insurancebusinessonline.com.au Issue 6.1
The AR model in 2017
CHU's venture into insurtech
DRIVING BETTER OUTCOMES
Telematics in fleet management
Suncorp’s Gary Dransfield on capturing the attention of tomorrow’s customer HOT LIST 2017
The men and women of insurance to watch in 2017
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CONNECT WITH US Got a story, suggestion or just want to find out some more information?
Exploring the art of the possible
CHU’s CEO Bobby Lehane talks about the strata insurance underwriting agency’s new foray into insurtech
06 Head to head
Does the surge in insurtech opportunity threaten brokers?
A match made in heaven?
10 News analysis
Industry commentators weigh in on what lies ahead for the global cyber insurance market in 2017 Zurich acquires an Australian travel insurance provider while QBE appoints a full-time local CEO
Highlighting those in the general insurance space to keep an eye on in the months ahead
Meet Gary Dransfield, the man heading up Suncorp’s customer platforms function
A new Accenture study ¬ surveying over 32,000 insurance consumers in 18 global markets ¬ offers valuable insights into buyer behaviours and the consequent insurtech opportunities for brokers
Senior leaders of Australian networks share their insights into being an AR in 2017
14 Insurer Update
Insurance chief urges the Federal Government to increase disaster mitigation spending
16 Underwriting agencies update Swiss Re report looks at the state of the Australian commercial insurance market
42 Driving better outcomes
The growing use of telematics technology for fleet management
50 Looking where you’re going
What’s ahead on the workers’ comp front for brokers to keep their eyes on?
STEPPING UP TO THE PLATE
IAG’s Donna Walker joins the ANZIIF Board to promote insurance education
55 Career path
ATC COO and former YIPs president Sampath Soysa discusses his diverse career
56 Other life
Suncorp’s Matt Kayrooz works to help those living with disabilities
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www.insurancebusinessonline.com.au FEBRUARY 2O17
EXPLORING THE ART OF THE POSSIBLE
or over a century, the insurance industry has changed only incrementally. However, the time has arrived when a combination of factors have created a perfect storm for the disruption of insurance. As KPMG’s Pulse of Fintech – Q2 2016 reported, the interest in insurtech is growing as the insurance industry “finally begins to play catch-up” with its counterparts in banking and financial services. In 2015, venture capitalist insurtech investments totalled US$2.5bn globally, and investor interest in insurtech is expected to continue increasing. Early last year, a PwC report entitled Insurtech: A Golden Opportunity for Insurers to Innovate cited three key drivers of disruption in the insurance space. Firstly, as consumers now enjoy the benefits derived from the implementation of new technologies across a range of industries, they have new and heightened expectations of insurance products and the channels through which access to those products should be available. Additionally, the arrival of the sharing economy, the Internet of Things, autonomous vehicles and wearable technologies has presented new opportunities for innovation in insurance, including the need for entirely new insurance solutions. And finally, according to PwC, the rising number of start-up businesses looking to fill voids in the insurance market has meant the threat from disruptors has been elevated. But perhaps S&P Global Ratings said it best last November when, in a report, the
The opportunities that insurtech presents for brokers ... are as real as the threat of disruption it poses firm characterised insurtech as a “long-term challenge and opportunity”. While there’s little doubt the industry will undergo a transformation of sorts, brokers and insurers should be examining how to exploit what the burgeoning insurtech industry has to offer and reap the benefits for their own organisations. As KPMG’s Martin Blake put it, brokers need to “explore the art of the possible”, engaging with tech start-ups in order to understand how their technologies can help to enhance brokers’ service offerings and assist them in remaining relevant in the changing world. The opportunities that insurtech presents for brokers and insurers are as real as the threat of disruption it poses. In this first edition of Insurance Business for 2017, much of our content carries an insurtech theme. We take a closer look at consumer behaviours and what they mean for insurtech, and at what some Australian incumbents are doing to prepare themselves for the industry of the future.
EDITORIAL Editor Tim Garratt News Editor Jordan Lynn Writers Libby MacDonald, Lucy Hook Production Editors Roslyn Meredith, Mary Webb
CONTRIBUTORS Philipp Kristian Diekhöner
ART & PRODUCTION Design Manager Daniel Williams Designer Joenel Salvador Traffic Coordinator Freya Demegelio
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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INSURTECH AND CONSUMERS
KNOW YOUR CUSTOMERS Accenture’s survey divided insurance consumers into three groups based on their behaviours and preferences: Nomads, who are very interested in shifting to online-only activity; Hunters, who seek value, expertise and advice from people; and Quality Seekers, who prioritise integrity regardless of the channel.
Insurtech is altering the consumer journey – and opening up new opportunities for insurers ADVANCES IN digital technology, combined with shifts in consumer behaviour, have opened up a world of opportunity for insurers looking to enhance their relevance and value. That’s the message of a recent global survey released by Accenture, which identified three main groups of consumers – Nomads, Hunters and Quality Seekers – each of which have distinct preferences about how they want to interact with insurers.
Of key concern are Nomads, who are interested in shifting to online-only activities. This group is highly digitally active and ready for a new model of delivery. They place a high value on innovation and want new ways of accessing service and advice. For this group, which represents 30% of Australian consumers, increased digital connectivity is key to going beyond the traditional insurance value proposition.
AUSTRALIAN CONSUMER BREAKDOWN Hunters
Percentage of consumers willing to buy insurance from online service providers
Percentage of consumers who would consider peer-to-peer car insurance
Percentage of consumers who would consider peer-to-peer home insurance
Percentage of consumers willing to buy insurance from a retailer or supermarket
Source: “Financial Providers: Transforming Distribution Models for the Evolving Consumer,” Accenture, 2017
ONLINE INFO IS OPTIMAL
CONSUMERS ARE ROBO-READY
The share of consumers who prefer to use online channels (including websites, mobile, email, chat/IM and social media) to look for information about insurance has gone up markedly in just three years.
Consumers who look for insurance information online 2013
The vast majority of consumers are willing to receive computer-generated advice about various aspects of their financial affairs – almost three out of four are willing to take this kind of advice on what type of insurance to purchase.
Source: “Financial Providers: Transforming Distribution Models for the Evolving Consumer,” Accenture, 2017
Investment asset allocation
Source: “Financial Providers: Transforming Distribution Models for the Evolving Consumer,” Accenture, 2017
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How they seek advice 70% 60% 50% 40% 30% 20% 10% 0%
How they seek advice 70% 60% 50% 40% 30% 20% 10% 0%
How they purchase insurance 70% 60% 50% 40% 30% 20% 10% 0%
How they seek advice 70% 60% 50% 40% 30% 20% 10% 0%
How they purchase insurance 70% 60% 50% 40% 30% 20% 10% 0%
Most valuable source of insurance advice 70% 60% 50% 40% 30% 20% 10% 0%
70% 60% 50% 40% 30% 20% 10% 0%
Most valuable source of insurance advice 70% 60% 50% 40% 30% 20% 10% 0%
How they purchase insurance 57%
Most valuable source of insurance advice 70% 60% 50% 40% 30% 20% 10% 0%
OK WITH P2P
FASTER AND EASIER
Peer-to-peer insurance is increasingly seen as an acceptable alternative to conventional models, especially among younger consumers.
Of those willing to receive computer-generated advice about the type of insurance to purchase, most are swayed by the speed of delivery and greater convenience of online platforms.
Millennials who would consider P2P insurance
Reasons for seeking computer-generated advice 40% 35%
Gen Xers who would consider P2P insurance
30% 25% 20%
Baby Boomers who would consider P2P insurance
15% 10% 5%
Seniors who would consider P2P insurance
27% Source: “Financial Providers: Transforming Distribution Models for the Evolving Consumer,” Accenture, 2017
Think it will be faster and more convenient
Think it will cost less
Think it will be more impartial
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HEAD TO HEAD
Does the surge in insurtech activity threaten brokers? As insurtech moves from the fringes to the mainstream, brokers caught in the oncoming wave are grappling with change
Donna Peeples Chief customer officer Pypestream
Managing director, commercial intermediary AXA Insurance UK
“Short answer: There’s enough room for everyone. The surge in insurtech is beneficial for those who are underserved by the traditional carriers. These are folks who look to self-serve in every field: they’ll book an Airbnb over a hotel and swipe for an Uber instead of calling a cab. When insurance shopping, they’ll go for a user experience that is instant and hassle-free. “However, there are those who prefer buying insurance from brokers and look to storefront agents to discuss their policy at length before committing to coverage. So while insurtech seeks to accommodate those self-serving customers, it does not threaten brokers.”
“The broker advice model will continue to evolve and has an opportunity to improve with insurtech. Change is here. Insurers are embracing intelligent automation and the use of chatbots to provide 24/7 real-time support in mobile messaging, allowing brokers to focus on higher-level tasks and support. “To redesign the customer experience, brokers ... must truly understand how their customers and carriers want to engage and what pain-point areas they can make a positive impact on – or what ‘passion points’ can be amplified. It’s about moving from transactions to relationships. Maintaining a human element is always important.”
“Brokers are used to being challenged by advances in the market, especially in the personal lines space. The rise in price comparison sites challenged the position of brokers long before insurtech arrived on the scene. “New technology threatens to do parts of the broker’s job in a much quicker and slicker way, allowing people to buy cover in the same way they would order a taxi from Uber. “Brokers can’t be complacent and must evolve, and should also look at ways of partnering with, or even investing in, insurtech firms to ensure that they stay relevant and safeguard their future.”
Co-founder and CEO Lemonade
INSURTECH GOES MAINSTREAM One of the key findings of a study released in mid-2016 by PricewaterhouseCoopers was the fact that 74% of insurance companies believe that some part of their business is at risk of disruption. The same study reported that 90% of insurers were afraid of losing some part of their business to new tech initiatives. So where does this leave brokers? In a recent report, global ratings agency S&P Global warned that “traditional insurance brokers’ business model may be considerably altered by technological changes”. While the report posited that the high cost of entry would protect the industry for longer than other financial services fields, insurtech is clearly a tide that won’t be turned back.
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A MATCH MADE IN HEAVEN? If the customer experience is the bottom line, then it’s time for the industry to start working with insurtech instead of fighting it, writes Philipp Kristian Diekhöner
A GAME DESIGNER, a hipster and a digital nomad meet in a boardroom. No, this is not a joke. Insurers are increasingly bringing customer-experience-focused talent from start-ups and major tech giants in to work in their newly established digital and innovation functions. In essence, they are building pockets of inspiration into a heritage structure. It’s a two-way street – many insurtech start-ups are founded by industry veterans that have left their safe, well-paying jobs and are looking to introduce a breath of fresh air into the industry. The same can be said of start-ups and corporations. According to a recent report, a large chunk of venture capital funding volume comes from corporate VCs. While these are most likely involved in more late-stage deals, there is an evident trend of corporations getting more involved. Start-up accelerators (however critical we may want to be of them) have done much to foster this proximity. In my view, fintech start-ups and financial institutions have increasingly come to realise that they benefit more from collaborating than competing. It paves the way to innovative operating approaches, such as institutional licence-sharing with start-ups. In some fintech verticals, the risk exposure that comes with running a financial services business serves as a perfect rationale for forming symbiotic relationships between disruptors and established players. Insurtech is a great example – take Slice and Munich Re, or Lemonade and their liaison
with Berkshire Hathaway and Lloyd’s of London. The more start-ups explore creating actual financial (especially insurance) products, the more potent and widely prevalent these mutual beneficial partnerships will become. They can serve as an effective strategy for managing regulation and reaching scale quickly via large
focuses single-mindedly on a specific customer problem, which means they are usually only solving one small wedge of customers’ overall needs. Most of us would need a variety of fintech services provided by different start-ups to take care of all our financial needs – a great user inconvenience and a tremendous market opportunity, which I believe will be solved by new types of service aggregators for fintech, covering a range of functionality in one digitalnative experience and customer proposition. Life insurers would be in an excellent position to provide such a holistic value proposition, given that wealth management and life insurance both have a mandate to take into consideration a person’s overall financial health. A financial planning one-stop shop would be a very ‘ownable’ territory for them, but it would require incumbents to rethink the nature of their business. If we were to reframe their purpose from being a financially stable and dependable provider of long-term, big-ticket financial products to being a single place for people to take care of their present and future financial health, the industry would future-proof itself in
“Fintech start-ups and financial institutions have increasingly come to realise that they benefit more from collaborating than competing” existing pools of customers that have already been through the KYC (know your customer) process. The extent of collaboration occurring at the moment is almost antithetical to what public perception has made of banks in the years after the GFC. Goldman Sachs estimates that, globally, financial institutions represent a $5trn industry in danger of being disrupted by fintech companies, so the enthusiasm to collaborate may be driven in part by a well-developed survival instinct. Insurance, a vertical within finance that has been a little late to the innovation party, is possibly facing the most fundamental threats and opportunities. According to CB Insights, the insurtech domain attracted in excess of $1bn in venture capital funding in the first half of 2016 alone. Perhaps the biggest discrepancy between corporations and start-ups is that the latter
a highly effective and relevant way. It would involve curating and working proactively with start-ups that are already providing the individual bits and pieces. Overall, we should be highly optimistic about present and future interactions between start-ups and financial institutions, especially in the domain of insurtech. Both sides have a long way to go in terms of assimilating. Tremendous potential awaits progressive entrepreneurs and intrapreneurs who are resourceful and realistic about finding natural connection points that create mutual benefit. Philipp Kristian Diekhöner is an emerging fintech thought leader in Asia and a pre-eminent voice in the Singapore start-up and innovation ecosystem. His vision is to shape the future of finance through customers’ eyes.
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CYBER BOOM ON THE HORIZON As the industry enters what’s predicted to be a benchmark year for cyber insurance, how will the landscape change, and what challenges lie ahead?
THE COMING year looks set to be the biggest yet for cyber insurance. Just a few days before the new year, Lloyd’s CEO Dame Inga Beale revealed that the London insurance market is bracing for a surge in the sales of cyber policies in 2017, after seeing a 50% rise in sales during 2016. Global firm CFC Underwriting also reported that the number of cyber claims it received had shot up 78% in 2016 compared to the previous year. But with increasing take-up set against a backdrop of rapidly developing risks, is the market prepared to evolve?
privacy breach product to becoming a more all-encompassing ‘cyber incident response’ solution, he adds. “There will be a greater focus on incident response and the claims service that underpins the policy wordings,” he says. “We expect to see greater clarity introduced to policy wordings and a shift away from the liability constructs that dominate current forms, toward the constructs found within more traditional crisis management classes like kidnap and ransom, crime and terrorism.” High-profile cyber attacks were in no short
“I don’t think we can say that there’s one industry or another that is more at risk – I think they are all at risk” Michelle Lopilato, HUB International “Cyber insurance will transition into a mainstream product with significantly increased penetration amongst small and mid-market clients, both in the US and internationally,” predicts Graeme Newman, chief innovation officer at CFC Underwriting. The focus will shift from cyber being a
supply over the past 12 months. Tech giant Yahoo had two enormous data losses come to light during the year, and its second reported hack – revealed in December – became the largest known data breach in history after more than a billion user accounts were compromised.
