed a claim for”

I am ecstatic that our brokerage has compared so favourably to older more established brokerages.

What is one thing you did differently this year, and why?

We employed a marketing and relationship manager, someone to ensure that we capitalised on our key relationships and opportunities. Whilst putting on a ‘non-income producing’ staff member was a bit of a gamble, we realised that we needed a specialist to manage the graphic designers, copywriters, web developers, industry associations and referral partners in order to ever get anything done in a timely professional manner.

What would you cite as the biggest challenge of the last year?

We lost some long-term staff this year and realised how specialised some of them had become and how we do not have an adequate knowledge transfer/training arrangement to ensure that multiple staff can perform the same tasks.

Are there any highlights of which you’re particularly proud?

This year we have had a 100% success rate with getting claims paid (often after arguing with the insurers) and have retained every client we have managed a claim for. Whilst we have a great claims manager, I think a big part of the success goes to our advisers who have clearly been writing the right policies for our clients.

Is there an approach or practice you think sets your brokerage apart from others?

We primarily focus on servicing a handful of niche industry sectors. As such, our staff have a higher understanding of those industries’ risk exposures and insurance needs, and a good knowledge of the products and the insurers who can write in those niche markets.

Simply put, we can provide a higher level of advice and terms in a quicker timeframe than most generalists.

Where do you think growth opportunities lie for brokers in the years ahead?

The greatest opportunities will be in the cyber area.

The growing number of cyber ransom attacks and business owners growing awareness of this will make this a major market.

How do you think the industry needs to change in order to prepare the world of tomorrow?

We need to see the minimum education and training standards increased, to ensure that advisers continue to provide their clients with the best advice. We do not want to see the industry scrutinised and over-regulated as has/is happening with the financial planning sector.

Your Risk Adviser on… the best education for tomorrow’s brokers

I think the best training comes from on-the-job. The breadth of industries we work with and policies we offer simply makes it impractical for any in-depth product knowledge to be provided or absorbed by those new to the industry either online or in classroom settings.

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SPECIAL REPORT

TOP 10 BROKERAGES 2015

03

WESTCOURT GENERAL INSURANCE BROKERS Jeff Hollands and Tremayne West, directors What is one thing you did differently this year, and why?

BEST CRITERIA RANKINGS: Client retention Policies per broker Revenue per broker

Westcourt General on… changes needed in the industry

Our role as intermediaries in the industry needs to fully service the advice model we represent.

When advising the customers of our industry, adequately identifying their risks and developing risk management strategies is the one thing we as brokers need to focus on. The insurance industry, however, needs to change the perception that society has of insurance. We need to all work together as an industry to consistently uphold the principle of utmost good faith in our dealings with the end client.

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This year we continued doing the good things we do to help the Authorised Brokers in our network grow, and in turn this has attracted new brokers to our network. We also introduced a new owner to the business (Tremayne West), which has invigorated the company and set a foundation for our future strategy and growth. Tremayne brings to the company his senior relationships with the major underwriters, a breadth of corporate experience and a keen focus on growth which will help us to continue to succeed in the future.

What would you cite as the biggest challenge of the last year?

Our biggest challenge last year was the decision to set and follow targets for growth as well as implementing service improvements to our network. This focus led to our ownership change and, following this decision, we now have the challenge of prioritising actions to implement our new strategic objectives. This is an ongoing process, but through the involvement of our National Relationship Committee (made up of respected Authorised Brokers within the network) and taking onboard feedback from our network at our Annual Conference, we will finalise this program and make it happen.

Are there any highlights of which you’re particularly proud?

At Westcourt General Insurance Brokers, we are firmly focused on our Authorised Brokers and their achievements, so the company highlights have naturally been those related to our Brokers’ successes. We had six of our brokers place in the Insurance Business Elite Broker Top 30, three featured in Young Guns, and Victorian broker Bunmi Ajayi from Megalines was recently named as the NIBA Broker of the Year. We are very much looking forward to celebrating these highlights and more with our network and supporters at our Annual Conference in Hamilton Island at the end of the month.

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“Our culture is one of nurturing growth and professional development.

We allow our brokers to have their own brand and business direction and we support them with every staff member in our company” Is there an approach or practice you think sets your brokerage apart from others?

Westcourt are for our Authorised Brokers. We are a dedicated authorised representative network without the conflict of a broker owner, corporate ownership or underwriter ownership. Our culture is one of nurturing growth and professional development. We allow our brokers to have their own brand and business direction and we support them with every staff member in our company.

Additionally, we have broker representation via our National Relationship Committee and an IT Committee who are the ‘voice’ of our network – providing input and feedback on future direction and investment.

SPECIAL REPORT

TOP 10 BROKERAGES 2015

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MEGA CAPITAL & BIZCOVER

Michael Gottlieb, managing director

How does it feel to be number two on the Top 10 Brokerages list in 2015?

BEST CRITERIA RANKINGS: Policies per broker Revenue per broker New revenue per broker

Fantastic achievement and we are delighted. For the fourth consecutive year, we have been ranked in the top two brokerages in Australia. It’s an amazing achievement.

What is one thing you did differently this year, and why?

We continue to focus on providing the best customer experience, whether through our online business, BizCover or our traditional brokerage, Mega Capital. So it’s about what we continued to do rather than what we started doing.

Is there an approach or practice you think sets your brokerage apart from others?

We are one of the very few brokerages that have adopted completely different business models to ensure we provide a fantastic customer experience to clients who are looking for advice and advocacy and those who are not.

What’s in the pipeline for your business in the next year?

Mega Capital on… what makes a topperforming brokerage

Understand what a customer perceives as the value of a broker and ensure you provide that! If you are in the advice segment, ensure you stay aligned to your client (and not the insurer) and provide them with choice, transparency, advice and advocacy.

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We will be creating a white label version of our online platform to allow these brokerages a low cost entry, utilising their own brand, into the digital world.

“We are one of the very few brokerages that have adopted completely different business models to ensure we provide a fantastic customer experience to clients who are looking for advice and advocacy and those who are not”

SPECIAL REPORT

TOP 10 BROKERAGES 2015

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ALLINSURE - IAA

Peter Chamberlain, director How does it feel to be number one on the Top 10 Brokerages list in 2015?

BEST CRITERIA RANKINGS: Policies per broker New clients per broker New revenue per broker

To even make it into the Top 10 for a second time is an incredible achievement! Given the quality and size of some of the brokerages that have made the list previously, we are extremely humbled and honoured to have again been recognised in such elite company. The recognition we received from last year’s entry opened up a lot of doors for us, and we look forward to seeing what we can achieve over the next 12 months.

