Insurance Business 6.02

insurancebusinessonline.com.au Issue 6.2

LEAVING A LEGACY

Allianz Australia MD Niran Peiris

THE TIME HAS ARRIVED

Australia’s new mandatory data breach notification regime

SAFE TRAVELS

Terrorism risk and corporate travel insurance

PHIL KEARNS InterRISK MD and former Wallabies captain talks broking in today’s world

7 1 0 2 S R E K O R B E T I L E hing for the best insurance brokers across the country Searc

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APRIL 2017

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CONTENTS

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UPFRONT 02 Editorial

Helping to resolve the dilemma

04 Statistics

18

PEOPLE

LEAVING A LEGACY

FEATURES

22

Niran Peiris, MD of Allianz Australia, talks about what to expect from the insurance giant in 2017

36

08 Opinion

Does the general insurance industry in Australia need more reform?

10 News analysis

Brokers are embracing technologies, but have they caught up with the pace?

14 Insurer update

February was results time for several of Australia’s biggest insurers

FEATURES

Former Wallabies captain Phil Kearns talks about his move into the broking world

Finding the silver lining on the arrival of driverless cars

Adroit and McNair Hurle Latrobe merge while the ICA announces a new president

For the fifth consecutive year, Insurance Business searched far and wide for Australia’s top brokers

BROKER INSIGHT

06 Head to head

12 Intelligence

ELITE BROKERS 2017

PEOPLE

A look at the world’s biggest risks – and how companies are managing them

44

PROTECTION FROM PERILS OF THE SEA

Discussing the state of play in the marine cargo insurance market

16 Underwriting agencies update A new study reveals the gender pay gap in finance and insurance

FEATURES 32 Safe travels

The importance of employers understanding their staff travellers’ exposure to terrorism risk

40 The strata outlook

The view for the strata insurance market in 2017

52 The show goes on

Tropfest founder John Polson talks about how CGU saved the festival

FEATURES

50

THE TIME HAS ARRIVED Australia now has its own mandatory data breach notification regime

PEOPLE

54 Career path

The global career of new Talbot Underwriting Australia CEO Andrew Case

56 Other life

SURA’s Sue Addison talks about her marathon effort

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UPFRONT

EDITORIAL

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HELPING TO RESOLVE THE DILEMMA

T

he Aon Insurance Market Update Half 2 2016 makes for interesting reading. It highlights the dilemma for insurance buyers created by the current market climate.

With competition having reached higher levels than ever before, insurers have felt the pressure to engage in a race to the bottom on rates. But as profitability becomes increasingly difficult (if not impossible) by continuing to discount at these levels, players are looking to change their pricing strategies. And at the same time, those incumbents continue to be confronted by existing and new market entrants looking to grow their market share.

So, the dilemma for buyers, which Aon’s report identifies, is whether to capitalise on the appealing options available or to behave conservatively by remaining loyal to existing relationships. To use the words of the report itself: “The balance between a very cautious insurance market desperate to return to profitability and the ever-growing capital growth in the reinsurance capacity that underpins it, makes the coming months a very critical time for insurers in Australia.”

The expertise that brokers offer the wider community remains as important as ever before It’s an obvious statement that when the market gets tough, clients need brokers to assist them in filtering out the noise and ensuring their insurance buying decisions are informed and have the end result of securing the best protection for themselves and their assets. In an age when price often plays too significant a role in the decisionmaking process, clients need brokers to emphasise the fine print, to bring home the potential true cost of the ostensibly cheapest product and to make clear the true stakes.

The expertise that brokers offer the wider community remains as important as ever before, and it’s with great pleasure that, in this issue, Insurance Business has the opportunity to recognise a handful of brokers from across the country – brokers who are passionate about the industry they serve and remain committed to sourcing the best risk transfer solutions for their clients. Our Elite Brokers 2017 feature celebrates the indispensable expertise the broking sector has to offer.

We also catch up with a legend of rugby union, Phil Kearns, and find out how the former Wallabies captain is now making his mark in broking. And before he heads off to join the insurance giant’s global board, Niran Peiris sits down to talk about his year to come at Allianz Australia.

And there’s plenty more packed into this issue of Insurance Business. I hope you enjoy it.

Tim Garratt, editor

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EDITORIAL Editor Tim Garratt News Editor Jordan Lynn Writers Libby MacDonald, Lucy Hook

SALES & MARKETING General Manager Peter Smith Commercial Development Manager Sophie Knight

Production Editor Bruce Pitchers

Marketing & Communications Manager Lisa Narroway

CONTRIBUTORS

CORPORATE

Dallas Booth

ART & PRODUCTION Design Manager Daniel Williams Designer Joenel Salvador Traffic Coordinator Freya Demegelio

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

EDITORIAL ENQUIRIES tim.garratt@keymedia.com.au

SUBSCRIPTION ENQUIRIES

subscriptions@keymedia.com.au

ADVERTISING ENQUIRIES

sophie.knight@keymedia.com.au peter.smith@keymedia.com.au

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Insurance Business is part of an international family of B2B publications and websites for the insurance industry INSURANCE BUSINESS AMERICA cathy.masek@keymedia.com T +1 720 316 0151

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UPFRONT

STATISTICS

WHAT LIES AHEAD

Canada

79.2

Overall risk score, 2017

84%

of finance professionals say forecasting risk is as hard or harder than three years ago

51%

anticipate that forecasting risk will be more challenging three years from now

77.3

78.3

Overall risk score, 2016

last year’s US presidential election continue to be felt on the other.

Both events – along with contentious elections in places like France and the Netherlands – point to the rise of protectionism, nationalism and anti-establishment parties in countries worldwide. This apparent turning of the tide raises new concerns for insurers – and therefore brokers and their clients.

67%

of companies have made efforts to mitigate exposure in response to current and emerging threats

Overall risk score, 2016

Overall risk score, 2017

What issues, trends and factors pose the greatest threats to the world in 2017?

THE WORLD is no stranger to political risk in 2017. China and Russia top the list of countries most likely to influence the risk landscape this year, due to factors such as succession risks, conflict and regional instability. But the West is by no means immune from events that stoke geopolitical risk – the ongoing ramifications of the UK’s Brexit vote are still playing out on one side of the Atlantic, while the consequences of

80.3

US

WHICH COUNTRIES ARE MOST AT RISK? In looking at political, economic and operational risk worldwide, Marsh found that Africa, the Middle East and parts of South America are still the least stable in terms of their ability to deal with such shocks as economic calamity or abrupt political changes. However, a closer look at some key countries reveals that stability has fallen slightly across the globe over the past year.

RISK SCORE

60%

< 49

of organisations have maintained liquidity due to the threat of geopolitical risks

50-59

60-69

70-79 80-100

Unstable

Stable

Source: Marsh & McLennan/Association for Financial Professionals, January 2017

MITIGATING RISK WITH DATA Given the current climate, more companies are committing to using risk data and analytics to inform decision-making.

How is your organisation using risk data and analytics?

To improve risk identification (50%) To inform the overall business strategy (43%) To enhance risk mitigation (34%)

WHICH RISKS ARE MOST LIKELY? According to the World Economic Forum’s Global Risks Report, geopolitical risks (shown in orange below) have taken on more prominence in recent years in terms of the risks businesses feel are most likely to happen.

2012

To support major transactions (25%) To facilitate risk reporting (21%) To optimise insurance programs (17%) Source: Marsh & McLennan/Association for Financial Professionals, January 2017

4

2014

Income disparity

Income disparity

Income disparity

Chronic fiscal imbalances

Chronic fiscal imbalances

Extreme weather events

Rising greenhouse emissions

Rising greenhouse emissions

Cyber attacks

Water supply crisis

Climate change

Water supply crisis

Mismanagement of population ageing

Cyber attacks

To understand risk-bearing capacity (28%) To inform decisions on specific risks (26%)

2013

Societal

2015 Interstate conflict with regional consequences Extreme weather events

Unemployment or underemployment

Economic

2017

Large-scale involuntary migration

Extreme weather events

Extreme weather events

Large-scale involuntary migration

Failure of national governance

Failure of climatechange mitigation and adaption

Major natural disaster

State collapse or crisis

Interstate conflict with regional consequences

Large-scale terrorist attacks

Major natural catastrophes

Massive incident of data fraud/ theft

Unemployment or underemployment

Environmental

2016

Geopolitical

Technological Source: World Economic Forum

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Germany

Russia

Overall risk score, 2017

Overall risk score, 2017

77.4

60.6

78.6

59.1

Overall risk score, 2016

Overall risk score, 2016

China

France

68.4

72.3

Overall risk score, 2017

Overall risk score, 2017

67.7

74.8

Overall risk score, 2016

Overall risk score, 2016

Singapore Brazil

81.1

India

Overall risk score, 2017

Overall risk score, 2017

Overall risk score, 2016

56.7

62.7

Overall risk score, 2017

57.2

83

63.6

Overall risk score, 2016

Overall risk score, 2016

New Zealand

77.6

South Africa

Australia

Overall risk score, 2017

Overall risk score, 2017

Overall risk score, 2017

Overall risk score, 2016

56.5

74.6

58.3

77

74.9

Overall risk score, 2016

Overall risk score, 2016 Source: Marsh/BMI Research

WHICH RISKS WILL HAVE THE MOST IMPACT? When it comes to the risks that would have the greatest impact, recent Global Risks Reports put environmental calamities right up there with societal and geopolitical risks, while economic risks have taken a backseat.

2012

2013

Major systemic financial failure

Major systemic financial failure

Water supply crisis

Water supply crisis

Food shortage crisis Chronic fiscal imbalances Volatility in energy and agricultural prices

2014

2015

2016

2017

Fiscal crisis

Water supply crisis

Failure of climatechange mitigation and adaption

Weapons of mass destruction

Climate change

Rapid and massive spread of infectious diseases

Weapons of mass destruction

Water supply crisis

Weapons of mass destruction

Water supply crisis

Unemployment or underemployment

Interstate conflict with regional consequences

Large-scale involuntary migration

Critical information infrastructure breakdown

Failure of climatechange mitigation and adaption

Chronic fiscal imbalances Weapons of mass destruction Failure of climatechange mitigation and adaption

Societal

Economic

Environmental

Geopolitical

Severe energy price shock

VIEW FROM THE C-SUITE Almost half of the executives at companies surveyed by Marsh & McLennan are concerned about geopolitical risks, especially those at larger and public companies.

All companies

Extreme weather events Water supply crisis Major natural disaster Failure of climatechange mitigation and adaption

Technological

46%

15%

Annual revenue less than US$1bn 42%

42%

16%

Annual revenue at least US$1bn 53%

35%

12%

Publicly owned 52%

31%

17%

Privately held 45%

Concerned Source: World Economic Forum

39%

42%

Not concerned

13%

Unsure

Source: Marsh & McLennan/Association for Financial Professionals, January 2017

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UPFRONT

HEAD TO HEAD

Will driverless cars be good for insurance?

Technology is leading motor insurance down a new road – but are brokers prepared to travel it?

David Williams

Teresa Cracas

John Matley

Technical director AXA Insurance

Senior vice president and chief risk officer The Cincinnati Insurance Companies

Insurance leader Future of Mobility Practice Deloitte Consulting

Automated vehicle technology could drastically reduce the number of accidents on our roads, and insurers are at the heart of making that happen. In addition, driverless vehicles could impact society in a number of positive ways – providing modes of transport for those currently unable to drive, tackling congestion, lowering emissions and reforming city planning.

Motor insurance has been compulsory in the UK for more than 80 years, but the industry has only made an underwriting profit once since 1993. We should be welcoming any disruption with open arms – and with insurers leading the charge in driverless, it puts us very much in control of our destiny.

The insurance industry has always supported innovations that help save lives. We’re learning that potential life-saving benefits could come from removing distracted humans from driving. And risks related to cars will still need to be managed, even if the potential liability shifts from driver to manufacturer.

While it’s still too early to know exactly what impact driverless cars will have on our industry, we know that we cannot sit and wait for this change – or any change – to happen. Carriers need to understand what’s coming and develop strategies that help agents serve their clients as the world around us evolves.

We believe we will see a seismic shift from traditional personal lines policies to a future in which personal and commercial lines will blur and combine very closely as car-sharing and ride-sharing begin to change lifestyles.

For the players who are extremely focused on personal [motor] policies and don’t have commercial lines capabilities, without a strategy to adapt, driverless cars represent a long-term existential crisis.

For those who have strong commercial lines capabilities – knowledge on how to underwrite and price product liability – and who are dynamic in their thinking, the change driverless cars represents is potentially very good.

THE NEW KINGS OF THE ROAD It’s just a matter of time before driverless cars dominate the world’s highways, according to a study from IHS Automotive, which foresees a future in which 76 million vehicles with some level of autonomy will be sold globally between now and 2035. The study predicted that autonomous vehicles that allow for driver control will be on roads worldwide before 2025, and that vehicles with no means of driver control will follow by 2030. IHS Automotive believes that at some point after 2050, almost all vehicles on the road will be self-controlled.

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? ibo@keymedia.com.au

DO WE NEED MORE REFORM? NIBA’s Dallas Booth questions the need for further reforms in respect of insurance brokers DESPITE MASSIVE amounts of recent and current regulatory reform, there are three parliamentary inquiries in the federal parliament at the present time.

I recently gave evidence to the Parliamentary Joint Committee on Corporations and Financial Services inquiry into the life insurance industry.

The inquiry follows many headlines, and two ASIC reports, about poor advice and poor claims handling in life insurance, especially in the bank-owned life insurance companies.

