Insurance Business 7.02

insurancebusinessonline.com.au Issue 7.02

PROFILES IN SUCCESS

Hyperion Insurance Group’s David Howden and DUAL’s Damien Coates

ACCIDENT AND HEALTH

What protection for travelling employees should look like

MANAGEMENT LIABILITY

Emerging risks that every business leader must understand

LEADING THE GALLAGHER WAY Chief executive Sarah Lyons on building the broking giant’s presence in Australia

FINALI

STS

ELITE BROKERS 2018

IB’s annual list of the nation’s top insurance brokers

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ISSUE 7.02

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CONTENTS

@InsuranceBizAU facebook.com/InsuranceBusinessAU

UPFRONT 02 Editorial

32

PEOPLE

LEADER PROFILES

SPECIAL REPORT

22

Insurance Business speaks to Hyperion Group CEO David Howden and the man he tasked with establishing DUAL in Australia 25 years ago, Damien Coates

PEOPLE

LEADING THE GALLAGHER WAY Gallagher chief executive Sarah Lyons talks about continuing to build the Gallagher name in Australia and what the future holds for brokers

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04 Statistics

What key opportunities are brokers neglecting with SME clients?

06 Head to head

Assessing Amazon’s potential impact on insurance

08 Opinion

How the industry can move the needle on recovery of injured workers

10 News analysis

The reality of reputational risk in today’s world

12 Intelligence

AXA and XL Group announce a gamechanging merger

ELITE BROKERS 2018

For the sixth year in a row, Insurance Business sets out to find Australia’s top insurance brokers

IB steps up its efforts to recognise the best in the business

FEATURES

40

COVERING THE BOTTOM LINE

What issues do brokers need to keep in mind when arranging management liability cover?

14 Insurer update

Minister Kelly O’Dwyer addresses affordability and the royal commission

16 Underwriting agencies update ASIC’s Peter Kell weighs in on the General Insurance Code review

FEATURES 44 Ensuring a pleasant trip

How to properly protect travelling employees in a rapidly changing word

60 Build a virtual workforce

Break free from the office chains with these four steps

FINALISTS FEATURES

48

IB AWARDS FINALISTS

Discover who’s in the running for recognition at the industry’s exciting new annual celebration

63 Reduce your flood risk

Steps businesses can take to mitigate their exposure to extreme weather

PEOPLE 64 Other life

Lacrosse superstar Alexander Liu

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UPFRONT

EDITORIAL

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More rewards and recognition

S

ince we began publishing almost six years ago, a hallmark of Insurance Business has been the ongoing recognition of the best of the best in our industry. Whether it be top brokers, rising stars or the best-performing insurers and agencies, IB has always strived to acknowledge the work of the finest insurance professionals Australia has to offer.

Towards the end of 2017, we made the decision to step up our efforts on this front, and the Insurance Business Australia Awards were born. To be held at the Westin Hotel in Sydney on Friday, 4 May, the inaugural ceremony will bring together industry leaders from across the sector in a celebration of the general insurance community. We will recognise leading brokers and brokerages, general insurers, and underwriting agencies for the outstanding contributions these organisations and individuals have made throughout the past year. Deciding who will receive these prestigious awards is a panel of more than 30 judges, including several of the industry’s most respected leaders. In total, 28 awards will be presented.

IB has always strived to acknowledge the work of the finest insurance professionals Australia has to offer As we move closer to the big night, I am proud to be able to announce the finalists for 25 of the accolades that will be presented at the first annual Insurance Business Australia Awards. I encourage you to read our full finalists feature, which you’ll find on p48. You may well discover your own business, or someone you know, included among the finalists.

As editor, it’s exciting to have the opportunity to take part in this next phase of Insurance Business’ development, reinforcing its commitment to the general insurance community in Australia. I would like to sincerely thank the organisations that are supporting our endeavours in this, our first year – specifically, our award sponsors, Gallagher Bassett, JAVLN, K2 Recruitment, Lloyd’s, London Australia Underwriting, SURA and XL Catlin, and our associate sponsor, Young Insurance Professionals Australia and New Zealand. We are grateful to you for coming on board to help ensure the success of this event, which will no doubt become a fixture on the industry calendar. The IB team very much looks forward to celebrating the industry with many of you in May.

Tim Garratt, editor

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

CONTRIBUTORS Mark Pittman, Ruth MacKay, Lyndon Broad

ART & PRODUCTION Designer Joenel Salvador Traffic Coordinator Freya Demegelio

SALES & MARKETING General Manager Peter Smith Commercial Development Manager Sophie Knight Marketing & Communications Manager Michelle Lam

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

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 America 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 Insurance Business Canada john.mackenzie@kmimedia.ca T +1 416 644 874O Insurance Business NZ peter.smith@keymedia.com.au T +61 2 8437 47OO Insurance Business UK nathan.beach@keymedia.com T +44 20 7193 0935 Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss.

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UPFRONT

STATISTICS

SMEs: a glass half full While broker use among SMEs remains stable, there’s still plenty of untapped opportunity in this segment

THE LATEST SME Insurance Index from Vero highlights both the complexity of SMEs’ buying behaviours and the increasing importance of referrals. While almost eight in 10 SME clients said they were willing to recommend their broker, only 19% had actually been asked by their brokers to do so. “The trend demonstrates the power of word of mouth for brokers, yet the index suggests there are very few exploring this

option,” said Anthony Pagano, head of commercial intermediaries for Vero.

The report also revealed that just under half of all SMEs are using brokers for only some of their business insurance needs. “If you can understand why your client is more comfortable obtaining certain products via direct channels, you’re much better placed to explain the value you can provide,” Pagano said.

Not at all comfortable Somewhat comfortable Very comfortable Reviewing existing insurance policies Getting an insurance quote Asking questions about current policies Filing a claim Researching insurance options Making amendments to current policies

59%

37%

of SMEs reported having a standard insurance review in place

of SMEs only review if there’s a change in premium or an insurance event

26%

16%

of SMEs review insurance when a significant business change occurs

of SMEs claimed that they ‘set and forget’ their insurance

Identifying the most appropriate coverage

Source: Vero SME Insurance Index 2018

BROKER USE UP SLIGHTLY

WHY SMEs ARE BUYING DIRECT

This year, 37% of SMEs reported using a broker – a minor increase on the 34% who said they used a broker last year.

Nearly a third of SMEs surveyed said they were using brokers less than they used to. But the reasons SMEs provided as to why they chose to buy direct also point to opportunities where brokers can up their value proposition.

Ease and convenience

56%

Price

45%

Under-serviced

39%

Online preference

34%

70% 60% 40%

38% 62%

38% 62%

34% 66%

37% 63%

0%

44% 56%

20%

2013

2014

2015

2016

2017

Broker users

Direct buyers Source: Vero SME Insurance Index 2018

4

0%

20%

40%

60% Source: Vero SME Insurance Index 2018

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GETTING MORE COMFORTABLE ONLINE For the first time this year, Vero asked SMEs to rate their comfort in performing certain insurance-buying tasks online, illuminating areas that are ripe for brokers to automate.

While respondents were most comfortable handling administrative tasks – such as getting a quote or renewing a policy – only 12% claimed they weren’t at all comfortable with the more complex job of figuring out which coverage best fits their needs.

8% 9% 8% 12% 10% 13%

39%

53%

42%

49%

45%

46% 48%

40%

50%

40%

49%

12%

38%

52%

36% Source: Vero SME Insurance Index 2018

MISSED OPPORTUNITY

42%

31%

Word of mouth is a powerful tool – and one not nearly enough brokers are using to their advantage.

How likely would you be to provide a referral if your broker asked you for one?

0%

Non-users (0%) Mixed users (1–89%) Broker users (90–100%)

5%

4%

20%

13%

40%

41%

The use of brokers for some, but not all, business insurance purchases is a widespread trend – 42% of SME respondents said they use brokers for just some of their insurance (between 1% and 89% of their purchases).

27%

37%

BUYING VIA BROKERS

Extremely Somewhat Not sure Somewhat Extremely likely likely unlikely unlikely

Has your broker ever asked you to recommend their services to others?

Yes

19% Source: Vero SME Insurance Index 2018

No

76%

Unsure 5%

Source: Vero SME Insurance Index 2018

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UPFRONT

HEAD TO HEAD

How would Amazon entering the industry affect brokers?

The online retail giant has started making moves toward offering insurance. Is this potential disruption a pro or con for brokers?

Geoff Stooke

Deepak Soni

Managing director Modern Risk Solutions

Director of commercial intermediary AXA Insurance

“My business would look forward to the prospect of working with Amazon on highly customised insurance solutions for clients across the technology sphere. Most of our clients are technology-enabled and have existing relationships with Amazon through Amazon Web Services [AWS]. In that space, Amazon has been a proven provider of affordable virtual servers that offer scale and active customer and managed services.

I am also enamoured of the fact that Amazon has a history of intermediating their services in AWS through their Amazon Partner Network – perhaps Amazon would intermediate their insurance distribution through such partnerships.”

“Both brokers and insurers, especially volume-based personal lines providers, could be impacted by Amazon’s possible entrance into the insurance market.

Amazon is renowned for cutting the cost of products and distribution and taking a customer-centric approach built on trust, transparency and convenience, and that is an approach the insurance industry needs to focus on.

Any move by Amazon into the industry should be seen as an opportunity. Tough competition, especially from a company with a strong track record, is an opportunity for us to look at our own operating models and how we can evolve in the future.”

Scott Guse

Partner, audit assurance and risk consulting KPMG “When you hear the word ‘Amazon,’ you immediately think disruption. I may be going out on a limb here, but I don’t think Amazon’s entrance to the insurance market will cause any major issues for brokers.

A broker’s clients are not retail clients, which are an easier insurance sell; they are SME and larger corporates. Provided the broker is doing their job properly – advising, assisting and adding value to their clients – I would expect their clients will remain loyal.

The retail/direct insurers … well, that’s a different question. Yes, it will certainly impact them.”

APPETITE FOR DISRUPTION Speculation abounds about Amazon’s designs on the insurance industry after it was reported that the tech giant was recruiting insurance professionals in London and plans to invest in India-based insurtech startup Acko. Any entry into the insurance market by Amazon is likely to equal disruption, according to Capgemini EVP and insurance lead Seth Rachlin. “There’s no digital property that is more pervasive from a retail perspective than Amazon,” he told Insurance Business late last year. “If they do something beyond [their] warranty business, then it’s likely to be disruptive because people will notice and pay attention.”

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UPFRONT

OPINION

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

Working towards better outcomes Improving the outcomes for injured workers requires insurers to adopt a new approach, writes Allianz’s Mark Pittman MAJOR SHIFTS across the entire insurance industry have been an enduring theme in recent years. Factors contributing to these shifts include the advent of advanced technology, which offers access to more meaningful data and better analytics than ever before. This has, in turn, led to new business models and products, as well as big changes in the way we interact with our clients and customers. Sitting alongside such change is the fundamental – and ongoing – transformation of our regulatory and risk landscape.

In the midst of all this, as insurers, we are seeking deeper understanding of the true complexity of the events that affect our customers.

In so doing, our goal is to isolate areas where changed practices and new thinking can make a positive difference, including in the claims experience, the development of models and products, and the way we interact with and support our customers in times of need.

Workplace injury is a prime example of such transformation in action. Recent initiatives undertaken at Allianz – which include piloting an entirely new holistic claims approach, underpinned by specialised behavioural assessment – are already delivering highly promising results.

Our focus on this area was triggered by increasing understanding that traditional medical models to assess and manage injured workers were not working. The focus was often more on the process than the person, with regulation and

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compliance seen as key drivers and very little worker engagement.

The result? Not only were return-to-work [RTW] figures remaining static, such claims were also increasingly accompanied by a disturbing level of secondary psychological injury. In NSW alone, for example, Allianz found that the proportion of people injured at work who go on to experience a secondary psychological injury has jumped by 50% in the past five years.

self-worth that work brings can lead to the kinds of secondary mental health problems too many injured workers are experiencing.

Further, the program reflects our understanding of an injured worker as a whole person – one with social, psychological and emotional as well as physical needs. To this end, we have applied a new ‘biopsychosocial’ claims philosophy.

As the name suggests, it is one that has the wellbeing of the whole person at its heart.

For Allianz, that initial claims experience forms the starting point for tailored support and RTW programs that combine behavioural insights with engagement with our customers as fellow humans, rather than in a transactional manner.

Just as important, in our new approach, we have stopped focusing on the injury or what a customer cannot do. Instead, we focus on what they can.

Already, compared to previous figures in the same sector, we are seeing 27% higher return-towork results, and claims finalisation is occurring three times faster.

Collaboration has been central to the program’s success – collaboration between the insurer, worker, doctor, employer and the relevant compensation scheme. That has involved working together from the outset in the design of the scheme, with transparent and aligned agendas.

Some 600,000 workers are injured each year

“As insurers, we are seeking deeper understanding of the true complexity of the events that affect our customers” New global figures also bore out our emerging understanding of the significant role of psychosocial factors in recovery from injury – one study showed that 81% of return-to-work barriers were not related to the original injury.

In the face of such figures, it became clear that we needed to extend our focus beyond the physical injury. The Allianz StartSMART program, co-designed by Allianz with icare and the NSW Department of Education, has been created to do just that. One of the underlying premises of the program is that connection with work delivers health benefits. Conversely, isolation, disconnection and removal from the sense of identity and

in this country, 127,000 of them seriously. The annual economic cost of such injuries sits at around $60 billion. The social cost is untold. We sincerely believe that, with the help of some frank self-scrutiny from our industry, the improvements we’re already experiencing – and driving – can form part of the overall positive shift of our industry as whole.