Is there an approach or practice you think sets your brokerage apart from others?

allinsure on… the growth opportunities of the future

Collectively, we need to set ourselves apart from the direct market by being a trusted adviser, rather than selling a product. This comes back to working closely with our clients to help them recognise what it is that we do and how we can add value to their business.

New and emerging markets or risks (such as cyber) will be a key growth area, but again we need to educate our clients to make the most of it.

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I believe culture is key, and the culture that we have established at allinsure has played a significant role in our success. We strive to create a collaborative environment where our team are excited to come to work, face challenges head on, and continue to grow both the business and themselves.

What are the essential attributes for a top-performing brokerage?

Being able to demonstrate to clients the value in what it is that we do has always been, and will continue to be, a main focus for us. Brokers need to show clients that we can play a crucial role in their business and we can do this through education as well as establishing and maintaining long lasting and trusting relationships. Sustaining strong relationships with your own key business partners to ensure that you get the best possible outcomes for your clients will always be an important factor. Again, having Insurance Advisernet on our side has helped us grow from strength to strength, giving us a global reach while ensuring we are able to maintain our local presence. Finally, having the right team in place is essential. You need people who are passionate about what they do and who are willing to go above and beyond for your clients and your business.

What’s in the pipeline for your business in the next year?

We’ve recently had Pete Davey join our team from a national brokerage to come onboard as our new general manager. In his short time here, he has helped to strengthen

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“We strive to create a collaborative environment where our team are excited to come to work, face challenges head on, and continue to grow both the business and themselves” and grow our existing client base, as well as oversee the continued development of our team, and we look forward to seeing where his experience and input can take us. As always, we will continue to re-evaluate our internal processes and procedures to ensure our clients are receiving the best service and advice possible.

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FEATURES

CLAIMS HANDLING

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MAKING THE CLAIM Why do things go wrong during the claim process?

And what does a first-class claim experience look like?

Insurance Business talks to the experts

IT WOULD be fair to describe claims handling as the litmus test for an insurance company or underwriter. Surely there’s no truer indication of their effectiveness than the quality of their response when called upon to fulfil their promise to pay under an insurance contract.

But on many occasions the claim process is rife with issues. Brokers and claimants complain of extended delays, poor communication, and other obstacles causing considerable frustration. Where precisely do things so frequently go pear-shaped? What has to change? And who in the space is on the right track, implementing robust strategies and practices to maximise their satisfied customer quota?

Darren Trott, Crawford and Company's national business development manager, has worked with brokers for many years. He’s had more than ample opportunity to gauge their views on the claim process.

“One of the things that has become very clear to me … is a broker’s got to deal with, potentially, 10 different insurers,” Trott says.

That’s 10 different notification of loss procedures, repairer panels [and] teams.

They might be based overseas, locally [or interstate].

“So what that does to an insurance broker is give them an inconsistency in claims outcome for their client. It’s a bit of a lucky dip, depending on which insurer it is or what

line of business it is or what type of loss it is or what policy they have. So it starts with the broker having to navigate their way through a myriad of different insurer processes.”

Trott doesn’t think there’s enough rigour around some of the technology currently employed. He also says, “Many claims operations have had their tasks segmented so that, instead of having one person responsible for the claim from beginning to end and overseeing that whole thing, you might have five different people involved in the one claim: someone that does the first notification of loss, someone that does the triage, someone that does the customer contact, someone that does the appointment of loss adjuster or repairer [and] someone that does the recovery at the end of it.

“I’ve seen examples of where the people responsible for those individual components understand their bit of the claim process, but they don’t understand it in the context of the whole claim. Provided they get their bit right, they’re not particularly fussed about what happens next.”

Jon Winsbury, managing director of Gallagher Bassett in Australia, refers to what he describes as too strong an emphasis on transactions per day rather than outcomes.

“A simple metric that helps ensure that claims flow-through is a claims closure ratio: you receive one claim, close one claim. This assumes, of course, that the portfolio sizes

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FEATURES

CLAIMS HANDLING that claims people are holding are optimal … [Brokers] have very little ‘look through’ over whether a claims officer is overloaded with work or whether they have the capacity to deal with the amount of work sitting on their desk. Each claims team needs to answer that question themselves: whether they’ve got the right mix of personnel, whether they have the right portfolio counts, depending on product class. That’s a key piece.

“What can happen is a loss of focus by management on actually getting a claim settled. We’ve had situations where we’ve run in to assist large carriers who’ve been caught in catastrophic situations, for example, where what we typically see is a lack of decisionmaking by claims officers, where they’re just caught on a transaction merry-go-round – move this bit of paper to here, step one of the process moves to step two – but are not sitting back and looking holistically at their portfolio and saying, ‘I’m getting more claims than I’m closing. How do I shut these claims out? How do I get them settled? And what do I need to do in order to move these transactions to a place where there are outcomes for the insured?’”

Winsbury says it’s crucial for leadership teams in claims departments to focus on maximising outcomes. “At the end of the day, a good claims officer is a decision-generator.

They’re a decision-maker. All the models supporting them should be around making that decision.”

Winsbury says hiring people without the right core competencies can also cause difficulties. “You do see the better claims departments tend to spend a lot more time picking the right people, and they have a good mix in their teams of experience – the greyhaired veteran in the corner who’s seen everything and can interpret the policy wording in their sleep, to the young up-andcomer who’s enthusiastic.

“If you’ve got a revolving door of case managers coming in and out of your organisation, without a sense of holding these people in their jobs, teaching them, training

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them, making them better with a good mix of resources, that can lead to frustration.”

Winsbury explains the knock-on effect for brokers and claimants. “They feel it because they feel the, ‘I was talking to Bill last week, and now Bill’s gone I’m talking to Ted’. You hear that a lot, and that could be you’ve got a large throughput of people in your claims department because we don’t pay enough attention to making claims a career path.

“We pay a lot of attention to making underwriters a career path, making sales a career path, even IT, but [don’t] necessarily pay attention to making claims management a career path of substance … The good insurers and brokers are the ones that understand that having a quality claims department actually enables you to sell more.

It doesn’t inhibit you from selling more.”

perform effectively in their jobs and that this investment has far more substantial a return for their business.”

For Jon Winsbury, it’s imperative that claims staff members are trained to communicate simply and clearly with claimants. “If I go to some stats that have come out to do with workers’ compensation, it was found in a study performed in New South Wales a few years ago that something like 70% of claimants only self-satisfied when they had spoken to the plaintiff lawyer because that was the first person who explained to them the claims process.