But the archetypal data loss event is just one of the many cyber risks that companies are now facing. Ransomware – malicious software that allows hackers to block access to a system until a sum of money is paid – is becoming increasingly widespread, and the potential for business interruption to companies of all sizes is significant. “It’s one of those types of events that is highly impactful and very successful,” says Michelle Lopilato, SVP and director of cyber and technology solutions at HUB International. HUB is seeing at least one ransomware event per month among its clients, Lopilato says, due largely to how easily attainable and inexpensive the software is. “The availability is somewhat astounding,” she says. “The reality is that because they’re so available and so successful, we are going to see a lot more of these types of ransomware families being developed and used.” As cyber products respond to these diversifying risks, solutions are likely to become increasingly tailored to both the size and type of business.
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CYBER INSURANCE BY THE NUMBERS
Projected amount of global written premiums for cyber insurance by 2025
Different types of cyber cover introduced by Lloyd’s in 2016
“At the SME/MM scale, we will continue to see cyber being incorporated into other products, whereas for larger risks, stand-alone products that cover all cyber perils are the obvious evolution,” says Alessandro Lezzi, international technology, media and business services team leader at Beazley. There are early signs in the market of a move toward industry specialisation, Newman
target them as “the lowest-hanging fruit”. Without the resources – particularly financial ones – of their larger counterparts, smaller companies are more likely to suffer significantly from a cyber event, even going out of business in some cases. But in some respects, Lopilato says, companies are on an equal footing: “I don’t think we can say that there’s one industry or another
“Cyber insurance will transition into a mainstream product with significantly increased penetration”
23,000 to 35,000
The average number of ransomware infections per month in 2015
US$209m (A$276.42m) Amount paid to ransomware criminals in the first quarter of 2016
Sources: Allianz, Lloyd’s, Symantec, CNN
Graeme Newman, CFC Underwriting adds, “with a growing recognition that you can’t sell the same cyber insurance product to a bank as you can to a hospital or a school.” Small and medium-sized businesses represent the biggest growth potential in the purchase of cyber policies, according to Lopilato, who explains that many hackers will
that is more at risk – I think they are all at risk.” So what should brokers and insurers be focusing on in terms of cyber insurance in the coming year? “Cyber exposure and the nature of the risks change very rapidly, so the challenge for the industry is to keep abreast of the changes
in order to identify new ways to assess risk,” Lezzi says. For Newman, the handling of claims is a more pressing issue. “Many insurers have not developed an appropriate internal or external claims infrastructure to support the products they are selling,” he says, “and this should be the biggest area of concern.”
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INTELLIGENCE CORPORATE ACQUIRER
Arthur J. Gallagher
Complete Financial Balance (CFB) Pty Ltd
Terms of the transaction have not been disclosed. CFB is a Brisbane-based financial services advisory firm
Arthur J. Gallagher
The deal sees AJG in Australia acquiring Western Australia-based workplace risk consultancy RiskLink
Bank of Queensland
Centrepoint Alliance Premium Funding
BOQ has acquired Centrepoint Alliance Ltd’s premium funding business for $20m. It will be rebranded and form a new division of BOQ Finance
Adaptra works with five of the top 10 insurers in Australia and New Zealand, providing platform advisory and implementation services
Elders Insurance (Underwriting Agency) Pty Ltd (EIUA)
QBE agreed to sell a 10% stake in EIUA to Elders (following a similar transaction earlier this year), taking its total stake in the agency to 20%
Jardine Lloyd Thompson
AssetVal Pty Ltd
AssetVal is said to be one of Australia’s largest specialist valuation practices and is based in Brisbane
Liberty Mutual Insurance
Liberty Mutual will acquire a 100% ownership interest in Ironshore, paying 1.45 times Ironshore’s actual tangible book value as of year-end 2016 (estimated to be approximately US$3bn)
Tokio Marine Management Australasia Pty Ltd
The deal will see Tokio Marine acquire 50% of eSentry Underwriting
Zurich Insurance Company Ltd
Cover-More Group Ltd
Under the transaction, Zurich will acquire 100% of Cover-More’s issued share capital for $1.95 per share
ONE UNDERWRITING’S DRONE INSURANCE SOLUTION
One Underwriting recently launched its remotely piloted aircraft (drone) insurance package. The package provides cover for hull, payload (including cameras, gimbals and associated equipment), transit and legal liability. Alison Smith, director of One Underwriting, spoke to Insurance Business about the offering in December and said that, despite the fact that some smaller operators using drones tended to go direct to an insurer, she believed brokers would have a major part to play in advising clients as to the nature and extent of their exposures.
IOMA LAUNCHES NEW SCHEME FOR JOURNALISTS
ZURICH SETS SIGHTS ON TRAVEL
It was announced in December that Zurich Insurance Group would acquire Cover-More Group in a transaction estimated to be worth $741m, as part of the insurer’s efforts to become a top three global travel insurance provider. Jack Howell, Zurich’s CEO for Asia-Pacific, said the proposed acquisition was “an excellent fit” with the insurer’s strategy for its retail business and should create significant value for Zurich. “It will further strengthen our position and expertise in the global travel insurance market and support our ambition to expand our distribution partnerships,” he said.
Specialist insurer IOMA has partnered with the International Federation of Journalists (IFJ) to create a new insurance scheme for media workers. ‘Insurance for Journalists’ will offer cover to members of IFJ affiliates working on assignments in any region of the world, including war zones and hostile areas. Each policy includes cover for accidental death and disablement, medical expenses from accident and sickness, and medical evacuation and repatriation from any place to the policyholder’s country of residence. All policies are provided by IOMA and Lloyd’s of London. According to the IFJ, at least 2,297 journalists and media staff were killed between 1990 and 2015.
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XL CATLIN REACTS TO RISING TERROR THREAT
In December, XL Catlin announced the launch of its Active Assailant, Loss of Attraction and Threat (ALT) solution, created to respond to the impact of terrorism or an active assailant attack or the threat of an attack on the operations of businesses and public service providers. XL Catlin says the product will be underwritten in Singapore, the UK and the US, and will be available in Australia. It includes access to specialist risk and business intelligence consultancy S-RM. That firm, with whom XL Catlin has recently extended its partnership, will assist policyholders in evaluating and mitigating their risks. According to XL Catlin, the ALT product offers capacity of up to US$35m (A$46.22m) for active assailant, as well as up to US$25m (A$33.02m), for loss of attraction or threat.
SUNCORP OPENS STORE IN SYDNEY
Suncorp has opened its first financial services concept store in the Sydney suburb of Parramatta. It says it’s the first step in “delivering Suncorp’s marketplace” and brings together many products and services from across Suncorp’s brands in “a unique retail environment”. CEO and managing director Michael Cameron described the store as taking customers “on a new retail journey”. “The store showcases our leading digital capabilities and products, as well as those from other companies, allowing us to deliver in-store experiences tailored to our customers’ specific needs,” he said.
NEW SUNCORP PLATFORM FOR SMALL BUSINESSES
Suncorp has created an online platform, Suncorp Start Company, for aspiring entrepreneurs, connecting customers to resources such as legal and accountancy documents and business name registration forms. “Our research tells us that small businesses want to spend more time on building their business, not completing paperwork – early access to the right tools and information can set them up for faster success,” said Gary Dransfield, Suncorp’s customer platforms CEO. “We consolidated solutions from our partner companies and insights from customer feedback to develop a product which … helps to meet their needs.”
General manager, government services, workers’ compensation division
Zurich Financial Services
Allied World Assurance
Vice president, professional liability, Australia
General manager, Australia and New Zealand (previously general manager of Australia)
Helen Nugent AO
Insurance Council of Australia
Insurance Council of Australia
CEO, Australian and New Zealand operations
CEO, strategic innovation
Talbot Underwriting Australia
Gow Gates Group
Willis Towers Watson
Division leader, South Asia and emerging markets, insurance consulting and technology
Zurich Financial Services
Head of customer, claims
QBE NAMES NEW LOCAL CEO
Pat Regan will become CEO of QBE’s Australian and New Zealand operations full-time, effective 1 March. Regan has acted in the role on an interim basis since last August, following Tim Plant’s departure, in addition to fulfilling his existing responsibilities as group chief financial officer. In a statement, group CEO John Neal said Regan’s “broad experience and fresh perspective have proved invaluable in recent months” and that this appointment “will ensure QBE remains at the forefront of insurance and innovation in Australia and New Zealand”.
SUNCORP RECRUITS MICROSOFT CHIEF
Pip Marlow, managing director of Microsoft Australia, will join Suncorp in March in the newly created role of CEO, strategic innovation. Marlow will have responsibility for Suncorp’s strategic role in market disruption, and identifying, establishing and cultivating new external marketplace partners to meet customer needs. She was with Microsoft for more than 20 years and has been managing director since 2011. “Pip is a highly recognised leader in her field,” said Michael Cameron, Suncorp’s CEO and managing director. “Her strong leadership will be pivotal to the success of our marketplace, our third party relationships and the delivery of our customer strategy.”
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INSURER UPDATE NEWS BRIEFS Insurers recognised for gender diversity efforts
Allianz and Suncorp were among 106 Australian businesses named in December as recipients of employer of choice for gender equality citations, awarded by the Workplace Gender Equality Agency (WGEA). Ed Cooley, Suncorp Group’s executive general manager of talent and planning, told Insurance Business that when it comes to striving for greater gender diversity in the workplace, promotion of change must start at the top. “It is not about social justice or … the right thing to do,” Cooley said. “Businesses that take this seriously outperform businesses that don’t.”
Harmer explains IAG strategy to investors
Peter Harmer, managing director and CEO, outlined IAG’s threeto-five-year strategy to drive customer and business benefits at an investor briefing in December. The strategy includes measures aimed at enhancing customer experience through better understanding and segmentation, higher growth in specific Asian markets, and a program to simplify its operating model that, the insurer says, will reduce its gross operating costs by an annual run rate of approximately $250m pretax by the end of FY 19. Additionally, IAG reaffirmed its guidance for the financial year ending 30 June 2017.
New Suncorp function aims to improve client experiences
Suncorp has appointed a Customer Advocate with a view to driving better outcomes and experiences for its customers. Mark Reinke, chief customer experience officer, said the new function would work across the business to identify and deliver opportunities to
provide better services to customers. Suncorp says the function will be led by executive general manager customer experience and group customer advocate Debra Tagg. Tagg is said to have played an integral role in designing new and improved customer experiences and leading customer strategy and insights since joining the insurance giant in 2010.
BHSI arrives in Malaysia
Berkshire Hathaway Speciality Insurance (BHSI) has received its licence to provide non-life reinsurance in Malaysia and has established a Kuala Lumpur office. “After putting down roots in Singapore, Hong Kong and Macau, we are pleased to further expand our operations in Asia and bring facultative reinsurance capacity and new products with the backing of our strong balance sheet to selected Malaysian insurance partners,” said Marc Breuil, BHSI’s president for Asia. “With the opening of our Malaysian office, we continue to deepen our underwriting and claims capabilities in the region.”
Japanese insurer replacing humans with AI
Fukoku Mutual Life Insurance Company will reduce one department’s staff numbers by nearly 30% after installing an artificial intelligence (AI) system, Japan’s The Mainichi has reported. The system, based on IBM technology, will read medical certificates and other documents to obtain information required to make payouts, including medical histories and hospital stay lengths. According to The Mainichi, the system can also check customers’ cases against their insurance contracts to identify special coverage clauses. Installation of the system will cost the firm approximately ¥200m ($2.34m).
ROUNDTABLE SAYS GOVERNMENT RESPONSE IS ‘DISAPPOINTING’ CEO of major insurer calls on government to accede to calls for greater disaster mitigation spending The Australian Business Roundtable for Disaster Resilience & Safer Communities has urged the Turnbull Government to reconsider its decision to delay increased funding for disaster mitigation measures. The government provided a response in late December to the report of the Productivity Commission Inquiry into Natural Disaster Funding Arrangements. That report, released in May 2015, recommended that $200m a year be spent on disaster resilience and mitigation measures. At the moment, only 3% of disaster funding is spent on mitigation. In its response, the government said it would reduce the complexity of post-disaster funding arrangements, reducing red tape and rebuilding better, more resilient infrastructure. According to the Roundtable, natural disasters cost Australia more than $9bn in 2015, taking into account social impacts. It said that that number is expected to double by 2030 and rise to an average of $33bn annually by 2050. In a statement released in January, IAG CEO and managing director Peter Harmer, speaking on behalf of the Roundtable, acknowledged that the government had made “some progress”, but described the overall result as “disappointing”, in light of statements by the Productivity Commission and ministers. “We have heard from policy makers, ministers and even the Prime Minister himself,
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that we have the funding mix wrong – we spend too much money after disasters hit and impact Australian lives,” he said. The Roundtable said the “overwhelming evidence” of the economic and social impact savings that can be achieved through upfront mitigation funding was being ignored. It also said in its statement that “carefully targeted investment in preventative infrastructure” of $250m per year would result in a 50%
“We spend too much money after disasters hit and impact Australian lives” reduction of recovery costs, amounting to economic savings of $12.2bn by 2050. “Too often the community impact from a natural disaster is too great,” said Harmer. “Why don’t we dig a little deeper today to save life, property and money tomorrow and help prevent these unsustainable costs from occurring in the first place?” Australian Red Cross CEO Judy Slatyer also voiced her concerns about the Roundtable’s statement, highlighting the long-term social impacts of disasters. “More than one in every 10 people exposed to natural disasters are reported to develop psychological distress. This can lead to all sorts of social issues, adding more than 50% to the economic cost of natural disasters,” Slatyer said. “Preparing people to cope with emergencies in advance significantly reduces these problems.” The Roundtable argues funding decisions should aim to create strong partnerships between government, the private sector and community organisations.
Willem Van Wyk CEO ALLIANZ GLOBAL CORPORATE & SPECIALTY (AGCS) PACIFIC
Fast facts The sixth annual Allianz Risk Barometer identifies the top corporate perils and potential solutions for 2017. The results are based on responses from over 1,200 risk experts in more than 50 countries
Top Business Risks 2017 What were the key takeaways from the list of Top 10 business risks for Australia in Allianz’s Risk Barometer 2017? The top 10 risks reflect a shift towards digital business models. Companies are concerned about market volatility (#2) caused by increasing automation, digitalisation and interconnectivity, and intense competition from non-traditional and agile starts-ups. Cyber incidents (#3), including cyber-crime, data breaches and IT failures, have also risen in the last 12 months. Increased regulation and changes in legislation (#4) have seen the greatest jump in ranking over the last 12 months. All eyes are on changes to the Privacy Act to introduce mandatory breach reporting, which will heavily impact those exposed to potential data breaches. However, what continues to trouble Australian businesses the most are losses arising from Business Interruption (BI) and Supply Chain Risks, which has taken the top spot in Australia and remains the number one concern globally for the fifth year in succession. While natural catastrophes and fires are the business interruption causes feared most, there is an emerging risk shifting increasingly towards non-damage events such as cyber incidents or the indirect impact of an act of terrorism or political instability.