Mark Pittman is general manager of government services in Allianz’s workers’ compensation division, leading strategy and operations for claims and injury management services to federal, state and territory personal injury schemes.

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UPFRONT

NEWS ANALYSIS

The risk of a reputation A maelstrom of social media, high stakeholder expectations and public discontent is driving the frequency and severity of reputational crises – and the insurance industry itself is not exempt DUE IN NO small part to the power of social media, both individuals and organisations are increasingly held to account for their actions by the public in today’s world.

Now that the average consumer has a smartphone in their pocket, they also have a platform with which to share their grievances with the world – which can be bad news when it comes to companies’ public relations. In an age when an incident can quickly become a viral sensation, organisations are finally waking up to the reality that a reputational crisis is always just a tweet away.

Alongside traditional operational risks such as mis-selling, poor product design and failure to protect customer rights or data, businesses today face wider-reaching cultural and societal challenges, too.

This was driven home in 2017, during

ment. United Airlines went viral for all the wrong reasons after a video emerged of a passenger being dragged off an overbooked flight. Perhaps most notably, Hollywood heavyweight film studio The Weinstein Company became embroiled in what has since become a major social movement when dozens of sexual assault and misconduct accusations emerged against its now-disgraced co-founder, Harvey Weinstein.

The prospect of a reputational crisis today means more than just bad PR, though – it is likely to impact a company’s bottom line. In the five years leading up to 2016, reputational insurer Steel City Re found a 461% increase in corporate reputation-related losses.

The growth in the overall frequency and severity of reputational losses has been driven by three factors, according to Steel City Re

“Reputational risk – because it is linked to expectations and is triggered by disappointment – can emerge suddenly” Nir Kossovsky, Steel City Re which time a number of major brand names encountered significant reputational crises.

Pepsi was forced to pull a commercial starring model Kendall Jenner after it was accused of trivialising the Black Lives Matter move-

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CEO Dr Nir Kossovsky. The increasingly high expectations of stakeholders (resulting in a progressively low tolerance of failure), the rise in the use and ability of social media to spread both true and false stories, and a growing

sense of anger and disappointment among the general populace are all creating a breeding ground for reputational disasters.

Social media in particular has the power to greatly accelerate change, and it’s being used as a “powerful weapon against companies, industries and individuals when they become targets,” Kossovsky says.

Insurance companies themselves have not been exempt from being drawn into controversy. Following the February school shooting in the US that left 17 people dead, a number of corporations cut ties with the gun lobbying group the National Rifle Association [NRA], including insurance giants Chubb and Lockton.

Chubb revealed it would stop underwriting NRA Carry Guard, a branded insurance policy for NRA gun owners, though it said the decision was made months before the Parkland shooting. Lockton followed with an announcement that it would no longer sell

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REPUTATIONAL RISK

BY THE NUMBERS

461%

Increase in corporate reputation-related losses between 2011 and 2016

40%

Proportion of millennials in the US who say they will avoid United Airlines following the passenger removal controversy that erupted in April 2017

Less than 24 hours

products with an NRA endorsement.

“Lockton Affinity has notified the NRA that it will discontinue providing brokerage services for NRA-endorsed insurance programs under the terms of its contract,” the broker said in a tweet.

According to Kossovsky, companies are

was allegations of unethical and inappropriate executive behaviour that gained prominence through #MeToo,” Kossovsky says. “At this particular moment, it is the NRA. For corporate leaders responsible for protecting the assets of a firm, the lesson is that reputational risk – because it is linked to expectations and

“Reputation harm insurance ... covers the temporary loss of income while an organisation recovers [from a breach]” Jeremy Barnett, NAS Insurance Services acting now because “the fear of economic harm by angry or disappointed stakeholders – what we call reputational risk – is much greater.

“Earlier this year, the top reputation risk

is triggered by disappointment – can emerge suddenly with shifts in culture.”

As technology continues to advance at rapid speed, cyberattacks and cybercrime can also present reputational risks for organisa-

Time that elapsed before Pepsi pulled its controversial ad starring model Kendall Jenner following a social media backlash Sources: Steel City Re, Morning Consult, LendEdu, Vox.com

tions. As a result, some insurance carriers now offer coverage for financial losses suffered as a result of cybercrime. Responding to a cyberattack can be costly and time-consuming, which can result in a serious knock-on effect on a business’s bottom line.

“Reputation harm insurance not only helps cover the cost of a breach, but also provides funds to cover the temporary loss of income while an organisation recovers,” says Jeremy Barnett, senior vice president of marketing at NAS Insurance Services.

The message to businesses is clear: In today’s world, a reputational crisis can mean more than just some bad publicity. According to Kossovsky, economic damage from a reputational crisis “can be as great as the damage from a sudden tornado.”

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UPFRONT

INTELLIGENCE CORPORATE ACQUIRER

TARGET

PRODUCTS COMMENTS

Aon

Affinity Insurance Brokers

Affinity will maintain operations out of its Cheltenham, Victoria, premises

Ausure

Abico Insurance Brokers

Ausure has acquired a 50% stake in the brokerage, which is based in Wollongong, NSW

AXA Group

XL Group

Total consideration for the acquisition amounts to US$15.3bn (A$19.8bn)

Gallagher

Russford Insurance Agency

Russford joined the Gallagher business on 2 February

Liliana Uhrik, national financial institutions and cyber liability product manager for AIG Australia, at February’s CyberEdge Launch Event in Sydney

Crawford & Company expands into workers’ comp

AXA acquires XL Group

On 5 March, AXA announced it had entered an agreement to acquire 100% of leading property & casualty insurer XL Group. XL Group employs around 7,400 people across the globe and generated US$15bn worth of gross written premium in 2017. The acquisition is valued at US$15.3bn.

AXA CEO Thomas Buberl described the transaction as “a unique strategic opportunity for AXA to shift its business profile from predominantly L&S business to predominantly P&C business”, adding that the move would enable “the group to become the number-one global P&C commercial lines insurer based on gross written premiums.”

“We are excited at the opportunity to build the scale, geographical footprint, product portfolio and the unmatched commitment to innovation that relevance in the global insurance industry requires,” said XL Group CEO Mike McGavick.

The transaction is subject to approval by XL Group shareholders and other customary closing conditions, including required regulatory approvals. It is expected to be finalised during the second half of 2018.

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Crawford & Co has expanded its service portfolio in Australia to include workers’ compensation, which will be delivered through Broadspire, its TPA solution. The workers’ compensation service offering will support existing customers and other large insurers, corporations and government departments.

Broadspire’s workers’ compensation claims product includes injury management services, legal cost containment, subrogation and a full suite of analytics, combined with medical management and multidisciplinary expertise aimed at helping to ensure employees’ swift and healthy return to work.

QBE launches school-fee insurance product

QBE has launched a new product targeting parents who send their children to private schools.

The product, School Fee Protect, provides cover for parents who become involuntarily unemployed or suffer an injury or disability that affects their ability to pay their children’s school fees. More than one in three children attend fee-paying schools in Australia, which “is creating enormous financial stress on ordinary families, who pay between $6,000 and $40,000 a year to send their children to non-government schools,” said QBE’s Eleanor Debelle. “Those parents will now be able to take out school-fee insurance as a safety net if they lose their job, have an accident or get sick.”

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PEOPLE AIG revamps its cyber offering

AIG has revamped its cyber offering to meet the changing needs of clients in the cyber landscape. The reworked CyberEdge product offers a broader scope of inclusions, which include assisting insureds with immediate legal services (with no retention for the first 72 hours post-notification), credit card coverage and ID theft monitoring coverage in the event of a data breach, and coverage if the insured fails to notify either a subject or a regulator of a data breach. AIG said it has worked closely with its legal teams to respond to Australia’s recently introduced data notification laws.

NAME

Solution Underwriting has launched a new online rater for its corporate travel product. Coverage is split into three options and can be tailored to fit all types of businesses. Coverage is also extended to directors’ leisure travel, as well as staff add-on travel at the end of a business trip, and all policyholders are given access to global emergency assistance through Solution’s partnership with Customer Care. “Even if your client is on the way to the airport and they have forgotten their travel [insurance], they can jump online at any time, and it is full cycle,” said Anita Lane, director of Solution Underwriting.

XL Catlin launches accident and health product

XL Catlin has rolled out a new accident and health insurance offering designed to help Australian businesses protect their employees against emerging risks and heightened security threats. The product, Protect and Assist, combines comprehensive personal accident and corporate travel insurance, providing global coverage and a wide range of support and response services to reduce and prevent risks before employees travel. It also provides comphrehensive assistance and support, along with insurance cover when things go wrong at home or abroad. The product allows clients to customise coverage based on the core and optional services they need.

JOINING

NEW POSITION

Thomas Barker

N/A

Zurich Financial Services Australia

James Baum

N/A

Aon Risk Solutions

CEO, Australia

Lockton Companies Australia

National client manager, professional risks

Simon Bennett

Aon

Broker relationship leader

John Clayton

Marsh

Aviso Group

Executive chairman

Adam Cox

N/A

One Underwriting

Director

Michael Cullinan

Ruralco

Ausure

General manager, sales

Lockton Companies Australia

National manager, professional and financial risks

George Harding

N/A

Lorelle Hillman

N/A

AIG

General manager, Queensland

Darren Jones

CGU Insurance

Zurich Financial Services Australia

Broker relationship leader

Lyndall Mitchell

Mitchell Insurance Brokers

EBM

National relationship manager, broking

Susan Mitchell

Mortgage Choice

AUB Group

Chief financial officer

Neil Morgan

N/A

IAG

Group executive, technology

Anne-Maree Paull

N/A

CHU

Chief customer officer

Gallagher Bassett

National business development manager, general insurance division

Christopher Prabu

Solution Underwriting unveils online tool

LEAVING

Zurich Financial Services Australia

Craig Robson

Allianz

Aviso Group

CEO

Neil Sheppard

ProRisk

Quantum Underwriting Agencies

Executive director

Alison Smith

One Underwriting

Aon Risk Solutions

Regional director, Southern and Western – commercial

David Watts

Westpac

IAG

Chief risk officer

Aon Risk Solutions Australia names new CEO

Aon has appointed James Baum as CEO of Aon Risk Solutions Australia. Baum will replace Lambros Lambrou, who will be taking a broader role with the global business.

Baum will transition into the role in the second quarter of 2018. He joined Aon from Marsh in 2005 and has spent time as northern region manager for program design and placement and state manager for NSW, as well as managing director and chief broking officer for the Pacific region. Most recently, Baum served as managing director, commercial, and as chairman of Aon Broking, Pacific.

EBM appoints Lyndall Mitchell to national role

EBM has appointed Lyndall Mitchell as its national relationship manager for broking, where she will be responsible for enhancing the national alignment of the company’s broking, RentCover, EBM Financial Planning and EBM Finance businesses, as well as its relationships with key accounts, partners and associations.

Mitchell’s insurance career dates back to 2001 and includes roles with BMW Financial Services and Marsh. In 2012, she established her own broking business, where she specialised in implementing strategic and operational marketing plans within the financial services sector.

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UPFRONT

INSURER UPDATE

Government minister addresses key issues At a recent industry forum, Minister Kelly O’Dwyer spoke to affordability, contracts and the royal commission

She also discussed the possibility of extending the unfair contract term provisions to general insurance contracts. “I know that many of you here today have consistently advocated that there is no need to extend the unfair contract term provisions to insurance contracts, as you are of the view that there are already comprehensive consumer protections in place for insurance, such as the duty of utmost good faith provisions,” she said.

“We acknowledge the complexity of insurance affordability in northern Australia”

Insurance affordability in northern Australia and the royal commission were among the issues canvassed by Minister for Revenue and Financial Services Kelly O’Dwyer in a recent address to the industry. Speaking at the Insurance Council of Australia Annual Forum in Sydney in March, O’Dwyer told attendees the government accepted the Northern Australia Insurance Premiums Taskforce’s finding that mitigating the risk of cyclone

NEWS BRIEFS

damage was the only way to sustainably reduce premiums in the region.

“Whilst we will not intervene directly in the insurance market, we acknowledge the complexity of insurance affordability in northern Australia. The inquiry is considering the competitiveness of markets, consumer access to information, regulatory issues and the key cost component for insurance pricing, especially catastrophe risk,” O’Dwyer said.

IAG announces 30% rise in profits at half year

IAG announced a 30.1% insurance profit increase at its half-year results in February, from $571m at the half in 2017 to $743m at the half in 2018.

GWP also rose by 0.6%. On a like-for-like basis, GWP grew by close to 4%, IAG said, thanks to rate increases in commercial and consumer lines, as well as volume growth in motor. The Australia division saw underlying GWP growth of close to 3%, thanks in large part to a 4.9% growth in personal motor rates, countering claims inflation.

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But she pointed out that many outside the industry disagreed and highlighted that such change would bring Australian unfair contract terms protections into line with regulatory approaches in both the UK and New Zealand, and said the government plans to release a proposal for consideration soon.

In regard to the royal commission into misconduct in the banking, superannuation and financial services industry, O’Dwyer noted that public submissions to the commission had “already raised concerns about delays in claims handling” in the industry, and said that “the work being done by Treasury to enhance ASIC’s oversight of insurance claims handling will now be considered pending the outcome of the royal commission”.