“That’s just crazy. That should be the claims people explaining … what the process is … That information provided upfront is very, very important, and it’s important that it comes from the claims department,

“The good insurers and brokers are the ones that understand that having a quality claims department actually enables you to sell more. It doesn’t inhibit you from selling more” Jon Winsbury, Gallagher Bassett Getting it right Anton Barnett-Harris, ANZIIF’s general manager of education, events and international, says investment in proper training for claims staff plays an important role in optimising results.

“One of the biggest challenges is that, particularly in softer markets, businesses don’t invest in the development of their staff.

While this might have immediate cost savings, research shows conclusively that investing in staff training has returns far more significant than the original outlay. The goal with professional learning and development is to ensure that claims staff are equipped to

not misinterpreted by the broker, not misunderstood by an intermediary, but is coming from them directly to the person in the field that’s suffered the loss.”

And if that process doesn’t happen early on? “Typically, a lot of claims go off the rails,” Winsbury says. “There should be a large focus in claims departments on training people to deliver information clearly [and] simply to claimants.”

Winsbury opines that it’s important to “reverse the pressure” in the claim process.

Explaining that concept, he says, “As far as possible, the transactional push-pull flows that exist within claims departments should

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CLAIMS HANDLING be designed so that claims officers are the ones making the phone calls to the repairer, to the claimants, not the other way around.”

On the benefits of this approach, he says, “It prevents phone calls from coming in and flooding the claims department, which is distracting. When you’re making the phone calls, people are more productive because they’re not having to stop what they’re doing to answer phone calls. It’s a lot more orderly.

You’re only dealing with emergencies that occur in the field, not the day-to-day process of claims management, if you’re proactive.

“If you speak to brokers in the field and ask them who do they like when they talk to claims people, I’ll bet that the people they

“Research shows conclusively that investing in staff training has returns far more significant than the original outlay” Anton Barnett-Harris, ANZIIF will talk about that make them comfortable are the ones who are proactive. It’s not rocket science.”

In 2015, broker participants in the Insurance Business Brokers on Insurers survey voted Chubb Insurance the top insurer in Australia for claims turnaround times.

INSURANCE BUSINESS ONLINE POLL What are your greatest frustrations when it comes to the claim process?

4%

10%

UNREASONABLE INFLEXIBILITY

16.5%

LACK OF EMPATHY FROM CLAIMS STAFF

17%

LACK OF TIMELY RESPONSES

25% 27.5%

CLAIMS STAFF’S LACK OF TRAINING

A COMBINATION OF THE ABOVE

TOTAL VOTES: 128

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OTHER

Chubb’s national claims manager for Australia, James Flaskett, says that when it comes to claims handling there’s no magic ingredient to getting the service experience right. “Integrity, empathy, promptness, expertise and fairness – we call them the five pillars, and they’re embedded in our culture.

“It’s about doing all of the little things right all of the time. It’s about being responsive to telephone calls and emails. It’s about showing empathy and care when you’re communicating with your customers. It’s about using the phone more than email and really trying to create a relationship with that individual. It’s about making sure that you’re actually allocating the files to the right resource, that that person’s skilled and capable to handle the claim ... It’s about setting expectations early, about timeliness.

It’s all of those little qualities all of the time which really define that service proposition.

It takes time, effort [and] a commitment from the top down.”

Darren Trott strongly agrees that it’s crucial that claims staff are empathetic towards claimants. “Most people, most businesses … have an insurance claim once every 11 or 12 years … and so when they need to make a claim it means something’s gone wrong; it means their car’s been damaged [or] their business or home has suffered property damage. They need someone who’s going to show some empathy and some understanding, and there are pockets of our industry that do that well. There are other areas that don’t do it well.”

Trott also rates managing client expectations as chiefly important. “If you say that you’re going to do something by a certain date, then do it by that date. Managing

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CLAIMS HANDLING expectations is something that is so critical and not particularly difficult, I don’t think,” he says. I’ve found that people can be really patient, provided you’re managing their expectations.”

Claudio Saita, COO and executive director of Tokio Marine Management Australia, says Tokio Marine’s focus during the claim process is on building relationships with customers.

“Our claims department is always looking for ways to assist customers, rather than looking for ways to limit their claims. We believe we have a social responsibility to help those we serve by providing insurance solutions rather than roadblocks.

“With this in mind, we are prepared to explore grey areas and challenge our underwriters in order to get the insured over the line, within the limit of the policy wording.”

only allow progression into people leadership roles. “The best claims people tend to get promoted to be claims team leaders,” Winsbury says. “They’re pretty good claims technicians, and probably the best in their unit, but not necessarily the best people leaders.

“And that can be a conundrum or a vicious circle that’s hard to fix because people want to get promoted. They want to grow and advance and look after their families and do the things they want to do. However, the pyramid structures that have been in place within most businesses, not just insurance, mean that for people to get promoted, they need to be doing something different. And typically, in a white-collar industry, that means becoming a people leader.”

Winsbury says a technical career path has

“We never see technology as being a replacement for good claims expertise and a claims officer. We see it as an enabler” James Flaskett, Chubb Insurance Heading in the right direction While the claim process remains a source of great frustration for many brokers and claimants, several players in the space are executing impressive initiatives aimed at improving and enhancing the claim experience. Darren Trott has been pleased to see some adopting technology aimed at improving transparency in the process. “If you’re the insured customer, you’re able to log on and see what the latest is on the claim and see what the progress is,” he says.

At Gallagher Bassett, considerable time has been spent over the past three years on creating new career paths for claims staff, deviating from traditional structures that

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been created for staff members who want to continue utilising their claims expertise.

“We’ve said to people, ‘You can be a claims practices manager, which means you are the sole rallying point for claims technical knowledge, but you’re not leading people.

You’re leading claims outcomes within a team, within a branch, within a division. So you are accountable for those claims outcomes. You’re accountable for the quality; you’re accountable for the leakage (or lack thereof ); you’re accountable for policy interpretation …”

Winsbury says there’s even an opportunity to move into claims-focused executive roles.

“We’ve created three of those at Gallagher

Bassett, which are called claims practices managers, where they are equivalent to an operations manager and wholly and solely responsible for what we call claims excellence.

We see that as innovative, and it’s paying us back in spades because it’s giving the greyhaired claim veteran that opportunity to get more salary, to grow their wealth, but also to do it in a way where we’re not losing that claims knowledge.”

As well as creating new roles, Winsbury says Gallagher Bassett is also focused on utilising new technologies for the customerfacing side of the claim process.

“The innovations we’re looking at are how we have an inclusive push-pull process that actually drives more information out to the consumer,” he says. “We’ve been looking at how we roll out apps for claimants, particularly for long-term claims … where you need to have constant communication over the life of a claim. And that’s looking at things like apps for people, so it’s keeping pace with technology.”