I urged the committee to consider the following, before recommending further legislative or regulatory reform: ADVICE – the FOFA (Future of Financial Advice) reform package is now in full operation, and places a heavy onus on those giving advice on financial products and services to act in the best interests of their client. The FOFA best interests duty applies fully to life insurance advice and, to a more limited extent, to advice on general insurance matters.

COMMISSIONS – legislation to allow ASIC to regulate life insurance commissions has now passed the federal parliament. The government has announced a timetable for the implementation of these laws.

PROFESSIONALISM – a comprehensive package of legislative reforms – including measures to increase standards of education, ethics and professional conduct – has now been passed by the parliament, and the government has announced a timetable for implementation of the package. This will include university degrees for financial

8

advisers, professional on the job training and mandatory membership of an industry code of practice.

DISPUTE RESOLUTION – a major inquiry is currently under way in relation to the operation of external dispute resolution schemes in the financial services sector, including the Financial Ombudsman Service, Credit and Investments Ombudsman and the Superannuation Complaints Tribunal.

PRODUCT MANUFACTURER AND DISTRIBUTOR OBLIGATIONS – Treasury has published a major consultation paper that gives effect to the government’s announced intention to implement recommendations from the Financial System Inquiry. These recommendations will place

evidence of systematic breaches of the duty.

It seems to me that the major areas of concern – as outlined in the ASIC reports and in the countless newspaper articles that have been written in this area – have been or are now being dealt with.

When the professionalism reforms and the changes to life insurance commissions take effect, the combination of these reforms and the earlier FOFA package will give ASIC very strong powers to investigate and prosecute instances of poor adviser and insurer behaviour.

Policyholders have and will continue to have strong consumer protections, including via the Financial Ombudsman Service dispute resolution processes.

In all of these matters, it has been very pleasing to be able to report to parliament that there is no evidence of systemic poor advice by insurance brokers. Brokers invariably act for and on behalf of their clients (occasionally they act on behalf of the insurer), and observe high levels of professionalism when doing so.

This is confirmed by the most recent reports from FOS: in the 2015-16 financial year, there were over 6,500 general insurance complaints to FOS, but only 344 complaints against insurance brokers.

NIBA is not complacent in this. The NIBA board is committed to maintaining and enhancing standards of professionalism in

“There is no evidence of systemic poor advice by insurance brokers” important new obligations on product issuers (ie insurance companies) and distributors (ie insurance brokers and agents of insurance companies) that are aimed to ensure financial products and services will provide real benefits to their target markets, and will only be sold to those target markets.

In addition to these major pieces of reform, the Insurance Contracts Act was amended in 2013 to make the duty of utmost good faith an implied term of every insurance contract, and to also deem a breach of the duty to be a breach of the act, giving ASIC power to investigate and prosecute companies where there is

insurance broking across Australia.

We will continue to argue for a solid educational foundation for brokers, continuing professional development, and adherence to a strong and effective code of practice.

By doing this, we will maintain and enhance the community’s understanding and acceptance of the role and value of insurance brokers.

Dallas Booth has been CEO of the National Insurance Brokers Association (NIBA) since June 2011, leading its government relations and industry representation work, and overseeing its events, publications and other activities.

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UPFRONT

NEWS ANALYSIS

THE TECH REVOLUTION? From mobile apps, to digital signatures, to social media content – the broker channel is embracing the technologies it once feared. But has it caught up with the pace?

IT’S NOTHING new to say that technology is drastically changing the landscape for businesses spanning industries and continents.

But while insurance, and specifically the broker channel, is often criticised for being too slow to adapt, the signs suggest that the industry might finally be having its moment.

“I actually think it’s a little bit of a myth that insurance in general, and our broker channel in particular, are averse to technology,” Michael Howe, SVP product management at insurance software provider Applied Systems, tells Insurance Business.

Howe says he would have agreed that some of the industry remained tech-phobic two years ago, but changes over the past couple of years suggest that’s no longer the case.

do, technology can help them. And it seems obvious to say that, but we actually see people acting on that,” he says.

While tools such as mobile apps and digital management systems can make a broker’s job easier, technology is also revolutionising the way that they can engage with clients – who, in turn, are expecting a higher level of customer service in the digital age.

Consumers are becoming more and more accustomed to immediate, 24/7 accessibility, and increasingly expect service providers to offer apps through which they can access their information and take action at any time of the day, Matt Bevan, president of brokerage DG Bevan, says.

A great example of how a simple technology is enabling brokers to provide a speedier, more

“People now get that technology, and enabling their business with technology, is no longer optional” Michael Howe, Applied Systems Applied saw the user-base for its mobile app surge by 162% year-over-year, the company announced last month, suggesting that brokers are not just going digital, but are embracing mobile technology.

“I think there’s a general recognition now that technology is not to be feared. The opposite – it’s actually the way forward,” Howe explains.

“All the things that [businesses are] trying to

10

convenient service, is through digital signatures.

“Many brokers are moving in this direction, especially for personal lines,” Bevan says of the technology.

“This is a solution that provides efficiencies on both the broker and client sides of the transaction. A prospect can find our company from a search on their phone, after a quick call or online chat, we can email them an e-signature

document. A few taps on their phone, and they have a policy.”

Social media – not typically considered an essential function in the insurance industry – is also fast becoming a vital part of a brokerage’s offering.

More and more brokers are feeling the pressure to keep their social media presence up to date, Stanislav Kojokin, partner at brokerage KASE Insurance, says.

“Just like any service industry, brokers would like to stay connected with their clients and engage them in the activities of the business,” he says, adding that there are firms that produce insurance-related content for brokers to make online media easier to manage.

“As a result, many brokers are making sure to have mobile-friendly websites and active social media accounts,” Kojokin adds.

But despite undeniable steps forward in the digital space, the outside perception of the industry as a whole may not have caught up just yet.

“The insurance industry has developed a

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THE CONSUMER MIGRATION

71%

of consumers use some form of digital research before buying insurance

76%

of millennials believe having a mobile service is very important

64%

reputation for lagging behind in regards to embracing new and emerging technology,” Daniel Kaufman, senior vice president and managing director Burns & Wilcox, warns.

More insurers in both standard and specialty markets are investing in technologies ranging from mobile tools to predictive analytics,

according to Kaufman but, with a large portion of its workers “greying and looking towards retirement”, a lot more needs to be done to attract the next generation of digital natives.

“It is no big secret that the insurance industry is facing an inevitable talent shortfall,” Kaufman says.

“Young, tech-savvy professionals cannot be expected to follow an insurance career path unless it is recognised that our industry is heavily investing in emerging technology” Daniel Kaufman, Burns & Wilcox Kaufman says, but adds that while investment has been slow, it is “positive to see the industry moving forward”.

The pace at which technology is growing is forcing a new perspective in the industry,

“Young, tech-savvy professionals cannot be expected to follow an insurance career path unless it is recognised that our industry is heavily investing in emerging technology,” he cautions.

Looking ahead, the consensus is that

of millennials believe social media is an effective customer service channel, compared to 27% of baby boomers

71%

of consumers who have had a good social media service experience with a brand are likely to recommend it to others Sources: PwC, IDG Research Services, Microsoft, Ambassador

technology will continue to drive the pace across the globe.

Technology and big data present a significant opportunity for all lines in the insurance industry to enhance operational proficiencies, and better understand the risks and needs of clients, Kaufman says.

“People now get that technology, and enabling their business with technology, is no longer optional,” Howe says. “They know that they can’t bury their heads in the sand and hope it goes away.”

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Ace IRM Insurance Broking Group

Terms of the transaction not disclosed.

Ace IRM is a retail insurance broker providing general commercial and personal lines broking services, based in Beenleigh, Queensland.

Adroit Insurance Group

McNair Hurle Latrobe Insurance Brokers

Adroit Insurance Group and McNair Hurle Latrobe Insurance Brokers (MHL) have announced a merger of their businesses in Gippsland, Victoria. They will join forces under the banner of Adroit MHL Insurance Brokers. The merger will take place on 1 July 2017.

The Hollard Insurance Company

Australian operations of Progressive Direct Insurance Company

Parties expect the transfer, subject to final negotiation of documents between the parties and regulatory and court approvals, to be effective in Q4 2017.

Willis Towers Watson

Russell Investments’ Australian actuarial practice

The deal covers 22 staff and over 50 clients spanning the corporate, government, master trust and industry fund sectors. The acquisition is expected to close in March. Terms of the transaction were not disclosed.

Arthur J Gallagher

ALLIED WORLD LAUNCHES THREE NEW PRODUCTS

Allied World has launched three new professional liability products in Australia: D&O Liability Insurance, Architects and Engineers Professional Indemnity Insurance and Miscellaneous Professional Indemnity Insurance. The Miscellaneous Professional Indemnity Insurance product is designed primarily for professional services providers, including interior designers, management consultants, advertising agents, educational institutes, accountants and technology firms. Each of the three products is targeted at Australian-domiciled small, medium and large companies and has a maximum capacity of $10m.

ADROIT AND MCNAIR HURLE LATROBE TO MERGE

Adroit Insurance Group and McNair Hurle Latrobe Insurance Brokers (MHL) announced a merger of their Gippsland businesses in February.

The firms will join forces under the banner of Adroit MHL Insurance Brokers with Joe Diamente, Rocco Gaudiano and Karen Locandro becoming partners.

The combined team will operate out of Morwell, with more than 20 experienced brokers and professionals servicing the region.

Managing director of Adroit Andrew Locke said the merger would allow the business to scale up and continue to grow in the future.

“The merger brings together two businesses with similar cultures and complementary skill sets, and aligns with the Adroit model and ambition to partner with like-minded and quality people,” Locke said.

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CFC INCREASES LIMITS FOR TRANSACTION LIABILITY

CFC has increased the available limits of its transaction liability insurance product suite.

It now has the capacity to offer limits up to $50m in Australia.

“Australia is one of the most developed markets for this particular product line and we continue to see high quality risks in the region,” said CFC’s transaction liability practice leader, Matthew Giddings.

“The increase in our capacity is an endorsement of our proposition in this fast-growing and competitive sector. We’re extremely positive about the future and look forward to building on the success of our first year throughout 2017.”

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EML LAUNCHES APP FOR CUSTOMERS

EML has launched a new app and online portal called EMpower, which provides its Victorian customers access to their WorkCover insurance policies and claims details.

Available now online and via a free app, EMpower allows an employer to lodge a new claim, access their policy information, access their claims information, download weekly payment and reimbursement claims, and to send claims-related documents to EML. “We’re planning to expand EMpower’s features and functionality over time, based on feedback from employers,” said Declan Collins, EML Victoria’s general manager.

Employers that have EML WorkCover insurance policies in Victoria can access the online portal at eml.com.au/ empower or, alternatively, download the free EMpower app via the Apple Store or Google Play.

ANSVAR’S NEW COMMERCIAL PROPERTY OWNERS PRODUCT

Ansvar Insurance has announced a new commercial property owner’s product, tailored for organisations with commercial assets of up to $20m at any one location. The policy provides accidental damage cover for buildings and contents of common parts together with cover for other exposures faced by a commercial property owner. It includes alternate bases of settlement for buildings of architectural or historical interest. “We have taken a proven product range from our parent company, Ecclesiastical, and tailored this for the Australian market,” CEO Warren Hutcheon said.

IAG LAUNCHES CROP INCOME PROTECTION

IAG has created a multi-peril crop insurance product for wheat, barley and canola growers to protect farmers against yield shortfall caused by natural perils, including flood, frost, drought and vermin. The product, known as Crop Income Protection, will be sold under IAG’s CGU and WFI brands. It is available under a one-year pilot program developed in partnership with Landmark.

Under that program, it will be offered to identified Landmark customers insured with CGU and WFI, who grow crops in Western Australia, South Australia, Victoria and New South Wales.

PEOPLE NAME

LEAVING

JOINING

NEW POSITION

Karsten Buescher

n/a

Allied World

Assistant vice president, onshore construction, Australia

Brent Smart

Saatchi & Saatchi

IAG

Chief marketing officer

icare (Insurance & Care NSW)

Group executive, innovation

Tim Plant Anthony Day

n/a

Insurance Council of Australia (ICA)

President and chairman of the board

Richard Enthoven

n/a

ICA

Deputy president

Eric Harris

n/a

National Insurance Brokers Association (NIBA)

Vice president

Tim Wedlock

n/a

NIBA

President

David McMillan

Aviva

QBE

Group COO

Victor Walter

n/a

QBE

Deputy group CFO

Bryce Hatton

n/a

Vero

Executive manager, Queensland commercial and consumer underwriting

Damien Cullen

n/a

Vero

Strategic relationship manager for AIMS, Austbroker and IBNA networks

Sarah Moltzen

n/a

Vero

National account manager, strategic relationships

Gordon McNab

n/a

Zurich Financial Services Australia

Construction practice leader

Ray Coleman

n/a

Zurich Financial Services Australia

Senior underwriter – motor

ANTHONY DAY IS NEW ICA PRESIDENT

The board of the Insurance Council of Australia announced several new appointments on 17 March, including the appointment of Anthony Day as president and chairman of the board. Day is the CEO of insurance at Suncorp, and has been a director of the board since last February. Richard Enthoven, CEO of The Hollard Insurance Company, has been appointed deputy president.

In a statement, Day said he was “delighted” to be able to lead the board at a time when the industry is under increased political and regulatory scrutiny.

“I’m committed to being a strong advocate for the industry as we navigate the opportunities and challenges ahead,” Day said.