Natural disasters lead to Suncorp profit dip

Natural disasters have been blamed for a 15.8% slide in profits at Suncorp. In its HY18 results, the group announced net profit after tax had fallen to $452m, down from $537m at HY17. But top-line growth was boosted by 2.5% across the group, thanks to consumer insurance and banking. In Suncorp’s Australian insurance division, net profit after tax was down 28.5%; growth in net earned premiums weren’t enough to overcome disaster costs.

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Q&A

Anthony Pagano Head of commercial intermediaries

What opportunities are brokers missing?

VERO

Fast fact Now in its seventh year, the Vero SME Insurance Index includes input from more than 1,600 business owners and decision-makers from around Australia

What does the 2018 SME Insurance Index say about broker usage this year compared to previous years?

Broker usage has remained broadly stable … 37% of SMEs have told us that they have used a broker. It’s not a statistically significant increase on last year.

[Using a] mix of insurance channels is now becoming the norm … Even a large client that employs potentially up to 200 employees still feels the need to buy some of their insurance on a direct basis. That might be travel insurance, motor insurance, workers’ comp, or it might be some domestic insurance.

The question brokers need to be continually asking themselves is how do they make sure they understand their clients’ total spend, and how do they continue to demonstrate relevance and value in all aspects of their insurance program – not just the ones [in which] they have an active involvement.

Is there certain technology brokers should implement to get more of SMEs’ business?

SMEs tend to go direct when they think it is easier and more convenient to do business. I think what brokers need to do is understand that there are aspects of their job that need to become more streamlined in how they interact with clients. Brokers need to potentially look at interactive websites and client

ANZ performance bolsters QBE’s annual results

QBE’s recently announced annual results revealed that its ANZ business saw GWP rise by 2%, as premium increases, tightened terms and conditions, enhanced underwriting discipline, and claims management initiatives boosted local operations. However, the global group overall saw a statutory net loss after tax of $1.2bn, compared to a profit of $844m in FY16. QBE’s Asia Pacific operations also saw an “unacceptable” combined operating ratio of 115.5%, up from 95.6% in the prior year.

relationship management tools like Salesforce.

The thing I think brokers need to also understand is that SMEs are not just 9-to-5 businesses, and when they run their business from 9 to 5, they’re [spending that time] running their [business] – whether it be a bakery, a clothing retailer, a manufacturer or an importer. In some cases, SMEs are now reviewing their insurance outside of business hours. So how do brokers then use … online interaction with their clients outside of business hours as [a means of making it] easy and convenient for clients to interact with them at a suitable time?

How can brokers improve their efforts when it comes to getting referrals from clients?

The survey showed that 80% of all SMEs would be happy to recommend a broker if they were asked. Only 20% of those brokers have actually asked their clients whether they would refer them to other clients.

It’s a relatively simple thing to do, but I think sometimes brokers just haven’t gone to that obvious question of asking for that referral from their most satisfied clients … There are some brokers who think they can put a tagline on an email about referrals and getting client referrals, and that’s their job done.

But I think it’s about having a conversation and seeking feedback.

Zurich to buy QBE’s Latin American operations

QBE has agreed to sell its operations in Argentina, Brazil, Colombia, Ecuador and Mexico to Zurich. QBE will retain its Puerto Rico business to facilitate servicing of claims resulting from Hurricane Maria. The estimated aggregate consideration of the sale is $409m, subject to closing adjustments, and is expected to be completed by the end of 2018. QBE CEO Pat Regan said the decision to exit the market is consistent with the company’s “focus on simplifying the group”.

Suncorp sells stake in Tower to Bain Capital

Suncorp has sold its 19.99% stake in Tower Insurance to Bain Capital for NZ$53.9m (A$50.1m). “As a result of the sale, a NZ$8.5m (A$7.9m) gain will be realised by Suncorp New Zealand in the second half of the June 2018 financial year,” the company said in a statement.

Suncorp originally purchased the stake through its Vero Insurance New Zealand subsidiary in a takeover bid that was ultimately shot down by the New Zealand Commerce Commission.

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UPFRONT

UNDERWRITING AGENCIES UPDATE NEWS BRIEFS UAC engages in top-level discussions with MGAA

The Underwriting Agencies Council [UAC] and its UK equivalent, the Managing General Agents Association [MGAA], participated in a high-level meeting in Sydney in March. In a statement released in the lead-up to the meeting, UAC general manager William Legge said the two entities have similar goals and ambitions, and that the highlevel exchange of ideas and information would be mutually beneficial. “UAC and MGAA are both very successfully promoting the interests of underwriting agencies and managing general agents to intermediated markets in the United Kingdom and Australia and New Zealand,” Legge said.

Underwriter releases cyber risk checklist for brokers

Emergence Underwriting has released a risk management checklist for brokers to use with their clients to help mitigate against cyberattacks. The checklist, aimed at the SME market, provides a number of questions brokers can ask to assess their clients’ cyber risk.

Gerry Power, national head of sales at Emergence, said that while cyber insurance awareness is rising amongst SMEs, take-up remains negligible. “The brokers who bring cyber risk back to a client’s own businesses are the ones who are more successful,” Power said.

Lloyd’s launches innovation lab to design techdriven solutions

Lloyd’s has announced it will launch an innovation lab in London in the second half of 2018. “Following the creation of the innovation team under Trevor Maynard, the innovation lab represents a significant next step in

16

driving a cohesive yet nimble approach to idea generation and implementation for the benefit of the Lloyd’s market,” said Vincent Vandendael, Lloyd’s chief commercial officer. The lab’s primary goal is to design technology-driven solutions and test them in a fast-track, fast-fail environment.

Cracking the code of consumer needs

Cover-More expands to Latin America market

ASIC deputy chair says review of Code of Practice represents an opportunity for the industry

Expert highlights the most underappreciated construction risks

The Insurance Council of Australia’s review of the General Insurance Code of Practice affords the industry an opportunity to “demonstrate to the community that you have heard their concerns and are committed to addressing them, and will do so in a timely manner”. That’s according to Peter Kell, deputy chair of ASIC, who addressed the industry at the recent Insurance Council of Australia Annual Forum in Sydney.

“For this to occur,” Kell added, “there must be a recognition and willingness among code subscribers that the bar needs to be raised ...

Ultimately, the quality scope and ambition of the code will determine in large measure the extent to which industry practice meets consumer needs and expectations. I therefore urge you to seize this opportunity to make the code as strong as it can possibly be.”

Kell also discussed changes ASIC regards as “most important to the success of the code”, including taking into account the needs of vulnerable and disadvantaged people in creating and distributing insurance products.

Another change ASIC is keen to see implemented is an effort to make it easier for consumers to compare insurance products.

“In our research into home insurance policies, we found that many consumers did not know that home insurance policies differed

Australian travel insurance and assistance provider Cover-More has acquired the second largest travel insurance and assistance group in Latin America. The group, which comprises the Travel Ace and Universal Assistance businesses, will become Cover-More’s Latin American hub.

According to Cover-More, the combined business and their brands hold leading positions in Argentina and Brazil, and have operations in five other Latin American countries (Chile, Colombia, Mexico, Panama and Uruguay), along with additional businesses in Spain and the US. The acquisition expands CoverMore’s global operations to 21 countries across five continents.

According to MECON Insurance CEO Glenn Ross, construction clients often aren’t aware of certain risks, but brokers can help alleviate this through education.

Ross explained that contractual liability, professional indemnity relating to the use of contractors and consultants, and delay in start-up or advanced loss of profit are three areas of insurance that clients may not be aware of. “If brokers can have a look at case studies on claims, then it is relatively easy for them to go and speak with some authority to their clients about these things they might not know about,” Ross said.

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“Consumers expect the underlying insurer to be aware of the outcomes that the products they underwrite have for consumers, however they are sold” between insurers,” Kell said. “They were unaware that policies can differ in their caps, limits and definitions of ‘covered events’.”

Kell noted that the ICA will be leading work focused on improving product comparability. “I suggest that, as part of this work, the ICA also consider how to better enable consumers to assess and compare product value,” he said. “For example, consumers may need help to understand that there is typically a trade-off between price and coverage.”

Kell highlighted that the code review had indicated a need for insurers to take increased responsibility for the conduct of third-party product distributors. He said that while the report suggested that agreements with insurers could include higher expectations around conduct, ASIC thought the industry could take this further.

“Insurers should set explicit standards in such agreements of what behaviour is and is

not acceptable,” he said. “And they should put processes in place so that they can satisfy themselves that high standards are being adhered to and the treatment of customers is as they would expect.”

Kell stressed that insurers cannot “walk away” from how their products were distributed, “regardless of the technical legal position”.

“Consumers expect the underlying insurer to be aware of the outcomes that the products they underwrite have for consumers, however they are sold,” he said.

Kell also outlined ASIC’s ongoing focus on add-on insurance sold through car yards, as well as the sale of consumer credit insurance, and emphasised the importance of insurers maintaining internal dispute resolution systems to assist in the fair, timely and effective resolution of issues.

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28/03/2018 5:04:29 PM

PEOPLE

THE BIG INTERVIEW

LEADING THE GALLAGHER WAY Gallagher chief executive Sarah Lyons talks about continuing to build the global brand in Australia and contemplates what the future holds for the industry SARAH LYONS became chief executive of Gallagher’s Australian operations last July.

“I’m delighted to be at the helm of a business that is changing the conversation in the market and with clients, and actively embracing change,” Lyons says. “No two days are ever the same, and I’m appreciative of the wealth of support and capability that sits within the team. We’re at an exciting time in our journey and are doing some great work with clients to take their business forward.”

A second-generation insurance professional, Lyons followed her father into the industry, starting out in the claims department of an insurance company in North West England. While working as chief finance and central operations officer for UK Global Risk Solutions, Lyons was invited to relocate to Melbourne to head up commercial broking for OAMPS Insurance Brokers.

It was a move that required upheaval to Australia, sight unseen.

“Looking back, it is one of the best decisions I have ever made,” she says.

Lyons took up the role in February 2014; just months later, a $1.01bn deal saw Gallagher acquire Wesfarmers Insurance’s broking arm, which encompassed OAMPS. As a result of that deal, Lyons joined Gallagher as chief operating officer.

“When I think back to where we were in 2014 versus where we are now, it’s incredible to think how much we’ve grown and changed in a relatively short timescale,” she says.

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Changing but staying the same In 2010, Gallagher had 80 employees in its local business unit. Today, it employs more than 900 people in Australia, placing $1bn in gross written premium. Part of that growth has been due to its ongoing activity in the M&A space.

“The Gallagher culture has a family feel to it,” Lyons says. “It’s inclusive and welcoming, and whilst we work hard, we also take time to connect and have fun along the way. This

are the right fit for the company.

“We have a strong entrepreneurial, ‘go-getter’ style culture here at Gallagher, which speaks to the way the organisation has grown over the years,” Lyons says. “Although our current headcount sits at around 25,000 colleagues globally, we haven’t lost sight of the family culture that makes us what we are today. Culturally, I think that sets a positive tone for the way we work together and do business, where we celebrate diversity and

“Becoming Australia’s largest and most admired insurance broker is a long-term aspiration … When we achieve our aspiration, I want it to be because we have achieved success and recognition on our own terms” extends to the acquisition partners we bring into the business. I think it’s important that people connect the ‘Why Gallagher?’ question with a confidence that they’ve made the right choice and are becoming part of a bigger family. It’s one of the things we take pride in getting right.”

While the organisation has grown substantially, what’s remained the same throughout Lyons’ time at Gallagher is its culture. That includes adherence to the global ‘Gallagher Way’ approach to hiring, which ensures that those who come on board

people can be themselves.”

As a leader, Lyons has accumulated plenty of salient lessons about managing people and getting the best from employees.

“I’m a great believer that as you develop as a leader, it’s important not to lose sight of yourself in the process and be something you’re not,” she says. “Being authentic can be confronting at times, but the payoff is the trust and commitment that grows within your team.”

She also firmly believes in making time for fun in the workplace.

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PROFILE Name: Sarah Lyons Company: Gallagher Title: Chief executive, Australia Based in: Sydney Years in the industry: 30 Fast fact: Before arriving in Australia from the UK, Lyons acquired more than 25 years of experience in insurance, including as group managing director of Giles Insurance Brokers

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28/03/2018 5:04:57 PM

PEOPLE

THE BIG INTERVIEW opportunities,” Lyons says. “With transport & logistics and construction, for example, we have more than three decades of experience to bring to the conversation and a team who have grown with the industry. That’s a significant value-add for clients, and also for us.”

Talk turns to the current state of the market, which is starting to see the upward movement of rates after an extended soft market.

“There has been a lot of talk in the market and within the broking community of a hardening marketing cycle,” Lyons says. “Whilst there is some truth to that statement, I think we need to remind ourselves of the big picture. We appreciate that there have been some changes in pricing and underwriter risk appetite in some lines of insurance and risk exposures, but this is not happening across the board. Insurers have backed out of some markets, and at the same time, we have seen increased capacity in others.

“The extended soft market may have created a sense of security for some brokers,” she adds, “but the current market cycle is where the value of a good broker really comes “As a fast-paced organisation, it’s important to strike the right balance and provide the right platform for the team to grow their relationships and connection with each other.

Whilst we’re professional on the job, it’s a highly social and relationship-led culture, which makes Gallagher a terrific place to work. We have a mix of things going on in any one month, from morning teas through to informal team lunches and people catching up on the news over breakfast. The genuine desire to connect is one of the things I like most about working here.”