Tech-savviness So, how important is it to implement new and emerging technologies, in order to deliver a superior claims experience?

“Technology is very important to Tokio Marine as part of both the claims handling process and, more broadly, customer satisfaction,” says Claudio Saita. “In Australia, we have an internal IT team that is dedicated to innovation and continuous improvement on this front, and we pride ourselves on being open to new ideas and updates to promote claims efficiency and superior service.”

Saita tells Insurance Business about some specific developments Tokio Marine has already rolled out to the market. “In the motor sector, we facilitate online claims registrations and have recently launched a Motor App that provides our customers with guidance on the claims process. It can help identify the nearest recommended repairer from an accident scene using automatic GPS location technology. It also delivers a user-

friendly experience for lodging claims, stores details about your vehicle and allows users to upload and send images instantly.”

Darren Trott considers embracing new and emerging technologies in claims handling processes to be critical. James Flaskett also endorses the use of new technologies, but importantly adds, “We never see technology as being a replacement for good claims expertise and a claims officer. We see it as an enabler … There is still absolute value in having an experienced and skilled claims examiner managing a loss. Really what technology does is just enable that process rather than replace it.

“We certainly see … the use of technology being critical for the collecting and analysis of big data. That will enable us to track trends and better understand our business so again we can continue to improve on that service proposition.”

The education piece Alongside talk of benefits, Darren Trott draws attention to a significant challenge technology can pose for staff training. “You might have a technological solution that fundamentally deals with claims of a low value that gets very low touch. They get processed straight through … bang bang bang! Great for a customer outcome potentially, because there are minimal delays; however, they’re the claims that new claims people used to cut their teeth on. They’re the ones that new loss adjusters used to learn their trade on. So, as we are automating more and more of the claim process, we’re making it harder and harder for people to get experience in managing claims.”

Perhaps the education providers have the answer to that challenge. ANZIIF Skills Units, a new education framework covering key areas of skill development for the insurance community, is soon to become available. Anton Barnett-Harris says a suite of broking units will be available in early 2016 and a systematic roll-out for all segments will happen next year. As to content

CLAUDIO SAITA ON TOKIO MARINE’S RESPONSE TO THE TOHOKU EARTHQUAKE AND TSUNAMI On 11 March 2011, following a magnitude 9.0 earthquake, a powerful tsunami struck the Pacific coast of eastern Japan. Over 18,000 people were killed, and the tsunami caused widespread and severe damage to coastal areas of the Tohoku and Kanto regions.

The Japanese government estimates the total damage bill from the earthquake and tsunami at approximately $300bn.

“In the wake of the disaster, Tokio Marine immediately set up a disaster management task force with staff from Sendai and Tokyo and support from Tokio Marine Group companies,” says Claudio Saita, COO and executive director of Tokio Marine Management Australia.

Saita tells Insurance Business that hundreds of staff were rostered to the region, and Tokio Marine not only assisted in the insurance and recovery process but also provided food, water and supplies.

He says, “During this time, Tokio Marine’s focus was on implementing systems to process speedy payments, including empowering staff across functions to assist as required. Aerial assessments were conducted to help make quicker decisions on total losses.”

According to Saita, Tokio Marine settled over 50,000 claims in the first two months alone. “Over 300 support staff were allocated to ensure we met our commitment from the start to adjust all claims within this period. In total we settled more than 160,000 home and content claims, along with further motor and commercial claims.” of the units, Barnett-Harris says, “They are aimed at new talent and developing talent in insurance. Our units focus on real-world skills, which cover a wide variety of entrylevel, mid-level and advanced skills. For example, we will offer Certificate 3 on ‘How to Register a Claim’ but also offer units up to advanced diploma levels, such as Advanced Industrial Special Risks.”

He says preliminary demonstrations to claims specialists in Australia have been extremely well received. “Assessment is truly outcomes-based to ensure that professionals are highly competent. By using explorative e-learning techniques we are able to integrate ASUs into the training and professional development frameworks of any business,

so it will always address the needs of the business and its staff.”

It may be that claims handling teams bring about change to minimise challenges in their processes, but the consensus is that there’s still much work to be done and there can be no denying the importance of getting the claim experience right. “There is no other scenario where the insurance industry can prove that its product is valid, viable and meaningful for the community than at the point of decision,” says Jon Winsbury.

And in Darren Trott’s words, “As an industry, it would be great if we were able to get that right mix of people and process and system, so that the end result was happy customers are the norm rather than the exception.”

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PEOPLE

STEPHEN CATLIN

EMBRACING A BOLD NEW WORLD XL Group’s executive deputy chairman, Stephen Catlin, spoke to Tim Garratt about building a global business and preparing for change in the industry STEPHEN CATLIN’S status as an icon of the insurance industry is widely recognised, so much so that, in 2015, the prestigious International Insurance Society inducted Catlin into its own Insurance Hall of Fame, in recognition of his long-standing leadership in the global property/ casualty insurance industry.

His career in the industry began in London in 1973. His initial foray into insurance involved no pre-planning. “My father was a doctor and he wanted me to go into medicine,” Catlin says. “It’s a complete joke this now, but I thought he worked too hard, so I didn’t want to do that.”

As a compromise, Catlin agreed to pursue studies in dentistry, but his heart wasn’t in it.

“I wasn’t particularly fond of academia at the time, and I didn’t get the required grades to get into dental school,” he recalls. “I decided I didn’t want to do a degree just for the hell of it. I’d rather get going.”

Soon after, Catlin began a role at BL Evens & Others at Lloyd’s of London. In his early days he received advice from a mentor that’s served him well to this day. “He used to say to me, ‘Keep your eyes and your ears open and your mouth shut’. In other words, listen and be aware of what’s going on around you.

“I think a lot of people miss out in life because they don’t keep their eyes and ears open. You’ve got two eyes, two ears and one mouth. Use them proportionately.”

Starting Catlin In 1984, Catlin founded Catlin Underwriting Agencies. “I’d been approached a couple of times to do a start-up,” he says. “The more I looked at it, the more I thought, ‘You know what? Maybe I

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should give this a go’. Now, I have to tell you I took that decision at the ripe old age of 29. I was just 30 when we set the company up. Looking back on it, I must’ve been completely barking mad!”

But Catlin’s decision to establish his own underwriting agency marked the beginning of a decades-long success story. Over 30 years the Catlin Group grew from a small managing agency into a multinational insurance holding company, with a presence in more than 50 cities and 2,300 employees working in 25 countries.

Catlin’s global expansion plans constituted somewhat of a pioneering endeavour. So why did he see international expansion as an important strategic move before it became popular among his contemporaries? He says: “... if you wanted to

them both wrong … and had to start again two years later,” Catlin says.