To what can the upward movement of ‘new technologies’ within the top 10 be attributed? There is no doubt the Australian and global economies are facing much greater challenges due to the rapid progress in technology and the shift from physical asset protection to intangible risks. This movement in new technology means that insurers also have to evolve. New technology (e.g. 3D printing and drones), emerging technology (artificial intelligence, driverless cars) and tech-related business models (e.g. Uber, Airbnb and other share-economy models leveraging greater inter-connectivity) expose both businesses and consumers to a completely new and sometimes uncharted territory of exposures and risks. While businesses are bracing themselves for a period of uncertainty, we are committed to working with them to re-think their current monitoring and risk management tools, with expert support and greater consideration given to more fluid, data-driven and intangible risks.
What does the report indicate regarding opportunities available for coverage of new and emerging risks? The Australian cyber market has doubled year-on-year and is now estimated at over $25m. Needless to say, cyber protection remains the most relevant emerging product in Australia. In less than three years, cyber protection has gone from being an ‘education piece’ to a standard topic in risk management discussions between insurers, brokers and clients.
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UNDERWRITING AGENCIES UPDATE
SWISS RE’S COMMERCIAL FOCUS Global insurance and reinsurance giant’s report fixes gaze on local commercial insurance space
reflects our strict liability regime. In 2015, liability premiums totalled $5.4bn or 33.6% of total commercial insurance premiums. Looking ahead, Swiss Re says the rising exposure of Australian companies to liability risks in overseas markets will correspond in a rise in demand for global liability coverage. Fred Kleiterp, CEO Asia Pacific, Swiss Re Corporate Solution, cites an Austrade analysis, which says one-third of Australia’s top 2000 companies have direct investment overseas, and that companies that had invested overseas held investments in, on average, 4.5 markets.
“Firms are likely to demand more global liability cover in the coming years”
While Australian corporations’ spending on commercial insurance is in line with several of their advanced-country peers, they’re underinsured when compared to companies in the UK and US. That’s among the findings of Swiss Re’s Australian commercial insurance market report, released late last year. That report examined key risks for Australian companies, factoring in the nation’s shifting economic structure, and the drivers of demand for the local commercial insurance market. According
to Swiss Re, commercial insurance penetration in Australia was 0.97% in 2015, whereas the UK figure was 2.4% and the US 1.6%. In 2015, direct premiums written in Australia for commercial insurance are said to have totalled around US$12.1bn (A$15.96bn), making us the world’s ninth-largest commercial insurance market and amounting to 45.1% of the nation’s total non-life insurance premiums. Liability insurance was the country’s largest line of commercial business which, the insurance giant says,
New board directors for UAC
The Underwriting Agencies Council (UAC) elected five new directors at its AGM in December. Directors Heath Amber (Millennium Underwriting Agencies), Emily Walker (Axis Underwriting) and Linda King (Sterling Insurance) were returned at the AGM. Simon Lightbody (Steadfast Underwriting Agencies) and Rhys Mills (Solution Underwriting) were elected as new directors. UAC chair Lyndon Turner told members, “UAC’s mandate is to be THE resource for our members and to enable our members to be THE resource for brokers.”
“As more Australian firms operate globally and investment in overseas markets rises, expectedly liability risk exposure in foreign markets will also increase,” Kleiterp tells Insurance Business. “This growing overseas exposure means firms are likely to demand more global liability cover in the coming years.” Further, Kleiterp says heightened awareness of potential damage to reputation and business interruption will be likely catalysts for a greater demand for liability and cyber risk insurance. And while expecting commercial insurance premiums in Australia would decline by 2.3% in 2016, the report forecasts growth this year of 1.1%, owing to strengthening economic performance.
UAC names QBE as strategic partner
UAC announced QBE as its newest strategic underwriting partner late last year. Last July, the council announced it was seeking expressions of interest and formal applications to replace Vero. Lyndon Turner said UAC was pleased to welcome QBE on board. “From initial meetings they were keen to support the initiatives and assist in our strategic plan to continue to support our members’ wants and needs,” he said. “We look forward to working closely with QBE to meet their desires through this new partnership.”
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Insuring start-ups Declan Rye Director LONDON AUSTRALIA UNDERWRITING (LAUW)
Fast facts Declan Rye and Steve Walker established LAUW in 2005. Rye has over 25 years’ experience in both broking and underwriting financial lines business, including a decade in the London market.
Generally speaking, how well do tech startups appreciate their insurable exposures? Many tech start-ups are cash poor and this can influence the level of insurance coverage purchased, regardless of how they perceive their insurable exposures. There can also be the misguided perception that a start-up has a smaller exposure footprint; however, in the tech world, many causes of loss are instant rather than gradual. In the fintech space generally, individuals from a financial background will appreciate the need for PI and D&O insurance, but individuals with no financial background may not unless certain cover is required, such as for regulatory authorisation. Crime and cyber exposures can be underestimated, but cyberattacks and cybercrime continue to become more common.
How significant are the kinds of risks to which start-ups are exposed? Claims from customers and regulatory investigations/ fines against the company can leave start-ups exposed to reputational damage and financial trouble. Cyberattacks and cybercrime [are] becoming more prevalent, especially for financial technology companies.
Would you single out any especially underappreciated exposures that tech start-ups face or fundamental mistakes they commonly make when it comes to seeking protection? In some cases management are understandably
NTI raising truck ﬁre awareness
NTI has been working with transport operators to raise awareness of the increased risk of truck fires. CEO Tony Clark said NTI had observed an increased number of fire claims, including engine fires, tyre or brake fires and electrical fires. He said many of these fires could have been prevented through better maintenance and inspections. “NTI encourages all truck owners and operators to spread the word of truck fire risks with their peers, and to make safety the number one priority for themselves and their businesses,” Clark said.
so focused on the product delivery itself that other issues can become less of a priority, such as the legal drafting of tight engagement terms and conditions which ultimately could limit future liabilities and protect their position. The buying of insurance can also become a secondary priority, so they should ensure they fully understand where their exposures lie by speaking to an experienced insurance professional. Having the right cover and levels of cover are essential to protecting the company balance sheet and the individuals themselves.
Where should brokers be beginning in their conversations with tech start-up clients in their efforts to understand their specific coverage needs? [By] getting a full understanding of the business, the products they are selling, their customers, regulatory environment, etc. [By] specifically obtain[ing] an understanding of the typical impact a product failure could have on the insured’s client, and any possible consequential loss. If the end product is platform based, such as a fintech, the broker needs to get hands-on with the platform itself to obtain a true understanding of the potential risks. Also specific to the fintech space, the broker must have a full understanding of any minimum insurance requirements to meet any ASIC regulatory guides.
Ensurance reveals European expansion
Ensurance will launch a significant operation in Europe. The owner of SHC Insurance Brokers, Ensurance Underwriting and Ensurance IT Solutions, it has set up its UK operations with an MGA, which will initially specialise in construction and engineering. Tim James joins the UK operations as CEO and will lead a team of 12 that will look to build up business in Europe and the UK. The new UK business will initially deal directly on a wholesale basis with insurance brokers in Europe and the UK.
Firm makes alarming cyber prediction
Australia faces the threat of over 10 million cyberattacks a year, says Deloitte. It said cyberattacks, particularly Distributed Denial of Service (DDoS) attacks, will get harder to mitigate and more frequent. Stuart Scotis, Deloitte Consulting and TMT partner, noted that it once needed a skilled programmer to launch a DDoS attack. “However, in 2017, ‘how to’ instructions and source code are online, helping increase attacks. Plus, rising uplink speeds increase speed and impact of attacks.”
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THE BIG INTERVIEW
CUSTOMER CENTRAL Gary Dransfield, Suncorp’s CEO customer platforms, talks about partnering with insurtech start-ups and working to create the Suncorp marketplace
LAST FEBRUARY, group CEO Michael Cameron announced the ‘One Suncorp’ business model. Key to that model is a sharpened customer focus; the banking and insurance giant has set out to create a unique financial services marketplace, in which those customers have multiple needs met by products across the group and their loyalty to Suncorp is accordingly strengthened. Gary Dransfield heads the team tasked with improving customer access to Suncorp’s products via the creation of new, interactive platforms. He tells Insurance Business how Suncorp has gone about working to seat the customer firmly at the centre of its business. “We had to reorganise ourselves … away from end-to-end businesses to a more customer-centric operating model and structure … with a team focused on customer experience, with a team focused on customer engagement platforms, but right across all of our lines of business, not siloed by line of business … And reorienting our processes and our systems to focus on the full breadth of a customer’s relationship with us,” he explains. “It then becomes much more about how what we measure is about the end-to-end customer experience of the organisation and how that drives us to design … processes that better meet customers’ needs … and, hopefully, dispose customers to want to stay with us longer.” Dransfield emphasises that the expectations insurance customers now have of their digital interactions with insurers are the result of interactions they have had in the digital space with other sectors. “That very much creates the frame of reference for how consumers, whether they be business customers or individual customers,
want to interact with any organisation,” he says. “So, we start from that perspective, trying to deliver customer experiences digitally that align – in terms of the user experience design, the interfaces and the intuitiveness of the journey – with the way consumers typically would see digital interactions in other industries.” On the claims front, Dransfield talks about the importance of increasing the visibility of the process. “We want to find ways to improve claims decision-making, speed it up, get an answer for a customer and get them through the supply chain for repair or reinstatement as quickly as possible. Digital and technology help to facilitate that, but still, where there are human experiences, we need to enable that kind of service interaction through the human experiences as well. And it’s equally applicable for businesses or consumers.”
“There are those players in insurtech and fintech who want to … go and upend traditional business models, and they do that usually by finding a way to solve customer problems better and quicker and at lower cost. We’ve got to be very aware, as have all industries, of the risk of organisations just coming along and disrupting our business model,” he says. “But then there are those insurtech and fintech players that are creating their model to help existing traditional business models work better for customers … In our case, we know there is an inevitability to digital business processes and business models creating disruption, so we want to participate in that, plus run our traditional business as well as we can so we’re not as prone to being disrupted.” Last April, Suncorp announced a US$5m equity stake in San Francisco-based technology
“We want to find ways to improve claims decision-making, speed it up, get an answer for a customer and get them through the supply chain for repair or reinstatement as quickly as possible” The disruptors? Preparing for future success in insurance requires clear cognisance of the work occurring in the ever-growing, multi-billion dollar global insurtech industry. Dransfield stresses that it’s important to consider insurtech businesses in two distinct categories – those that threaten and those that enable.
developer Trōv. The insurer and the start-up partnered to launch Trōv Protection, offering on-demand insurance to customers for individual items, all organised from their mobile phone. Suncorp was the first insurer globally to work with Trōv. More recently, multinational insurer AXA has announced a partnership with Trōv to
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THE BIG INTERVIEW provide single-item insurance in the UK. Dransfield talks about the significance of the Trōv partnership for Suncorp. “We very much went into it to partner with an organisation that thinks differently about the customer experience in insurance because, of course, we can think about the customer experience in the way we would typically think as an insurer, but Trōv’s not an insurer. They’re a customer experience company, they’re a data company, and that’s how they’ll disrupt the traditional insurance business models – by thinking from a pure customer experience point of view and enabling a better customer experience with access to data. “That was very much the inception of the relationship with Trōv – how do you work with somebody who’s going to help, almost infect the DNA of Suncorp, to think differently about the customer experience and how we enable it and then, secondly, use that different thinking to innovate our own business model?” On potential further insurtech partnerships, Dransfield says, “We want to go out and find partners in that wider innovation ecosystem globally to work with, to help us understand how we need to innovate and to undertake with us some of that innovation.” Increasingly though, he says, Suncorp won’t just apply that approach to its insurance business. “We want to apply that to how we think about financial well-being for our customers beyond the various classes of insurance, to the way in which customer interactions more generally are done, particularly in a marketplace model, where we want to be able to introduce to our nearly nine million customers a whole range of solutions that will improve their financial well-being.”
Open for business Dransfield describes Suncorp’s first concept store, recently opened in Sydney’s Parramatta, as the first physical manifestation of its marketplace approach. “What we wanted to do was take the opportunity to trial making the broader range of brands that sit within the group available to
“We want to go out and find partners in that wider innovation ecosystem globally to work with, to help us understand how we need to innovate and to undertake with us some of that innovation” our customers and visible,” he says. “So we have AAMI, GIO, APIA visible in that location, as well as the Suncorp brand, but also [we wanted to] move beyond banking and a limited amount of insurance to enable our customers to see the broad range of what we can do. The word ‘concept’ is very deliberately chosen because it is a ‘test and learn’ environment. We don’t assume that we’ve got it perfectly right on day one, in terms of the way that we make our brands more visible to our customers, and the way in which we bring more of our products and solutions to bear than just pure banking in a physical store environment.” Dransfield says the concept store is very deliberately retail-oriented. “It doesn’t look like a typical bank branch, and we’ve skilled the people in the store to be able to work across a number of brands and a number of products and solutions and, with partners, we’re delivering digital customer journeys in there.” While Suncorp is undertaking significant
work targeting consumers directly, Dransfield says the business also wants to expose more of the organisation to its broker partners to then help them to grow their businesses. “One dimension of that is opening up our application programming interfaces (APIs) to partners to be able to connect their systems into. Increasingly, for the whole business, we think about everyday tools that we can make available to both consumers and to our business customers and our broker partners. A good example of that’s a risk assessment tool that we’ve been able to open up and expose to brokers.” Dransfield foresees a future for insurance which, in addition to customers’ service expectations being driven by experiences across industries, will see much greater symmetry in information between customers and insurers. “We see that as an opportunity to really enhance the customer experience of insurance and to make it much more frictionless than it’s historically been.”
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2017 HOT LIST
Who are the influencers, innovators and game-changers in general insurance in Australia? Insurance Business profiles the individuals leading the way
WELCOME TO the fourth annual Insurance Business Hot List. At a time when the industry is grappling with how to survive in a market more competitive than ever before, leaders in the sector have a sizeable challenge on their hands – to drive innovation that equips insurance effectively for the world of tomorrow. On the pages that follow, you’ll find profiles of 40 individuals who will likely play a role in successfully leading the industry through its next phase. Some are the high-profile leaders of our biggest players,
while others are less established names for whom disruption is the name of the game. Every year, it’s a tough task deciding on the names that belong on this list, and you may disagree with some of the decisions made. Of course, we’d never claim that this is a definitive list of the industry’s most important leaders. Rather, it’s a spotlight on some of those whose current work, from our perspective, warrants our attention. Feel free to comment at www.insurancebusinessonline.com.au.