FORMER QBE CHIEF JOINS ICARE

Tim Plant has been announced as group executive, innovation to “bring thought leadership and drive the implementation of new technologies and models in healthtech and fintech that exceed customer expectations and transforms icare into a world-class insurance and care organisation”, according to a statement.

Plant’s role will involve driving innovation across icare, including identifying, harvesting and implementing technologies aimed at enhancing the customer experience.

Plant has more than 25 years’ experience in insurance and reinsurance, most recently as CEO of QBE’s Australian and New Zealand operations.

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UPFRONT

INSURER UPDATE

RESULTS SEASON February saw results announcements from each of the big three in Australia

counter higher claims costs.

The Australian Business Division produced better than expected GWP with like-for-like growth of over 4%, after allowance for the divestment of Swann Insurance motor dealership business.

“This is a sound result for our core businesses in Australia and New Zealand, reinforced by the strength and integrity of our brands, our sharpened customer focus, and the quality and passion of our people,” said Peter Harmer, IAG managing director and CEO.

“This is a sound result for our core businesses in Australia and New Zealand”

February saw results announcements from each of the big three in Australia.

Suncorp was first up on 9 February with half-year results, the insurer announcing that insurance net profit after tax had risen by $110m, from $259m in HY16 to $369m this year.

Overall, group net profit after tax saw a rise of $7m from last year, with profit after tax on business lines boosted from $544m to $613m.

The 42.5% increase in NPAT in the insurance Australia division was attributable to top line growth, lower claims costs and disciplined expense management, Suncorp

NEWS BRIEFS

said in a statement to the ASX. Gross written premium (GWP) grew by 6.2%, thanks in large part to an increase in its CTP portfolio, following Suncorp’s entrance into the South Australian CTP market.

In the commercial market, strong competition saw GWP grow just 0.4%.

On 22 February, in its half-year results, IAG announced that insurance profits for the first half of 2017 had dipped to $571m from $610m in HY16. Net profit after tax also fell from $466m to $446m, but GWP rose from $5.5bn to $5.8bn, thanks to improved commercial pricing and rate increases to

QBE to invest $50m in insurtech

QBE will devote at least $50m to partnerships with insurtech companies, The Australian Financial Review reported. At an analyst briefing in February, group CEO John Neal said, “For the first time in 2017 we will be investing a minimum of $50m in partnering with insurtech companies that have a particular focus in data analytics.”

Neal said the Australian global insurer would be screening “several hundred” companies in Britain, the US, Israel and Australia.

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In announcing its full-year 2016 results on 27 February, QBE revealed a 5% rise in net profit after tax, up to $844m. On a constant currency basis, this was a 16% rise, but GWP dropped 2%, it was announced.

Net earned premium also dipped 2% but saw a 2% rise on a constant currency basis, while GWP rose by 1% on a constant currency basis.

The Australian and New Zealand operations of the business saw GWP rise 4% but insurance profit dipped US$49m (A$64.15m) to US$418m (A$547.26m).

Group CEO John Neal described the 2016 result as “strong” as the rise in profitability reflected the strength of the global business and “a strong underwriting culture”.

CGU out of workers’ comp scheme

CGU announced in March that it will exit the NSW workers’ compensation scheme when its current contract runs out at the end of the year. The insurer said it would not make a submission to act as an agent for the scheme for the 2018-2020 period. In a statement, IAG chief executive Australian Business Division Ben Bessell said the decision was made based on “changes to the design and distribution of the new model” and that it was “not commercially viable to continue as an agent in the future”.

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Q&A

Andre Eisele Head of client management P&C Australia and New Zealand director, reinsurance SWISS RE

Fast facts Released on 1 March, the latest Sigma report, Cyber: getting to grips with a complex risk, examines how the local and global communities can work together to address this ever-increasing emerging threat.

Getting to grips with cyber risk What were the key takeaways from the recent Swiss Re Sigma study on cyber?

People feel that cyber insurance … will solve the issue of a cyberattack. In reality, cyber insurance is an important form of risk mitigation that we need to consider when building a more resilient world around cyber issues.

In this particular publication, we do put a lot of emphasis on how the world is becoming more hyperconnected. Very often, there isn’t just one solution to the full problem. The solution relies on industries working together, with the government, and trying to find a much more holistic approach towards prevention of cyberattacks and building up cyber resilience.

Do you think it will be difficult for industry players to lay aside competition and work together?

I think it’s an absolute must. First, you need to quantify the barriers of what exactly you are trying to protect – where does cyber start and where does it end? That’s quite a wide-ranging topic, depending on the player that you’re speaking to. But naturally, I think with any good risk prevention landscape, you need to have different policy players coming together to understand the topic holistically to then be able to find ways to quantify the topic. From those methods of quantification a plausible protection product can

Zurich expands partnership with iSelect

Zurich has joined iSelect’s general insurance panel, with its commercial motor policies to be available via iSelect’s platform. Rajbir Nanra, CEO, general insurance, Zurich Australia and New Zealand, said in a statement: “Through iSelect we will bring a compelling insurance proposition, initially in commercial motor, to the small business market.” Nanra also said Zurich is looking forward to exploring other areas in the commercial insurance space with which it can work with iSelect.

then be designed around it. We’re seeing current developments in Australia in different forms, and one of the probable reasons why more companies are not being more proactive themselves and just launching straight-forward cyber standalone products, has been the fact that we don’t have enough holistic information - where the risk can be quantified without a gamble.

What more could be done to help boost take-up of cyber insurance?

I think everybody who is in the market at the moment, including insurtech startups and disruptors, has a role to play in educating the market. I think if you talk about brokers specifically, brokers are not risk carriers, but they are the interlinks of the industry, and thus have a very important role in highlighting to their clients what emerging risks they’re facing, [and] the importance of being able to capture certain data around it. This will enable them to find risk mitigation and risk transfer mechanisms. There are different insurance companies and reinsurance carriers like us that can strongly support that process. We’d love to work closer with brokers and try to understand the market even better to be able then to create new solutions.

Insurance giants welcome legislation

Suncorp and IAG have welcomed NSW legislation to reform the CTP personal injury scheme.

Christopher McHugh, Suncorp’s executive general manager of personal injury portfolio and products, said the Motor Accidents Injuries Bill 2017 provides much-needed reform to make the scheme fairer and more affordable. Anthony Justice, chief executive of IAG’s Australian consumer division, said the bill strikes a balance between supporting the most seriously injured and making CTP insurance affordable for motorists.

Suncorp backs insurtech start-up

Suncorp is the backer of an insurtech chatbot that provides micro-insurance for peer-to-peer, online transactions. Called Kevin, the platform insures any online transaction, on sites such as Gumtree, from theft, fraud and scams. Kevin is a collaboration between the insurer and Traity, an online reputation start-up. Customers using Kevin will be provided with a link that they can send to their online seller, and once that person is approved, the transaction is insured for up to $100 for free.

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UPFRONT

UNDERWRITING AGENCIES UPDATE NEWS BRIEFS SURA opens South Australian office

Specialist underwriting agency group SURA has launched an Adelaide office, promising brokers genuine local underwriting authority for faster quotes and decisions on local client risks. It will focus initially on underwriting engineering, construction and machinery breakdown risk and will be headed by specialist underwriter Michael Holbrook. As well as SURA Construction, headed by Jim Wiechman, the new office will support SURA Plant & Equipment, headed by Peter Curtis, and SURA Engineering, headed by Peter Curtis.

Solution Underwriting announces new partnership

Solution Underwriting has announced a new partnership with Chubb, which will see the international giant provide capacity for the underwriter’s portfolio of products. Under a binder agreement, Chubb will provide capacity for professional indemnity, general liability and management liability products offered by Solution, with this applying to new business and renewal transactions from 1 April.

“The stable capital platform that Chubb provides will enable Solution Underwriting to continue providing quality insurance products and exemplary service to the Australian broker market,” said Rhys Mills, managing director of Solution Underwriting.

MECON announces new product

MECON Insurance has unveiled an industry first cover for the construction industry. Called Earthworks Advantage Cover, the new endorsement will be optional across

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all products in MECON’s portfolio, and will cover construction clients for subsidence, collapse or displacement through defective design or weather peril of embankments on work sites.

The cover provides a maximum indemnity of $1m or 25% of the project value for any single event. The new optional endorsement will also cover increased cost of work for the insured, up to $50,000.

New player in marine to launch

CGU and Vero have announced an agreement with NTI to create Australia’s leading marine insurance specialist – Marine Protect: Powered by NTI. CGU and Vero jointly own and underwrite NTI on a 50:50 basis. From April, marine insurance specialists from CGU and Vero will move to NTI’s Marine Protect. Marine Protect will be led

by Andrew Kidd (Vero), with senior leadership support from Chris Kelsey (CGU) and Mike Sullivan (CGU).

More information can be accessed at www.nti.com.au.

Record numbers for UAC’s Sydney expo

The Underwriting Agencies Council saw record numbers flock to its 2017 annual expo in Sydney recently. There were 435 brokers who attended as well as 86 exhibitors. At the expo’s lunch, UAC chair Lyndon Turner talked about the “extraordinary growth” of the agencies sector over the past six months and attributed it to brokers “voting with their feet”. He acknowledged a strong partnership between UAC and NIBA. NIBA CEO Dallas Booth congratulated UAC on the expo’s success, while noting the UAC-NIBA relationship was broader than just the expos.

REPORT HIGHLIGHTS GENDER PAY GAP Study shows that when it comes to men and women in finance and insurance, the pay gap is substantial The financial and insurance services sector is at the top of the list with respect to the gender pay gap for full-time roles in Australia.

The concerning statistic comes from a recently released study commissioned by Bankwest Curtin Economics Centre and the Workplace Gender Equality Agency.

Entitled Gender Equity Insights 2017: Inside Australia’s Gender Pay Gap, the study revealed that top-tier female managers in Australian organisations earn, on average, $93,000 or 26.5% less each year compared to their male counterparts.

Additionally, the study reported that, in the financial and insurance services sector, women employed full-time can expect to earn on average around $30,000 or 26% less each year in base salary than men employed in the same industry. The gap increases to more than $52,000 or 33% when taking into account additional remuneration including superannuation and bonuses.

“The case for change is clear,” says Libby Lyons, director of the WGEA, in a foreword to the report.

“Research shows that diverse work teams lead to better workplace culture, greater innovation and improved performance. And, the analysis shows organisations that increase their gender balance at the leadership level improve working conditions for women, as evidenced by lower pay gaps.”

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PEOPLE

THE BIG INTERVIEW

LEAVING A LEGACY Next January, he’ll take on a global role within the German insurance giant.

But before then, Niran Peiris has a hectic year ahead with Allianz Australia ON MARCH 10, Insurance Business broke the news that Niran Peiris, managing director of Allianz Australia, has been appointed to the board of management of the global Allianz Group, effective from 1 January 2018.

It was announced that Peiris, who has been with Allianz Australia for 16 years, will assume responsibility for the property and casualty businesses in the group’s Anglo markets (which include Australia and New Zealand), the Global Insurance Lines (for example, Allianz Global Corporate and Specialty), Russia and the group’s commitment to environment, social and governance. According to Allianz, work has commenced appointing his successor in Australia, with Peiris to continue in his current role until the end of the year.

Insurance Business had the good fortune to meet Peiris in his Sydney office to discuss Allianz Australia’s recent progress. Reflecting on major wins for the business, he cites the 2014 acquisition of the general insurance business of the Territory Insurance Office from the Northern Territory government, as well as Allianz’s partnership with Westpac General Insurance in 2015, under which the bank began sourcing products from the insurance giant.

Additionally, Peiris mentions the opening of the South Australian CTP market, at which time Allianz became one of four CTP insurance providers in the state.

He also discusses the biggest challenges

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the business is facing in the Australian market right now. He refers firstly to the soft state of the commercial market.

“While it’s recovering, I don’t see it recovering quickly, and I think that’s an indicator of capacity that we have around the world,” he says.

“Secondly, I think low interest rates continue to be challenging for any financial services organisation, particularly general insurers because you’ve got to price to your interest rates, and when interest rates are very low, of course, your price has to be much higher than you otherwise would have.

“I think that’s a pressure on us all, and

Tomorrow’s industry Talking talent in insurance, Peiris opines the industry needs to do a far greater job of making jobseekers appreciate the intellectual challenge associated with careers in insurance.

“The intellectual challenge is trying to price something that you really don’t know the cost of,” he explains.

“You’re taking very educated guesses at that cost. There are very few industries like ours, where you really don’t know the cost of your product on the day you sell it, because it’s subject to weather events or whatever that you’re trying to cover. And I’ve found that quite stimulating over time.

“There are very few industries like ours, where you really don’t know the cost of your product on the day you sell it … I’ve found that quite stimulating over time” we don’t see interest rates moving up dramatically in the near future, and so that pricing pressure will remain.”

The regulatory landscape is also an important factor to Peiris.

“I think the move of regulators, particularly towards customer advocacy, is a big change and something that I think the whole financial services industry is adapting to at the moment,” he says.

“If you think about … a message to people who are smart, young [and] motivated who might be attracted into the industry, rather than have them fall in, try to show them that [challenge]. I think that’s something that we’ve been trying to do more of through, particularly, our graduate induction program, going out to campuses and showing people that, but also generally through our employee value proposition, to try and help people

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PEOPLE

THE BIG INTERVIEW

understand that there are exciting, rewarding careers with interesting jobs, now particularly around data, that will attract young people.”

On the subject of data, Peiris talks about the evolving role he foresees for data and analytics in insurance in times ahead.