He and Paul Brand (now chief underwriting officer at XL Catlin) took the lessons learned from that experience and decided to leverage them.

“We then spent 15 years building a global business, which wasn’t easy, and we had a fair amount of criticism from most people in the marketplace for doing it … and it was quite difficult, as a public company, to be spending quite a lot of our earnings on organic growth. It doesn’t always please shareholders. They want to see the money today, not tomorrow.”

But Catlin and Brand were committed to the concept. “We thought it was the way the market was going and how the markets were going to

“We’ve got to start thinking very much on the front foot about what life is going to be like in the next 10–20 years, where are the risks going to be, and how we can help our clients manage those risks” have a global book of business, sitting in London waiting for people to come in to see you wasn’t going to happen over time … More and more business would be placed locally in the local markets, and therefore if you wanted to write that business and not just see the big-ticket business, you’d have to have a presence in the local markets.”

Early on in executing the strategy, there were some challenging times. “We started an office in Houston and one in Singapore. Frankly, we got

behave in the future … I think it’s interesting the amount of people who say, ‘Well, I wish I’d done that’; ‘I wish I’d done what Catlin had done’; I wish I’d seen what he’d seen’.”

The next chapter On 9 January this year, it was announced that the Catlin Group had been acquired by XL Group, an Ireland-based global insurance company. That transaction was completed

on 1 May, and Catlin is now executive deputy chairman of XL Group plc.

Talking about times ahead, Catlin stresses the importance of adapting to rapid change.

“Think about the change that [iPads and tablets have] brought about in our lives. You no longer spend two and a half hours arguing pointless facts at a dinner party, because somebody will get the fact within 30 seconds … The way we transact at business level, but also at a personal level … is very different to what it was, and people who don’t adapt to that change get left behind, whether you’re in commerce or in industry.”

Catlin mentions one of the greatest emerging risks – cyber. “Cyber brings with it challenges though,” he says. “I’ve been misquoted a couple of times as saying I don’t think we should do it.

I haven’t said that at all. I’ve said I think we should, as an industry, be writing cyber risk, but that we have to recognise what we can and cannot do, and if you have a total global systemic failure caused by the Internet going down worldwide, that type of loss is beyond the capability of the insurance industry to pay because it’s too big.

“We need to work with government to make certain that the government understands what we can do and what we can’t do for them … I think we’ve got to start thinking very much on the front foot about what life is going to be like in the next 10–20 years, where are the risks going to be, and how we can help our clients manage those risks.”

Catlin expects the concept of ‘Uberisation’ to become widespread within the service industries, and thinks it’s important for the insurance industry to be ready to address the threat posed.

“In other words, you’ll get an outside player coming in who has got nothing to do with insurance whatsoever at the moment, who will say, ‘I can do this more efficiently and I’m going to join the party on a more efficient basis’. I think the next 10 years will show fundamental change on that front.”

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MARINE INSURANCE

ON THE MARINE AGENDA Insurance Business asked a leader in the marine insurance space to share key themes to emerge from a recent global event THE INTERNATIONAL Union of Marine Insurance (IUMI) has held its annual conference in Germany.

In mid-September, 700 maritime stakeholders, including insurance industry members, attended the four-day event in Berlin. Now in its 141st year, the conference affords attendees the opportunity to network with stakeholders from around the world. But its chief purpose is to serve as a forum to discuss the pressing issues for the global marine market, and how the market should react.

Kai Brüggemann, global head of marine at HDI-Gerling, attended this year’s conference, and spoke to Insurance Business upon his return to Australia. He says there was significant discussion around the growing cyber threat, specifically the cyber security measures necessary to address the risk of hackers exploiting vulnerabilities in ship systems. “We now have more of a spotlight [on cyber] in marine because of the combination of cyber threats [and] the vulnerability of the supply chain,” Brüggemann says. “That can be a very toxic cocktail because the industry is more and more relying on workable supply chains to get their value creation chain in line. And if you then add the cyber threat, that is quite an interesting development.

“You could, for example, stop the workability of a container terminal. You don’t need a bomb to explode it. You just [stop] a container terminal from working for a week because of a cyber-attack, [and] then you have a huge problem … This can be very, very expensive.”

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As expected, Brüggemann reports a huge market interest in addressing cyber challenges.

Among other hot topics were overcapacity and the potential of lower premiums to lead to lower-quality products characterised by poor terms and conditions.

Brüggemann says there was also discussion of a global problem that he thinks Australian marine market participants need to be

particularly mindful of – coverage of risks using marine policies when the risks aren’t technically marine risks. “It’s not only an Australian problem, but probably more here than anywhere else because we have a lot of exports of agricultural products and natural resources,” he explains.

“We have a market trend to put risks, which have been usually somewhere else, into marine because marine is, on some occasions, cheaper

“We now have more of a spotlight [on cyber] in marine because of the combination of cyber threats [and] the vulnerability of the supply chain” Kai Brüggemann, HDI-Gerling GLOBAL TOTAL OF MARINE PREMIUMS IN 2014: US$32.6BN (A$46.41BN)

52.6%

Europe AsiaPacific Latin America North America MiddleEast

25% 9.8% 6.4% 3.1% 3.0%

Africa 0%

20%

40%

60%

Source: Global Marine Insurance Report 2015, International Union of Marine Insurance

or, even from the terms and conditions, easier to place than others.”

Brüggemann cites misappropriation as an example. “Misappropriation … is something which has always been insured with credit insurance.

Because it’s very difficult to place it or expensive to place it in credit, the market tends to try, at least, to bring it into the marine market [because of] much weaker terms and conditions and premiums than you would have in credit.

“The whole market has to be careful that we don’t fill our bellies with things that, in other lines, let’s say, are not so tasty.”

IUMI’s 2016 conference will be held in Genova, Italy.

FEATURES

PREMIUM FUNDING

A PREMIUM POSITION Brian Crowe, co-owner of a Victorian premium funding company, shares his views on the current market from the perspective of a smaller player In association with

THE RECENTLY RELEASED white paper and broker survey created by Premium Funding confirmed the continuing upward trajectory of funding in Australia. The paper highlighted the important impact of the funding market on the insurance industry, and was created in an effort to raise the visibility of the space.

Among the highlights of the paper, Premium Funding repor ted that approximately one in three commercial premiums in Australia are now funded and the local industry is worth in the vicinity of $4bn annually.

So, what’s the experience of the smaller players in the premium funding sector right now?

Insurance Business recently sat down to talk to the co-owner of Victory Funding, a family-owned and operated business based in the Melbourne suburb of Malvern East.