Strategic thinking When she became chief executive, Lyons affirmed her commitment to Gallagher’s ongoing ambition to become Australia’s largest and most admired broker.

“Becoming Australia’s largest and most admired insurance broker is a long-term aspiration and not about a race to the finish

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“The extended soft market may have created a sense of security for some brokers, but the current market cycle is where the value of a good broker really comes to the fore. In that respect, I think Gallagher is well positioned to respond” line,” she says. “Our focus remains on delivering a high-quality experience to clients, backed by a team that is recognised as being the best in market. When we achieve our aspiration, I want it to be because we have achieved success and recognition on our own terms.”

Gallagher also remains focused on building its reputation as a specialist broker.

“We have a number of specialist capability areas that we will continue to invest in and grow, and we are constantly exploring new

to the fore. In that respect, I think Gallagher is well positioned to respond.”

Like many other industries, insurance is facing pressure from the ever-increasing pace of change. While the industry has been widely regarded as late to the party in embracing new technologies, Lyons thinks insurance is beginning to grapple with what can potentially be accomplished.

“Insurtech investment has grown exponentially in recent years, and I believe Australia sat at a higher rate of adoption than

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the global average,” she says. “That speaks volumes about the critical role technology and data will play in the insurance purchase process and in things such as predictive risk modelling in the years to come.

“Telematics, robotics, wearable technologies and artificial intelligence are being more frequently discussed in the boardroom, which is challenging executive teams to get up to speed with where the industry is heading, and the conversation has shifted from this being the domain of the IT team to being owned by everyone around the table.”

Technology also creates opportunities for brokers, Lyons points out.

“Technology and 21st-century service delivery work hand-in-hand in a business like Gallagher, and there is so much we can do now to streamline the manual tasks such as data processing, which would have historically absorbed a significant amount of time that could have been used to grow our relationships with clients. But we are also being careful not to jump onto the latest gadgets and gizmos, more to properly assess what makes a difference and creates value first, and then understand where technology can respond to that need.”

Advances in technology bring their own risks, and there is no emerging risk more talked about today than cyber.

“From our daily conversations with clients, it’s concerning how many businesses continue to operate without cyber coverage and the number of corporate organisations that are lacking a sufficient data breach plan following the 22 February mandatory reporting requirements,” Lyons says. “What’s more is that cyber affects businesses right across the board, all shapes and sizes. People need to be aware of their exposures.”

Of course, cyber also represents enormous opportunity for brokers and insurers.

“What has been good to see is the investment made by a number of insurers to ensure brokers remain up to speed with evolving cyber exposures,” Lyons says.

“With the pervasive nature of technology, cyber risk exposure is at risk of moving faster

and becoming more complex than underwriters and policy wording specialists can respond to.”

GALLAGHER BY THE NUMBERS

Looking to the future Lyons sees a bright future ahead for broking – one where risk advisers will remain indispensable in the insurance value chain.

“The emergence of digital and the ability to manipulate vast pools of data is playing a role in transforming the traditional model of purchasing insurance, and it has carried with it a level of disruption for the broking industry,” she says. “That said, whilst some SME clients are generally looking for speed and convenience, there is a still a critical and relevant role for brokers to play, especially where an ‘off the shelf ’ solution will not provide tailored cover to fit a specific need.

Ultimately, a low price does not always translate into comprehensive cover.

“Increasing access to data is also transforming client conversations, and brokers are creating value in new and innovative ways.

Part of our role as a service industry is to move with the times and provide the flexibility for clients to connect with us when they want, in their preferred style of engagement.”

Not only is Lyons optimistic about insurance’s future, but she also is passionate about what it has to offer those who opt for a career in the industry.

“I’ve not come across many people who actually set out to carve a career in the insurance industry,” she says. “But I do work with a lot of people who are passionate about being part of something that powers progress. The industry could do much more to engage with millennials and the next wave of school leavers and university graduates. We need to do more to get the message out there about the breadth and scale of opportunity that exists in the industry and how insurance is critical to our future growth and success.

“It’s an industry ripe for innovation and fresh thinking, and the pace of change is gathering momentum. There is a lot of untapped potential, and the best may be yet to be seen.”

1985

Year the Australian operation of Gallagher began trading

7

Number of years Gallagher has been named one of the World’s Most Ethical Companies by the US-based Ethisphere Institute

400

Number of Gallagher offices in more than 30 countries; the business has an alliance of network partners in more than 150 countries

26,783

Number of employees currently working for Gallagher across the globe

US$4.6 billion Gallagher’s total adjusted revenue for 2017

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SPECIAL REPORT

ELITE BROKERS 2018

ELITE

BRO Insurance Business ranks and celebrates the top brokers across the nation 22

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2018

KERS WELCOME TO the 2018 Insurance Business Elite Brokers list.

This is the sixth consecutive year in which Insurance Business has conducted its annual search for Australian insurance brokers at the top of their game in order to recognise and celebrate those individuals.

Over the years that we have presented our Elite Brokers report, we have received substantial positive feedback about the flow-on effects for those who have secured a place on one – or more – of our lists. A number of honorees have found that endorsement as an Elite Broker has meant recognition from both industry colleagues

and clients, and has even been a valuable business development and marketing tool.

It’s an obvious statement that insurance brokers continue to do vital work for the wider Australian population, and it is our privilege to be able to acknowledge 20 of these insurance professionals here.

As always, we would like to offer sincere thanks to everyone who applied to be a part of the Elite Brokers 2018 report, and we look forward to continuing this now highly anticipated tradition in 2019.

TIM GARRATT, EDITOR

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SPECIAL REPORT

ELITE BROKERS 2018

Brokers: the past and the future In its Insurance Facts and Figures 2017 report, PwC found that revenue for insurance intermediaries continues to rise, notwithstanding the fiercely competitive environment. PwC primarily attributed that growth to higher premiums and the flow through to commissions, but also decisions by intermediaries to diversify the services they offer, branching out into risk consulting and advisory services, among others.

And while recognising that insurer investment in technology to heighten direct customer engagement poses a risk to intermediaries, PwC reported that nearly half of all insurance policies bought in Australia are written through an intermediary.

“The rise in direct and online channels has not affected the benefit of impartiality that brokers bring to the table,” the report said. “However, the more self-sufficient consumers become, the more intermediaries need to find ways to add value to customers.”

Speaking recently to Insurance Business about the findings of the 2018 Vero SME Insurance Index, Vero’s head of commercial intermediaries, Anthony Pagano, talked about opportunities for brokers specifically in the SME space.

“Without question, the business environment for brokers is changing, whether that be through the consoli­ dation of brokers, the geographies of brokers [or] the sophistication and the diversification of services they provide,” Pagano said. “Brokers have the opportunity to really differentiate themselves, and I think that is the point brokers really need to focus on – how can they differentiate themselves … through the services they provide?”

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WHAT THREATS ARE INSURANCE INDUSTRY CEOs MOST WORRIED ABOUT?

Q

How concerned are you about the following threats to your organisation’s growth prospects?

95%

93%

85%

85%

83%

Over-regulation

Cyber threats

Speed of technological change

Populism

Geopolitical uncertainty Source: PwC’s 21st CEO Survey, Insurance

How CEOs are thinking Of course, brokers – and the rest of the insurance industry – will have to grapple

with the challenges the wider space will face in the years to come. PwC’s recently released 21st CEO Survey (polling 1,293 CEOs in 85 countries) included a look at the issues on the minds of insurance industry CEOs around the globe today.

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METHODOLOGY

THE TOP 20 RANK

NAME

COMPANY

1

Joe Khoury

Insurance One

2

Bonni Gordon

Global Risks

3

Victor Dabrowski

Securitex Financial Services

4

Prudence Chang

National Credit Insurance (Brokers)

5

Ken Dixon

Dixon Insurance Services

6

Schalk Van Der Merwe

Omnisure

7

Michael Stewart

Stewart Insurance Group

8

David Powell

Elliott Insurance Brokers

9

Karen Hardy

Acme Insurance Brokers

10

Dale Hansen

Austbrokers Coast to Coast

11

Jaron Bresland

Bresland Insurance Group

12

Stephen Mison

Quattro Risk Services

13

James Skiadas

IMC Insurance Brokers

14

Garth Krasinski

Elliott Insurance Brokers

15

Shane Moore

Trade Risk

16

Arthur Hatzinikolis

Austbrokers SPT

17

Todd Ferguson

Allsafe Insurance Brokers

18

Daniel Webber

Webber Insurance Services

19

Roxanne Heibloem

Roxanne Insurance Brokers

20

Robert Cooper

Cooper Professional Risks t/as CPR Insurance Services

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 be eligible, along with details of a contact who could verify those figures. The criteria included: • 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.

The brokers were then placed in order, with the lowest overall score ranking first on the list. (Think of it like a golf score, where a higher ranking in each section means you have a lower total score.)

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SPECIAL REPORT

ELITE BROKERS 2018 DALE HANSEN Austbrokers Coast to Coast

10 DALE HANSEN ON WHAT HE WOULD CHANGE ABOUT THE INSURANCE INDUSTRY “I would change the way in which a brokerage is paid by the insurer. As brokers, we should be more transparent. We should charge a fee in accordance with the service we provide and be very transparent about any commissions that we receive. Brokers should not accept profit-share payments from insurers, as this has the potential to seriously compromise the broker to the detriment of the client.”

KAREN HARDY Acme Insurance Brokers

Karen Hardy is the principal broker at Acme Insurance Brokers in Far North Queensland. “We are primarily an agricultural community,” she says.

“Tourism would be considered our secondary industry, due to our idyllic location and lifestyle. We provide insurance services to all of our community members – large or small, without exclusion. We are truly diverse and inclusive.”

Last year, Hardy won the Valerie Baker Memorial Award, an experience she describes as “amazing, inspiring and incredible ... The support and recognition winners receive is fantastic. Any broker with a burning desire to better themselves and their communities would be a great candidate for the VBMA.” Hardy advises her fellow brokers to “put down your electronic devices and

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Coming in at number 10 for 2018 is the man named NIBA’s 2016 Australian Broker of the Year. Dale Hansen heads up Austbrokers Coast to Coast, the South Queensland business that won ANZIIF’s Small Brokerage of the Year Award in both 2016 and 2017. On top of that, the brokerage is a finalist for Brokerage of the Year (6–20 staff) at the upcoming Insurance Business Australia Awards.

Hansen credits his success as a broker to his relationships with clients. “I spend a lot of time one-on-one with clients, understanding their business,” he says.

“I educate my clients in relation to the policies they purchase and how they will respond in the event of a claim. It is important that my clients see me as a trusted professional, which hopefully gives them peace of mind that their assets are properly protected.”

embrace your community ... You may be the best broker in the world, but if you don’t mix with the locals, you will never earn their respect or trust. Join a club, sponsor an event or contribute your time to a worthy cause. Every act of goodwill is repaid tenfold, in my experience.”

If Hardy could change anything about the industry, she would start by lifting the standard of education.

“We have lost sight of the underlying general principles of insurance,” she says. “Knowledge is power, and [it is] the primary reason why our clients look to us for guidance. Continued and meaningful education is key to the longevity of our industry and all of its participants.

Without knowledge, we are collectively dangerous individuals.”

So, what’s ahead for Hardy as a broker?

“I will continue to challenge our traditional view of insurance within Australia by saving my community and the world, one peril at a time,” she says.

In terms of the biggest challenge he’s faced as a broker over the past year, Hansen says, “A significant number of brokerages are commoditising their service and competing with the direct insurers on price. The challenge that I have faced … is to ensure that my clients are buying for the right reason and are not just buying the cheapest product in the market. It is a lot easier to tackle this issue with a client when you have a very good relationship with them and you are trusted.”

Hansen also has some advice for other brokers as to how they can boost their own businesses.

“Service your clients properly and explain to them what, in fact, a broker actually does for them,” he says. “A lot of clients – and the general public at large – have very little understanding of what a good broker actually does for them.

Ensure you understand your clients and their business.”

9 KAREN HARDY ON THE KEYS TO HER SUCCESS Honesty: “The truth can never hurt you. It may not always be pleasant, but that’s part of the job. You will earn far more respect from others in the long run by being forthright.”

Conviction: “I believe general insurance broking is a vocation, not a job. We all hold very privileged positions within our communities. We are the keepers of secrets and pivotal to the continued wellbeing of our clients.”

Mettle: “Advocacy on behalf of our clients can never wane, regardless of circumstances. Insurance is not an industry for the inconsiderate.”

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DAVID POWELL Elliott Insurance Brokers

David Powell is senior account executive at Perth’s Elliott Insurance Brokers. “I look after our larger SME and corporate clients,” he says. “We offer a full broking service, including looking after a number of multinational clients …

There is very little we are unable to offer our client, either ourselves or via our partners.”

Key to Powell’s success as a broker is “[doing] my best to understand a client’s business,” he says. “I am happy to talk insurance with them all day.

When asked about his highlights over the last 12 months, Powell says, “I think nothing should give a broker more joy than knowing that they have given their client the right advice, and at the time of a claim, the advice and service you have provided has saved that business. We have had a couple of major claims this year, [and] our insureds have been well covered, and the insurance has saved their business.”

To other brokers looking to boost their own businesses, Powell advises: “Understand your client’s business and the risks they face.

I have written a lot of trade credit polices this year because, during our conversations, clients are indicating how hard it is to get paid, or they are worried about bad debts. Management liability and cyber are other polices we are writing a lot of, purely because we are having discussions regarding the risks.”