“Insurers have been using data for a long time to rate properly. The thing that I think has to change is more customer overlay on top of that data, because the data that we use at the moment really is portfolio by portfolio, and we look deeply down into those portfolios and we’re trying to balance the pool that we have,” he says.

“I think we can get better customer data that enables a better rating and risk selection, and then, secondly, better customer data to make sure that we’re offering them the right thing at the right time – both of which I think the insurance industry is developing.”

THE ALLIANZ GROUP

BY THE NUMBERS

Investing in the future Peiris says Allianz has a significant focus on data and analytics, both at a local and at a global level.

“We’ve invested quite heavily in data science, in machine learning and all those things that you need to do to be a big data company, going forward,” he says.

Discussion turns to insurtech and the associated threats and opportunities.

“I think as with any new competition emerging from left field, you must always pay attention to them, because what emerges from left field is always something that can be a major threat to you in years to come,” he says.

“In engaging, what we need to continue to be good at is risk selection and pricing, and the investments in that side of insurtech are very interesting to us. We’ve invested significantly at a global level and here in data scientists and in analytical tools so that we can better refine our rating models.

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86 million

The number of retail and corporate customers Allianz Group serves across the globe “I think, also, engaging with insurtech is important and our Allianz global colleagues certainly have investments with various insurtech companies.”

On other recent developments in Allianz Australia, Peiris discusses its enhanced commercial packages online platform.

“We’ve launched our SME platform, Allianz Alive, which went live towards the back end of last year and is now fully up and running … [it’s] a major refresh of our SME offering – which is very important to brokers and really important to us … and we continue to refine that as time goes on and innovate further,” he says.

“If we look at our tailored solutions business – again, a big strategic push of ours – we’ve restructured our entire team behind the

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Allianz Group has customers in more than 70 countries

140,000

Allianz Group has over 140,000 employees worldwide

€122.4bn

In 2016, Allianz Group achieved total revenues of €122.4bn (A$172.97bn)

€10.8bn

In 2016, Allianz Group achieved an operating profit of €10.8bn (A$15.26bn)

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scenes here so that we have a very focused underwriting capability and distribution capability for risk underwritten business, offer and acceptance business that isn’t SME and is smaller than big-end corporate stuff that we’re doing. And then, finally, when we look into rural and regional as well, we have a significant push into farm, and the farm pack offering will commence towards the back end of this year, which is a fully automated farm offering, which will be part of the overall strategic fit with us for rural and regional.”

A diverse workforce Inside the organisation, Allianz Australia’s efforts to enhance the diversity of its workforce have been recognised externally for some time.

In December, its ongoing work to improve gender diversity in the business was acknowledged for the eighth consecutive year by the Workplace Gender Equality Agency, which awarded Allianz an employer of choice for gender equality citation. Allianz was one of only two general insurers to receive this acknowledgment.

“Diversity is strategically important to us, because we’ve said for a long time it’s just good for business. It helps us think more broadly and to understand our customers better if we are a more diverse bunch inside this company,” Peiris says.

He says diversity has been a focus of the business during his time as head of Allianz Australia.

“Through that focus, we try to then encourage the drivers of diversity, whether it be through selection, training and development of our people, or things like flexible working conditions.”

Peiris emphasises the importance of accountability for efforts on the diversity front.

“I think it’s really important that you hold yourself accountable,” he says.

“We’ve set up targets internally. They’re aspirational, but we basically say we want to achieve a certain level of female representation in senior management ranks by 2020, and we’ve been working our way through to that and I’m quite pleased with the progress we’re making at the moment.”

People change, Peiris says, is the biggest change happening internally at Allianz Australia.

cultural change takes a lot of effort and it’s something I personally lead. I think it’s something that we need to have necessarily in order to have different ways of making decisions that aren’t reliant on hierarchy.”

The year ahead Key priorities for Allianz Australia in 2017 – Peiris’ last year as MD – centre around the continued execution of its strategic plan.

“We’ve invested quite heavily in data science, in machine learning and all those things that you need to do to be a big data company, going forward” “When you look at our organisation and how we grew up, necessarily we were quite a traditional hierarchical system. As we grow – we’re now $4.6bn in turnover in terms of GWP – our aspiration is to be much bigger still. You need to change the way the company goes about doing its business and you need to devolve decision-making.

“For that, we’ve got a strategy around a workforce for 2020, which looks at how we recruit people and the types of people we’re recruiting, and that’s where diversity comes into it as well. Secondly, [we’re looking at] how we get them through the organisation, in terms of their development, and, thirdly, how we then get them into those senior management roles that are necessary in a diverse talent base that recognises the challenges of the future.

“We say we would like to have the best workforce that’s able to deal with all those challenges in the future, and have the right skills and capability to achieve it.”

Peiris continues: “That, I think, is a huge change … you can always do a project, but

“We had a strategy approved in 2015, and year one of implementation was 2016,” Peiris says.

“The plan really focuses on a few things: firstly, what I would call a focus on the end customer. We have previously always looked at our intermediary partners as the way we grew, so we acquired intermediaries and we grew that way, and as a result … we have significant market shares in motor car dealers and [financial institutions].” But we really haven’t focused on their end customer base.

A lot of the work that’s going on in systems and in process is to look at how we get to the end customers together with our partners – or indeed the end customers directly when we have our direct business – and look at them in a way that we understand them better and, therefore, they’re more likely to buy more product from us and/or stay with us for longer.

“A lot of work is going into that. It’s a threeyear program, and implementation will take some time to carry through. As I said, we’re one year into that three-year program and so far, so good.”

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FEATURES

ELITE BROKERS 2017

Insurance Business celebrates top brokers across Australia WELCOME TO the 2017 Insurance Business Elite Brokers list.

This year marks the fifth occasion on which Insurance Business has set out to find insurance brokers across the country at the top of their game – fine examples of the enormous value the sector provides to the wider community.

This year, we’ve decided to change our approach slightly. In previous years, we’ve

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published a full ranking list of the top brokers who entered. But this year, in our efforts to place more emphasis on the fact that being named an elite broker is significant recognition on its own, we have decided not to publish any final rankings and instead shine an equal share of the spotlight on each of the top entrants who qualified for our Elite Brokers list. You can find the names and faces of those brokers on the pages that follow.

It remains our privilege to be able to acknowledge some of the high achievers in broking in Australia. We’d like to offer a sincere thank you to everyone who applied to be a part of the Elite Brokers 2017 report, and we look forward to bringing it all back again in 2018.

Tim Garratt, editor, Insurance Business

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METHODOLOGY The Insurance Business ranking system is an objective means of ranking the best performing insurance brokers in the country – not just those with the biggest portfolios or the largest clients.

Each broker was required to supply their own details to Insurance Business to be eligible, along with details of a contact who could verify those figures.

There were eight criteria, covering: • Number of policies written • Total revenue • Revenue per policy • Number of clients • New clients • New client revenue • Client retention Each broker was ranked in each of these measurements and the sum of all of their rankings was calculated to determine those who would receive recognition. While no rankings have been published this year, this methodology was used to determine the brokers included in this report.

ANDREW BOURKE DYNAMIC INSURANCE BROKERS

Andrew Bourke is the managing director of D y n a m i c I n s u r a n c e Brokers, based in South Australia.

His experience in insurance over the past 14 years has encompassed work for both suburban and international brokerages and, in 2008, Bourke was named the National Insurance Broker Association’s Young Professional Broker of the Year for SA/NT. Additionally, Bourke was the NIBA YP SA chairman between 2009-2011, and has previously featured on Insurance Business’ Elite Brokers list.

DALE HANSEN AUSTBROKERS COAST TO COAST

Dale Hansen appeared in last year’s Elite Brokers list and shared his insights into what 2017 would hold for the industry in a feature last December. He leads Austbrokers Coast to Coast, based in Queensland, which was named Small Brokerage of the Year at the 2016 Australian Insurance Industry Awards. Hansen went on to win NIBA’s Stephen Ball Memorial Award for Broker of the Year. He undertakes significant pro bono work for the not-for-profit sector, often providing seminars on the subject of risk management practices for charitable organisations, and mentors young brokers.

ADAM PILE Insurance HQ

Adam Pile is making his third consecutive appearance as an elite broker in 2017. He’s worked in the insurance industry for 18 years and heads up Insurance HQ. Like many, Pile fell into the industry, loved the work and never left. Insurance Business asked him last year to tell us what he thought was the most important thing a broker can do, in order to develop their business. “Develop systems, procedures, and templates for everything you do,” he said at the time. “What might be second nature to you after 10 years will be completely alien to someone new to [the] business. Clearly defined procedures and templates will ensure each client receives the same high-standard service, while ensuring compliance obligations are met.”

DAVID CLARKE CHASE GROUP INSURANCE SOLUTIONS

He’s spent a decade as a broker and has become a fixture of Insurance Brokers Elite Brokers list. Back in 2013, NIBA awarded David Clarke the Young Professional Broker of the Year Award and, today, he’s the managing director of WA-based Chase Group Insurance Solutions.

While previously a part of the team at Elliott Insurance Brokers, he specialised in subsea and offshore insurance. Today, he continues to be a commercial awareness course lecturer for Subsea Energy Australia, in addition to undertaking his broking work. Clarke was also invited by Ernst & Young to be an expert speaker at a cyber risk presentation in conjunction with Curtin University, presenting on new and emerging risks and cyber coverage.

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FEATURES

ELITE BROKERS 2017 DAVID COE NORTHWEST INSURANCE

David Coe, managing director of Bundabergheadquartered Northwest Insurance, has amassed 25 years’ experience in insurance and has qualified for all five of Insurance Business’ Elite Brokers lists. He has built substantial knowledge of commercial and business insurance, including farm, marine, heavy transport and commercial motor.

Coe is a big believer in the view that the insurance industry in Australia needs more newcomers. “Putting on new young people is something I like doing,” he says. “I am just about to put another new young person on to train them in the industry.”

JAMES FLETCHER MALTON ROAD ADVISORY

James Fletcher is the founder and managing director of Sydneybased Malton Road Advisory.

With 13 years’ experience as a broker, Fletcher and his firm are focused on servicing the needs of businesses that employ between one and 300 staff members. Insurance Business understands Malton Road Advisory has developed a travel insurance solution for transplant donors and recipients via the not-for-profit organisation Transplant Australia. The scheme is in its infancy, but is said to have attracted an impressive amount of attention from persons with pre-existing medical conditions. And while the brokerage assists businesses with a variety of commercial insurance needs, Malton Road Advisory also specialises in insurance for craft breweries.

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DAVID POWELL ELLIOTT INSURANCE BROKERS

David Powell is the senior broker at Elliott Insurance Brokers and services clients around Australia. He’s the point of reference for four account executives and their assistants, and assists with advice to ARs in the group. Powell has spent more than a quarter of a century in insurance and was featured in our 2016 Elite Brokers list. Last year, he commented on there being too many “price-driven” brokers in the market. “As

an industry, we need to value the service and the offerings we provide to our clients more than just a price w i t h o u t significant consideration and discussion about appropriateness of cover to the client,” he told Insurance Business.

DAVID SUMMERS MARKEY INSURANCE BROKERS

As well as making Insurance Business’ Elite Brokers list for 2017, David Summers is an ambitious broker who belongs to another select club – he’s appeared on each and every Elite Brokers list since it was introduced

by Insurance Business in 2013. Summers is the senior broker in a team of three brokers and is based in Newcastle, NSW. He joined Markey Group back in 2003 and, as the senior broker, is responsible for sourcing and closing new business in the portfolio. Last year, Insurance Business asked Summers to tell us what he thought it took to succeed as a broker in this increasingly competitive market.

“Knowing what the client really wants [and] knowing who you work for” was his answer.

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FEATURES

ELITE BROKERS 2017 KAREN FRAZER

JARON BRESLAND

SHIELD TRADE CREDIT

BRESLAND INSURANCE GROUP

Trade Credit Insurance remains an important product, existing to protect organisations against the potential impacts of bad debt. Karen Frazer is the director of Shield Trade Credit, a specialist trade credit insurance broking business, which is based in Sydney. Frazer has accumulated 16 years of experience in the trade credit management industry and is, once again, no stranger to Insurance Business. In 2017, she makes her third appearance on the Insurance Business Elite Brokers list, having previously featured in 2015 and ’16.

Jaron Bresland returns to the Elite Brokers list for the second consecutive year. He’s worked in broking for five years and is part of the Bresland Insurance Group team in WA. “I travel far and wide seeing clients, ranging from remote communities in the Kimberleys to all around the Central Wheatbelt,” he told Insurance Business last year. “There is no part of WA that Bresland [Insurance Group] will not or does not visit.”

Over the last 12 months, he’s achieved good growth and a strong client retention rate.

“What I have done over the last 12 months is build a strong platform to launch into much bigger growth over the next few years,” Bresland says.

JOE KHOURY INSURANCE ONE (AR OF ACTION INSURANCE BROKERS)

Joe Khoury has spent a decade as a broker and is currently the managing director of Insurance One in the Sydney suburb of Parramatta. Khoury is no stranger to accolades, having won the Action Insurance Broker’s managing director’s award on two occasions, in addition to having won its outstanding sales award on five occasions and its client service excellence award.

Khoury describes his passion as mentoring account managers and assistant account managers in order to help them progress in their careers.

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KAREN HARDY ACME INSURANCE BROKERS

Karen Hardy is the principal broker at Acme Insurance Brokers in Far North Queensland, having been with the business since 2001. She’s qualified for all five Elite Brokers lists we’ve compiled. When interviewed recently for Insurance Business, Hardy was asked, ‘Why insurance?’ “It’s fascinating and ever-changing,” she said. “We provide

hope and assistance to communities and clients when they are most in need.