It’s a company that’s been in business for well

COMMERCIAL VS DOMESTIC In its research, Premium Funding compared the amount of its own commercial funding versus its domestic funding business for FY2015 100% 80% 60% 40% 20% 0%

Contract value Commercial

Contract number Domestic

Source: Premium Funding Industry White Paper and Broker Survey

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“Pay-by-the-month is a welcome service in a whole range of retail products. Insurance just happens to be one of them” Brian Crowe, Victory Funding

over two decades, and its co-owners are Brian Crowe and his son, Matthew. Crowe is a former insurance broker who at one time was the Victorian chairman of NIBA. Matthew’s background includes a successful stint in stockbroking.

We asked Crowe to provide an insight into how things are going with his funding business as we approach the end of 2015.

“We’re very happy in our space,” he says. “We do very nicely, and we do provide a service that isn’t available to a lot of people, and we’re very happy about that … Pay-by-themonth is a welcome service in a whole range of retail products. Insurance just happens to be one of them.”

Crowe describes Victory Funding as operating at the small end of the market. The business focuses on markets it sees as underserviced by the major funders. “We fund all classes of business – private and commercial,” he says. “But with the rise in domestic premiums we’re finding more of a call on our services that traditionally haven’t been done by the bigger funders. We also do quite a lot in the motor trade … We’re finding the call on that to be quite consistent.”

“We do a range of non-insurance products here at the lower end of the market. That seems to be a trend with some of the bigger guys too.”

Crowe adds, “As premiums have risen in recent years, the domestic policies have become more expensive, and a pay-by-themonth facility is attractive to a lot of consumers.” He says the company is even

doing business for some insurers who don’t offer such a facility. “They outsource it to us, and we’ve found that to be a growing market in recent years.” He also says Victory Funding finds that the business it does is “not quite as rate-sensitive as the top end of town”.

Asked whether awareness of premium funding as a payment option is growing, Crowe responds, “Yes, perhaps not by the name of premium funding; more described as a pay-by-the-month facility.” He also says

awareness of premium funding among brokers is significant. “There’s a huge awareness in the broker market of pay-bythe-month service for their customers … It’s a great boost to the services a broker offers to his client.”

On the subject of developments in the market, Crowe tells Insurance Business, “Major funders appear to be more interested in the domestic product … As premiums have risen, some of the major funders are certainly getting into the domestic market. To my understanding, that’s a major shift that we’ve come across … A move into that area.”

So, what will the next 12 to 18 months have in store for the premium funding space?

Time will tell. But right now, whether it’s the small or the top end of town, it seems to be a good time to be a broker or a client dealing with premium funders.

VICTORY FUNDING Victory Funding is a privately owned insurance premium funding and instalment company owned and operated

by Brian Crowe and Matt Crowe.

Victory Funding has operated in insurance premium funding for over 25 years. It operates in all insurance funding markets but specialises in the domestic and smaller commercial markets that other funding companies may consider too small or too difficult.

Personal insurance, large commercial policies including fleet and heavy haulage, smaller commercial policies, extended warranties, gap insurance, consumer credit insurance, after-market products, workers’ compensation, as well as an assortment on noninsurance items are all funded, with a variety of flexible repayment schedules and terms.

Victory Funding offers personalised service, flexible repayments, quick settlement, seamless renewal rollover, competitive rates and upfront commission payments for most insurance products.

Victory Funding is operated by experienced insurance and finance industry professionals.

Brian Crowe was the previous owner of Associated Premium Funding and prior to that he was an insurance broker and past Victorian chairman of the National Insurance Brokers Association.

Matt Crowe recently joined Victory Funding after a successful career in banking and finance.

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FEATURES

SME INSURANCE

SIMPLIFYING SME INSURANCE SURA Commercial’s national manager, Ian Faragher, talks about building new policies to make life easier for SME customers, brokers and underwriters CLAIMING TO be a specialist in the insurance industry is one thing. To prove it is another altogether.

Early in 2015, underwriting agency SURA Commercial launched a product it hopes will solidify its status as a specialist. “A real specialist understands their customers and doesn’t just talk about responding, but really does respond to their needs,” says Ian Faragher, SURA Commercial’s national manager. “I believe that’s what we’ve done.”

The SURA 360 insurance product provides policies for a range of small to medium commercial and industrial occupations. It offers asset protection, income protection, liability protection and crime protection, and it’s available via a bespoke online system, fully integrated into both broker systems and SURA Commercial’s own system.

Discussing the genesis of SURA 360, Faragher says it was all about better meeting SMEs’ needs.

“We were competing in a commoditised marketplace. Pretty much all the other major insurers had bulk-standard business packs,” he says. “So we said, ‘How can we distinguish ourselves in that space, offer something a little bit different and, in doing that, respond better to the needs of our customers?’

“Often, people think of a specialty business as plant and equipment or construction. But it really should be possible to also be a specialist in our area – small business.”

What an SME wants Faragher and his team examined precisely what it was SMEs needed. “We actually went out

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and had a bit of fun with it. We talked to some people in the street, and one of the things that really became apparent was that, as insurance professionals, we almost have our own language. We talk about things like ‘increased cost of working’ and ‘additional increased cost of working’ … the average businessperson looks at us and thinks we’re quite mad! We all understand what it means and there are important differences between those two which we understood but the customers probably didn’t appreciate. So we felt a need to address that. We also felt the industry was out of step with not only the customers but also the commonly accepted business terms.”

Faragher says it was paramount to align the new offering with how SMEs think about their businesses. So a key benefit now of SURA 360 is its accessibility. “It talks to customers in their own language. We think about business the way a businessperson thinks about their business.

“So instead of the eight to 10 sections that insurance policies typically have, we have four sections that are set up the way that the customer thinks about his business … Asset, income, liability and crime are the four sections.”

Faragher describes the business income protection section as the “jewel in the crown” of SURA 360. “This is a cover that customers think is important, but it’s either not been sold well enough to them or explained well enough. The reason is that, in the traditional insurance world, business income or loss of gross profits requires a complicated explanation. It’s difficult to get the sums insured accurate. As a result of that, it’s not selling in line with its importance to businesses.

“We said if we move to talk to customers in their own language, it should be easy to explain to them. We should also use the same definitions that their accountants use … We said let’s start to use proper Australian definitions of accounting terms so that there’s no mismatch or misunderstanding when we’re talking to the insured or the accountant.

“It’s simple, clean, clear, which is what customers want when there’s a loss. They don’t really want to be sitting there looking at a proviso on page 72.”