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HOT LIST 2017
ALLAN MANNING Managing director LMI GROUP
Over the last 45 years, Allan Manning has amassed both a tonne of academic qualifications and abundant professional experience. He remains committed to assisting consumers in heightening their understanding of insurance. Last year, his LMI Group launched an education
ANDREW BOAL Head of Australasia WILLIS TOWERS WATSON
Last September, Willis Towers Watson announced the appointment of Andrew Boal as regional head of Australasia, replacing Tony Barber. Boal had most recently served as head of large accounts for Australasia and general
channel on YouTube, which has so far published almost 40 videos explaining, in clear terms, a vast range of insurance concepts from selecting an indemnity period, to the utmost duty of good faith, to correct calculation of the sum insured (the videos are presented by Dr Manning’s son, Steven, one of Insurance Business’ 2016 Young Guns). Manning, a highly experienced university lecturer and author entered LMI Group into a partnership in 2016 with the Queensland-based Financial Services School, a move aimed at enhancing the quality of educational offerings available to Australian insurance professionals. More recently, he’s assisted young professionals in their own industry inductions by creating a ‘History of insurance’ resource on the website of the Young Insurance Professionals (YIPs) Australia and New Zealand. You can keep up with Manning’s extensive thought leadership on insurance and risk management at his regularly updated blog (www.allanmanning.com).
manager of corporate risk and broking for Victoria for the merged organisation, and was previously managing director of Towers Watson in Australia for 12 years, during which time he was part of its Asia Pacific leadership team and global marketing leadership team. In a statement announcing the appointment, Adam Garrard, head of the company’s international business, described Boal as well respected for his “strong leadership, client relationships and for his ability to develop strategic solutions for clients”. Garrard also said Boal brings to the role a “strong knowledge of the company’s corporate risk and broking operations”. Boal said at the time the business sees “a lot of untapped potential in Australasia”, and that he believes it’s “extremely well placed” for success in Australia and New Zealand. Insurance Business looks forward to watching Willis Towers Watson’s development under Boal’s leadership.
ANDREW GODDEN Chief executive, Australia ARTHUR J GALLAGHER
Arthur J Gallagher is one of the world’s largest insurance broking and risk management companies, with operations in 33 countries. Its operations in Australia began in 1985, and today AJG employs over 2,500 staff in Australia and New Zealand. When speaking to Insurance Business late in 2015, local chief Andrew Godden said it was fair to say the firm in Australia was only just getting started. AJG is a business that appears well attuned to the rapidly changing environment in which it operates, and the importance of brokers coupling expert advice and knowledge with new technologies utilised as enablers. Its key pillars mean its employees work aggressively for organic growth and to convince top businesses to join AJG through mergers and acquisitions (recent M&A transactions in Australia have included the acquisition of OAMPS Insurance Brokers, Blue Broking and Blue Insolvency, Parmia Insurance and Instrat Insurance Brokers). Watch Godden and his local AJG team as they work to further build this world-renowned broking business in Australia this year and beyond.
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2017 HOT LIST
ANGIE ZISSIS Managing director SURA
Last March, Craig Patterson became SURA’s executive chairman and Angie Zissis became managing director of the AUB-owned specialist underwriting agency group. Prior to that time, Zissis was the NSW state manager at ATC Insurance Solutions. His more than 25 years of industry experience includes a tenure as the chief operating officer at Aon Australia, as well as finance director at Marsh. The AUB Group remains focused on execution of its strategy to diversify its income generation. The group’s managing director and CEO, Mark Searles, told Insurance Business in October 2016 that 15% of the group’s income now comes from its underwriting agencies. Its strategy in the underwriting agency space is to build specialist businesses that become the top three players, if not the market leaders, in chosen segments (Longitude Insurance is today one of SURA’s high-profile agencies). How will the SURA agencies continue to grow in 2017 under the leadership of Zissis? How significant an income source for the AUB Group will its agencies become in times ahead?
ANDREW SHEPHERD Australasian president YOUNG INSURANCE PROFESSIONALS (YIPS)
ANDREW CASE Managing director TALBOT UNDERWRITING AUSTRALIA
Andrew Case was appointed managing director of Talbot Underwriting Australia in November. He brings to the role more than 30 years of industry experience,
Last year, Young Insurance Professionals (YIPs) Australia and New Zealand turned five. It was also the year in which co-founder Sampath Soysa stepped down from the role of Australasian president. Melbournebased broker Andrew Shepherd has taken his place. Shepherd worked in the banking industry in the UK for five years before entering the insurance industry in 2010 as part of OAMPS’ personal lines team. At the time of his taking over from Soysa, he told Insurance Business of his aims to attract school leavers and graduates to insurance, to work with ANZIIF and NIBA to further the interests of YIPs’ members, and to continue running educational events, which have become an important component of YIPs’ offerings to its members. With over 6,700 members in Australia and New Zealand, YIPs continues on an upward trajectory. Keep an eye on the continuation of the organisation’s good news story under Shepherd’s leadership, and how YIPs impacts on the industry’s ability to attract and retain young talent.
including over a decade spent as head of country for Catlin Australia. Recently, he was also a member of the XL Catlin regional Asia-Pacific board, where he had joint responsibility for the overall management of subsidiaries in Dubai, India, China, Malaysia and Singapore. A statement announcing Case’s appointment said that Talbot, which commenced local underwriting operations in April 2015, is “committed to serving the Australian market and will continue to build out its capabilities in the region”. The statement also said that Case will further drive Talbot’s plans to expand its business lines in property, crisis management, financial lines and specialty. The impressive depth of industry knowledge and experience that Case brings to Talbot will be valuable in his new leadership role, as he and his team work to heighten the presence of the business in the Australian marketplace.
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HOT LIST 2017
DAME INGA BEALE CEO LLOYD’S
It’s difficult to conceive of any list of movers and shakers of general insurance omitting Inga Beale who, this year, celebrates 35 years in insurance. She was recently made a dame in the Queen’s 2017 New Year Honours List for services to the economy. Last November, she visited Australia and New Zealand for the first time since becoming Lloyd’s CEO, speaking about the crucial need for cyber insurance in Australia before sharing a host of insights in a speech at the Insurance Council of New Zealand’s annual conference. In her fourth year at Lloyd’s, Beale remains firmly focused
on modernising the three centuries-old specialty insurance market. Recently, she announced several structural changes that, she says, will make it easier for Lloyd’s to play the role the market expects, “namely protect, promote and provide the services they need”. Key changes announced took effect on 1 January. Beale is a major advocate of the robust results that diversity of thought and experience can bring to a business, and has been instrumental in launching a number of initiatives at Lloyd’s including Pride@Lloyd’s, an internal LGBT employee resource group, as well as the Dive In Festival, which promotes the importance of embracing diversity and inclusion in insurance. Dive In last year included 45 events in 16 cities around the world. Expect its reach to expand again in 2017.
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2017 HOT LIST BEN BESSELL Chief executive, Australian business division INSURANCE AUSTRALIA GROUP (IAG)
In Brisbane last April, Ben Bessell delivered one of the stand-out presentations at the annual Steadfast Convention, examining the societal impact of the sharing economy and the importance of an appropriate response from the insurance industry. On several occasions, he’s advocated to Insurance Business the need for insurers and brokers to ensure their ongoing relevance to customers, and has also talked about IAG’s own focus on how technology can be better utilised, while working to ensure the basics of relationship management and case
General representative in Australia
2016 was a big year for Chris Mackinnon and Lloyd’s in Australia. Mackinnon oversaw the opening of the new co-location hub in Sydney’s CBD in April, a facility that aims to bolster both Lloyd’s profile and physical footprint in Australia. Right now, Lloyd’s is co-located with Argenta, Talbot and Ironshore, but it’s hoped others will join as tenants in future. As well as providing a meeting place for syndicates, coverholders, brokers and insurance buyers, the co-location hub is a venue Lloyd’s will use to house educational sessions and present the findings of its research reports. Mackinnon also led the launch of Dive In in Australia – Lloyd’s festival for diversity and inclusion. He told Insurance Business the event was a “huge success” and, ongoing, he’ll be working with a group with a view to putting in place strategies and plans aimed at increasing D&I in the industry. Keep an eye on the D&I initiatives driven by Mackinnon, and the impact they have across the Australian general insurance space.
underwriting aren’t forgotten. Bessell has led CGU during a time when it’s received significant industry recognition, the insurer having won Insurance Business’ Insurer of the Year Award in both 2015 and 16, as well as NIBA’s General Insurer of the Year Award in both years. CGU also scored a win with the general public when it threw a lifeline to the annual Tropfest Film Festival last December, allowing it to continue in 2016. Next year, Tropfest will live to celebrate its 25th birthday, thanks in significant part to CGU’s three-year sponsorship, announced in July. It’s a highly visible example of insurance making a difference in the Australian community.
David Porteous is director of the marketleading Sydney-based Brooklyn – winner of ‘Underwriting Agency of the Year’ at the Australian Insurance Industry Awards for four years in a row (between 2012 and 2015). In September, it was announced that global insurer XL Catlin had reached an agreement with Brooklyn’s beneficial owner, Paul Hines, to purchase the business. What will the acquisition mean for Brooklyn in 2017, particularly in terms of the product range it will now be able to offer to brokers and insureds? As well as the possibilities arising from the XL Catlin transaction, Porteous and his team will be worth keeping an eye on because of their ongoing efforts to facilitate further opportunities for broker education. Last July, the agency’s Brooklyn University introduced three new subjects: claims handling, natural catastrophes and an insurance lingo unit. Insurance Business is looking forward to Brooklyn’s continued roll-out of educational initiatives in times to come.
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HOT LIST 2017
CHRIS COLAHAN President, Australasia BERKSHIRE HATHAWAY SPECIALTY INSURANCE
April will mark two years since Berkshire Hathaway Specialty Insurance (BHSI) began underwriting general insurance policies here in Australia. Chris Colahan, who had previously spent a decade in Asia amassing experience in a number of senior leadership roles for RSA, became the man to bring BHSI to our shores. It’s been a busy two years for Colahan and his Australasian leadership team, with BHSI’s geographical footprint across the ANZ region and its product range both continuing to grow. Last year
kicked off with the launch of four new executive and professional lines policies, and later the insurer launched accident and health products locally. That launch was followed by the introduction of its cyber liability insurance offering in the region. Later in the year, BHSI announced an underwriting agreement with Tego Insurance to provide medical indemnity insurance to medical practitioners in Australia and then launched its Professional First Financial Institutions Civil Liability Insurance products in both Australia and New Zealand. It’s certainly reasonable to assume that Colahan and his team have a number of things up their sleeves for brokers and insureds in 2017.
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2017 HOT LIST DONNA WALKER Executive general manager, broker business, Australian business division INSURANCE AUSTRALIA GROUP (IAG)
Donna Walker has spent 18 years with CGU and her career has encompassed three years of lecturing at the University of Melbourne’s Centre for Actuarial Studies. She just became the third woman to be appointed to the ANZIIF Board, an appointment that will see her focus on the promotion of education and learning in insurance, and the ongoing challenge of attracting top talent into the space. Diversity and inclusion continues to be a hot button topic in insurance and an issue about which Walker is passionate. She’s the former chair of IAG’s Diversity and Inclusion Action Group, which aims to diversify the organisation’s workforce and harness the benefits diverse ideas and perspectives can deliver to a business. Insurance Business suggested last year that Walker was precisely the kind of leader the industry should look to for thought leadership on creating truly diverse and inclusive workplaces. It’s
DALE HANSEN CEO AUSTBROKERS COAST TO COAST
It was Gold Coast-based brokerage Austbrokers Coast to Coast that took out Small Brokerage of the Year at the 2016 Australian Insurance Industry Awards. Less
DONALD TRUMP encouraging to see ANZIIF appoint her to their board, affording her an opportunity to share her insights and knowledge with the wider space. than a month later, Dale Hansen was named NIBA’s Broker of the Year. There’s no doubt 2016 was a year of success for Hansen and the brokerage, and he’s extremely excited about times ahead. An industry veteran with over two decades’ experience and passionate about the role of the broker, Hansen is determined to play an active role in promoting awareness in the wider community of the important role of brokers, and precisely what they can achieve. Last year, Hansen told Insurance Business he’s not buying into the “doom and gloom” regarding disruptors, and sees those businesses as providing an opportunity for brokers to reinforce their value proposition. Talking about current times, he said he’s “never been prouder and more excited and enthusiastic to be an insurance broker”. We look forward to following Hansen, particularly the work he undertakes to bring home to the community outside the insurance space the real value that brokers can offer.
President of the United States
While careful strategic planning affords business leaders some clarity as to what lies ahead for their organisations, the impact of macro environmental factors on the insurance space ensures a level of uncertainty always lingers. In 2016, the geopolitical environment contributed to heightening that uncertainty, no single event perhaps more so than Donald Trump’s shock victory in November’s US Presidential Election – a result that may forever change reliance on pollster predictions. Immediately, the future of the Patient Protection and Affordable Care Act (more commonly known as ‘Obamacare’) looks bleak. Whether total repeal or amendment is its fate, the decision will affect millions of US citizens who obtained coverage under President Obama’s legislation. Beyond ‘Obamacare’, the ramifications of a Trump presidency on the global insurance industry are even more uncertain. Will Trump’s be an administration characterised by unpredictability, as many believe, or will it be more a case of ‘business as usual’ at the White House?
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HOT LIST 2017
JOHN NEAL Group CEO QBE INSURANCE GROUP
John Neal is in his fifth year as head of the QBE Group, having been – and continuing to be – responsible for steering the business through some of the industry’s most challenging times. Last August, announcing the global insurer’s interim results, QBE reported a 46% drop in its interim net profit after tax to $265m. It was also announced that QBE’s CFO, Pat Regan, would take over as interim CEO of the company’s Australian and New Zealand operations, replacing Tim Plant who had left the business “effective immediately” (it was announced in December that, effective 1 March 2017, Regan will fill that role on a permanent basis). At the time, Neal noted that it was a challenging environment for all insurers and while the first half result was “solid”, the Australian and New Zealand business demanded a decisive response. “We are responding decisively with price increases, revised terms and conditions and other portfolio adjustments and remain confident that these actions will benefit the claims ratio in 2017,” Neal said. So, what impact will these actions have on QBE’s 2016 full year results, to be announced in February, and further down the line?
JOHN FRENCH Country president, Australia and New Zealand CHUBB
John French has led the local arm of the now-combined entity through the
KELLY O’DWYER Federal Minister for Revenue and Financial Services/ Assistant Treasurer
Following last July’s federal election, returning the Turnbull Government to power, Kelly O’Dwyer retained insurance in her portfolio. In October, O’Dwyer announced a
integration of ACE and Chubb, one of the biggest-ever global insurance transactions. Today, Chubb is the world’s largest publicly traded property and casualty insurer, as well as being the sixth largest general insurer here in Australia. Speaking to Insurance Business last year about the impact of combining the businesses, French talked about Chubb’s significantly increased capacity within its property ISR portfolio, its enhanced capabilities within construction and the fact of its financial lines business having increased “dramatically” in size. French talked about the company’s efforts through investment in data analytics and portfolio management to continue providing clients “the best there is to offer”. We should continue to find out through 2017 what this means for Chubb, its brokers and clients. Additionally, the insurer is doing significant work in the cyber insurance space across the globe, including within the risk management arena. Its progression on this front should be fascinating to watch in this next year and beyond.
taskforce to assess “the suitability of the existing regulatory tools available to the Australian Securities and Investments Commission (ASIC) to perform its functions adequately, whether there is a need to strengthen ASIC’s enforcement toolkit and if so, what that might look like”, according to a media release. The ultimate goal, it said, is to “deter misconduct and foster consumer confidence in the financial system”. This year, upon completion of its review, the taskforce will report to the government on any gaps it identifies in ASIC’s powers and make recommendations as to whether any reforms should be progressed. And speaking of taskforces, there’s still the matter of the government’s response to last year’s final report of the Northern Australia Insurance Premiums Taskforce. Will it commit to the taskforce’s recommendation that mitigation spending is the best way forward?