What’s ahead for Powell and Elliott Insurance Brokers over the next year?

“With the hardening market, whilst our attention never shifts from growing the business, our attention will shift inward a lot more,” Powell says. “To deliver the same level of service to our existing clients, it will take a lot more work, effort and skill to achieve the right outcomes.”

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DAVID POWELL ON HIS BIGGEST RECENT CHALLENGE AS A BROKER “The last three months in particular, the insurance market has hardened significantly. A lot of younger brokers and younger underwriters have never seen a hard market, and clients have forgotten that insurance premiums do go up, so it is an education process. Risks need to be underwritten properly and not just thrown out. In regards to clients, we are now doing insurance presentations incorporating the last five to six years of premiums to highlight the fluctuations of their program. Whilst the market is hard, [they can see] they are paying the same as, or not much more than, five to six years ago, rather than focusing on the 30% increase this year.”

MICHAEL STEWART Stewart Insurance Group

Michael Stewart is the director of Stewart Insurance Group in southeast Melbourne.

“We tend to focus on the smaller SME clients, which are often overlooked by brokers who are seeking more corporate accounts,” he says. “These clients tend to be more loyal, and you usually have more opportunities to find competitive covers, rather than being limited to only one or two insurance providers.”

Stewart puts his success as a broker down to “explaining how insurance works and what covers our clients do and don’t have ... making sure they are familiar with their policies and what we have done to ensure they are adequately protected, [and] being at the forefront of technology and using new tools and systems as they are developed and released.”

His advice to other brokers is to take the time to speak to clients and explain things in terminology they will understand.

“Only sell quality products using reputable insurance

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“We tend to focus on the smaller SME clients, which are often overlooked by brokers who are seeking more corporate accounts. These clients tend to be more loyal” companies and underwriting agencies,” he adds. “They sometimes cost more, but will be worth it when there is a claim.”

If he could change anything about the insurance industry, Stewart would like to see “more attention to training people on how policies work, how the industry works and the basic principles of why insurance is what it is”.

Stewart also shared his thoughts around a major ongoing challenge – how the insurance industry can attract more job-seekers.

“Highlight the positive aspects of the industry – flexible working hours, job share opportunities, being an integral part of a person’s business,” he says. “You can make it whatever you want.

There’s opportunity for anyone to become highly successful.”

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SPECIAL REPORT

ELITE BROKERS 2018 SCHALK VAN DER MERWE Omnisure

Schalk Van Der Merwe is director of Omnisure in North Sydney, a business he describes as having “tightly held underwriting and client relationships.”

“My portfolio mainly consists of medium and small enterprises across a wide and varying range of industries,” he says. “However, I have recently had a particular focus on country pubs, hotels, kitchen manufacturers, accommodation, hostels and hard-to-place professional indemnity risks.”

Looking back on the past 12 months, Van Der Merwe says his highlight has been “building a high-performing team at Omnisure, and seeing the growth and camaraderie of these young, driven and immensely passionate individuals. We are really lucky to have such a dedicated and loyal team who share our vision.”

In regards to his personal success, Van Der Merwe again credits his team: “Omnisure is a family business that lives and breathes insurance, so I believe that teamwork plays a

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“We are really lucky to have such a dedicated and loyal team who share our vision” significant role in my success,” he says. “I have had immense support from my parents, who are great business mentors.

With over 70 years of experience in the industry combined, my mother and father have given me a great foundation of knowledge and wisdom for all things business and insurance.”

In a year in which Omnisure took on more than 500 new clients, Van Der Merwe says his greatest challenge has been “managing the business’s rapid growth and maintaining our high quality of service. I’ve had to focus on staff training, improving processes and investing in new technologies to ensure my team is efficient in handling this growth.”

Van Der Merwe is excited about the next 12 months at Omnisure. “We’re on track to make two broking hires and have plans to market our company and ourselves as professionals across additional platforms,” he says. “I personally am looking to become more involved in emerging issues such as cyber risk and insurance technology. As advisors, we need to be at the forefront of these rapidly evolving pitfalls so we can better educate our clients on the risks facing their businesses.”

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KEN DIXON Dixon Insurance Services

At number five is Ken Dixon, a regular in Insurance Business’ Elite Broker lists who heads up Dixon Insurance Services in Toowoomba. “Our portfolio is heavily weighted towards the hard-to-place industries/ markets, including transport & logistics, manufacturing, engineering, construction and larger retailers/property owners,” Dixon says.

His greatest highlight of the past year has been constantly being able to deliver on his promises to clients. “This enables exceptional relationships to be developed and maintained,” Dixon says, “and as result, we retain all clients and continue to receive multiple referrals each day from our clients due to their trust.”

On the other side of the coin, Dixon mentions the hardening insurance market as his biggest challenge over the past 12 months. “Not only does the upward pressure on rates cause clients to rethink how they manage their policies, [but] the most recent EPS losses in Australia have had a terrible effect on

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“Turn your customers into loyal and devoted clients. It takes years of dedicated and consistent service, but it does pay off ” acceptance and premiums for my larger clients,” he says. “Whilst this is a challenge, we rise above the problems and develop new relationships internationally that are able to assist us to provide the level of service and expertise our clients have become accustomed to and expect.”

So, to what does Dixon attribute his success as a broker?

“I am an advocate for my client. I act for and on their behalf and in their best interests in every capacity as their broker,” he says. “Our office actively ensures our clients are educated on risk management and claims processes. Through transparency, we engage their trust and respect so they become advocates of us.”

Dixon advises other brokers to truly get to know their clients.

“Without that relationship and trust, they are never a client, but just a customer,” he says. “Turn your customers into loyal and devoted clients. It takes years of dedicated and consistent service, but it does pay off.”

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4 PRUDENCE CHANG National Credit Insurance (Brokers)

Prudence Chang has been named in every one of Insurance Business’ Elite Brokers lists. Based in Melbourne and co-chair of the Victorian NIBA Young Professionals Committee, Chang is a senior BDM for National Credit Insurance (Brokers).

She says the key to her success as a broker is “honesty and integrity – always

VICTOR DABROWSKI Securitex Financial Services

Another regular fixture on Insurance Business’ Elite Brokers list, Victor Dabrowski is the director of Securitex Financial Services in South Australia. “We are mainly focused on the SME clients for Buspacks & ISR, but we also receive referrals from these clients to their family

do what you say you’re going to do. And make sure you are always up to date with the correct policy wording and legislation.”

Asked about her highlight as a broker over the last 12 months, Chang says: “We are looking into developing new products.

Recently I helped to launch our soft collections product with our partner IODM, which is aimed at decreasing the time debtors take to pay our clients, bringing better cash flow to their businesses.”

In terms of challenges, “we have faced a growing number of brokers attempting to put on trade credit policies, but have been underqualified,” Chang says. “It is a specialised insurance, and unless you have a lot of education on the subject, you can provide the wrong advice. We have had to help some clients and brokers out of some very sticky situations that could have been easily avoided if the brokers had asked for our assistance. Insurers have become tighter with the types of business they wish to underwrite, so an educated trade credit

broker also has the ability to understand which markets best suit their clients.”

So, is there any advice Chang can offer to other brokers as to how to boost their own businesses?

“Don’t be afraid to pick up the phone and ask for referrals,” she says, “and make sure that you take the time to understand your client’s business, no matter how big they are.”

For the year ahead, Chang’s goal is to create more awareness of trade credit insurance in Tasmania.

“This market is booming with potential businesses that could use the protection and the information flow that a trade credit insurance policy can bring,” she says. “I also feel that with the changing global economic market, more businesses will find a need for export or political risk policies.

“I also aspire to help younger brokers to understand the product line and become just as passionate as I am about protecting their client’s bottom line.”

mentored new ARs in the business, and seeing them grow and gain confidence in dealing with clients has been one of the highlights of his year. However, he admits it has been a challenge to devote his time to new ARs while balancing the servicing and advice he provides to existing clients.

Dabrowski’s advice to other brokers is simple: “Answer the phone,” he says.

“There’s a client or referral on the other

“Answer the phone – there’s a client or referral on the other end wanting to do business with you” and friends,” he says.

Dabrowski attributes his success as a broker to “giving great advice, options, a very high level of service and meeting clients face-to-face to discuss their requirements”.

In recent times, Dabrowski has

end wanting to do business with you …

[Also], where possible, have face-to-face interaction with clients and referrals.”

So, what’s ahead for Dabrowski?

“As I am approaching 62 years of age this year,” he says, “I would like to lessen my load in the business and get the new

3 ARs to step up and start taking over the workload to allow me to only deal and network with my A-class clients.”

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SPECIAL REPORT

ELITE BROKERS 2018 BONNI GORDON

JOE KHOURY

Global Risks

Bonni Gordon is the principal of Global Risks Australia, a Sydneybased boutique general insurance brokerage that operates under the motto ‘Strong relationships, superior solutions’.

“Our focus is on medium to large private and ASX-listed corporations and affluent individuals and families,” Gordon says. “We transact in all classes of insurance; however, we are not arrogant and employ the services of external specialists if and when required in order to provide the best possible advice to our clients.”

Gordon puts her success as a broker down to a willingness to stick to her principles. “Whilst premium is a driver for many brokers – especially in the current market – I think to succeed, one must adhere to your principles,” she says. “Mine have not changed since I entered the industry – namely, to be advicedriven, [have] attention to detail, [be] customer-focused and [act with] utmost good faith. One has to understand, listen, assess, be able to negotiate and arrange programs that are tailored to that specific insured. If you are not sure, call in an expert to assist you. Your client will respect you more.”

Gordon also talks about the importance of not resting on one’s laurels. “Whilst one has to be competitive, it is important to keep in mind that not all products and insurers are the same,” she says. “If you explain these differences, your client can make an informed decision. The shop window of any brokerage is claims, and ultimately you are judged on how claims are handled and settled, and this invariably comes down to product and insurer, coupled with your relationship.”

So, what’s ahead for Gordon and Global Risks in the near future?

“We have many opportunities, which we are grateful to our loyal clients for, and we will continue to work with them and the referrals they provide as we grow our business,” she says. “We want to consolidate our position in the market as a responsive, dedicated, client-focused broker. We are selective in which clients we act on behalf of, as one has two options – you can be the biggest or the best, and we have chosen to be the best!”

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BONNI GORDON ON ATTRACTING NEW TALENT TO INSURANCE “Our industry is a very exciting one to work within. However, in order for individuals to see this aspect of the industry, they need to work side-by-side with an experienced broker who is prepared to embrace them and include them in all aspects of the broking process, which must include meeting with underwriters and clients.”

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Insurance One (AR of Action Insurance Brokers)

Joe Khoury of Insurance One, an AR of Action Insurance Brokers located in the Sydney suburb of Parramatta, is number one in 2018.

“The main product lines I focus on are construction, plant and equipment, and builders warranty,” Khoury says.

“Most of my clients are associated with the construction industry, from builders to contractors and professionals providing services to the industry.”

Khoury gives credit to those around him for helping to foster his success as a broker. “I work with a great team who are all focused on the same goal – to provide exceptional service to our clients,” he says.

Asked to single out a highlight of the past year, Khoury

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“There are still plenty of people out there who appreciate good old customer service and faceto-face interaction” names having been “part of a brokerage group [Action Insurance Brokers] which has been selected as one of the approved distributors of the Home Building Compensation Fund insurance for the NSW government”.

For other brokers looking to enhance their own operations, Khoury encourages them to focus on service.

“In a world where we are encouraged to purchase more and more of our products online, there are still plenty of people out there who appreciate good old customer service and face-to-face interaction,” he says. “Leave the office and meet more of your clients, develop a detailed understanding of their business, and be prepared to go that extra step to help them out.”

If there was anything Khoury could change about the insurance industry, what would it be?

“Less IT systems and more old-school underwriters who look at a risk and underwrite it accordingly,” he says.

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PEOPLE

LEADER PROFILE

CREATING A TITAN Hyperion Insurance Group CEO David Howden shares how he turned a small business into a global empire and offers some advice on what it will take to survive in tomorrow’s industry

DAVID HOWDEN began his insurance career at the age of 16. Starting out as a broker, Howden went on to establish Hyperion Insurance Group in 1994, which was originally a wholesale broker that employed three people. Today, Hyperion has more than 3,800 employees working in business units across the globe and achieved £542m in revenue last financial year.

So, what sets Hyperion apart from its competitors? “We have employee ownership at the heart of our insurance and MGA business, and that’s really the key to it,” Howden says. “Because we’re owned by the people working in the business, we have a culture that’s different; we’re much more entrepreneurial [and] much more empowering … [and] the talent we have, to be blunt, is second to none.”

Howden also emphasises the crucial importance of expertise.

“Clients want to buy expertise, so we are specialists; we are not generalists,” he says.

“Wherever we’re in an area, we want to really own that area [and] understand what it is … When you go around the group across the globe, we have people who are really expert in what they do.”

Howden points to the business’s ongoing success in fostering organic growth – in 2017, its organic revenue growth was 8%.

“You can grow by buying businesses – and we grew 25% last year because we did buy some businesses,” he says, “but the reality is that organic growth is the barometer of the healthy business.”

Part of that growth is a result of

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Hyperion’s mounting success in Asia Pacific.

“One of our fastest organic-growing areas is in the Asia Pacific market. It’s well over 20% of growth organically and about 14% of our group’s total revenue has come from Asia Pac. So, it’s a very important part of our business, and one we’re investing in heavily, both on the underwriting and the broking side.”