Without insurance, the world’s economies would flounder and fail. We often forget the significance of our roles within society and the security we afford.” Asked to name the most important thing a broker can do to develop their business, Hardy said, “Opportunity abounds as long as you listen with interest. Use your knowledge to provide solutions and always act with integrity and honesty.”

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KATE FAIRLEY SIMPLEX INSURANCE SOLUTIONS

MARK SACKS

PRUDENCE CHANG

EXPERIEN INSURANCE SERVICES

NATIONAL CREDIT INSURANCE (BROKERS)

Experien Insurance Services is a Sydneybased insurance firm that specialises in the insurance needs of doctors and dentists. “We focus on a broad range of complex insurance categories and are happy to work with doctors and dentists late at night when it suits them,” CEO Clive Levinthal told Insurance Business last year.

Mark Sacks is the principal adviser of NSW and the founder of the business, and has been a specialist risk insurance adviser since 2004. His experience includes roles in Switzerland and the USA, and he has both general and life insurance clients.

Sacks has helped a number of new life insurance advisers to become established senior advisers.

Prudence Chang has achieved the distinction of becoming part of the select group of brokers to have appeared on all five Elite Brokers lists. She’s a member of the team at National Credit Insurance (Brokers) and is based in Melbourne.

Chang’s role also involves the review of sales training material on a regular basis.

Over the past 12 months, in addition to being a mentor of the sales team, she’s become co-chair of the Victoria/Tasmania NIBA Young Professionals Committee and she’s started new projects for NCI, as well as having introduced a new product.

This has all occurred while Chang has simultaneously exceeded her budget and all KPIs.

KRISTY CACCAVIELLO GEELONG INSURANCE BROKERS

Last year, Kristy Caccaviello appeared on Insurance Business’ Young Guns list and, in 2017, has qualified for inclusion in Elite Brokers. As an employee of Geelong Insurance Brokers, Caccaviello is described as being a “very motivated” person who “has the ability to engage with the business’ multitude of referral partners” on many levels. “Her approach both strengthens and maintains our commercial bonds with other businesses that are important to Geelong Insurance Brokers,” Insurance Business is told. Additionally, Caccaviello elevates herself above the team when it comes to creating new business opportunities and relationships by making sure she goes the extra mile for each and every client.

While Kate Fairley has spent the last three and a half years in broking, she has been part of the insurance space for the last nine years. Currently working as part of the team at Simplex Insurance Solutions in regional Victoria, Fairley is the founder of broker advocacy and consumer awareness website Get Informed and is the author of the eBook A Broker’s Guide to Social Media. She’s been a successful mentor and has been a speaker and panellist at a number of industry events – both locally and in Asia – encouraging brokers to become more engaged with consumers.

KAY JACKSON SIMPLEX INSURANCE SOLUTIONS

Kay Jackson is the director of Simplex Insurance Solutions.

She has 20 years of experience as a broker, is a mentor for Commerce Ballarat businesses and has been a speaker at the Asian Insurance Brokers Summit in Singapore. Talking to Insurance Business late last year, Jackson was asked about the most important thing a broker can do to develop their business.

“Have a smart marketing and networking plan so you [don’t waste] time with the referrals you attract,” she said. “We have a target strike rate of 60% for our new quote enquiries. For the first four months of this financial year, we have averaged a strike rate of 59.45% of quotes that have converted to new business. This is due to the quality of referrals we attract.”

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FEATURES

ELITE BROKERS 2017 PHIL TASKER

KEN DIXON

UNITY INSURANCE BROKERS

DIXON INSURANCE SERVICES

Phil Tasker is a director of Unity Insurance Brokers, based in Western Australia, and has chalked up more than four decades in insurance – an impressive achievement!

He began his career with Zurich in the UK before arriving in Perth in 1975, and his time with Unity Insurance dates back 35 years.

At Unity, he specialises in SME, construction, transport and liability.

Tasker has served on both the Western Australian and Australian boards of IBNA, which he describes as his way of “contributing to a profession I am proud and passionate about”.

MICHAEL STEWART STEWART INSURANCE GROUP

Stewart Insurance Group is based in the bayside Melbourne suburb of Sandringham. Director Michael Stewart has been in the broking business for the last 22 years. Stewart is always looking to provide young people an opportunity to enter the insurance industry by affording a chance to those with little to no experience, but who are keen to give it a go. Outside of insurance, Stewart is a regular supporter of the Reach Foundation, an organisation dedicated to encouraging young people to achieve their full potential, as well as local sporting clubs and schools.

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Making his fourth appearance on Insurance the Business Elite Brokers list is Queensland broker Ken Dixon. Dixon has been working in the insurance industry since 1990, but it was 2003 when he decided to make the move into broking. In 2013, Dixon and his wife Anita – also a veteran of the insurance industry – created Dixon Insurance Services. Based in Toowoomba, the business services clients across Australia, and its core clientele comprises large transport and logistics operations, residential and commercial construction, manufacturing facilities, engineering companies, as well as broad retail insurance clients.

LUKE PHILLIPS GARDIAN INSURANCE SERVICES

Luke Phillips is the managing director of Gardian Insurance Services, based in the regional Queensland centre of Mackay. The business was established in 2006 and is said to be the region’s only locally owned and operated insurance brokerage.

This year, Phillips is making his fourth appearance on the Insurance Business Elite Brokers list. He was described by one colleague last year as a broker who works very hard for new business. Phillips and his team have achieved growth in recent times despite a downturn in the resources sector in which, Insurance Business understands, a majority of Gardian’s clients and prospects operate.

VICTOR DABROWSKI SECURITEX FINANCIAL SERVICES

Victor Dabrowski is another member of the 2017 Elite Brokers list who has featured in every one of the five annual lists Insurance Business has compiled. He’s a director of Securitex Financial Services in South Australia and has over two decades of industry experience. Asked last year about

succeeding in the business today, he told Insurance Business: “You have to be a total professional, keep up your education/ product knowledge, provide tailored solutions to each client, [and] provide a high level of service and look after clients when they have a claim.” Last year, Dabrowski mentored two new entrants to the industry and is now mentoring a further new employee.

ROBERT COOPER COOPER PROFESSIONAL RISKS T/AS CPR INSURANCE SERVICES

Robert Cooper has spent close to 40 years in the insurance industry and has worked for several prominent insurance companies and international brokers. Today, he’s a director of CPR Insurance Services, based in the Brisbane suburb of Grange. He specialises in professional indemnity and directors and officers liability insurance and has provided services to small, medium and larger clients. Cooper is a member of the committee for the Queensland chapter of the Australian Insurance Law Association and is an experienced speaker and presenter. He also shares insights with Insurance Business online readers regularly, and has had opinion pieces published both on the site and in the magazine. This marks Cooper’s third appearance on our Elite Brokers list.

SHANE CROWLEY

ROXANNE HEIBLOEM ROXANNE INSURANCE BROKER

ABLE INSURANCE SERVICES NT

Darwin’s Able Finance Services established its general insurance arm, Able Insurance Services NT, in 2012. Its business insurance solutions offerings include public liability, business pack insurance and workers’ compensation. This is Shane Crowley’s third appearance on the Insurance Business Elite Brokers list, having been featured in both 2015 and ’16. Additionally, in ’15, Crowley was selected to be profiled in Insurance Business’ Young Guns report.

Adding to his list of accolades, Crowley was named Westcourt General Insurance Brokers’ Authorised Broker of the Year last October – an award that recognises outstanding achievement in all aspects of broking activities.

Roxanne Heibloem says her insurance broking journey has changed her life in many ways. Beginning her career in the industry in a brokerage 11 years ago, Heibloem went on to spend time working in a larger broker house in Ireland, before returning to Australia and ultimately starting her own business. She joined Westcourt General Insurance Brokers as an authorised broker two and a half years ago and says she hasn’t looked back. In 2015, Heibloem was named the winner of Westcourt’s Rising Star Award, which afforded her the opportunity to be mentored by Calibre Insurance CEO Mike Hooton. And last year, Heibloem featured for the first time in the Insurance Business Elite Brokers list.

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FEATURES

ELITE BROKERS 2017 DANIEL WEBBER WEBBER INSURANCE SERVICES (AR OF CAPELLA INSURANCE GROUP)

Daniel Webber has been in the insurance industry for over a decade and is becoming a regular on the Insurance Business Elite Brokers list. Director of Webber Insurance Brokers in South Australia, he’s spent his last six years in broking. Speaking to Insurance Business last year, Webber was asked to name the most important thing a broker could do to develop their business. “Ask clients for feedback and be flexible and willing to act on the responses,” he said. Webber had strong results in 2015 and, in 2016, achieved portfolio growth of over 50%.

He’s also spent time mentoring the young staff in the office.

SHANE MOORE TRADE RISK

VANESSA DAVIS B&L FINANCIAL SERVICES

Vanessa Davis is general insurance manager at the Queensland-based B&L Financial Services. Her career in insurance began 28 years ago, and she’s been included in the Insurance Business Elite Brokers list for each of the past three years. In addition to her broking responsibilities, Davis is tasked with ensuring that all B&L staff involved in general insurance have up-to-date training.

At the current time, Davis is mentoring one new staff member, who’s joined as an internal broker, exposing her to the wonderful world of insurance.

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Shane Moore is the founder and director of Trade Risk, and has a passion for taking care of the insurance coverage needs of tradespeople across Australia. Based in Brisbane, Trade Risk says its clients hail from all corners of the country, with the majority located outside of its home state. Last year, Trade Risk was awarded a Feefo Gold Service award, which recognises businesses delivering exceptional experiences and is determined based on client reviews. A broker of seven years’ experience, Moore is a previous Insurance Business Young Gun, and appeared on our 2015 and ’16 Elite Broker lists.

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FEATURES

CORPORATE TRAVEL INSURANCE

SAFE TRAVELS

In this increasingly volatile international political climate, it’s more important than ever for employers to understand terrorism risk when placing coverage for their corporate travellers How completely do employers appreciate the terrorism risk to which their travelling employees are exposed in today’s world?

Wayne Anstiss, chief underwriting officer for Accident & Health International (AHI), tells Insurance Business employers are becoming more cognisant of their evolving duty of care to employees with respect to terrorism and safety and security.

“In the past, there was an assumption that these risks only occurred in high-risk countries, like Iraq and Syria. Often it was only people travelling to high-risk areas who sought terrorism cover, such as missionaries

ACCIDENT & HEALTH INTERNATIONAL AHI is an award-winning underwriting agency, offering general and highly personalised personal accident, medical and travel insurance in Australia and abroad. We cover hundreds of thousands of Aussies – from local tradesmen to the CEOs of some of Australia’s biggest companies.

Our continued success comes down to the superior service provided by our people and the comprehensive coverage offered to brokers and their clients.

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or charity workers,” Anstiss says. “However, as the 2014 Lindt siege and last year’s Nice and Berlin attacks showed, these incidents can happen anywhere and any time. Organisations need to ensure they have appropriate cover for their people.

“Many would be shocked to know there were 100 terror events around the world in the last month alone.”

So precisely what types of employers should have terrorism included in their corporate travel coverage?

“These days, every organisation should have terrorism included in their corporate travel policy,” Anstiss says.

Increasingly, he adds, brokers are seeking AHI’s view on client travel risk situations.

“We work closely with our assistance provider, Dynamiq, to provide up-to-date advice and information to brokers and their clients. This is not about stopping the business trip, it is about weighing up the risks and putting mitigation strategies in place to maximise the safety and security of the travellers.”

An evolving risk Dynamiq’s founder and director of strategy, Anthony Moorhouse, discusses the evolution of terrorism risk since the beginning of the 21st century. He refers to the 11 September

2001 attacks on the USA, carried out by a coordinated group of terrorists using hijacked commercial passenger jets as weapons.

“Then, in Mumbai, Bali and Paris, terrorists struck again but with more conventional weapons. The tools used were simple yet deadly explosives and small arms, but the planning was still complex and mass casualties and panic caused.”

Moorhouse notes the increased frequency of attacks that has come with the rise of ISIS. “But ISIS has also given rise to another form of attack – the lone wolf assault,” he explains.

“This attack is characterised by the use of unsophisticated weapons … without a highly coordinated team carrying out the attack. The introduction of such attacks, marked with allegiance to various terror groups, has made the jobs of law enforcement, security and risk managers that much harder.

“In many situations, these attacks may not be able to be foreseen or prevented, so a wellexercised emergency response plan is vital.”

Moorhouse mentions last June’s nightclub shooting in Orlando, Florida.

“It was simply undertaken by a lone wolf who used his attack for notoriety, pledging allegiance to ISIS in the midst of carrying out his violence. He used military-style weapons and masses of ammunition in a traditional hostage or mass shooting situation.”

Moorhouse describes the 2016 attacks in Nice and Berlin – carried out by lone wolf actors using trucks – as both particularly shocking and representative of another evolution in terrorists’ tactics.

“In many ways, the blunt-force trauma caused by a speeding truck was worse than a large, sophisticated explosive device,” he says.

“This has required organisations, insurers and assistance providers to review their travel risk policies and procedures, and adapt them to this new threat environment.”

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Check the cover Anstiss emphasises the need for brokers and their clients to check their cover to ensure its adequacy.

“It’s no good just having cover that pays a specific benefit amount for a terrorism event, because this doesn’t help the traveller when they are in the middle of a terror incident,” Anstiss says.

“The policy must include effective security and medical emergency response. In an emergency, an organisation must be able to immediately identify who is involved and be given updates on their safety and security in the quickest possible time.”