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2017 HOT LIST LAMBROS LAMBROU CEO, Australia AON RISK SOLUTIONS
Lambros Lambrou is a senior leader in general insurance who can always be relied upon to offer valuable insights into the issues of the day. In recent times, one of the issues he’s spoken about is the need to ‘demystify’ many of the regularly used acronyms and jargon for insurance buyers, as well as the importance of responding to the flourishing sharing economy. In fact, Aon recently announced a three-year corporate partnership with Melbourne-based innovation platform York Butter Factory, as part of its efforts to keep pace with disruptors. It’s a deal that
LYNDON TURNER CEO NM INSURANCE
provides Aon with the ability to bring risk management and brokerage advice to a host of start-up businesses and to stay apprised of developments in the fintech space. Lambrou regularly advocates the importance of investment by the industry in data and analytics as a means of increasing its relevance to clients in a difficult climate (globally, he says, Aon itself is investing around US$350m a year on data to predict and analyse trends). Keep an ear out for valuable thought leadership from Lambrou throughout 2017.
Lyndon Turner is the CEO of NM Insurance and has been in insurance for more than two decades, having undertaken roles spanning the broking, claims, underwriting and management spheres. Since 2011, Turner has been a member of the Underwriting Agencies Council (UAC) Board and was appointed its chairman in December 2015. 2016 was another hectic year for the UAC, the highlights including partnerships formed with the American Association of Managing General Agents (AAMGA) and the UK’s Managing General Agents Association (MGAA). The AAMGA partnership saw Turner and UAC general manager William Legge travel to the US during the year to attend the association’s annual meeting to consider how learnings about its practices could inform UAC activities in Australia, going forward. So, what will UAC learn from its interactions with the AAMGA and MGAA, and what benefits will those partnerships deliver to its member agencies in Australia and New Zealand? Additionally, Turner and UAC continue to execute the Strategic Plan 2020, which includes its Asian expansion plans. What progress will be made with respect to that expansion in 2017?
MICHAEL CAMERON Managing director and group CEO SUNCORP GROUP
Last August, the Suncorp Group announced its first full-year results since Michael Cameron replaced Patrick Snowball as group CEO (that succession occurred on 1 October 2015). Suncorp reported an 8% drop in annual profit for FY2016. General insurance, the group’s largest division, reported a net profit after tax of $624m, down from $756m in FY2015. Also in general insurance, Suncorp reported an ITR of 9.9% which, it said, reflected the increased cost of settling claims and lower investment returns. Cameron said reducing working claims costs was his highest priority and that Suncorp was “continuing to implement a plan to rectify performance across both home and motor working claims”. He also said the completion of an organisational restructure, announced not long after Suncorp’s half-year results, had “positioned the business to deliver on its strategy”. That strategy is about increasing Suncorp’s relevance to clients by striving for ‘connected customers’, whose needs are met by purchases across the range of Suncorp products. It’s a move away from reliance on competing on price. So, will Cameron’s strategy deliver the Suncorp Group the desired result?
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HOT LIST 2017
DALLAS BOOTH CEO NATIONAL INSURANCE BROKERS ASSOCIATION (NIBA)
Dallas Booth and NIBA continue with their efforts to ensure the voice of brokers is heard in their communications with government and regulators. In recent times, a significant win for both Booth and NIBA has been the role they’ve played in having general insurance brokers exempt from new legislation mandating university degrees for financial advisers, which was introduced in Parliament last November by Assistant Treasurer Kelly O’Dwyer. Booth and NIBA will continue their advocacy in 2017 on brokers’ behalf. Late last year, Booth voiced concerns over moves by the NSW Government to phase out broker commissions for home warranty and CTP motor vehicle insurance, seeking to directly raise the concerns with the NSW Minister for Innovation and Better Regulation. Also on the agenda is closely following the Federal Government’s proposed industry funding model for ASIC, which would see ASIC’s regulatory costs recovered through annual levies and fees for service. Additionally, Booth and NIBA will be working to ensure the brokers’ collective voice is represented in its submission to the Senate Economics References Committee’s inquiry into Australia’s general insurance industry. Submissions to the inquiry close on 10 February and the committee is expected to deliver its report by 22 June.
LEO ABBRUZZO General manager, Australia and New Zealand DUAL
Leo Abbruzzo has been in insurance for over three decades. A founding employee of DUAL, he became general manager of Australia in August 2014, an appointment that reflects the substantial contribution he’d made to the development of the company’s Australian operations. It was announced in November that
PETER HARMER Managing director and CEO INSURANCE AUSTRALIA GROUP (IAG)
Peter Harmer remains one of insurance’s most respected and influential leaders in Australia. At IAG’s AGM in October, Harmer discussed IAG’s future development in Asia. He said IAG is keen to build on the “sound
Andrew Beaton was stepping down from the top job at DUAL New Zealand, and Abbruzzo’s role has now expanded to encompass the NZ business. At the time of the announcement, Damien Coates, Asia Pacific CEO, said Abbruzzo’s leadership would allow DUAL to “further leverage the strength and innovation in the SME and mid-market for which DUAL Australasia has become renowned”. DUAL is the largest independent underwriting agency in Australia and, once again in 2016, was a major winner in Insurance Business’ Brokers on Underwriting Agencies survey. Brokers voted DUAL to gold medal victory in the cyber and IT liability, D&O liability, management liability and professional indemnity categories, and singled out its cyber liability and privacy protection product for particular praise. We look forward to seeing what Abbruzzo and his DUAL team delivers in 2017.
businesses and good markets” it has in Malaysia and Thailand, and that the insurer plans to increase its holdings in its joint venture with AmBank in Malaysia (currently, IAG holds a 49% stake in AmGeneral Holdings). IAG’s progression in Asia will certainly be a story to follow in times to come. At an investor briefing in December, Harmer announced IAG’s reaffirmation of its guidance for the 2017 financial year, and discussed the three- to five-year strategy that aims to provide “inspiring customer experiences” and to simplify IAG’s processes and systems. Partnerships with tech start-ups are a focus of the business going forward. Will IAG become a leader in the technological evolution of the insurance industry in Australia? Harmer continues advocating for significant investment by the government in disaster mitigation activities. He told Insurance Business in 2016 that it dismayed him that “four years from the commencement of [IAG’s] work in this area … government is engaged well but we still haven’t got traction”. Will 2017 be the year?
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2017 HOT LIST
MICHAEL GOTTLIEB Managing director BIZCOVER
Michael Gottlieb and his BizCover organisation continue to go from strength to strength. It’s a business with its focus fixed on making insurance easy to access for SMEs. In 2016, the business launched its own white label solution and, according to Gottlieb, over 12,000 new SMEs purchased their insurance policies through BizCover during the year. It also found itself on Deloitte Technology’s Fast 500™ Asia Pacific 2016, boasting 103% revenue growth over three years. Gottlieb is a strong advocate of the importance of brokers properly understanding their clients’ needs, including those instances where forcing advice is pointless because it’s not what the client wants and, in those circumstances, providing an efficient transactional service. Gottlieb says BizCover has developed a best of breed technology platform with “tremendous white label capabilities” which, he says, enables the company to partner with any business, including brokers, to allow them to offer a general insurance solution to their client base. “There are substantial opportunities in this space”, Gottleib has said to Insurance Business. So, just what will we see from Gottlieb and his BizCover team in 2017 – its 10th year of business?
MICHAEL KEENAN Federal Minister for Justice/ Federal Minister Assisting the Prime Minister on Counter-Terrorism
Last October, Justice Minister Michael Keenan introduced the Privacy Amendment (Notifiable Data Breaches) Bill 2016 into the House of Representatives. If enacted, it would impose a mandatory
NIRAN PEIRIS Managing director ALLIANZ AUSTRALIA
Allianz Australia received the Large General Insurance Company of the Year Award at the 2016 Australian Insurance Industry Awards – an accolade that it attributes to its building of a truly customer-centric culture, as well as having a
data breach notification scheme on organisations, agencies and entities regulated by the Privacy Act. Keenan told Parliament, “The bill will improve the privacy protection of Australians in the event of a data breach without placing an unreasonable regulatory burden on business.” He also said that “extensive consultation” had occurred during the development of the bill to ensure that its mandatory data breach notification scheme is “both workable and effective”. The introduction of a mandatory data breach notification scheme has been on the cards for some time, the government having committed to introducing a scheme in its response to the recommendations of the Joint Parliamentary Committee on Intelligence and Security, which were released in February 2015. Many pundits believe the introduction of mandatory notification laws will lead to a significant uptake in cyber insurance locally. Could 2017 therefore be the year of cyber insurance in Australia?
company-wide focus on innovation and investment in its people. Niran Peiris, who’s now been managing director of Allianz Australia for four years, said in September that the insurer’s investment in developing people, processes and systems had improved its employee retention rates and engagement scores, “resulting in an even better service for our three million customers”. Allianz Australia achieved strong results for 2015, reporting an above market GWP growth of 7.9% to a record $4.377bn for the year. Additionally, Allianz is also achieving on the diversity and inclusion front, having recently been again named one of the Workplace Gender Equality Agency’s Employers of Choice for Gender Equality. In late November, Peiris was appointed deputy president of the Insurance Council of Australia, so will play an important role in times ahead in the ICA’s efforts to assist the wider industry in navigating through persisting tough times.
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31/01/2017 11:46:41 AM
HOT LIST 2017
PETER KELL Deputy chairman AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION (ASIC)
Last year, Peter Kell spoke out at the ICA’s Annual Forum highlighting ASIC’s particular focus on the inappropriate sale of ‘add-on’ insurance products – instances of products being distributed to consumers in a manner that resulted in those consumers failing to understand the extent of their coverage, or being provided with coverage they didn’t need. In September, ASIC released a report detailing its review of the sale of add-on
PRUE WILLSFORD CEO AUSTRALIAN AND NEW ZEALAND INSTITUTE OF INSURANCE AND FINANCE (ANZIIF)
Talking to Prue Willsford, what quickly becomes clear is her passion for educating and enhancing the capabilities of those working in the insurance industry. After an agreement with NIBA was signed in November 2015, ANZIIF
general insurance policies through car dealers and said that “the market is failing consumers”. ASIC found that consumers are being sold “expensive, poor-value products”, products that provide consumers with “very little to no benefit”, and that this is occurring in a sales environment of “pressure selling, very high commissions and conflicts of interest”. ASIC said insurers had notified it of their intention to implement specific steps to address the problem, but while it welcomed those initial steps, it said “there is still a long way to go”. Kell said, “If industry does not deliver swift improvements for consumers, ASIC will take further action, including enforcement action where appropriate.” Will there be a “swift improvement” for consumers? And what will be the focus of Kell’s regulatory update at the ICA’s next annual forum in March?
became the industry’s chief education supplier. Willsford told Insurance Business late in 2016 about the impressive feedback ANZIIF has received on its new Skills Unit content, rolled out from last March. Some of that feedback has even come from those who admitted to having been highly sceptical of the institute’s new content. Late last year, Willsford and Franck Baron, chairman of the Pan-Asia Risk and Insurance Management Association (PARIMA), signed an agreement to provide risk professionals across Asia-Pacific with a professional designation and ongoing professional education. At the time, Willsford said it was a “wonderful opportunity … [to] provide risk professionals with world-class education and training”. Willsford has said ANZIIF’s focus in 2017 will be on engaging with the industry to better understand how the institute can partner with businesses to assist in attracting and developing insurance professionals. Also on the cards is the continued buildout of the Skills Units.
RACHAEL LAVARS CEO MACQUARIE PACIFIC FUNDING
When Insurance Business caught up with Macquarie Pacific Funding (MPF) CEO Rachael Lavars last September, she reported that the organisation was coming into the best shape it had ever been. Lavars has been CEO of MPF since January 2015, when she left her role as head of the insurance broking segment of Macquarie Business Banking to take on the recently merged funder’s top job. Her conversation with us came after 18 months spent reshaping the business – a period that involved a full review of the company’s service platform and a focus on ensuring the business was utilising the right people and the right skills. So, what’s ahead for Lavars and MPF in 2017? Not only has her team been working hard on a total rebuild of the funder’s Edge platform for brokers, but Lavars herself is determined to see funding become the number one payment choice for insurance. How significant will the progress be that MPF makes against that objective over the next 12 months, and how much stronger a force will the business become in the funding space during that time?
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2017 HOT LIST RAJBIR NANRA CEO, general insurance, Australia and New Zealand ZURICH FINANCIAL SERVICES
The challenging year that Zurich faced both locally and globally in 2015 is well documented. Rajbir Nanra became CEO of general insurance in Australia and New Zealand, and oversaw a period of significant change for the Australian business in the final quarter of that year. Nanra told Insurance Business late in 2016 about his satisfaction with the progress the business had made since that time. He also described the rebuilding of Zurich’s executive team last year, which included the appointment of Stuart Farquharson as CFO and Hilary Bates as chief claims officer, as a “huge success”. Nanra and his team will remain focused this year on the reengagement of Zurich with the market, particularly brokers. According to Nanra, Zurich will be working to ensure that its broker distribution partners know the insurer is back in the market to support them. In December, it was announced that the insurer had acquired the ASX-listed
ROBERT KELLY Managing director and CEO STEADFAST GROUP
Robert Kelly co-founded Steadfast and has now led the group for two decades, having become one of the most respected and influential leaders in general insurance in Australia and New Zealand. His inclusion on Insurance Business’ Hot List is always a no-brainer.
ROB WHELAN Executive director and CEO INSURANCE COUNCIL OF AUSTRALIA (ICA)
Cover-More Group Ltd – a move to expand its travel insurance business. What else will we see from Zurich in Australia in the months ahead? Celebrating its 20th anniversary this year, Steadfast is the largest general insurance broker network in Australia and New Zealand, with 346 brokers in 1,000 offices. In FY2016, its brokers placed $4.5bn in GWP and its acquisitions of Calliden, CHU and UAA made Steadfast the largest underwriting agency group in the country. Its underlying revenues rose 54% year-on-year to $460m and its net profit after tax (excluding non-trading net gains) was up 44% to $60m. In his address at Steadfast’s AGM in October, Kelly told the room the group was on track to meet its 2017 financial goals. Watching the movements of Steadfast is always fascinating, and it’s clear the year ahead will be no different. As well as continuing to roll out its IT platforms to brokers and agencies, another of the group’s key strategic initiatives is expansion of its footprint in New Zealand and Asia. The Steadfast – and Kelly – success story continues…
Rob Whelan has been CEO of the ICA since 2010. In November, it was announced he had been re-elected to the executive committee of the Global Federation of Insurance Associations (GFIA). The GFIA was founded in 2012 and includes 41 member associations with interests in 60 countries and, according to an ICA spokesperson, it promotes the importance of insurance in the global economy to the G20. The spokesperson also said Whelan’s presence on the committee “ensures the interests of Australian insurers continue to be heard in these key international forums”. At home, Whelan and the ICA continue to be vocal on issues impacting our general insurance industry. Recently, Whelan voiced his concerns over the controversial proposal for a government-run insurance price comparison website, arguing that such sites have the “perverse impact of reducing consumer awareness of product features and selection” by focusing first and foremost on price, which sometimes leads to a lack of appropriate coverage in the event of a claim. Whelan said the fastest way to slash the cost of insurance would be to pressure state and territory governments to abandon stamp duties on insurance policies. Will the government take on Whelan’s advice?