Reflecting on Hyperion’s 24-year history, Howden singles out the 1998 launch of DUAL – now the world’s largest international underwriting agency – as a highlight.

“We launched DUAL in Spain,” he says. “I

An evolving industry Looking to the future, Howden shares what he calls his ‘3D vision’ – factors he believes are now driving the world of insurance.

“Those three Ds are distribution, data and delineation,” he says. “I think distribution is absolutely key, and that can come about many different ways. The use of data now – not just in insurance, but in all industries – is going to be a driver [of ] not only what clients want, but pricing, efficiency, everything.”

When it comes to delineation, Howden

“Clients want to buy expertise, so we are specialists; we are not generalists. Wherever we’re in an area, we want to really own that area [and] understand what it is … When you go around the group across the globe, we have people who are really expert in what they do” think it was something that was really key to the development of the group – having this ability to create an MGA where we were able to offer a really specialised service in products to brokers. I think this was a gamechanging moment for the group.”

Another game-changer was the 2015 acquisition of RK Harrison [RKH].

“I tried to buy them for many years,” Howden says. “RKH were the outstanding specialty broker.”

muses: “Are we going to be Uber-ised? Is it going to be the insurers? Is it going to be the brokers? I think that as an industry, we need to look at our efficiency levels. On average, something like 50% of the premium is being spent on delivery of the product … There are people who will look at that and think, ‘I can actually take something out of that.’”

But is Howden genuinely fearful that the industry will be completely disrupted? “I don’t think that’s going to happen,” he says.

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PROFILE Name: David Howden Company: Hyperion Insurance Group Title: CEO Based in: London Years in the industry: 37 Career highlights: The launch of DUAL and the acquisition of RK Harrison Greatest challenge: Maintaining Hyperion’s unique culture as the business grows

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PEOPLE

LEADER PROFILE

“There is a very real risk that some people have got very good data that some insurance businesses might not have, so I think that capturing of data and the use of it to give our clients a better service and to be more efficient is going to be what sorts winners from losers in the future … Data will drive our ability to offer better products, more efficient products [and] better pricing.”

Pricing and efficiency, he adds, will be even more important going forward.

“How do you price things? Who’s going to be better at pricing?” he says. “You’ve then

the benefit for the client, not the benefit for you as the broker.”

Howden also stresses the importance of adding value through expertise, which he believes has allowed MGAs and underwriting agencies to make headway in the market.

“MGAs are able to do a few key things,” he says. “They’re able to attract real talent – talent that wants to come in and be a bit more entrepreneurial. They’re able to have a real specialty as their focus; the whole management team is focused on delivering

“I think anyone who’s nimble and flexible and embraces technology will be a survivor; it’s probably the slightly more lethargic, bigger businesses that are going to be more challenged in the future” got the whole efficiency element in terms of policy issuance, claims [and] how much you’re using robotics. I think brokers and underwriters who can embrace and invest in all those areas will succeed, and I think, as an industry, we shouldn’t be looking …. to fight and decide who’s going to eat each other’s lunch. We must pull together and make sure there isn’t a third party coming along and taking it all away whilst we’re squabbling over there.”

Capability and customer-centricity It will also be vital, Howden says, to maintain a focus on the client.

“Those brokers who put the client first will win,” he says. “A chairman I worked with in the past, Richard Elias, said to me, ‘David, look after the client, and the money will look after itself ’ … You must focus on

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that, [and] sometimes they’re able to … deliver a better level of service to the brokers and therefore to brokers’ clients.

“I think anyone who’s nimble and flexible and embraces technology will be a survivor,” he adds. “It’s probably the slightly more lethargic, bigger businesses that are going to be more challenged in the future.”

Speaking of the future, now that Hyperion has surpassed the £500m revenue mark, Howden is focused on the next leg of the journey. In December, institutional investor Caisse de dépôt et placement du Québec [CDPQ] agreed to invest more than US$400m in Hyperion to provide new growth equity and liquidity to existing shareholders.

“Now,” Howden says, “we’re looking forward to: ‘When’s that billion [in revenue] coming up?’”

FAST FACTS: HYPERION INSURANCE GROUP

1994

Year Hyperion Insurance Group was founded (with three employees)

4

Brands under the Hyperion umbrella, which include DUAL Underwriting Agency Group, Howden Broking Group, RKH Specialty Broker and RKH Reinsurance Brokers

121

Number of Hyperion offices, spread across 38 countries

3,800

Number of employees working in Europe, the Middle East, Asia Pacific and the Americas

US$6bn

The amount of premium Hyperion wrote during the 2017 financial year

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PEOPLE

LEADER PROFILE

CONTINUING A SUCCESS STORY DUAL Asia Pacific CEO Damien Coates discusses how the business is working to raise SME awareness of critical risk exposures IT WAS 2004 when Damien Coates opened the doors of DUAL in Australia; he describes the 14 years since as a “colourful journey”.

“We now employ 150 people throughout Asia Pacific [and write] $180m in premium,” Coates says. “[We’re] the largest independently owned MGA in Asia Pacific … [and] we write 110,000 policies annually. Our motto is ‘We do boring things very well’, and that is 100% based on helping, developing and supporting SME businesses, whether it’s brokers who handle SME clients or the SME clients themselves.”

Part of that assistance includes helping SME clients address uninsured exposures.

“What we focus on is dealing with uninsured exposures and providing a platform to get SMEs buying insurances that traditionally only large corporates would purchase,” he says.

“The way these products are delivered for large corporates, where you’re filling out a 20-page proposal form – that’s just not going to work for an SME. So, we work with brokers and say, ‘What is the information that you’ve got on the compulsory purchases?’ – property and liability – and we develop an underwriting model that’s based on the information [already collected].”

In today’s market, Coates sees a heightened appreciation among brokers of what underwriting agencies bring to the table.

“The historic purpose of underwriting agencies 20 years ago – of being able to deal with hard-to-place [risks] – has evolved to recognition that underwriting agencies are able to be more responsive and move a lot

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quicker in developing solutions,” he says. “I think that’s where the underwriting agency space is so exciting. It’s in these emerging insurance lines of management liability, cyber or corporate travel that underwriting agencies have been able to move a lot quicker ... than the big insurers with their historic structures.”

The year of cyber?

On 22 February, the Notifiable Data Breaches scheme came into law in Australia, imposing

activity probably double [with] the mandatory breach legislation [in effect], particularly to do with the notification costs cover.”

Coates describes the outlook for cyber as exciting, given that only 2% of companies have acquired cyber coverage.

“The claims activity is already coming, and it will only increase – and that is across both Australia and New Zealand that we’re seeing a significant increase in claims activity,” he says. “I think the key thing for anyone

“Our motto is ‘We do boring things very well’, and that is 100% based on helping, developing and supporting SME businesses, whether it’s brokers who handle SME clients or the SME clients themselves” an obligation on organisations to notify individuals if their personal information is involved in a data breach that could result in serious harm. In light of this regime, does Coates expect a big year for cyber insurance locally?

“We have over 3,000 cyber policies in the market, and we now have over 300 cyber claims, and the claim notification rate has tripled in 2017 from what it was in 2015 and ’16, and that’s for claims coming from the malware and Cryptolocker areas of the policy,” he says. “We estimate that we’ll see the claims

purchasing a cyber policy is to … have a clear understanding of what the breach response service is, because what happens in that first 72 hours on a cyber breach is the most critical aspect. We’ve been very pleased to have some strong feedback from clients that have experienced our breach response service working as effectively as it should.”

Broker education is another key component of the evolving cyber insurance space. “[Recently], we ran a webinar for brokers – one hour of education on cyber, what it

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PROFILE Name: Damien Coates Company: DUAL Title: CEO, Asia Pacific Based in: Sydney Years in the industry: 30 Fast fact: Coates was seconded as DUAL Group CEO for two years from 2011 to 2013, where he oversaw the business’s global operations in 14 countries

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PEOPLE

LEADER PROFILE

DUAL INTERNATIONAL

BY THE NUMBERS

1998

Year DUAL was established in Madrid, Spain

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Number of DUAL offices across 15 countries

600

Approximate number of DUAL employees across the globe

5,000

Approximate number of brokers DUAL works with worldwide

£719m

Amount of premium DUAL wrote during the 2017 financial year

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covers and how to sell it, and dealing with it,” Coates says. “We originally thought 400 brokers might attend.” In fact, more than 2,100 brokers took part in the webinar.

“The demand for high-quality educational training is critical because this is one of the most frightening and least understood risks that the industry faces,” Coates says. “If we’re not educating ourselves, we have no hope of being able to educate our clients on the importance and need for cyber insurance.”

Cyber isn’t the only uninsured exposure that the majority of SMEs face, which repre-

ances are no longer just ‘nice to haves’.”

Taking on technology When it comes to underwriters’ use of new technology, Coates believes agencies’ biggest challenge in developing solutions for SMEs isn’t the new technology itself, but instead the fear of embracing that technology.

“The hardest decision is to have the discipline to only require four pieces of information to provide a client with a management liability solution, rather than 20 pages,” he says. “In terms of communication, it’s adapting to the

“The demand for high-quality educational training is critical ... If we’re not educating ourselves, we have no hope of being able to educate our clients on the importance and need for cyber insurance” sents a multitude of opportunities for underwriting agencies.

“The great thing is you don’t have to go far to look for opportunities because the opportunities are already there,” Coates says. “Less than 15% of SMEs are purchasing management liability … 2% are buying cyber, [and] 1% are buying corporate travel … On these uninsured exposures, we haven’t even scratched the surface.”

As an industry, Coates says, insurance has a responsibility to deal with these massive uninsured exposures, which are business-critical and have resulted in substantial claims activity.

“It’s almost negligent for us, as an industry, to get distracted about further uninsured exposures until we’ve done our job in making management liability, cyber and corporate travel as compulsory an insurance purchase as property and liability,” he says. “These insur-

way people want to be communicated [with] now. People don’t want visits by BDMs pounding the pavement … They’re not looking for bricks and mortar. They’re looking for communication via webinars, three-minute videos [and] LinkedIn updates. We’re spending a lot of time on our digital marketing to ensure that our engagement is tailored in the way that brokers are looking to get information, digest it and then get back to their client.”

Coates also shares some insight into what brokers can expect from DUAL in 2018.

“We’ll continue to shape DUAL based on giving brokers what they want, rather than telling them what they need,” he says. “Our whole strategy is based on really listening to brokers, finding out what they want and delivering it in the way that they need it. So for us, the key thing is to continue to listen and then ensure that we deliver.”

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FEATURES

SECTOR FOCUS: MANAGEMENT LIABILITY

Covering the bottom line LAUW’s Glenn Dawson talks about the challenges in the management liability market and what separates some products from the rest MANAGEMENT LIABILITY insurance represents crucial protection for Australian businesses. It’s essential coverage that helps to ensure that an organisation has the ongoing ability to run as it should when defending employment practices liability [EPL] claims, when it becomes the unwitting victim of crime perpetrated by an employee, or when facing steep financial penalties for breaches of legislation.

While directors & officers coverage is obviously imperative for large listed entities, management liability coverage offers crucial protection to businesses of all shapes and sizes. In fact, when it comes to smaller organisations, the kinds of events covered by a management liability policy can represent a far shorter path to financial ruin for a small business than for larger operations.

Glenn Dawson, portfolio manager for management liability at London Australia Underwriting, provides a snapshot of the current state of the market.

“From an underwriter’s perspective, the most significant aspect of the management liability market currently is that it is undergoing a correction similar to that of the directors & officers insurance market,” Dawson says. “Across many industry types,

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the minimum premiums and deductibles that are currently on offer have increased from recent historic levels … [and] underwriting guidelines/appetites are becoming more restrictive.”

In its #Optima2017 report published last October, Finity Consulting reported signs of material hardening in the manage-

tion, unfair dismissal, and sexual and workplace harassment. In its 2016–17 annual report, The Fair Work Commission reported that 14,135 unfair dismissal applications were lodged during the year. The commission anticipated that figure would remain steady in 2017–18.

Dawson says the major challenge for underwriters offering management liability cover in Australia at the moment is “trying to avoid attritional losses in a marketplace that has been highly competitive for a number of years, with insureds having enjoyed broad levels of coverage with comparatively low premium levels attached”.

Horizon scanning On the subject of emerging claims trends in the management liability space, Dawson mentions one of the global insurance industry’s hottest topics: cyber.

“The major emerging trend that we have seen is the increasing frequency of cyberrelated attacks leading to losses under

“The type and number of standard exclusions that apply to management liability policies in the Australian market varies greatly between insurers” Glenn Dawson, London Australia Underwriting ment liability space, noting rate increases of between 10% and 20%. But despite that hardening, Finity also projected that another 25% rise in premiums would be necessary for those writing these risks to meet target profitability.

On the claims side, Finity reported an escalation in EPL claims, affording employers vital protection against claims made by employees for alleged discrimina-

management liability crime cover,” Dawson explains.

According to EY’s 2017–18 Global Information Security Survey, some estimates say the global cost of cybersecurity breaches will reach US$6trn (A$7.7trn), which is double the total for 2015.

And while cunning hackers can wreak havoc by breaking into companies’ systems, vulnerabilities in those systems aren’t the

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Brought to you by

PROTECTING DATA A recent study on information security by PwC, CIO and CSO gathered responses from more than 9,500 executives in 122 countries (18% of respondents were from Asia Pacific). The findings indicate there’s some way to go when it comes to implementing procedures around the handling of data.

only weakness cyber criminals are exploiting.