Looking beyond coverage, Moorhouse talks about the ways in which employers – and the brokers advising them – can work to ensure an organisation’s employees are best protected against terrorism risk.

“These incidents can happen anywhere and any time. Organisations need to ensure they have appropriate cover for their people” Wayne Anstiss, Accident & Health International “As an employer, you can’t protect your people every minute of the day. However, it’s part of your duty of care to have a plan in place for when the unthinkable happens to your people, whether they were specifically targeted or just happened to be in the wrong place at the wrong time,” he says.

“This includes assessing the specific risks at the location in which the employee is travelling, as well as assessing the particular

risks of the traveller. Once you have assessed the risks, you turn your attention to mitigating those risks.”

One way a company can do so, Moorhouse says, is by warning its people of potential incidents that could affect them.

“Intelligence alerts or push notifications are a great way to inform your people about threats and potential impacts to their safety,” he says.

He adds that it’s important to make a

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FEATURES

CORPORATE TRAVEL INSURANCE brought to you by

WHEN THE UNTHINKABLE HAPPENS AHI’s Wayne Anstiss recalls events that reinforce the difference that can be made when corporate travel policies encompass terrorism risk.

“During the 2008 Mumbai terror attacks, a number of AHI travellers were caught up at the Taj hotel, where the attack occurred,” Anstiss says.

“AHI not only covered the evacuation of those who were injured, but also any medical treatment they required in addition to the security response to get the clients to safety.”

Anstiss says Dynamiq was able to get the clients out of the building while the attacks were still occurring, even before the Indian hostage rescue team had arrived on the scene.

“AHI also covered the cost of finding a missing client who lost contact during the attack as they were outside of the hotel grounds,” he adds.

“Sadly, one of our clients was killed inside the hotel when the incident first erupted. AHI and Dynamiq worked around the clock with authorities to get the deceased’s body home respectfully.”

Anstiss also discusses last year’s attack in Nice, France, which killed 86 people.

“We had a traveller who was in close proximity to where the Nice attack occurred but not involved,” he says.

“One of Dynamiq’s security consultants reached out to them. While the traveller believed they were safe, the consultant reviewed their situation and gave them invaluable advice on what personal safety measures they needed to take, including a back-up evacuation plan.”

travelling workforce aware of the risks that exist in the country in which they’ll be travelling and to arm them with appropriate training to mitigate those risks.

“We are working with Amazon Web Services,

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for example, to roll out hostile environment awareness training to their travelling staff, which looks at both country-specific and personal risks,” Moorhouse says.

“It’s also important for organisations to take a step back and look at their broader resilience strategy. Most businesses have looked at crisis management through a business continuity lens, but they’re only looking inside the fence.

They will look at what would happen if a terror incident directly affects their head office or people, but won’t look at the wider ramifications if a larger scale terror event was to occur outside

team to go in and get the traveller to safety before the situation deteriorated to violence.”

Anstiss refers to another case that illustrates the importance of a security component in a corporate travel policy.

“One of our travellers had some personal images of himself and his partner in Indonesia.

During the trip, he broke up with his partner and was subsequently blackmailed by the ex-partner, who threatened to go to the local authorities with the photos.

“We sent in a security team to get the traveller out of the country and to safety.”

“As an employer, you can’t protect your people every minute of the day.

However, it’s part of your duty of care to have a plan in place for when the unthinkable happens to your people” Anthony Moorhouse, Dynamiq the wire. Consideration needs to be given to everything from supply chains and partners to suppliers and contractors.”

Terrorism risk aside Asked to cite other essential inclusions in a corporate travel policy, Anstiss talks about the importance of a security assistance component.

“This is necessary for when an employee experiences a direct personal threat,” he says.

“For example, we had a traveller who was in the Philippines on a work trip. He was touring an area with a local resort owner and was riding on the back of his motorbike. The resort owner collided with a police bike, killing both drivers.

The police and the resort owner’s family were soon threatening the traveller. Through Dynamiq, we were able to arrange for a security

It’s also essential, Anstiss says, for medical expenses to be covered under the policy.

“There are many countries in which a hospital stay can easily cost hundreds of thousands of dollars.”

Interestingly, he notes that the USA is probably no longer the most expensive location in the world when it comes to medical expenses.

“Major Chinese cities like Beijing and Shanghai, Hong Kong and others like Singapore quite often exceed the USA in medical costs,” Anstiss says.

“Being covered for financial collapse is another one to watch out for. You only need to cast your mind back to the collapse of Ansett or Strategic Airlines to understand that airlines, travel agents and hotels do go bust and it’s best to be covered.”

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FEATURES

BROKER INSIGHT

INTERRISK AUSTRALIA He’s a former captain of the Wallabies, a Fox Sports rugby commentator and a recent recipient of the Member of the Order of Australia. Phil Kearns talks to Insurance Business about the brokerage he’s led for the past two years

IB: Can you talk about the history of InterRISK? Phil Kearns: Dennis Guy founded the business 14 years ago. He’d spent a lot of time in JLT in Australia and Asia, and he started his own business and he had very good initial shareholders in Soul Pattinson Group, Babcock & Brown and GPG, which is now known as Ariadne … [The business] grew from there, and we’re very proud to say that those three initial shareholders are still clients of ours today – and very good clients of ours. There’s a lot of loyalty built up across the business.

We grew into Melbourne and Brisbane

and, about three years ago, we bought a business in Mackay.

IB: What distinguishes InterRISK from its competitors?

PK: The first thing is loyalty and service.

We’re a very service-oriented business. We pride ourselves on attention to detail and on having our clients’ backs. Through that, we’ve built great loyalty with the clients. They’re loyal to us and we’re loyal to them.

I think the second thing is embracing technology. We’ve implemented a number of things here which are aimed at making insurance easy for our clients, and we’ll

HOW PHIL KEARNS ARRIVED IN INSURANCE Kearns tells Insurance Business that his first job out of university was selling life insurance.

“I had about two years of doing that, which was the best and worst job I’ve ever had,” he says.

Years later, Kearns was the CEO of Centric Wealth, a private equity business.

“We had two life insurance businesses and a small general insurance practice, as well as being a wealth management adviser network,” he explains.

Kearns was introduced by a board member to industry veteran Dennis Guy, who founded InterRISK. “Dennis was turning 70 and wanted to slow down a little bit, and he knew the business needed some change and didn’t want to do that change. So, he got me involved.”

Kearns has been the managing director of InterRISK since April 2015.

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continue to aim to do that just to value-add the service proposition that we’ve got. We’re continually reviewing our service offering to see how we can improve it and make that better for our clients.

IB: How does InterRISK go about attracting and retaining top talent?

PK: Most of the young talent that we’ve got into the business has been through word-ofmouth. Someone may have joined us and been here for a little while, and they enjoy the environment and enjoy the culture, [and] enjoy the fact that we have a bit of fun here.

And that’s one of the values of our business, is that we enjoy what we do. And I think our staff sell that story quite well. We’ve attracted through word-of-mouth mostly, and people know what a good place this is to work.

A good environment is the best way to retain your talent – a very open, honest working environment.

I think the second way is that we continue to try and offer other benefits, as well as education, to help our employees rise to the next level. Often, that next level may be with another company. When you’re a small company like we are – only about 70 people – you can’t provide every opportunity for every person that they may want. But part of our responsibility is to make sure that those people are well trained and can be successful, and if that level of success means that they need to leave us for a period of time, hopefully we’ve been able to skill them up for the future and maybe, down the track, we’ll get them back.

IB: Can you talk about the recently developed InterRISK app?

PK: We have a couple of different client bases here. One is corporate, and that’s the largest part of our business. The second is an SME client base. We look after about 1,200 electrical contractors around the country.

So, if you’re an electrical contractor and you’re up a ladder and you get an email saying that your insurance renewal is due, you want

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FAST FACTS

Areas of Specialty Insurance Broking Corporate Insurance • Professional & Financial Risk Management • Risk Management Consulting • Due Diligence, Mergers and Acquisitions • InterREACT Small to Medium Enterprise Insurance Private Clients Industry Specialties People Risk Management Tourism & Leisure Industry Groups & Associations Electrical Contractors NECA QLD NECA VIC Year founded: 2004 Headquarters: Sydney Number of offices: Four (Sydney, Melbourne, Brisbane and Mackay) Number of employees: 70

“We’re a very service-oriented business. We pride ourselves on attention to detail and on having our clients’ backs. Through that, we’ve built great loyalty with the clients”

Leadership: Phil Kearns, managing director; Bernard Cass, managing director InterRISK Global; Danny Gluszkiewicz, managing director InterRISK Queensland; John Mutton, managing principal; Joe Zammit, managing principal; James Sinclair, managing principal; Joanne Becker, head of people & culture; Marcia Ferreira, head of finance; Christine Bryant, head of operations.

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FEATURES

BROKER INSIGHT

to make that process as easy as possible. So, we’ve been able to put together an app where all that documentation can be stored within that app. It also can be used to manage claims, ask questions, get weather warnings, etc. And through another company, we’ve been able to utilise some technology that prepopulates their renewal form. All the electrician needs to do is to have a look at the document on their screen and press OK, and it’ll all be processed from there. We’re

the two should get stronger and stronger.

IB: Is there anything else you think will become increasingly important attributes of brokers in the future?

PK: Scale is an interesting thing – how do you achieve greater scale as a broker but maintain your service offering? Many of the clients that we win, we win because clients are frustrated with the level of service from global brokers. As we grow as a business,

“Good numbers come when you have a great environment and you’ve got people who are living the values and the aspirations of the business” really trying to make it easy for our clients to do their renewals and to get a higher level of service.

IB: Do you think investment in new and emerging technologies will be important for brokers to remain competitive in the future?

PK: It’s going to be vital for brokers to embrace technology as much as possible.

There’s no point fighting it. Technology is here to stay, as we all know. But I think what is going to be more and more critical in the future is the relationship between the insurers and the brokers, and how they can work together to create new technologies to embrace their customers.

I think that three-way partnership will really strengthen those relationships with clients. In many cases, the brokers know a lot more than the insurers do about a particular client, so that relationship between

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we’ve got to maintain that service at the forefront of what we deliver. And you’ve got to keep re-evaluating that because clients change, industries change, technologies change and, as the world changes, your service proposition has to evolve as well. So, I think that evolution around scale is going to be important for brokers, moving forward.

IB: Can you talk about your future goals as managing director of InterRISK? PK: Without talking specifically about numbers, good numbers come when you have a great environment and you’ve got people who are living the values and the aspirations of the business. I know I try to be as open as I possibly can with information among our staff. They know exactly what’s going on across the business, and in a service business, your people are critical. So, a lot of my focus goes into getting that piece right – making

PHIL KEARNS ON CAREERS IN INSURANCE “I think brokers and the industry should feel proud of the industry that they’re in, because it has an amazing history and people should speak up about what they do and how they do it. I know there are a few things in place or that people are trying to put in place to further legitimise the bona fides of the industry, but there are some really good people doing some good things, and the thing that surprised me most about coming into the insurance industry was the breadth of product that is available and what clients can use insurance for.

So, while investment banking may be the sexy part of the financial services industry to be in, the insurance industry is something that the youth of today should be investigating as a future path.” sure that we do have good strong values, and that we’re living those values. So, many of the goals of the organisation come together through living those beliefs, and it sounds very airy-fairy, but it’s been proven time and time again in organisations, large and small, how critical those values are.

I’d certainly like to grow our Melbourne and Brisbane offices. If we’ve got 50 people in Sydney, which we do, we should have 20 in Melbourne and Brisbane, at least. And certainly to assist our Mackay business.

[Due to] the coal resurgence and a lot of emphasis [being] put from the Queensland and federal governments into North Queensland, we need to think of ways to embrace that change that’s coming to those areas and help to facilitate the growth of those businesses. So, a lot of my attention over the next little while will be focused on our Melbourne, Brisbane and Mackay businesses.

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FEATURES

STRATA INSURANCE

THE STRATA OUTLOOK

What separates the best from the rest when it comes to strata insurance coverage? And what does the future hold for the market in Australia?

Australians are embracing the benefits of both living and working in strata title developments, says Bobby Lehane, CEO at CHU Underwriting Agencies. And according to Strata Communities Australia, around 50% of the nation’s population will work or live in strata by 2040.

Lehane describes the strata insurance market as “very dynamic”.

“There have been a number of new entrants in the market over the last couple of years, which, in addition to the soft market cycle, has driven a significant suppression of rates as the new players strive to find market share and secure survival,” Lehane tells Insurance Business.

He says the industry has seen double-digit levels of discounting for the past two years.

“I believe the market should be a billion dollar market, in terms of insurance premium. In fact, it’s probably closer to $750-$800m at this point in time,” Lehane says.

But he adds that there are positive signs that the market is turning.

“In the last quarter of last year, we started to see the discounting slow down and, certainly this year, we’ve started to see the market harden, as in the commercial insurance space,” he says.

However, Lehane doesn’t expect that rates will rise dramatically.

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“What we’re going to see is a slow and gradual adjustment over the next 12 to 18 months. It’s not going to go up as dramatically as it has come down over the last couple of years, in my opinion.”

Choosing strata coverage When it comes to the purchase of strata products, Lehane mentions several attributes that should be taken into account in that process. He mentions the need to ensure minimum legislative requirements are met, as well as the importance, as with any insurance type, of veering clients away from decision-making

He expects the trend of entrants coming and going from the market to not only continue, but even accelerate, as in many industries.