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HOT LIST 2017
MARK SEARLES Managing director and CEO AUB GROUP
Mark Searles is another of the industry’s most respected senior leaders, his contract to lead the AUB Group having last year been extended by a further three years (taking him through to January, 2019). Searles continues to lead the AUB Group’s diversification strategy and was pleased with the traction gained on that front in 2016. Last year, AUB Group’s equity partner Altius Group acquired PeopleSense, an injury management and psychological services business, another outward indicator of the group furthering its
aim to be Australia’s leading risk management group. Searles has told Insurance Business it’s more of the same in 2017, with work to continue executing against that strategic intent. Searles was also one of two senior industry leaders who, at last year’s NIBA Convention in Melbourne, posed the question of whether it was time to move away from the term ‘insurance broker’ and opt for ‘risk consultant’, in order to better describe the value proposition of these professionals for the wider community. “What we should be about is supporting clients, assessing their total risks appropriately and finding solutions for them. This concept of ‘risk advice’ and the ‘risk consultant’ is really key to us moving forward,” Searles told Insurance Business.
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2017 HOT LIST DAVID KEARNEY Chief executive partner WOTTON + KEARNEY (W+K)
Fifteen years ago, David Kearney co-founded W+K, the first Australian law firm solely focused on insurance-related legal services. It’s a practice that has grown to encompass over 120 lawyers across four offices. Kearney is recognised as the only Eminent Practitioner in insurance law in the Chambers Asia Pacific Guide in both 2016 and 2017, and is widely known – in Australia and internationally – as an insurance law specialist. Very recently, Kearney has played
an integral role in launching an innovative business model to serve the global insurance market, collaborating with leading insurance law firms across the globe. In January, W+K joined with German firm BLD Bach Langheid Dallmayr, UK firm DAC Beachcroft and the US’ Wilson Elser to found Legalign Global. Combined, the four firms have 2,000 lawyers in 58 offices throughout the US, Europe, Latin America, Australia, New Zealand and Singapore, and say the Legalign Global alliance has been developed to service clients on a global basis. Key to the Legalign Global model, its member firms say, is the immense intellectual capital related to insurance that combines local insight with international reach, cost efficiencies and innovative claims solutions.
ROBIN JOHNSON Country head, Australia XL CATLIN
It’s coming up to two years since Robin Johnson took control of the merged XL Catlin insurance business in Australia. In November, he told Insurance Business the insurer has exceeded its own expectations in terms of the level of growth it’s achieved in the local business unit since integration. Johnson arrived at XL Catlin in Australia having accumulated immense industry experience in several roles around the world. He and his team see substantial opportunities in the local marketplace and will launch an expanded accident and health business and political risk and trade credit products this year. Additionally, the business has attracted considerable attention as a result of last October’s announcement of the acquisition of Brooklyn Underwriting. How significantly will the transaction assist Johnson and his XL Catlin team in Australia in establishing a stronger presence in the SME space? And, on the technology side, how will the global business’s partnership with UK organisation Oxbotica facilitate an opportunity for the insurer to pioneer in the underwriting of emerging risks?
VIVEK BHATIA CEO and managing director ICARE
icare was established in 2015 as the NSW Government’s insurance and care organisation. A $33bn not-for-profit social insurer, today icare is one of the largest insurance organisations in Australia. Prior to joining the NSW Government, Vivek Bhatia was CEO of Wesfarmers Insurance Australia, tasked with leading the multi-brand insurer (Lumley, WFI, Coles Insurance) through a significant period of transformation. He’s also been co-lead of McKinsey & Company’s Asia Pacific Restructuring and Transformation practice, and has held
several other insurance leadership roles. Before the formation of icare, he was CEO and board member of Safety Return to Work & Support (SRWS), chair of the former Dust Diseases Board and the NSW member on the board of SafeWork Australia. Bhatia has a degree in engineering, holds an MBA in strategy and is a chartered financial analyst. Sharanjit Paddam of Deloitte recently cited icare as one of the companies to watch in the near future. Speaking to Insurance Business, he said, “I think they’re going to have a huge impact on the market [in 2017], in terms of how they’re setting up their business and how they intend to run their business going forward.”
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HOT LIST 2017
Meet the players in insurtech who, in recent times, have set their sights on disrupting the industry status quo DANIEL SCHREIBER CEO and co-founder LEMONADE
Last September saw the launch of what is said to be the world’s first peer-to-peer (P2P) insurance company, Lemonade, providing homeowners and renters insurance in New York State. The company is powered by artificial intelligence and behavioural economics, and Daniel Schreiber told Insurance Business last year that Lemonade was “reinventing insurance from the ground up” and “transforming the very experience
SCOTT WALCHEK CEO and founder TROV
Scott Walchek is a serial entrepreneur with over two decades’ experience building technology companies. In recent times, he set his sights on reinventing insurance for the mobile generation, recognising an appetite for on-demand protection of single items and micro-duration premiums. It was this that led Walchek to
JASON WILBY AND JONATHAN BUCK Founders and joint chief executives HUDDLE MONEY
Australian fintech start-up Huddle Money set its sights on insurance last year. Together, Jason Wilby and Jonathan Buck founded and lead the business. Wilby’s background encompasses financial planning, technology, marketing and design, while Buck has spent the last two decades assisting larger
of insurance, from a necessary evil into a social good”. The company has digitised the entire insurance process, facilitating the organisation of insurance and settling of claims any time and from any device. In December, Lemonade announced its reception in New York had been “remarkable” and that it had filed for a licence in 46 US states and the District of Columbia, hoping to become available to 97% of the US population in 2017. And then, just recently, the company announced it had set a world record for the speed and ease of paying a claim – three seconds and no paperwork! The growth of this innovative start-up might well become one of the most interesting global industry stories of the year.
create Trōv, a San Francisco-based start-up launched last year, which describes itself as “the world’s first on-demand insurance for your things”, allowing individuals to insure only the items they want, when they want and entirely from their phone. Suncorp is the first insurer worldwide to have partnered with Trōv, together launching Trōv Protection, providing on-demand insurance to Australians on mobile devices. Will Trōv’s entry into the marketplace ultimately mark the beginning of an insurance revolution?
organisations to understand how to utilise data and technology. Huddle Money provides car and travel insurance products backed by its underwriting partner, Hollard Insurance, but the service provided is also about increasing consumer education about risk and heightening consumer appreciation of the kinds of insurance protection they require. Huddle Money is still very much in its infancy, and we look forward to watching their progress in 2017.
PERRY ABBOTT CEO and managing director FRIENDSURANCE AUSTRALIA
Perry Abbott is leading Friendsurance’s entrance into the Australian market. He’s worked in executive roles with the Reliance Group, Wesfarmers Insurance, Superpartners and the Computer Sciences Corporation, and serves on CPA Australia’s Centre of Excellence for Retirement Savings. Having been founded in Berlin in 2010, Friendsurance is said to be the first company worldwide to launch genuine peer-to-peer insurance products. It also offers its customers a cash-back bonus in the event they remain claims free. Abbott has been a director of Friendsurance Germany for more than three years and has seen the business grow to have over 100,000 customers. In October, the company announced plans to offer a range of insurance products based on its share economy approach and that it would launch its first product in Australia early this year. Abbott told Insurance Business in November he didn’t have any doubt that the industry in Australia will embrace the concept of peer-to-peer insurance “if customers do better out of it and insurers are doing better out of it”. So, to what extent will this P2P provider make an impact on the local market? And what implications will that have on the future for peer-to-peer insurance in Australia?
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Bobby Lehane, CEO of CHU Underwriting Agencies, talks about working to futureproof the business by leading the digital disruption of strata insurance THE THREAT digital disruption poses to the insurance industry, including strata insurance, is real. Appreciating that reality was the catalyst for CHU’s venture into insurtech - a move it’s effected by launching CHUiSAVER, its own digital underwriting agency. “[CHUiSAVER] enables us to disrupt ourselves well before someone else does,” Lehane says. “To quote Mark Zuckerberg … ‘If we don’t create the thing that kills Facebook, someone else will’.” CHUiSAVER obtained its Australian Financial Services Licence last year and has been open for business since November. It’s delivering strata products to the market both directly and through intermediary channels. Lehane tells Insurance Business about the need CHU sees to take a leading role in disrupting strata insurance. “To stay relevant, we need to understand, to meet, to exceed and, indeed sometimes, to pre-empt the emerging needs of our customers,” he says. “While I believe CHU is among the best at doing so in the strata market, we need to continue to push ourselves, to lead. Setting up a digital arm underlines CHU’s determination to be at the forefront of innovation and stay closely attuned to our customers’ growing expectations.” In deciding to create CHUiSAVER, he says CHU is working to pre-empt digital disruption,
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provide a vehicle for testing and proving new innovations without jeopardising CHU’s core business, and to put in place a toolset to help transform its traditional business.
Back to the start In the planning stages, Lehane says the business looked at several industries to understand how high levels of disruption had impacted incumbent market players. He specifically mentions the taxi and hotel industries, famously disrupted by Uber and Airbnb respectively. “Both of these industries were slow to respond to the consumer-led push to a different way of engaging, including digital. This has enormous and far-reaching impacts on the industries they disrupted,” he says. “We also witnessed a number of players in these industries who adapted to this disruption, evolved their businesses and now thrive in the new digital environment.” But Lehane says CHU also took note of the ways in which companies tried and tested innovations before rollout across their businesses. “One of the organisations that we looked to – and it might sound very strange – was Red Bull … and, particularly, the Red Bull Formula One Team,” he says. “In the rules of Formula One, every team is allowed to run two cars. Red Bull … have four cars going around the track … because they actually have a second team called ‘Toro Rosso’ … In that second team, which has a different engine, different drivers, a completely different car, they try out all of these different innovations, and everything that works in the Toro Rosso, they promote to the Red Bull [team]. And if it doesn’t work in the Toro Rosso, no harm done.” Lehane says CHU will innovate and learn in CHUiSAVER and apply the successes to the premium CHU brand. “The reality is if CHUiSAVER and the products that we sell through CHUiSAVER don’t move the needle in a significant way, that’s okay because that’s not actually the game. It’s about the innovation and the learnings that we can apply to our premium business, so that we can modernise … and prepare the whole of CHU for a very different type of digital future.”
Customer centricity In its planning period, CHU established the Strategic Advisory Group of Experts (SAGE) – a group of clients and intermediaries from across Australia. “We challenged them to think differently about the way we conduct business,” Lehane says. “The response from the SAGE was very
aligned – there is too much paper and duplication of work and, in a digital world, the current strata insurance market is confined to working hours.” Based on that feedback, CHU embarked on a project to design and build a platform (called StrataTech) to allow the hosting of multiple products and services for distribution to CHU’s client set.
“To stay relevant, we need to understand, to meet, to exceed and, indeed sometimes, to pre-empt the emerging needs of our customers” CHU UNDERWRITING AGENCIES CHU is a specialist strata insurance underwriting agency and is part of the Steadfast Group, Australia’s largest underwriting agency group. CHU is Australia’s first and largest strata insurance specialist, operating in every major state and looking after over 100,000 schemes nationally. For more than three decades CHU has consistently led the market and has relied on the professionalism and dedication of its people and on long-standing support from many active partnerships fostered with managers, brokers, suppliers and organisations throughout Australia. CHU REMAINS AUSTRALIA’S NO. 1 PROVIDER OF STRATA AND COMMUNITY TITLE INSURANCE, AND IS: The leading specialist. CHU’s sole focus is strata-related insurance. It understands better than anyone the intricacies, risks and requirements unique to the strata market and for this reason it consistently delivers the best cover for both Residential and Commercial Strata Insurance Plans. Pacesetting. CHU sets the benchmark for innovative insurance solutions and has maintained its market
leadership for three decades because it constantly reviews and updates its cover so it’s the best and most extensive in the market, coupled with competitive rates. Fairer, faster and easier. www. chuniverse.com.au is the dedicated online service for existing customers, providing them with 24-hour access to day-today transactions for arranging, renewing and managing strata insurance. For claims, a simple phone call starts the process, with a decision made within 24 hours and the majority of standard claims settled within three days. Personalised, with access to decision makers. Customers can speak with like-minded CHU staff, specially trained and empowered to deliver the highest quality of customer care. CHU also has a 24-hour Emergency Hotline, 1800 022 444, to assist its customers. Secure. CHU policies are underwritten by QBE Insurance (Australia), one of Australia’s most secure insurance companies.
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INSURTECH THE BROKERS In November, the 2016 Macquarie Insurance Broking Benchmarking Report was released, which surveyed 200 broking businesses and intermediaries across Australia. It highlights key industry trends and insights. The following are some of its insights with respect to technology.
of surveyed respondents said they were leading the way in innovation
of surveyed respondents said insurtech start-ups would be a competitive threat in 2017
of surveyed respondents said they offered full quote, bind and pay capabilities online Source: 2016 Macquarie Insurance Broking Benchmarking Report
“StrataTech is an online purchasing and intermediary self-serve platform specifically designed for the needs of the strata market,” Lehane says. “The aim of the StrataTech platform is to allow clients to purchase and manage a range of products online without all the need for duplication and to be available 24/7 to suit people’s busy lifestyles.” The process of working with the SAGE is ongoing, Lehane says, and CHUiSAVER is already receiving feedback from direct customers and intermediaries regarding the usability of its platforms.
“That feedback is already being incorporated into the CHUiSAVER platform, so that by the time we implement StrataTech for CHU … we’ll already have refined it very well to hit the mark,” he says. Lehane says this is an opportunity to more dynamically understand and incorporate customer feedback on an ongoing basis. “Our quote form, for example, has been reduced significantly from the standard number of questions, which could be something like 200, to less than 50. So, a quarter of the number of questions to get to the same kind of underwriting outcome.” He says use of the StrataTech platform will enhance the broker experience from a service perspective. “This will enable better rating, reflecting more accurately the risks being insured, while streamlining their workflow,” he adds. “On the product side, the strata insurance market has been starved of choice. The vast majority of players in this sector provide a very
Asked about other CHUiSAVER benefits, Lehane mentions features like ease of use, the availability of full quote and bind online, a paperless process and a level of rating sophistication that, he says, is not available from CHU’s competitors. “I’m keen to ensure that the opportunities that digital can unlock are delivered to strata insurance, which includes everything from ease of engaging and doing business with intermediaries and customers, to reduction of costs associated with traditional insurance workflow,” he says. “Through CHUiSAVER and the StrataTech platform, we will be able to introduce this new way of doing business.”