Dawson highlights the frequency of incidents in which social engineering techniques are employed by external third parties against organisations in order to trick employees into handing over valuable information and/ or money. Training and educating employees to be alert to these kinds of techniques is vital.

“We believe that more small business owners and managers need to recognise that planning for and protecting against these types of incidents is required for businesses of all sizes – not just those at the larger end of

the spectrum,” Dawson says.

Cyber is especially topical in Australia right now as a result of the Notifiable Data Breaches [NDB] scheme (under Part IIIC of the Privacy Act 1988), which commenced on 22 February. The scheme requires all organisations to which it applies (which includes Australian government agencies, as well as businesses and not-for-profit organisations with an annual turnover of $3m or more) to notify affected individuals, as well as the Australian Information Commissioner, of a data breach that is likely to result in serious harm.

56%

53%

Have an overall information security strategy

Require employee training on privacy and practices

51%

49%

Have an accurate inventory of personal data

Limit personal data collection, retention and access to the minimum necessary

46%

46%

Conduct compliance audits of third parties that handle personal data

Require third parties to comply with their privacy policies

Source: PwC, CIO and CSO, The Global State of Information Security Survey 2018

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FEATURES

SECTOR FOCUS: MANAGEMENT LIABILITY Brought to you by

One of the major intentions of the scheme is to force greater transparency around the volume and severity of data breach incidents in Australia – failure to comply can result in fines of up to $420,000 for individuals and $2.1m for corporations.

In the short time since the scheme was enacted in law, the privacy commissioner has reportedly received notification of 31 breaches. The lingering question is what consequences those who comply with the scheme – and those who don’t – will ultimately face. And what level of exposure will the NDB scheme represent for management liability insurers?

“It remains to be seen what, if any, regu-

being the only differentiator.”

So, what is it that separates the best management liability policies in today’s market from the rest?

“As opposed to the insuring clauses and extensions on offer, I believe that it’s often the standard exclusions contained in a management liability wording that make a significant difference to the level of cover afforded to an insured,” Dawson says.

He adds that brokers should take the time to understand how an insurer’s management liability product may or may not respond to common claim types.

“The type and number of standard exclusions that apply to management liability

“Obtaining advice from external consultants can be a highly cost-effective way to assist a company with mitigating its exposure” Glenn Dawson, London Australia Underwriting latory action is taken against companies and their management in response to notified – and also un-notified – data breaches,” Dawson says. “Affirmative policy language, specific coverage sub-limits or policy exclusions relating to the NDB scheme – under fines & penalties cover or statutory liability cover, for example – could be introduced by insurers moving forward.”

Defining differences As to businesses’ level of understanding and appreciation of management liability risks, Dawson says the recent market correction is perhaps indicative that the coverage has generally been unappreciated.

“In recent years, the product has almost become commoditised,” he says, “with some in the market viewing all management liability policies as identical [and] price

42

policies in the Australian market varies greatly between insurers,” Dawson says.

“Some brokers aren’t aware of the differences as they apply to their clients, leading to issues at claim time.”

He says because of the commoditisation of the product, resulting from circumstances such as the use of online portals and specifically agreed pricing/facilities/schemes between insurers and broking houses, some brokers don’t take the time required to thoroughly read the standard exclusions applicable and understand how those may apply to an individual insured.

“The lowest price does not necessarily equate to the most appropriate level of cover for a particular insured,” Dawson says. “For example, some insurers apply a blanket insolvency exclusion to all policies as standard practice, whilst others only endorse

LONDON AUSTRALIA UNDERWRITING Established in 2005, London Australia Underwriting provides brokers and clients with innovative products backed by first-class security.

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

For more information, please visit lauw.com.au.

this exclusion onto a policy as and when required. The same can be said of various types of major shareholder exclusions.

“Given that, historically speaking, the two types of claims that represent the most significant directors & officers/management liability insured losses are insolvency/ administration claims and shareholderbrought claims, a lack of understanding of these points can have material ramifications for both brokers and their insureds.”

Preventative measures Dawson offers advice on what insureds – and their brokers – can do to mitigate management liability risks.

“Dependent on the size and resources of an entity, obtaining advice from external consultants can be a highly cost-effective way to assist a company with mitigating its exposure by educating its management and employees on both traditional and emerging risks,” he says.

“To use the NDB scheme as an example, this is a complex and still developing area.

Yet, many clients are unaware that the NDB scheme applies to their business and that it is compulsory, meaning that they will be wholly unprepared if or when they have a notifiable data breach. A third-party consultant would easily be able to assist a client in this scenario.”

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FEATURES

SECTOR FOCUS: ACCIDENT AND HEALTH

Ensuring a pleasant trip

ically on assisting businesses to meet their duty of care to employees.

Protecting your greatest asset

How can brokers help their business clients maximise protection against the myriad accident and health risks their travelling employees face?

WORKERS ARE becoming increasingly mobile, travelling to unfamiliar countries and territories where they’re confronted by a variety of dangers, some of which – including the growing threat of terrorism – represent evolving risks. In that context, the need for businesses with travelling workforces to have comprehensive accident and health insurance coverage has become more important than ever.

But as is the case with many kinds of insurable exposures, much can be done to reduce the impact of any incidents that occur and to prevent losses altogether. There are many services available today that offer businesses and their employees greater protection against A&H risks. In February, XL Catlin launched Protect and Assist, its first move into the accident and health space in Australia. It’s a product that focuses specif-

Patrick Corbett, XL Catlin’s global head of life, accident and health, emphasises the need for employers to ensure proper attention is paid to people risk management.

“If you go to any CEO and ask her or him, ‘What’s your most important asset?’, they generally are going to say their people,” Corbett says. “There’s been a lot of focus over the last 20 years around risk management in organisations, but really around two things – one, their physical assets, and second, their liabilities – but not a lot around what they consider to be their most important asset, which is their people.”

Nicole Yates, XL Catlin’s head of accident and health for Australia, similarly believes businesses could be more proactive around managing people risk and adopting strategies to assist in preventing loss, as well as in educating employees about their A&H risks.

“I think overall, from an insurance

A DANGEROUS LANDSCAPE Last April, the World Economic Forum released its 2017 Travel and Tourism Competitiveness Report, which rates various countries on a set of factors and policies that facilitate the sustainable development of each country’s travel and tourism sector. One of the criteria on which countries are assessed is safety and security.

These 10 countries ranked as the least safe and secure out of the 136 countries that were surveyed.

10

Ukraine

4

7

3

Egypt

9

Honduras

El Salvador

1

6

Venezuela

Colombia

2

Pakistan

Yemen

5

Nigeria

8

Kenya

Source: World Economic Forum, The Travel and Tourism Competitiveness Report 2017, April 2017

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around psychological first aid, around the post-traumatic response in a post-traumatic stress situation, and getting in front of the challenge that the insured’s facing,” Yates says.

“A lot of the time, if you can get them help early on, then they won’t suffer from the incident as much as they would have otherwise.”

Travel risk management Included in XL Catlin’s Protect and Assist offering is assistance for companies in creating a travel risk management policy, a document that should include both proactive and reactive plans and procedures. Corbett says the implementation of a travel risk management policy should be viewed as essential for businesses with mobile employees.

“I think a travel risk management policy is absolutely critical,” he says. “You’d be surprised how many organisations, even some large organisations, don’t have that sort of policy in place.”

Travel tracking tools can also be useful in an employer’s efforts to discharge their duty perspective, [businesses are] well placed and have the adequate level of insurance,” she says, “but in terms of delivering their duty of care, I think that they can look at their practices and procedures and policies … to deliver and exceed that duty of care to their staff.”

Corbett says a major part of the value proposition for Protect and Assist is service-led. In addition to offering personal accident and business travel insurance, the product includes access to support and response services, which aim not only to help insureds when things go wrong, but also to reduce and prevent loss or harm before they travel. According to Corbett, today’s evolving risk landscape makes these types of services crucial.

“The services, especially around crisis management, are becoming more and more important,” he says. “We partner with [the

“A travel risk management policy is absolutely critical. You’d be surprised how many organisations ... don’t have that sort of policy in place” Patrick Corbett, XL Catlin crisis management] team internally and then with service providers externally to provide a suite of services and products that meet those needs … We’ve taken a number of service providers [that are] market leaders in the areas where they provide their services and put it all together to package it for clients.”

One of the issues XL Catlin is devoting a great deal of attention to is wellness.

“Some of the covers in our products are

of care.

“If there is a natural disaster or a terrorism event in some location,” Corbett says, “whether you’re the risk manager, HR manager [or] CEO, you’re able to quickly find out who’s in that area, what they are doing, what their contact numbers are, [and] be able to push out some alerts [and] some communication to ask, ‘Are you all right?’”

Yates stresses the need for businesses to

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FEATURES

SECTOR FOCUS: ACCIDENT AND HEALTH

HOW TO FOSTER CORPORATE WELLNESS In a recent blog post, Dr Rodrigo Rodriguez-Fernandez of International SOS shared his top eight corporate wellness tips for the year.

Recognise health as a cornerstone of good business Both the World Economic Forum and the United Nations regard health as a necessary driver of business continuity.

1

Incorporate health metrics into annual company reporting Employee health indicators are becoming core to the existing corporate social responsibility, sustainability and integrated reporting looked at by shareholders and potential investors.

2

De-stigmatise mental health in the workplace Preparing mid-line managers to act as mental health champions and offer support is a fast-growing trend.

3

Look beyond ROI to value on investment [VoI] New programs have begun to use VoI, incorporating metrics such as employee morale and company employability.

4

Find out if your workplace wellness programs are working Each program or activity should have a set of indicators that allow progress and success to be measured.

5

Balance out the fruits and yoga with the science It’s important to use programs that are evidence-based and scientifically proven.

6

Provide smart incentives Well designed incentives, integrated into wider evidence-based programs, are more likely to have long-term impact.

7

Partner with experts Partnering with other organisations can help leverage in-house capabilities with external skill sets.

8

focus on travel preparedness.

“I think a lot of times, they have a travel policy in place, but it doesn’t go as far as it could around preparing travellers for the areas that they’re travelling to,” she explains.

“Are there any diseases that are prevalent?

Are there any preventative strategies? And if they do get struck down with something over there, how do they treat it? What areas should they avoid, and what are the local contacts in an emergency?”

Yates says it’s also important to ensure employees appreciate simple matters such as not travelling alone at night and not using ATMs unless located in public places. “People

that’s going into sales, or a services to mining firm that’s going into a new area? The business activities are important.”

Corbett concurs. “Sometimes there’s a shift in travel patterns – maybe it’s a new business opportunity or an M&A situation – where all of a sudden, what was there before changes radically,” he says. “I don’t think the client necessarily recognises the additional risks that brings with it, and so a good broker will prod those areas a little bit with their clients to really understand that so they’re able to help them with the people risk management element of that – and, of course, the products and services that the

“I think a lot of times, [employers] have a travel policy in place, but it doesn’t go as far as it could around preparing travellers for the areas that they’re travelling to” Nicole Yates, XL Catlin need to be prepared with the education and some of the skills to avoid getting into bad circumstances.”

Keeping the conversation going On the insurance side, as businesses change shape, it’s crucial brokers are across any developments that may necessitate an update to a client’s coverage. Yates says brokers should encourage regular and ongoing communication with their insureds around the details of their operations.

“Things that [brokers] should be aware of are: [Are clients’ employees] doing any non-scheduled flying that they haven’t declared? Are they going into disturbed areas, which requires quite a specific and tailored approach? Are they changing their business approach? Are they a manufacturing firm

likes of ourselves and others are able to bring to mitigate that risk.”

While it’s one thing for an employer to secure accident and health coverage that provides employees with access to a range of beneficial services, it’s another to ensure that the employees actually understand the nature of those services and the fact that they are available.

“It’s one thing to have a really expansive proposition, both from an indemnity perspective and a service perspective, but if no one uses the services you’re providing, then no one’s getting the benefit out of it,” Yates says.

“So it is very much about a communication message from the broker to the insured, and from the insured to their employees, because that’s how we can prevent some of these losses from occurring.”

Source: International SOS, Top Eight Corporate Wellness Tips for 2018, January 2018

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28/03/2018 5:10:09 PM

THE WESTIN SYDNEY 4 MAY 2018 Next month, Australia’s insurance industry will begin a new annual tradition with the first-ever Insurance Business Awards. On the following pages, Insurance Business presents the professionals and companies that have been named as finalists in the inaugural event

LAST OCTOBER, following the success of sister events in Canada and the US, the Insurance Business Awards were announced. This brand-new event will bring together Australia’s top brokers and industry professionals for an evening celebrating excellence in insurance.

On Friday, 4 May, in a black-tie gala event at The Westin Sydney, 28 trophies will be presented to individuals and organisations that have achieved tremendous success in

48

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insurance. Insurance Business was overwhelmed with the response we received to our callout for nominees earlier in the year, and on the following pages, you will find the names of 157 finalists across 25 categories.

The finalists for the top awards – Australian Broker of the Year, Australian Brokerage of the Year and Australian Young Gun of the Year – will be announced on the night.

Not only is this event an opportunity to rub shoulders with the crème de la crème of

Australia’s insurance industry, but it’s also a chance for insurance professionals to come together to have some fun. One of Australia’s top comedians, Tom Gleeson, a regular on ABC TV’s The Weekly, will be taking time out from his Sure Thing stand-up comedy tour to assume MC duties for the event.

We look forward to celebrating your success at The Westin Sydney on Friday, 4 May. For more information and to book a table, visit ibawards.com.au.