“If you can reconcile product differences, satisfy yourself that the service and security will meet expectations at least for this year, then a key question to ask in the current strata environment is: Will the chosen provider be in the market in three years’ time? Loyalty is recognised both formally and informally, so giving clients the opportunity for continuity should be a key consideration.”

And, as Lehane emphasises, claims performance is the key to a satisfied customer.

“Strata insurance has a high claims frequency,” he says.

“The majority of feedback we get from the market is about the need for a smooth and efficient claims process. Brokers need to look at how the insurer handles claims – are they centralised or decentralised? Are they onshore or offshore? Are they outsourced or in-house?

Do the claims teams have the relevant experience in strata with the ability to respond quickly?”

Lehane flags the need for brokers to be on the lookout for non-compliant strata policies.

“The phrase ‘not all things are created equal’ is never more relevant than in strata insurance” Bobby Lehane, CHU Underwriting Agencies purely around price.

“The phrase ‘not all things are created equal’ is never more relevant than in strata insurance,” Lehane adds.

“While the products may look similar, we see, with the influx of new players, that there are vast differences in the quality of service and of security.”

“Strata insurance policies cover material damage to structural fixtures, including fixed plant, machinery and underground services resulting from an insured peril. These policies also provide cover for owners’ fixtures, fittings and improvements, which form part of the building.

“Many policies offered in the market are

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brought to you by

CHU UNDERWRITING AGENCIES

household policies that may not cover the full requirements of the strata legislations.”

Lehane also adds the need for brokers to ensure their clients are clear on precisely what is insured by their strata policies.

“Many lot owners and tenants in strata complexes incorrectly believe all of the personal assets are protected as part of the strata insurance policy,” he says.

“Strata insurance specifically excludes contents within individual units such as carpets, curtains, blinds, light fittings and electrical appliances not actually wired into the premises.

These items should be insured by contents insurance or a landlord insurance policy.”

A holistic approach And when it comes to work on top of efforts to secure suitable strata risk transfer solutions, how else can brokers assist their strata clients?

“Strata developments are becoming more

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 the 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:

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.

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.

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.

Pace setting CHU sets the benchmark for innovative insurance solutions and has maintained its

Fairer, faster and easier www.chuniverse.com.au is the dedicated online service for existing customers, providing them with 24-hour access to day-to-day 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.

Secure CHU policies are underwritten by QBE Insurance (Australia) Ltd, one of Australia’s most secure insurance companies.

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FEATURES

STRATA INSURANCE brought to you by

THE LEGISLATIVE LANDSCAPE On 30 November 2016, NSW enacted the Strata Schemes Management Act 2015 and the Strata Schemes Management Regulations 2016.

“This was a wide-ranging review of the strata laws within NSW and included a number of changes to the rules governing strata living in NSW,” Bobby Lehane explains.

“Strata insurance was an area addressed in the review and the new legislation included a number of additional requirements.”

Those requirements included: The minimum limit of public liability cover has increased to $20m.

Managing agents must obtain a minimum of three strata insurance quotes.

Strata managers must disclose all commissions.

Strata insurance sums insured must be sufficient to cover the total costs associated with rebuilding and reinstating the strata property in a total loss.

Increased liability risk to strata executive committees.

For more information on the new legislation, head to http://stratalaws.nsw. gov.au “Other states are currently in the process of reviewing their respective legislations,” says Lehane.

complex and so are the risks. The need for broker advice is now more necessary than ever,” Lehane says.

That advice, he says, should include additional coverages that should be purchased.

“While building and liability insurance is mandated, there are a number of risks strata committees need to consider. These covers include fidelity cover, officer bearers legal liability cover, machinery breakdown cover, catastrophe

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cover, government and audit costs cover, and lot owners fixtures and improvements cover.”

When it comes to risk mitigation, Lehane says the strata market hasn’t been renowned for strategies on this front.

“This continued to be a relatively low priority for strata plans through the recent soft market,” he says.

“However, awareness of the value of good risk mitigation strategies will rise significantly as we see the market hardening. This is where the advice from a broker will greatly assist strata clients.”

insurance. CHUiSAVER is the first digital underwriting agency with the ability to provide real-time quotes.”

Lehane anticipates strata insurance will begin to follow other lines of insurance, in terms of using higher deductibles to offset premium.

“In home insurance, motor insurance and health insurance, it’s a common tool to offset the increase in premium, but strata hasn’t really caught up with that at this point in time,” he notes.

“One of the things we are piloting through CHUiSAVER is actually having much higher

“Strata developments are becoming more complex and so are the risks. The need for broker advice is more necessary than ever” A positive outlook Looking ahead, Lehane describes the future for strata as “very bright”.

“Strata will be the preferred way for Australians to live in the future,” he says.

“If strata can be typified as the modern way Australians will live, CHU is looking to provide solutions for modern living.”

He says, right now, the strata insurance market is behind the times when it comes to embracing technology.

“The processes for underwriting and claims are still manual and there are many inherent inefficiencies in the current systems all providers utilise. This, of course, is not sustainable.”

He expects digital transformation to have an “enormous impact” on strata insurance similar to the way in which it has elsewhere in the industry.

“CHU is taking the leadership role by disrupting ourselves and exploring ways to lead the inevitable change in strata

minimum excesses, and that is resulting in premiums that are 20% less.”

Lehane believes the shift may start to happen this year.

“As the market hardens and people are looking to keep their premiums at a manageable level, then they may well be open to the concept of a higher deductible or a higher minimum excess, but we’ll see.

“The uptake of CHUiSAVER’s been pretty positive, and what we’ve found in three-quarters of the quotes that we get [is that] they’re going with a much higher water damage excess.”

As the market starts to harden, Lehane says insurers will bend over backwards for a loyal customer, which reinforces the importance of choosing an insurer partner that will last the distance.

“Just because you make $50 in savings this year doesn’t necessarily mean it’s in the longterm interests of the clients,” he says.

“The competition is there, but not all of them are going to be around [for the duration].”

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FEATURES

MARINE CARGO INSURANCE

PROTECTION FROM PERILS OF THE SEA

Insurance Business asks expert underwriters for insights into the state of play in the marine cargo insurance market

The maritime industry is currently confronted by several challenges that have arisen as a consequence of the rapid development of technology and digitalisation.

“Unmanned and fully automated vessels are now expected to be in operation as early as 2018,” says Tom Hughes, XL Catlin’s head of marine, Australia.

“While it is an exciting prospect from a ship owner’s perspective with the obvious cost and efficiency benefits, this innovation brings with it a number of safety and reliability challenges that will need to be addressed before they can be passed by the relevant regulatory bodies.”

Insurers, Hughes says, will equally need to be prepared, as the prospect of a crewless ship and its on-board cargo will mean a range of new risk considerations for underwriters.

“This very issue was addressed at the latest International Union of Marine Insurance conference in Genova, who are understandably monitoring developments closely from a marine and transportation underwriting perspective,” he says.

Similarly speaking about the impact of technology on cargo exposures, Richard Grant, Chubb’s marine manager Australia and New Zealand, notes that larger container vessels are

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substantially increasing accumulations on container vessels.

“The first container vessel in 1956 carried approximately 58 containers. By the 1980s, ships were carrying 3,000 to 6,000 containers. Now, we are looking at container vessels that can carry 18,000 containers,” Grant says.

“With these accumulations, brokers need to

challenges for which the international salvage community does not currently have answers,” he says. “While these vessels don’t currently visit Australian shores, our customers’ cargo may end up on them.”

Kidd says the 2015 incident at Port Tianjin demonstrates the danger of port accumulations to marine insurers, with many global companies

“Brokers need to be comfortable that they are placing their business with [an insurer] with the right financial strength to deliver protection in the event of a catastrophic loss” Richard Grant, Chubb be comfortable that they are placing their business with [an insurer] with the right financial strength to deliver protection in the event of a catastrophic loss.”

Andrew Kidd, head of marine for NTI, also comments on the use of larger capacity vessels.

“The impact of these vessels running aground, or being involved in a casualty, presents

facing claims costs in the hundreds of millions of dollars.

“Even with all of our technological advancements, there is still a degree of uncertainty in measuring cargo accumulations.

This is a growing concern for insurers, and also for reinsurers.”

Hughes says the industry still needs to see a

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greater investment in data capture and analytics.

“The global economy is, after all, dependent on seaborne trade and so improving our understanding of cargo exposure accumulation and its potential for catastrophic loss is absolutely critical,” he says.

Under the radar Asked to name exposures in the marine cargo space that are commonly underappreciated, Grant talks about the potential exposures faced by logistics operators.

“Logistics operators may have significant professional indemnity exposures if they do not have correctly drafted operating terms and conditions dovetailed in with appropriate levels of liability and material damage coverages,” he explains.

Additionally, Grant says that clients benefit by brokers having a thorough understanding of the attachment and cessation of transit under a marine transit policy.

“This should fit in with the client’s property program to ensure there are no gaps,” he says.

“As a general rule of thumb, cover continues during the ordinary course of transit and ceases on delivery to the final destination. However, if the cargo is unloaded at any other warehouse or place of storage prior to reaching the destination, some marine covers may cease.”

Mike Davies, XL Catlin’s regional product leader for marine Asia Pacific, mentions the increasing sophistication of supply chain management and the demand for just-intime deliveries.

“As a result, other than physical loss or

damage to cargo, shippers can find themselves exposed to huge consequential or financial losses as a result of late or non-delivery, or damage to the cargo following an insured loss,” he says.

Davies says that although consequential loss cover can add significantly to the cost of cargo insurance, insureds need to be aware of their exposure to additional costs, either contractually or through the need to maintain relationships with important customers.

“Consequential loss cover is particularly relevant for items critical to the continuity of a project,” Davies says.

Kidd discusses the importance of perishable commodities being insured correctly under appropriately worded policies.

“Intermediaries need to ensure they are recommending a specialist marine insurer so

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FEATURES

MARINE CARGO INSURANCE

be left paying the bill themselves if they don’t hold appropriate [coverage].”

THE FORECAST FOR MARINE INSURANCE In a report last October, Swiss Re said the outlook for premium growth across commercial lines was improving because of strengthening economic performance.

It forecast 1.4% growth for marine insurance in 2017

10% 8% 6% 4%

When it comes to broker conversations with clients with a view to ascertaining their specific coverage needs, Grant’s advice is to keep the questions open and broad, in order to encourage the sharing of information.

“For cargo insurance, a good starting point is: ‘Can you take me through the various stages of transit that your goods undertake and is it clear who is responsible for loss or damage to

-6%

“The global economy is … dependent on seaborne trade and so improving our understanding of cargo exposure accumulation and its potential for catastrophic loss is absolutely critical”

-8%

Tom Hughes, XL Catlin

2%

2.3%

1.5%

1.4%

0% -2%

-2.2%

-4%

-10%

2013

2014

2015

-9.2% 2016 2017 Forecast Forecast

Source: Swiss Re, Australia’s commercial insurance market, 2016

that policy conditions can be tailored to support the customer and the goods they are transporting,” he says.

Kidd adds that recent changes to the unfair contract terms law will impact carriers within Australia, particularly SMEs. “Smaller carriers seeking to use written agreements – such as standard trading conditions – to totally exclude their own responsibility for damaged cargo in transit might find those contract terms are thrown out of court and, as a result, they will have to pay for cargo damage. This could mean that carriers might

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Talking insurance

brokers deal with day in day out, so partnering with a trusted marine specialist adviser plays an important role in delivering the best solutions for clients,” he says.

Hughes notes the growing trend in Australia in recent years in commoditising marine cargo products online.

“A more tailored underwriting approach remains critical for businesses whose imports, exports and domestic transits bear increasingly complex and evolving exposures,” he says.

On the topic of risk mitigation, Davies says brokers should look at engaging cargo insurers

the goods at each stage of each transit?’

“This should open up a whole range of further questions and areas the broker can address.”

Davies says: “As each client’s business and exposures can be very different, my main guidance for brokers who have limited experience in marine cargo insurance is to find a specialised cargo underwriter to partner with. The underwriter will have the knowledge and expertise to highlight the exposures a client’s cargo may have during international shipments and recommend the most appropriate cargo insurance solutions.”

Similarly, Grant says brokers can benefit from dealing with an insurer that has “the prerequisite specialist knowledge to provide sound advice for clients”.

“Marine insurance is not something most

that offer risk engineering services to clients.

“Marine risk engineering is an added value offered by some marine cargo insurers, and it plays a vital role in helping clients formulate their loss prevention strategies and determine the future direction of their business,” he says.

“Risk engineering can be used proactively to assess clients’ existing or new operations and tailor solutions to minimise the business exposure to a loss. It can also be used reactively after a cargo claim to identify the reason for the loss and suggest actions to prevent similar or related losses from occurring in the future.

“Clients will get insights to the industry benchmarks, best practices and loss history, empowering them to make informed decisions around their risk improvement actions and budgets.”

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27/03/2017 9:27:44 AM

ADVERTORIAL

MANAGEMENT LIABILITY

PARTNERSHIP PROTECTION Management liability for partnerships – are you buying the correct cover?

Brought to you by:

TODAY, MANY partnership firms, while not incorporated within the meaning of the corporations law, have adopted a corporation style management structure. Adopting such a structure may expose the firm, individual partners and any other “non-partner” individuals charged with the responsibility of running the firm to claims arising from the management of the firm. This exposure is in distinct contrast to claims arising from a breach of professional duty while providing professional services to the firm’s clients; traditional professional indemnity matters.

Employment disputes such as unfair and wrongful dismissal, sexual harassment, workplace harassment and discrimination are becoming much more common in Australia.

Partners may be personally exposed to liability arising from employment disputes along with the firm.