Stay tuned It’s been four months since the launch of CHUiSAVER was announced, as well as its first product, residential strata insurance. And according to Lehane, 2017 is going to be an “exciting” year.
“I’m keen to ensure that the opportunities that digital can unlock are delivered to strata insurance” comparable cover with similar limits and policy wordings. CHUiSAVER is the first innovation in the strata insurance market for a number of years, offering choice.” Lehane says that while consumers have had the ability to choose the levels of cover and deductibles in other types of insurance, this has been lacking for strata clients. “With the proliferation of new entrants, there are a number of low-cost options available. However, they haven’t always provided the quality of service or indeed product that has become the norm within strata insurance. CHUiSAVER will provide a value yet quality modern product, reflecting the increasing need of an emerging customer for choice in how they choose to manage their risk.” He says a number of key services, including claims, will be delivered via CHU to ensure “a positive service experience”.
“CHUiSAVER as the brand and StrataTech as the delivery platform will be utilised to deliver much more than the single product of residential strata insurance,” he says. He says CHUiSAVER is also planning for an energy comparison site, tailored to strata and community living. CHUiSAVER Energy is expected to be released in the first quarter of 2017. “Customers will be able to answer a few simple questions, such as their address and the number of occupants, and get an idea of the best deals available in electricity and gas supply,” Lehane says. “CHUiSAVER will continue to develop digital technologies, including the new digital intermediary platform StrataTech, new insurance products for strata clients and new non-insurance products to benefit consumers in their day-to-day lives.”
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DRIVING BETTER OUTCOMES
Growing in sophistication and offering its users a range of benefits, telematics will become increasingly widely used in fleet management
Technology continues to play a central role in transforming our world, and the fleet management space is no exception. With competitive pressures driving a need to focus on cutting business costs and improving both productivity and efficiencies, the utilisation of telematics technology in the commercial fleet space will continue to rise at home and across the world. The technology can become an integral tool for fleet managers.
A slow start Telematics, generally, in Australia is yet to approach the take-up levels seen in major international markets such as the UK, but its use is continuing to grow. Steven Hamilton, business development manager for Fleetsure, says levels of adoption of telematics by commercial fleet operators vary as greatly as the industries those operators serve. “An almost 100% take up exists in fleets involved with FMCG [fast-moving consumer goods] and courier-styled businesses,” Hamilton says. Freight tracking systems, he says, are heavily used and “almost mandatory
requirements of the owners of the freight. “At the other end of the scale, there is very little use of telematics,” he adds, citing as examples dump truck and demolition operators.
Watching out One of the most important benefits of using telematics in fleets is the ability to monitor use of vehicles. “Vehicle use … systems provide enormous benefits to the fleet owners to maximise vehicle efficiency and, in turn, utilisation of an expensive asset,” Hamilton says. “Maximising vehicle usage, whilst a great advantage to the fleet operator, may result in higher exposures to accidents … More kilometres on the road generally means greater exposures.” Optimisation of routing is a key benefit that arises from fleet managers having the ability to monitor vehicle use. Being able to identify the location of a vehicle and any delays that may lie ahead in the path of that vehicle affords a manager the opportunity to instruct that an alternative route be taken, potentially avoiding the significant extension of journey times.
BY THE NUMBERS
ABI Research says fleet management system revenues globally will exceed US$22bn by 2021
ABI Research’s Commercial Telematics report predicts there will be 59 million subscribers to commercial telematics by 2021
ABI Research anticipates that fleet management penetration will increase over the next five years with a global compound annual growth rate of 11%. ABI Research expects that growth will be fastest in Eastern Europe and the Asia-Pacific
Source: ABI Research’s Commercial Telematics Report
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The ability to quickly locate fleet vehicles also has customer service enhancement functions. The quick and easy location of vehicles means precise identification of the best-placed vehicle in a fleet to undertake a customer deliver y with the greatest immediacy. Geo-fencing is also achievable using telematics technology, ensuring that drivers stay on-track, adhere to curfews set as to vehicle movements, and restrict personal usage of vehicles. Health risks to vehicles can also be ascertained via the use of telematics, offering f leet managers insights into whether particular vehicles are in need of repairs or even replacement, and also contributing to lower maintenance and overall fleet costs.
“Vehicle use … systems provide enormous benefits to the fleet owners to maximise vehicle efficiency and, in turn, utilisation of an expensive asset” Driver management Of course, telematics systems installed in fleets can also monitor driver behaviour itself. But Hamilton says, “Driver behaviour systems … are the least often used and the most difficult to adopt. There is a cultural fear of ‘big brother’ watching drivers in their day-to-day work.” But the fear of ‘spying’ aside, he also says
these systems, by far, offer the greatest accident reduction potential. The ability of telematics to measure driving habits and record those for fleet managers – including acceleration, breaking behaviour and cornering speed – allows those habits to then be assessed and drivers consequently encouraged to behave in a manner that maximises safety, as well as
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THE FUTURE As part of the 2016 RAC Telematics Report, surveying 1,000 UK businesses, respondents were asked to indicate what they’d like to see from telematics in the future. Here’s what they had to say:
Connectivity with other business motoring services
Automatic reporting of faults to fleet manager or chief mechanic
Alerts for concierge-style bookings for service, maintenance and repair (SMR) requirements
Alerts for proactive intervention by a breakdown provider
Remote diagnostics to proactively identify and fix potential faults Source: RAC Telematics Report 2016
improving fuel efficiency. Where vehicles are driven recklessly or inefficiently, managers can make decisions about where driver training should be mandated. If vehicles are driven with heightened care, the potential exists for both maintenance and fuel costs to be reduced. And, needless to say, a reduction in accident volume and severity,
Last year, UK motor services provider RAC released the results of a survey of 1,000 UK businesses, conducted between September 2015 and April 2016, ascertaining their use of telematics technology. As to the benefits those users were experiencing, 55% of respondents cited a reduction in fuel use, 49% cited a reduction in speeding incidents/fines, 43%
“Overwhelmingly, driver behaviour, which cascades down from the fleet operator’s culture, is the major determining factor of a business’s risk profile” Steven Hamilton, Fleetsure and injuries occurring at work and to third parties (and any consequent legal action) is a flow-on effect. From an insurance perspective, claims not only against commercial motor policies decrease, but also potentially against liability, marine and workers’ comp policies. “Overwhelmingly, driver behaviour, which cascades down from the fleet operator’s culture, is the major determining factor of a business’s risk profile, whether that be measured by customer satisfaction levels, injury days lost, accident rate per kilometre or insurance costs,” Hamilton says. An ultimate benefit of telematics, for both personal and commercial customers, is the potential for collected driving data and evidence of mitigation measures adopted to reduce insurance premiums. And as usage picks up, and more and more demand insurance solutions that recognise positive behaviours, telematics will likely transform the pricing of car insurance, sharpening its accuracy.
reported a reduction in accidents involving staff, and 31% had seen a reduction in their vehicles’ maintenance costs.
The cost? So, just how expensive is telematics technology for commercial fleets in Australia today? “The cost of these systems can be very low … under $100 for GoPro-style cameras or dash cams or GPS tracker devices,” Hamilton says. “Alternatively, full f leet management systems may cost up to $1,000 or $2,000 per vehicle when teleanalysis is undertaken.” Hamilton believes it will pay off for those businesses that decide to become early adopters of telematics. “Through the management of risk, driver safety, work planning and vehicle usage, businesses would see commercial efficiencies appear,” he says. “Potential insurance premium savings may flow as a result also.”
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F c t
Additional binder now available Fleetsureisnowamulti-binderagencyofferingadditional capacityasanApprovedCoverholderatLloydâ€™salongside theproductsofferedviaourexistinglongstandingbinder.
P Commercial motor
P Non broker owned
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P Plant and equipment P Professionalservice P Mixedfleets
ÂŠ2017 Fleetsure All rights reserved. Fleetsure Pty Ltd ABN: 78 078 661 220 AFSL: 238151 All policies are underwritten by APRA licensed insurers
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Three senior leaders of authorised representative networks discuss what the AR model can offer brokers in Australia in 2017
THE POPULARITY of the authorised representative (AR) model continues to grow in Australia. “AR networks are more significant now than, say, 10 years ago,” says Shaun Standfield, managing director of Insurance Advisernet. “And that growth is likely to continue for a long time to come.” Travis Kemp, executive director of Marsh Advantage Insurance, says the AR model provides insurance professionals with an opportunity to earn an income based on their client relationships. “This drives high service standards and competition in the marketplace and, ultimately, customers are the biggest winners,” Kemp says. The growing popularity of the AR model in recent years owes partly, he says, to the regulatory challenges associated with operating an Australian Financial Services Licence (AFSL), which makes the model more appealing to insurance brokers. Of course, as Standfield reminds us, while ARs are authorised to transact business by the licence of another, they’re held to the same standards in their provision of advice. “ARs, like brokers, are subject to the same AFSL regimes, including all compliance, ongoing educational learning and reporting. The same rules apply, because the principal
licence holder needs to manage and protect their licence in exactly the same fashion as a broker does.”
Correcting the record Over the years, some unfavourable perceptions of ARs have persisted. Kemp says the biggest misconception people have with respect to the model is that ARs lack professionalism. “It is contrary to the experience we have had across the Marsh Advantage Insurance network,” he says.
According to Brent Campbell, a director of Oracle Group Insurance Brokers, when acting professionally, the only divide between licensed brokers and ARs should be ownership of the licence itself. “An authorised representative still holds the responsibility to manage their corporate entity and act as a qualified, compliant professional,” he says. “We shouldn’t hold a division between ourselves, rather work together to build a better image for the industry.”
“ARs have the passion because, ultimately, their success is based on how well they manage and service their clients” Shaun Standfield, Insurance Advisernet “Cynics will say that any model that drives personal revenue based on how much a client spends is unhealthy. However, for many ARs, their business model is based on building strong client relationships, which are paramount to their success. As such, they provide not only a high level of service, but are also attuned to the commercial impact failing these clients would have on their business.”
Standfield speaks highly of his own IA network of ARs. “I would 100% back every one of our advisers,” he says. “The culture across the IA network is unique and whilst we have individual adviser businesses, we team well where it counts. The diverse professional experience of our advisers is on show every day, as they work together
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financial peace of mind to their clients.” On the importance of the AR model in today’s broking community, Standfield says you can’t beat local business people dealing with local businesses. “ARs have the passion because, ultimately, their success is based on how well they manage and service their clients. If they’re not attentive, in simple terms, their business suffers and so does their financial position,” he says. “ARs aren’t guaranteed a salary each fortnight. They need to build their book, network well and, most of all, be there when the client needs them. My observation is that the vast majority of IA’s advisers are growing their businesses and IA’s client count is increasing also. “So, as a team, we are getting a lot right!”
to solve clients’ issues.” Standfield emphasises that becoming an AR with IA is not automatic. “We cherish our AFSL and it is not for rent. We have a stringent on-boarding process that includes potential new ARs meeting existing advisers to ensure they understand our culture, and to allow one of our existing advisers to gauge how the potential new AR will fit into our IA culture.”
The state of play Standfield thinks perceptions of AR networks today are strong. “I say this by the number of new AR models
that have developed over the last few years, the fact that large insurers are now owning their own AR networks, and from the quality of professional brokers who are becoming ARs,” he says. “From an Insurance Advisernet position, the perception of what we offer in terms of professional advisers, geographically diverse distribution, [and] advisers who are equipped with technology to enhance their strong client relationships, were key features in our recent collaboration with the Commonwealth Bank. The CBA saw the potential in our network to assist their business bankers to provide broadened
Discussing precisely what the AR model can offer, Campbell says he believes the real benefits are flexibility and freedom. “You may be an individual entering the later stages of an accomplished career, simply looking to achieve a better work-life balance … Others are seeking to concentrate on building a solid portfolio whilst meeting their compliance obligations yet avoid costly overheads including IT, licence fees and PI premiums,” he says. Kemp opines that while many people cite good work-life balance as the main benefit of being an AR, he’s not sure how true that rings in reality. “The most successful ARs I encounter work harder and more diligently than most, and their success is no accident,” he says. “The real benefit of becoming an AR is that the model provides ARs with the opportunity to back their ability to cultivate a client portfolio and be remunerated in correlation with their performance.” Standfield says one of the key benefits of becoming an adviser with IA is getting the opportunity to build an asset for yourself and your family. “Whilst the thought of running your own
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AUTHORISED REPRESENTATIVES ARS: ACCURATELY DESCRIBED? In 2015, Westcourt General Insurance B r o k e r s (subsequently acquired by IAG last July) announced what it described as “a subtle but unique change” to its branding and company description. Westcourt decided to become known as an “authorised broker network”. In a statement, Westcourt said the decision was made as a result of general feedback and discussion amongst its network. “It was communicated to us that being referred to as ‘representatives’ as opposed to ‘brokers’ diminished the perceived value of the services they provided to their clients as professional insurance brokers,” the statement read. “We believe that by recognising and promoting our authorised representatives as authorised brokers it will allow them to more confidently align their identity as authorised representatives to the advice and service they provide as brokers.” business can be daunting, the comradery and willingness of others within the IA group to assist you in becoming successful is also a great benefit, often not felt until you join. If you are willing to invest in continuing your professional development, using the support services we offer, I haven’t seen any new advisers fail yet,” he says. “There are many great brokers out there who would make great advisers; however, many brokers are now caught up on the corporate treadmill and are spending less and less time with clients, and more time on corporate projects and other non-valueadding activities.”
Standing out ARs today advise in a space that’s increasingly competitive. So, how do individual ARs stand out from their competitors? “The environment is no more competitive for ARs than it is for brokers,” Kemp says. “It comes down to quality of advice and value being provided to clients based on a foundation of trust and relationship.” Talking specifically about his IA advisers, Standfield says they don’t talk about price. “We seek to understand the business and then we can work through the areas where insurance can provide some risk mitigation,” he says. “The 5 star Benchmark Survey has been invaluable in pointing out how underinsurance can be a real issue, and hence many clients who have had a survey completed for them have increased their property sums insured.” He also talks about other tools with which IA advisers are equipped to provide key client support.
and its work to increase its reach via several digital and social marketing campaigns. “These initiatives have increased the number of leads going to our advisers. The importance of a nationally recognised brand to supplement our advisers’ strong personal brand is now paying dividends for our team,” he says. And just how important is specialisation for ARs? “Specialisation is important to the extent it displays professionalism and knowledge, therefore value and trust, to clients and prospective clients,” Kemp says. Standfield says it’s a personal decision, based on which direction an AR wants to grow their business. “We have many advisers who are specialists in certain industry groups, schemes or occupations. Those advisers who specialise, in my observation, are very willing to share their knowledge across the IA network,” he says.