Cutting-edge technology After the product was created, Faragher’s team turned its attention to delivering it in a manner that was similarly simple. “We said we’ve got to deliver this electronically and efficiently,” Faragher says. “We made a very significant investment in

“A real specialist understands their customers and doesn’t just talk about responding but really does respond to their needs. I believe that’s what we’ve done” Ian Faragher, SURA Commercial electronic delivery and we worked very closely with our business technology folks, who did an enormous amount of work on this.”

He says the system built is unlike anything anybody has seen before but remains simple. “We can’t have a hugely complicated front end because that’s not what the product’s about. It’s about simplicity [and] ease to understand.”

Dale Hansen, CEO of Austbrokers Coast to Coast, says, “The 360 electronic delivery system

is unique, particularly for business income protection, where the system assists us in the selling process in language the customer really understands.”

Theo Stevens, SURA’s chief technology officer, describes the online offering as intuitive. “We built it using our know-how of the ‘tech space’ and have adapted that to the clear insights we received from our brokers in the market. That is, keep it simple, and take the double keying off our

hands. We’ve done this and we’ll continue to listen to our brokers and continue to feed their insights into the technology. It also happens to be the first underwriting agency product in the Australian market with full policy life cycle integration to a broking system.”

Faragher hopes the system’s efficiencies mean brokers can claw back time needed to build client relationships, and that underwriters have more time to be better underwriters.

So far this year, there’s been significant activity in the new system. SURA general manager Toby Guy says, “The take-up has been extremely pleasing, producing double-digit growth quarteron-quarter.”

And while SURA 360 has been rolled out, remaining agile is essential to its ongoing success, according to Faragher. Since launch, the online system has already been tweaked in response to client feedback. “The secret of this product will be continuous improvement. There will be future versions, the system upgrades will continue …

We’re continuing to look at how to integrate ourselves into how the brokers do business.”

Craig Patterson, managing director of Austagencies, tells Insurance Business, “We’ve made product specialisation/simplification coupled with end-to-end delivery systems that eradicate duplicate handling a core part of our business strategy … We want to be known as the product leader in our chosen fields coupled with being the easiest market to transact with.

“Change like this doesn’t happen overnight, and the broker partners that have supported our development journey are reaping the rewards.

We’ve got ambitions to make this type of technology available across more and more of our business – brokers will feel the positive impact as this type of delivery helps reduce frictional costs and allows them more time to interact with their clients in lieu of being tied down on nonrevenue-producing tasks.”

So what does Faragher cite as a key takeaway of the SURA 360 experience?

“Keep listening to your customers. It’s easy to go out there and say, ‘I’ve listened. Now I’ve delivered that’. But until they see it and say, ‘Yeah, I like it, but I would like that more’, you’ve got to be big enough to say, ‘Okay, we can do this’.”

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BUSINESS STRATEGY

NETWORKING

THE POWER OF THE TRIBE: RECOGNISING AND REALISING THE VALUE OF BUSINESS NETWORKS In this incredibly fast-paced business and economic landscape we can no longer do it alone – realistically, we never could; we just thought we could.

Janine Garner shows us how to harness networking and collaboration to future-proof our success

BUILDING A powerful and diverse network, your own personal tribe, is a critical ‘must have’ within the new operating system of commercial collaboration. Moving from the isolated ‘Me’ space to the collaborative ‘We’ space will future-proof careers, leadership and your own personal success.

A powerful and diverse network drives your success. It: creates new opportunity for growth stretches, pushes, drives and inspires you enables you to contribute and influence more and leverage your position further This ‘We’ space of commercial collaboration requires courage, confidence and bravery and is one in which: networks of connected individuals, communities and businesses work together to drive success

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we can bring our skills, strengths and talents to the table and together amplify and share expertise to create progressive, results-oriented solutions collective intelligence means we work smarter and quicker together diversity and difference of opinion is actually the new competitive advantage Networking, connecting, meeting, doing coffee, lunch dates and even speed connecting – all these terms are synonymous with meeting others to drive skill sets, contacts and ongoing business and personal growth.

And however much you might want to hide under the white tablecloths of a corporate breakfast, powerful and effective networking has evolved and is now a business must for all who want to forge ahead. It’s not simply about building up a Rolodex of business

cards (or, more accurately, a smartphone full of virtual ones), a mass of LinkedIn contacts or a significant number of social media followers. It’s about a true meeting of minds and skill sets, and skilfully parlaying said meetings into long-range successful relationships.

Networking is a must-have for successful collaboration, and diversity of that network is the tipping point between average connections and those that collaborate to create magic. The cross-fertilisation of connections, skills and brainpower, and the ideas that are openly discussed and shared through network creation, in their turn create new opportunities, innovation and new solutions to existing problems. It’s a domino effect – the way your initial networks

Networking, connecting, meeting, doing coffee, lunch dates and even speed connecting – all these terms are synonymous with meeting others to drive skill sets interact provides a guideline for the subsequent or flow-on networks that spring up from these collaborations. They will only benefit from your experience and way of working together.

Success through collaboration The most innovative businesses and organisations are finding that collaboration and effective and powerful networking are

giving them an edge. So, how do you find, build and manage a diverse network? How do you gain entry to a true circle of excellence that will work with you and not against you?

Because, let’s face it, there are still ladderkickers out there.

The critical element of a powerful network that can become your lifeline, and is an absolute must-have for successful collaboration, is diversity.

Building an effective and powerful network is so much more than finding a safe, likeminded tribe. It requires: diversity a width and breadth of contacts a willingness to embrace the opportunity that exists in differences an understanding that you may not always agree with or understand certain points of view, but that through the connection you build awareness and knowledge An effective network is a diverse network that consists of people with differing levels of: expertise age gender experience

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BUSINESS STRATEGY

NETWORKING Powerful networks are those that are cross-functional and cross-industry. Think about it. A like-minded network limits the breadth of conversation. Lawyers sit in a room with lawyers sharing their legal experience from the industry of law. CEOs play golf with CEOs; fashion industry PR experts mingle with other fashion industry PR experts. Imagine the colour of the conversation if instead you had lawyers, accountants, creatives, athletes, marketers and business owners discussing the various solutions to a problem. Imagine the different perspectives shared, the varying insights, the depth of conversation that would stretch thinking and push perspective wider.

Diverse connections: challenge thinking drive further questions push boundaries increase awareness open our eyes to another way bring to the forefront opportunities that were not previously in the direct line of vision present solutions that were not previously on the radar create innovations that were once not thought possible Who do you need to surround yourself with to inspire you and your business to achieve more? As Jim Rohn said, “You are the average of the five people you spend the most time with”.