LAUW has seen many partnerships (and, more specifically, law firms) while recognising the evident exposures to their businesses, purchase off-the-shelf management liability or

48

standalone directors and officers and employment practices liability (EPL) products.

Such offerings are tailored to incorporated entities and may not offer partnership firms the specific cover they need. Key flaws in these offerings can include an indemnity provided by the firm to any partnership board member not being insured and EPL insurance not extending to cover partners (whether salaried or equity) who may have committed a wrongful act.

Recognising these weaknesses, PARTNERSHIP PROTECTION was developed to provide meaningful cover specifically tailored for partnership firms, including those that have adopted a corporation style management structure.

Among others, four key features of PARTNERSHIP PROTECTION are: Cover is provided for both salaried and equity partners acting in the capacity of director or executive officer of the firm or any service or administration company or trust related to the firm. Cover is also provided for

1

both salaried and equity partners in relation to employment practices liability.

2

Nil excess is payable where the insured receives final adjudication in their favour.

The firm retains the right and duty to defend and contest any claim. This has proven very attractive in particular to law firms who can defend a matter in-house without having to share internal management issues with an external law firm.

3

Partner versus partner and partner versus the firm coverage. There is no insured versus insured exclusion or consensual claim

4

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LONDON AUSTRALIA UNDERWRITING

exclusion applicable. Furthermore a major shareholder exclusion only applies to claims arising from any outside directorships that may be covered.

Steve Walker states that interest and uptake in PARTNERSHIP PROTECTION has been strong and continues to grow. Broker and client feedback to the product has been excellent.

LAUW has not been asked to manuscript a single PARTNERSHIP PROTECTION policy to date, testament to the breadth and quality of the product.

The uptake has been particularly strong within the legal sector and encompasses the smallest to largest firms.

Policy limits are available to $20m with a

sub-limit of $5m available for entity/EPL cover for the firm.

Crime coverage is available to a sub-limit of $1m as is statutory liability making PARTNERSHIP PROTECTION the complete management liability product for partnership firms.

Please contact Steve Walker or Glenn Dawson for further information: Glenn Dawson – Portfolio manager PPML (02) 8912 6405 glenn.dawson@lauw.com.au Steve Walker – Director (02) 8912 6402 steve.walker@lauw.com.au

Since the company was established in 2005, London Australia Underwriting (LAUW) has been providing brokers and clients with innovative products backed by first-class security.

LAUW underwrites on behalf of an expansive stable of Lloyd’s of London syndicates, so our policyholders can sleep easy in the knowledge that they are protected by the strongest chain of security available in today’s global insurance market.

Having now been established for over 10 years, LAUW has firmly cemented its position at the head of the marketplace with a wide choice of innovative products backed up by one of the most experienced underwriting teams in the market.

LAUW’s underwriting personnel and portfolio managers all boast significant experience in the financial lines sector in the local Australian marketplace.

LAUW’s model focuses on innovation and service. While maintaining a consistent open market presence, LAUW can also target specific business sectors, applying a stringent risk-selection criterion that ultimately delivers superior and sustainable underwriting results.

This in turn benefits brokers and their clients with fair and timely claims settlements and consistent pricing.

Having an ever expanding product range, the company is constantly on the look-out for new opportunities, relationships and strategic partners.

Any broker wishing to establish a trading arrangement with LAUW is strongly advised to contact the management team.

All contact details are available at LAUW.com.au.

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FEATURES

MANDATORY DATA BREACH NOTIFICATION REGIME

THE TIME HAS ARRIVED

Australia’s long-awaited mandatory data breach notification scheme is finally here

THE PRIVACY Amendment (Notifiable Data Breaches) Bill 2016 has passed into law and will come into effect within the next 12 months.

The amendments require organisations governed by the Privacy Act, with an annual turnover of more than $3m, to provide notice to affected individuals and the relevant regulator when particular kinds of security incidents compromise personal information.

“The requirement to notify certain data breaches will increase the exposure that data breach incidents receive in society, which will in turn increase the likelihood of claims arising,” says James Morse, litigation and dispute resolution partner at law firm DLA Piper.

“While the mandatory data breach notification regime does include a mixed subjective/objective test in terms of whether the relevant disclosure thresholds are met, when coupled with the recent 2014 tightening of the general privacy regime in

50

Australia, it is clear that the regulatory focus has shifted from education on risks to potential liability where information risk is not managed adequately, and cyber claims are, therefore, likely to result.”

Those cyber claims, Morse says, are likely to be extremely technical and demand “a rapid but specialised response”.

“Cyber events also have an inherently global dimension, and the complexity and diversity of breach notification requirements across the world are expected to increase in the coming years,” he says. “Combined, these impacts represent real risks which businesses are unlikely to be able to adequately address on their own.”

Cyber insurers, Morse says, are “particularly well placed to formulate and mobilise a team of experts to respond to a data breach, across a number of jurisdictions in a very short period of time.”

“That said, even if a business elects not to take out standalone cyber insurance with rapid response cover, it would be well advised to take out a cyber extension on its existing policies – management liability, for example – which is likely to provide valuable, even if comparatively limited, cover in the event of a cyberattack.”

Peter Jones, information technology and data protection partner at DLA Piper, says the degree of impact for any particular business will depend on the extent and sophistication of its operations, its existing and future supplier environment, and the nature of its contractual obligations.

“For example, for international entities with offshore operations already subject to other mandatory breach notification regimes, the impact may be minimal, such as tweaking internal compliance functions,” Jones explains.

“Yet for entities with local footprints only and who do not have experience in managing data breaches or associated notifications, the changes may be significant.

“Perhaps the most immediate impact will be a need for each business to review its privacy regime – including around its supplier environment and contractual obligations – and ensure it has operational and risk management procedures in place to adequately manage a data breach event.”

Morse says it’s the general consensus in the United States that mandatory data breach notification legislation was a catalyst for the increased uptake of cyber insurance.

“Given the Australian laws are stricter than those across the US, one could expect to see a similar increase in the uptake of cyber insurance, at least among those businesses which are not already exposed to other mandatory breach notification regimes,” he says.

“However, and quite interestingly, there was concern among some circles in the US that the influx of mandatory notifications was desensitising society to the seriousness of data breaches, with smaller notifications being lost as background noise in the face of larger breach notifications.

“Some critics of the regime suggest Australia may experience similar notification fatigue, which could eventually undermine the effectiveness of the entire reporting scheme.

“Only time will tell whether or not this, in fact, occurs.”

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FEATURES

TROPFEST

THE SHOW GOES ON

Australian actor, director and Tropfest founder John Polson talks about the phone call that led to the rescue of the world’s largest short-film festival THIS YEAR, on Saturday 11 February, the Tropfest film festival celebrated its 25th anniversary at its new home at Sydney’s Parramatta Park. Each year, more than 70,000 people attend its main event.

“It’s come a long way in 25 years,” John Polson tells Insurance Business.

“It started as a screening of a short film for 200 people in a cafe … I never thought we’d get to five years, let alone 25.”

But in 2015, the future of Tropfest began to look bleak. Polson, who is based in New York, was contacted by the management company licensed to run the festival. According to Polson, he received an email, which advised him that there were insufficient funds to move forward with the scheduled December 2015 event.

“That was a major blow. I thought Tropfest was probably done, although I didn’t want to admit it to myself or anyone else at the time.

But I was forced to announce the postponement … I really had no clue how we were going to bounce back from this. The financial hole was overwhelming and there was really no way to fix it.”

Polson says Tropfest has helped to launch some of the finest film talent in the country.

“There’s a very long list of filmmakers, actors, writers and producers who have come through over the years, and I think it would be a pretty big vacuum in the Australian film industry to not have an event like this.”

News of Tropfest’s postponement spread quickly. Soon, Polson received a phone call from CGU, with an offer to help ensure the festival would go ahead.

“I thought it was a prank call, to be honest,” Polson says.

But it wasn’t long before Tropfest was able to announce that, as a result of CGU’s intervention, the festival would return in early 2016.

52

“I thought Tropfest was probably done, although I didn’t want to admit it to myself or anyone else at the time” “We had our biggest and best festival to date … thanks to CGU,” he says.

It was then announced last July that CGU had signed a three-year deal with Tropfest. Polson describes Tropfest’s partnership with the insurer as “amazing”.

“They’ve been the best kind of partner in the sense that they offer a lot of support and resources, but they also respect what Tropfest is and has been for 25 years. They let us run our business and are just there to help support the creative community in Australia through Tropfest,” he says.

That support means the outlook for the festival is now far more optimistic.

“Longevity, when you’re running an organisation like Tropfest is difficult at the best of times. It’s a very big, expensive event to produce. It’s free for the audience to attend, so

there’s no obvious ways to make revenue, so corporate goodwill and corporate sponsorship is a major part of our business model,” Polson says.

“We’re now a not-for-profit organisation for the first time in our history, and we’re moving forward in a very different way. To have CGU and others commit for a period of years really gives us breathing room to not just be thinking about surviving, but actually building and growing the event.”

For the first time in Tropfest’s history, the 2017 event comprised a five-day program of events.

“We’ve never been able to do that before, and it’s largely thanks to the support of CGU and giving us enough rigour to be able to build a platform out of this over a period of time which, in turn, helps the people that we’re trying to help, who are Australian filmmakers.”

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PEOPLE

CAREER PATH

A GLOBAL FOOTPRINT

Talbot Underwriting Australia managing director Andrew Case began his career in a London broker and became the man to bring Catlin to our shores Case completed his geology degree and sought a role where that knowledge would be valuable.

1985 ENTERS INSURANCE

1993 ARRIVES IN ASIA Looking for a new life experience, Case relocated to Singapore with Willis and learned an important lesson about the need to devote proper attention to individual Asian markets.

“On arrival in Asia, I was given the freedom of originating energy business from any country in the region. However, only when I focused on one or two countries did I begin to make progress. The lesson I took away from this experience was that success requires focus and a scattergun approach to business production seldom yields results.”

2004 BRINGS CATLIN DOWN UNDER Case was employed to establish Catlin’s Australian operation, based in Sydney.

“We were lucky that the Lloyd’s market had already written a lot of business, following the collapse of HIH and the capacity crunch post-9/11. So, Catlin as a group had already developed: a brand presence among the bigger brokers, products that were needed in Australia, appetite that was broad and, most important, could offer prices that were both competitive and adequate.”

2017 MOVES FORWARD Case’s first task at Talbot is to ensure infrastructure is created suitable for today’s distribution environment.

“Brokers are increasingly investing in infrastructure to expand their role into underwriting in turn for a bigger slice of the premium pie. In my view, this expansion is the new reality and it’s up to underwriters to adjust our business model to remain profitable. As a new entrant, we need to ensure we don’t replicate their infrastructure to enable us to keep our products competitive in the market.”

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“My cousin worked in Lloyd’s and he suggested that perhaps a position at an oil and gas insurance brokers would be interesting for me. I had interviews with Alexander Howden, Sedgwick, and Willis Faber and Dumas (WFD). I think they all offered me a job, but WFD had the most impressive building, so I joined them – not a very scientific way of choosing a job, but a very fortunate decision, as the oil and gas division at Willis was resplendent with exceptional talent and fantastic clients.”

1988 BREAKS INTO BROKING Soon after commencing work as a technician at WFD, it was apparent to Case in which direction he should move.

“Market brokers had greater visibility in the market than technicians, so I needed to get hold of a slipcase and get out into the market ASAP – so I became a placing broker.

In this role I met a lot of people, gained a lot of knowledge and, courtesy of my slipcase, developed a bad back.”

2002 RELOCATES TO AUSTRALIA Case asked to be relocated to WA after his family fell in love with Australia in the late 1990s. But he kept his responsibilities in Asia, which meant regular trips back to Singapore and soon clocking over 100 flights a year.

“I think the highlight of my stint in Perth was realising that my understanding of offshore energy legal contracts was in relatively short supply and a number of local oil and gas companies would value my expertise.”

2016 TAKES ON TALBOT After growing Catlin in Australia into a relevant player, Case sought a new challenge.

I knew the senior team at Talbot in London and fortunately for me they were looking for someone to lead the team in Australia. Hopefully my experience building a Lloyd’s business in Australia will prove valuable to them

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PEOPLE

CAREER PATH

www.ibamag.com

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PEOPLE

OTHER LIFE

A MARATHON EFFORT Sue Addison has taken part in many long-distance running events, but nothing could match her experience of the world’s largest marathon ON 6 NOVEMBER 2016 Sue Addison, senior underwriter for SURA Commercial, crossed the finish line in the New York City Marathon, a 42km run through NYC’s five boroughs.

Addison had previously taken part in half-marathons

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and Sydney’s annual City2Surf, but this was her first marathon.

“My running buddy wanted to do it for her 40th …

I didn’t think I could do it,” Addison says.

With encouragement from those around her and taking inspiration from a podcast by former world champion runner Robert de Castella, Addison eventually decided to enter.

“Nothing prepares you for it,” she says of the experience. “It was spectacular! It blew my mind …

I just had the time of my life.”

It was an experience that afforded Addison the opportunity to meet de Castella in New York. She talks about the ongoing impact of her NYC Marathon run.

“It’s certainly changed my view on a lot of things, and I’ve already made many changes this year [in terms of] goals that I want to achieve. It’s not only for me, personally. It’s about also giving back to the community.”

1970

The year of the first New York City Marathon, held entirely in Central Park

51,394

The number of runners who finished the 2016 marathon

4h 37m 38s

The average finishing time for runners in the 2016 marathon

www.insurancebusinessonline.com.au

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