“The most successful ARs I encounter work harder and more diligently than most, and their success is no accident” Travis Kemp, Marsh Advantage Insurance “Whether that be our IA App, early warning weather alert service or our IA emergency claims response service … We can provide these services for all clients due to our buying power and the cloud technology we employ right across the network. We have technology infrastructure that is flexible enough to provide our advisers and clients with timely information. “Our advisers also have access on their mobile devices to business intelligence reports that show how they are tracking in terms of GWP written, income, client numbers and other benchmark activity to assist them in making the right decisions for their own business.” Standfield also mentions IA’s rebranding
But he adds that the essential point is that, at IA, culture drives outcomes for advisers and clients. “Culture can’t be taught,” he says. “It is derived by having a united sense of purpose and aligned values in the way we strive [to] provide ‘advice you can trust’. This can’t be replicated and, in my opinion, acts like a magnet to professional brokers who wish to build their own business with the support of a professional network of likeminded advisers, and systems and processes to allow them to spend quality time with new and existing customers, in the knowledge that all the back-office functions are delivered in such a way to reduce their time spent on non-value-adding activities.”
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WORKERS’ COMPENSATION INSURANCE
LOOKING WHERE YOU’RE GOING
What developments afoot across Australia should be on the radar of workers’ comp insurance brokers in times ahead?
IN ITS second half insurance market update for 2016, Aon reported that a flattening in most Australian workers’ compensation markets was starting to occur. In the privately underwritten jurisdictions of WA, ACT, NT and TAS, the report observed insurer appetite for growth remained in these markets but, because of a heightened focus on profitability, that underwriting was now more selective. Meanwhile, in the governmentunderwritten jurisdictions of NSW, VIC, SA and QLD, Aon says rates have remained stable following the implementation of recent ‘step change’ reductions. So, what lies ahead on the workers’ comp landscape for 2017, including on the regulatory front?
NSW Helen Silver AO is chief general manager of Allianz Australia’s workers’ compensation division. Allianz is one of five insurance agents providing policies and managing claims on behalf of icare, NSW’s new workers’ compensation insurer (launched in November, 2015). She says icare is currently focused on improving the overall customer experience of workers’ comp transactions for employers and employees.
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“icare … is really quite innovative in the way it’s looking at managing the overall NSW workers’ compensation system,” Silver tells Insurance Business. She says icare’s changes begin coming into effect early this year. “The first of those … is the policy and billings scheme,” Silver says. “They’re looking at simplifying the way customers buy and renew their workers’ comp insurance … They’ll be implementing a selfservice system where customers can undertake policy and billing transactions direct with icare. “The details are still being worked through but it should create a lot of efficiencies and a more streamlined service,” she says. Slightly further down the track, claims management enhancements are also on the cards. “They’re looking to implement a new centralised claims system to improve consistency in outcomes and reporting,” Silver explains. She says icare also intends to focus on increasing the engagement of employers and their workforces. “It is well documented that if you’ve got more engaged workers and employers in the system, the better the outcomes.” Still on the subject of NSW, Silver mentions the State Insurance Regulatory Authority’s (SIRA) proposed self-insurance licensing framework, about which it sought stakeholder comment late last year. She highlights the fact that the last time the framework was reviewed was 2001. “They’re looking at … creating a best practice licensing framework and they want to look at how they can ensure they get very good outcomes … for self-insurers,” says Silver. That consultation has closed, with SIRA having received 34 submissions. It says it will provide a final self-licensing framework in “early 2017”.
At the same time, SIRA also sought stakeholder comment on its draft guidelines, updating existing guidelines for workplace return-to-work programs, which were developed in 2010. SIRA will issue the final guidelines sometime this year – activity Silver also flags for brokers to monitor, given its potential implications. “Anything that encourages greater return to work … [is] obviously an important driver of costs in the workers’ comp system and also an important source of greater engagement of workers,” she says.
Comcare Discussion turns to federal workplace insurer Comcare and what might be in store for Commonwealth Government employees – more specifically, whether changes prescribed
Country Liberal Party in the Territory election. Potentially, there are workers’ comp implications arising out of Labor’s victory. In July 2015, several amendments were made to NT’s Workers’ Rehabilitation and Compensation Act (including a name change for the legislation to the ‘Return to Work Act’). “One of [Labor’s] election promises was to repeal some of the amendments,” Silver explains. “We’re waiting to see what those might be and how that would occur. “Whatever they decide we’ll work closely with the government to facilitate their objectives. Again, it’s a space that we’ll need to closely monitor.”
TAS Taking talk from the Top End to the Apple Isle, Tasmania’s recently-introduced Workers
“icare … is really quite innovative in the way it’s looking at managing the overall NSW workers’ compensation system” Helen Silver, Allianz Australia in bills prorogued as a result of last year’s election will resurface. “We’re not really sure what the government might or might not bring back … We don’t really know what the future might hold there,” Silver says. “I think we need to wait to see what the Turnbull Government brings forward.” She emphasises that, once any proposed changes are announced, insurers – like Allianz – will be on hand to provide brokers with advice.
NT Last August, Michael Gunner became the NT’s new chief minister after Labor defeated the
Rehabilitation and Compensation Amendment Bill 2016 aims to reduce red tape for businesses. “They’re looking at how they could make things administratively easier under the workers’ compensation framework,” Silver says. The bill deals with matters such as returnto-work plans, as well as changes to the retirement age to align with the Social Security Act 1991 (CTH). At the time of publication, the bill was yet to pass both Houses of Parliament. Needless to say, there’s much for workers’ compensation insurers – and brokers – to keep abreast of in 2017.
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STEPPING UP TO THE PLATE IAG’s Donna Walker talks about joining the ANZIIF Board, promoting education and learning, and attracting top new talent to insurance
SHE’S SPENT almost two decades with one of the country’s leading insurers and, in 2017, has become the latest addition to the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) Board. Donna Walker, executive general manager of broker business at IAG, is excited to step into a space beyond her day-to-day insurance role. “I feel very privileged to be invited to join the board,” she tells Insurance Business. “They’re a fabulous group of people, there’s a huge amount of knowledge and experience in the board itself across the industry, and I’m really looking forward to working with them to help drive education and learning across our industry.” Education has been a passion of Walker’s throughout her entire career. Before entering the general insurance industry, she worked in the financial services sector. Walker also spent three years lecturing in actuarial studies at The University of Melbourne and assisted in creating a course for Monash University. “I love helping people grow their knowledge, and there’s something really nice when you can actually see people blossom as a result of
enhancing their skills. That’s something that really resonates strongly with me.” That passion, she says, has also been fuelled by CGU’s rollout of its own educational offering. “We’ve made a significant investment in our Platinum Leadership Network course, which provides the opportunity for brokers in our industry to step outside their comfort zone … and actually be exposed to self-development, business development, and learn skills and attributes that will help them not only in their business and in helping drive our industry forward, but also in their lives,” she says.
The next generation Walker is keenly interested in working with ANZIIF to ascertain how to attract the best candidates to careers in insurance, to have those individuals sharing their knowledge, and taking their thought leadership forward to secure the ongoing strength of the industry. She talks about the marketplace and changes that have been implemented within IAG in moves to prepare to address the changing requirements of the industry. “If I think about the world that we’re working
in now, there are continually evolving customer needs … As an industry, we need to have the skills, the knowledge and the attributes to be able to meet the evolving needs of the customers,” she says, again referring back to her experience within IAG. “We have a great depth of experience in our underwriting team. We’ve got men and women who underwrite risks using very traditional ways of looking at risks … But we then supplement those skills with some of the innovations and
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“We need to have the skills, the knowledge and the attributes to be able to meet the evolving needs of the customers”
investments that IAG, as a group, is making more broadly, whether that be customer insights or some of the thinking we’re doing around how we can utilise technology more effectively by combining the traditional skills that we have and bringing that new thinking about how we might meet customer needs going forward. “We can create much more holistic propositions for end-customers that our brokers can take to the market.” As to how to bring more of the best and
brightest jobseekers into the industry, Walker observes that members of today’s younger generation seek to work in roles aligned with their own values. “They want flexibility in their working environment, creativity [and] growth, and they want it all in a relatively quick way,” she says. “I think there’s a perception that you can’t have that in insurance … When you think about insurance, we are a vital part of the broader economy. We pay over $20bn in benefits in any
year. That actually helps individuals, businesses [and] governments continue to contribute and thrive.” She adds: “I think, though, when you think about how we attract people to the industry, we have to stop talking about what we see as the traditional roles in insurance … They are roles that we need … but the skills that we’re looking for and the opportunities that present to a younger generation are things like storytelling, entrepreneurship, [and] we need attributes like
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Became executive general manager of broker business in IAG’s commercial division (now the Australian Business division)
Became general manager of claims and chief actuary for CGU
Became general manager of technical services for CGU
Became head actuary for CGU
Began career in insurance by joining CGU
Began lecturing in actuarial studies at The University of Melbourne
Worked in financial services
curiosity. We actually have the opportunity for people to create their own websites and bring the digital lens to our industry. “This is where ANZIIF can play a great role, in getting that message out about what the opportunities for young people are in insurance … I think if you talk to anyone who works in the industry, they have that passion for our business, they see the opportunity and they see the breadth of roles that our industry covers. We’re just not very good at getting that out externally.”
insurance, Walker says a that number of actions should be considered, including sponsorship and mentoring. “We have some great women in the industry, who are great role models for women looking to take on senior roles. So, there is an advocacy piece that I think all our leaders in the industry need to play to ensure that women can see that there are opportunities and feel that they are supported in doing that,” she says. “If I look at my own career, I’ve been fortunate
“When you think about how we attract people to the industry, we have to stop talking about what we see as the traditional roles in insurance” Women in insurance For three years, Walker chaired IAG’s Diversity and Inclusion Action Group and continues to advocate the benefits diversity brings not only to jobseekers, but to businesses themselves. “There is a mountain of research … that evidences that having diversity in senior leadership in organisations actually makes your business perform much more strongly, and it makes good sense when you think about it,” she says. “If you bring a diversity of perspectives to the table [and] you bring different voices to the room, you will have much stronger and more rigorous decision-making that will actually help drive your business strategy forward.” Walker describes gender as a “really good catch-all”. “Fifty percent of our population are women, and if you target more women to sit around the table, you will also naturally get a diversity of age, skills, experience [and] ethnicity.” On the key to ensuring the progression of more women to executive leadership roles in
in having great people around me, who’ve supported me.” Coupled with that, Walker says, there needs to be a focus on conditions of work. “We need flexibility in the working environment to ensure that it’s not just about women needing to be there from 9 to 5, which are often hours that they might find difficult, in order to be able to have a fulfilling career,” she says. On a positive note, Walker says she’s been struck by how much attention the industry is now giving to the topic of gender diversity. “Even just talking about those things raises the awareness, which means that we will actually promulgate change just through having the conversations. I think that’s been a really important change in our industry in the last five years,” she says. No doubt, challenges for the industry lie ahead, but we look forward to seeing how Walker contributes to ANZIIF initiatives as she takes on the new role.
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FROM LITIGATION TO MITIGATION From media production to the practice of law, Sampath Soysa has enjoyed a diverse career and recently joined the team at ATC While studying law at uni, Soysa worked for national broadcaster Television New Zealand in a role that involved digital video and media production, and website design.
1999 A CREATIVE START
2005 CROSSES THE DITCH While many of his legal colleagues opted for a rite of passage overseas, gaining work experience in the UK, Soysa decided to move to Australia. Once here, he secured a role with DLA Phillips Fox (today, DLA Piper) in Melbourne. He later moved to Moray & Agnew Lawyers, focusing solely on insurance. While at DLA, Soysa also joined ANZIIF’s Generation i program, which aims to create a strong sense of community among young insurance professionals. He later became president of its Victorian Committee.
It was a fantastic time … I got to see how a creative business runs … and it set me up with a lot of skills which came in use down the track
2001 TAKES ON THE LAW After completing his degree, Soysa bid farewell to his life in media for a legal career. He began working for law firm Fortune Manning (today, Duncan Cotterill). “Insurance law … turned out to be one of the main focuses of that firm, and also one of the things that I got stuck into pretty early on in my legal career and enjoyed immensely right from the start. So, it’s the classic [story of] getting into insurance by accident!”
CO-FOUNDS YIPS Soysa and his Generation i Victorian Committee colleagues decided to embark on a new chapter. “We made a decision initially to form YIPs [Young Insurance Professionals] to help promote the ANZIIF events we were running and expand our marketing reach. But then we realised, as that program began to wind right down, we had the core group and skill base and experience to be able to set up YIPs as a fledgling organisation.”
LEADS FIRM INTO MELBOURNE Soysa opened the Melbourne office of insurance law firm Gilchrist Connell, becoming principal of that office. His new role gave him the opportunity to develop marketing strategies and to undertake a number of business development activities, in efforts to effectively establish the firm in the Melbourne market. Meanwhile, Soysa was three years into his role as founding president of YIPs which, by this time, had grown to include five branches across Australia.
2017 & beyond GROWING ATC “ATC’s a very rapidly growing business. It’s now the largest independent Lloyd’s coverholder in Australia … The short-term goals are really to get heavily involved in and continue to grow ATC’s broker relationships … and also to really assist with developing and advancing its claims and legal processes … It’s an opportunity to grow the claims capabilities and depths to provide additional value out of the claims experience for brokers and our insured clients.”
2016 HEADS TO INSURANCE Soysa decided it was time for a change. He’s now ATC Insurance Solutions’ chief operating officer. “I decided … to move out into the insurance industry proper, and I think YIPS probably can take a lot of the credit for that, in terms of broadening my outlook and relationships, and understanding the insurance industry well beyond the legal claims sector. “I’m head of legal, head of claims, and also head of clients, but also … it’s quite market-facing and [has a] strong business development emphasis.”
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From left: Angie Ballard (Australian Paralympic wheelchair sprinter), Matt Kayrooz (Suncorp), Ryley Batt (Australian Paralympic wheelchair rugby player)
INCREASING ABILITY Suncorp’s Matt Kayrooz is keenly interested in working to change the lives of people with disabilities for the better MATT KAYROOZ, head of accident and trauma insurance at Suncorp, has been heavily involved in compulsory third party insurance for several years. “I’ve seen first-hand just how much of an impact motor injuries have on people’s lives,” he says.
For many years, Kayrooz has been involved with Wheelchair Sports NSW and, since 2010, he’s served on the board of Technical Aid for the Disabled (TAD). “TAD is an amazing organisation that develops modifications for everyday items to make them more accessible, including bikes, wheelchairs, cots and baths,” he explains. Kayrooz says it’s been a pleasure to be involved with TAD. “I’ve met so many people with disabilities, and I’m left in awe by the way they achieve their goals and live their lives,” he says. “It’s also been great to work with so many volunteers who strive to make a real difference. The inventions and modifications that TAD develops are often quite simple, but they can really change people’s lives.”
Number of skilled volunteers who make up TAD’s core workforce
Number of Australian athletes who competed at the 2016 Paralympics in Rio de Janeiro
Number of wheelchair athletes to whom Wheelchair Sports NSW provides opportunities
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