A powerful network is one that consists of people who: have similar mindsets but diverse experience will stretch thinking and push boundaries realise the power of sharing ideas and of coming together value-add to each other’s businesses through the power of plural perspectives Those who are willing to be a part of a collaborative working environment are doing so because they want to be challenged. They want the opportunity to constantly learn from others, and to share what they’ve learnt; to engage on an intellectually challenging

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level with like-minded thinkers; to see their own business benefit from the knowledge of specialists; to be happy knowing that they are on the edge of technological advancement, constantly pushing the ‘what if ’ button – because, as a team, they feel secure enough to take risks.

needed to get there. They are seeing procedures streamlined, the bottom line coming up, and employees more engaged and happier. Their ‘communities’ are becoming communities without the inverted commas.

It is not enough, in the words of the amazing Sheryl Sandberg, to ‘lean in’ for

Powerful networks are those that are cross-functional and cross-industry. Think about it. A like-minded network limits the breadth of conversation. Lawyers sit in a room with lawyers sharing their legal experience from the industry of law. CEOs play golf with CEOs, etc The concept of commercial collaboration and the move from the ‘Me’ space to the ‘We’ space and way of thinking is not something for the faint-hearted. It’s for those who can see the far-reaching benefits of what the ‘We’ space is about – and yes, it is a gradual move, which involves challenging thinking. But it is not something that one has to contemplate in solitude.

Understanding the power of your network and using its potential is intrinsic to the ‘We’ mentality. To care about the wellbeing of those who are connected to you through business similarities, or ethical focus, or a desire to advance the same cause – and expecting nothing in return – creates a fantastic opportunity for collaborative relationships, and also for a true value exchange, where ‘what’s in it for Me’ turns into ‘what can I do for you’.

The ‘We’ space The ‘We’ space is not a pipe dream. There are businesses and leaders who are clearly succeeding by operating within this framework. It is the centre of discussion among academics, thought leaders and consulting groups. Those corporations and entrepreneurs who are using the space well, and understanding the shift in thinking,

future-proofing our success, our businesses and our careers. As leaders who are taking teams into an uncertain future, it’s now about leaning out and collaborating with others – because to lean out means to embrace and engage on an unforeseen aggregated level, where thinking bigger than ever before will bring rewards to a collective commercial mind.

The barriers between genders, between generations, between cultures, between the inventors and the investors, between the change-makers, the visionaries and those that make it happen – these all have to be broken down.

This is all part of the evolution of Me to We. This is all a part of collaborative business.

Commercial collaboration is the key to future-proofing business, leadership, careers and success.

This is not about a revolution; it’s about evolution.

Janine Garner is a businesswoman and entrepreneur, and is the author of From Me To We – Why Commercial Collaboration will Future-proof Business, Leaders and Personal Success, published

by Wiley. She is the founder and CEO of LBDGroup and works with senior leaders to build high-performing teams. For more information, visit www.janinegarner.com.au.

REACHING NEW HEIGHTS IN STRATA INSURANCE QUS and AIG have partnered together to deliver superior value and stronger support to strata insurance brokers.

This new partnership with AIG enables QUS to provide even stronger support to the Australian broker market, through an increase in risk capacity and location appetite.

For more information on our new product enhancements or for full details regarding this switch, visit www.qus.com.au.

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In Australia, products and services are written or provided by AIG Australia Limited ABN 93 004 727 753 AFSL 381 686. Not all products and services are available in all jurisdictions and are subject to actual policy language and underwriter discretion.

PEOPLE

FAVOURITE THINGS

JOHN MCCABE

COO, senior vice president Asia Pacific and NSW branch manager, Liberty International Underwriters John McCabe shares what he enjoys most when not busy fulfilling his many responsibilities to LIU’s Asia Pacific businesses Strangest insurance coverage you’ve come across/offer?

I remember that we insured the deep-sea submarine that James Cameron used to take to the deepest part of the ocean. That vessel was made here in Australia and piloted by Cameron personally. Whilst the coverage was pretty straightforward in insurance terms, the whole project was extraordinarily interesting. The technical and engineering issues that had to be considered and overcome, along with the back-up plans and systems that had to be developed, were mind-boggling. It was a testament to the skills of our underwriters and risk engineers to see that project through to its successful completion.

Favourite advice I have two pieces of advice that have stuck with me: Firstly, don’t ask someone to do something that you wouldn’t do yourself. The second piece of advice I received many years ago was: don’t be afraid to fail. People who have never failed have never tried anything new. I know that sounds a bit folksy, but in many businesses things can become overly complex. It is sometimes worth reflecting on some simple mantras to help sort through all the noise.

Favourite sport My favourite sport to watch is NRL. I’ve been a diehard St George Illawarra Dragons fan since I was a boy. But my favourite sport to play is soccer. I only stopped playing this year when I turned 50.

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Favourite holiday spot It is Hamilton Island and I have just been there, albeit working rather than relaxing. I like that it is a two-hour direct flight from Sydney and within 30 minutes of landing I can be relaxing by a pool or on the beach. It is located in one of the most beautiful parts of Australia and it is just so easy.

Favourite book I must admit I like those page-turners you buy in airports when travelling – things by Tom Clancy or Robert Ludlum or Matthew Reilly. I think it is because the characters in those books closely resemble what it is like in the insurance industry … just kidding of course. If I had to pick a novel that I had read many times it would be The Hobbit. I read it as a child and I have read it to all three of my children when they were young and learning to read.

Favourite film This is a toss-up between Pulp Fiction, which I will often watch if it is on TV, and Reservoir Dogs. I know I am outing myself as a Tarantino fan here, but I like what I like.

Favourite indulgence This is tough because I have so many, but if I have to pick one it would be a good glass of red … an Aussie Shiraz, to be precise. I read somewhere that a glass or two of red was good for your heart, so I am sticking with that theory.

What’s on your playlist?

I have quite eclectic musical taste. I have over 700 songs on my current playlist and it ranges from the Arctic Monkeys to the Hilltop Hoods and all the way back to the Bee Gees and the Commodores. I know it sounds strange but with kids in their twenties and teens you constantly hear new stuff, and I pick up on some of it. It kills my 21-year-old son that I like Hilltop Hoods.

Best day you’ve had working in insurance

If I had to pick a standout moment it would have to be the first day I started at Liberty International Underwriters, which we started in Australia from scratch in June 1999. We had a fax machine and two rented PCs in a serviced office and I had the lofty title of CFO Asia Pacific – but the reality was that there were four staff and the other three were underwriters, and so I was licking the stamps and putting them on the envelopes for our launch; I was the IT guy, the HR manager and the chief cook and bottle-washer. We didn’t have a dollar of premium on the books and we had it all ahead of us …