INSURANCE BUSINESS AWARDS FINALISTS 2O18

EVENT PARTNER

BEST COMMUNITY ENGAGEMENT PROGRAM

BEST COMMUNITY ENGAGEMENT PROGRAM

MOST EFFECTIVE INTERNET PRESENCE

This category recognises the insurer or underwriting agency that has made the most impressive or substantial contribution to the wider community.

Criteria include the nature of the community service initiative(s) in which the organisation is engaged, the alignment of the initiative(s) with overall business strategy and the impact of the initiative(s) on the community.

This category recognises the brokerage that has made the most impressive or substantial contribution to the wider community. Criteria include the nature of the community service initiative(s) in which the organisation is engaged, the alignment of the initiative(s) with overall business strategy and the impact of the initiative(s) on the community.

This award recognises the underwriting agency that has best harnessed the power of the internet to provide brokers with practical, effective and easily accessible facilities to help them with their businesses. Criteria include the objectives of the website, its design and functionality, and features and quality of content (e.g. product information, broker resources).

(INSURER)

FINALISTS

(BROKER)

FINALISTS

(UNDERWRITING AGENCY)

• Adroit Insurance Group

FINALISTS

• Ansvar Insurance

• Elliott Insurance Brokers

• Brooklyn Underwriting

• DUAL Australia

• Insurance Advisernet

• CHU Underwriting Agencies

• National Transport Insurance

• JLT

• DUAL Australia

• QBE

• Knightcorp Insurance Brokers

• RACQ

• PSC Connect

• High Street Underwriting Agency

• Sportscover

• Mecon Insurance

• SURA

• Solution Underwriting

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INSURANCE BUSINESS AWARDS FINALISTS 2O18 MOST EFFECTIVE INTERNET PRESENCE (GENERAL INSURER)

This award recognises the general insurer that has best harnessed the power of the internet to provide brokers with practical, effective and easily accessible facilities to help them with their businesses. Criteria include the objectives of the website, its design and functionality, and features and quality of content (e.g. product information, broker resources).

FINALISTS • AIG • CGU • QBE • Vero • Zurich

UNDERWRITING AGENCY CLAIMS TEAM OF THE YEAR

GENERAL INSURER CLAIMS TEAM OF THE YEAR

When an insured has to call upon the promise to pay, what follows will ultimately determine that insured’s overall perception of the underwriting agency. This award recognises the best claims team within an underwriting agency operating in Australia. Criteria include overall customer service proposition, turnaround times, and a demonstrated commitment to innovation and continuous improvement of the claims process.

When an insured has to call upon the promise to pay, what follows will ultimately determine that insured’s overall perception of the insurer. This award recognises the best claims team within a general insurer operating in Australia. Criteria include overall customer service proposition, turnaround times, and a demonstrated commitment to innovation and continuous improve­ ment of the claims process.

FINALISTS • Accident & Health International Underwriting • CHU Underwriting Agencies

• CGU • Chubb • Liberty International Underwriters

• National Transport Insurance

• Vero

• ProRisk

• Zurich

• UAA

www.insurancebusinessonline.com.au

• Berkshire Hathaway

• Mecon

• SURA

50

FINALISTS

AUSTRALIAN UNDERWRITING AGENCY OF THE YEAR This award recognises the best underwriting agency operating in Australia. Results of the 2017 Insurance Business Brokers on Underwriting Agencies survey will be taken into consideration. Criteria include business achievements in the insurance intermediary channel (including, but not limited to, coverage, service levels, and turnaround times for claims and new business), service innovations (including, but not limited to, technology, broker communications, and training and development), and overall support of and contribution to the insurance intermediary channel.

FINALISTS • Accident & Health International Underwriting • CHU Underwriting Agencies • DUAL Australia • High Street Underwriting Agency

AUSTRALIAN GENERAL INSURER OF THE YEAR

UNDERWRITING AGENCY BDM OF THE YEAR

This award recognises the best general insurer operating in Australia. Results of the 2017 Insurance Business Brokers on Insurers survey will be taken into consideration. Criteria include business achievements in the insurance intermediary channel (including, but not limited to, coverage, service levels, and turnaround times for claims and new business), service innovations (including, but not limited to, technology, broker communications, and training and development), and overall support of and contribution to the insurance intermediary channel.

This award recognises the best BDM working for an underwriting agency operating in Australia. Criteria include the BDM’s accessibility and communication with broker clients, demonstrated understanding of brokers’ businesses, product knowledge, and how the BDM adds value to the brand he/she represents and to the insurance intermediary channel.

FINALISTS • Allianz • CGU • Chubb

FINALISTS • Matt Almond High Street Underwriting

• Ben Anglin Strata Unit Underwriters

• Tony La Rocca SURA

• Philippa Ryan CHU Underwriting Agencies

• QBE • Vero

• Mecon Insurance • National Transport Insurance • ProRisk

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INSURANCE BUSINESS AWARDS FINALISTS 2O18 THE K2 AWARD FOR

GENERAL INSURER BDM OF THE YEAR

BROKER OF THE YEAR

(AUTHORISED REPRESENTATIVE)

This award recognises the best BDM working for a general insurer operating in Australia. Criteria include the BDM’s accessibility and communication with broker clients, demonstrated under­ standing of brokers’ businesses, product knowledge, and how the BDM adds value to the brand he/she represents and to the insurance intermediary channel.

This award recognises the best broker attached to an authorised representative network. Criteria include client retention, customer service proposition, lead generation, contribution to the overall business and relevant financial results (including number of policies written, number of clients and total revenue generated).

FINALISTS

FINALISTS

• Grant Bowen

• Ken Dixon

Ansvar Insurance

• Rebecca Gumm CGU

• Peter Horan QBE

• Paul Kelly Berkley

• Mark Matthews Vero

• James Pennetta Vero

• Charlie Tame

Dixon Insurance Services

• Simon Feldman Sound Insurance

• Shaun Geddes PMA Insurance Services

• Marcus Hamill Elements Insurance

• Julie Machell Leedam General (Ausure)

THE SURA AWARD FOR

BROKER OF THE YEAR (SPECIALIST)

This award recognises the best broker who derives at least 50% of his or her business from one area of specialty risk.

FINALISTS • Roger Irvine Gallagher

• Arthur Kinnas Austbrokers SPT

• Michael Parrant Aon

• Stephen Rudman Gallagher

• Sonya Smith Bill Owen Insurance Brokers

• Gary Sim

CCM Insurance Group

• Shane Thaw Intuitive Brokers

• Racheal Tumelty Gallagher

• Leigh Moulden Doreen Insurance Solutions

The Hollard Insurance Company

AWARD SPONSOR

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AWARD SPONSOR

BROKER OF THE YEAR

BROKER OF THE YEAR

BROKER OF THE YEAR

This award recognises the best broker working in Australia in an international brokerage operation. Criteria include client retention, customer service proposition, lead generation, contribution to the overall business and relevant financial results.

This award recognises the best broker working in an independent brokerage operation with 20 or more staff (or full-time equivalents). Criteria include client retention, customer service proposition, lead generation, contribution to the overall business and relevant financial results.

This award recognises the best broker working in an independent brokerage operation with less than 20 staff (or full-time equivalents). Criteria include client retention, customer service proposition, lead generation, contribution to the overall business and relevant financial results.

FINALISTS

FINALISTS

• Damien Coorey

• Michael Alexander

(INTERNATIONAL)

FINALISTS • Amanda Blackburn JLT

• Russell Boucher Gallagher

• Matthew Gestier Aon

(INDEPENDENT, 20+ STAFF)

CRM Brokers

• Maria Parry Austcover

• Keiran Volpe North Queensland Insurance Brokers

(INDEPENDENT, LESS THAN 20 STAFF)

HIB Insurance Brokers

• Peter Apolakiatis Bellrock Broking

• Kate Fairley Simplex Insurance Solutions

• Jody Williams Oracle Group

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INSURANCE BUSINESS AWARDS FINALISTS 2O18 THE XL CATLIN AWARD FOR

YOUNG GUN OF THE YEAR (INTERNATIONAL)

This award recognises the best broker under 35 working in Australia for an international brokerage. Criteria include demonstrated career progression and professional development, contribution to the nominee’s business, relevant financial results, and overall customer service.

FINALISTS • Callum Duff Marsh

• Zoe Evans Gallagher

• George Kwasi Winfull Gallagher

• Stacey Lloyd Marsh

• Mark Luckin Lockton

• Shweta Nimkar JLT

• Daniel Quintin Gallagher

YOUNG GUN OF THE YEAR

YOUNG GUN OF THE YEAR

(INDEPENDENT, 20+ STAFF)

(INDEPENDENT, LESS THAN 20 STAFF)

This award recognises the best broker under 35 working for an independent brokerage operation with 20 or more staff (or full-time equivalents). Criteria include demonstrated career progression and professional development, contribution to the nominee’s business, relevant financial results (including number of policies written, number of clients and total revenue generated), and overall customer service.

This award recognises the best broker under 35 working for an independent brokerage operation with less than 20 staff (or full-time equivalents). Criteria include demonstrated career progression and professional development, contribution to the nominee’s business, relevant financial results (including number of policies written, number of clients and total revenue generated), and overall customer service.

FINALISTS

FINALISTS

• Ben Gair

• Tina-Marie Beznec

McLardy McShane Insurance & Financial Services

• Jackson McDonald GSA

• Jaclyn Rowlands Austbrokers HCI

• Adam Ware BJS Insurance Brokers (Gippsland)

Elliott Insurance

• Alana Brown MGA Darwin

• Christopher Guy Avant-garde Financial Services

• Joshua Lauren Empire Insurance Group

• Steve Paton Mountain Insurance

• Nikita Piil Elliott Insurance Brokers

AWARD SPONSOR

• Jonathan Ross Aviso WA

• Aimee Williams Austbrokers Coast to Coast

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AUTHORISED REPRESENTATIVE NETWORK OF THE YEAR This award recognises the best authorised representative network in Australia. Criteria include year-overyear growth, effective business development and lead generation strategies, development of key partnerships and relationships with ARs and insurers, demonstrated broker support systems and processes, overall support of and contribution to the insurance intermediary channel, and the business’s value proposition and strategy around stakeholder engagement.

FINALISTS • Insurance Advisernet

BEST CUSTOMER SERVICE FROM AN INDIVIDUAL OFFICE

SPECIALIST BROKERAGE OF THE YEAR

Customer service is an important measure of any brokerage’s long-term sustainability and success. This award recognises the best brokerage office or branch that maintained consistent and sustainable customer service standards in the 2017 financial year. Criteria include overall customer service proposition, responsiveness to changing market demands, product knowledge and offering, impact on client retention and customer satisfaction, and the business’s value proposition and strategy around stakeholder engagement.

This award recognises the best brokerage operation that derives more than 50% of its business from one area of specialty risk. Criteria include client retention, customer service proposition, financial results (including total revenue, percentage of new business, and growth in client and staff numbers), staff development and retention, and the business’s value proposition and strategy around stakeholder engagement.

FINALISTS

• Marsh Advantage Insurance – Landmark

• 20:20 Insurance Brokers

• PSC Connect

• BAC Insurance Brokers

• Allinsure • BizCover

FINALISTS • Austbrokers SPT • BAC Insurance Services • Experien Insurance Services • Modern Risk Solutions • Sparrow Group

• Joe Vella Insurance Brokers • Knightcorp Insurance Brokers • Simplex Insurance Solutions • TradeRisk • Webber Insurance Group

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INSURANCE BUSINESS AWARDS FINALISTS 2O18 BROKERAGE OF THE YEAR (1–5 STAFF)

THE LLOYD’S AWARD FOR

THE JAVLN AWARD FOR

(6–20 STAFF)

(20+ STAFF)

BROKERAGE OF THE YEAR

This award recognises the best brokerage operation with five or fewer staff members (or full-time equivalents) in Australia. To be eligible, the brokerage must be independently branded and headquartered in Australia. Criteria include client retention, customer service proposition, financial results (including total revenue, percentage of new business, and growth in client and staff numbers), staff development and retention, and the business’s value proposition and strategy around stakeholder engagement.

This award recognises the best brokerage operation with six to 20 staff (or full-time equivalents) in Australia.

To be eligible, the brokerage must be independently branded and head­ quartered in Australia. Criteria include client retention, customer service proposition, financial results, staff development and retention, and the business’s value proposition and strategy around stakeholder engagement.

FINALISTS

BROKERAGE OF THE YEAR This award recognises the best brokerage operation with more than 20 staff (or full-time equivalents) in Australia. To be eligible, the brokerage must be independently branded and headquartered in Australia. Criteria include client retention, customer service proposition, financial results, staff development and retention, and the business’s value proposition and strategy around stakeholder engagement.

• Allinsure

FINALISTS

• Austbrokers Coast to Coast

• Austcover

FINALISTS

• Bellrock Broking

• Brookvale Insurance Brokers

• Able Insurance Services NT

• Elliott Insurance Brokers

• Centrewest Insurance Brokers

• CPR Insurance Services

• IMC Insurance Brokers

• Insure 247

• InterRe Insurance Brokers

• Simplex Insurance Solutions

• McLardy McShane Group

• Intuitive Insurance Solutions • MKS Insurance Services • Modern Risk Solutions • Optimus 1 Insurance Brokers • Stewart Insurance Group • Trade Risk

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AWARD SPONSOR

AWARD SPONSOR

THE GALLAGHER BASSETT AWARD FOR

INTERNATIONAL BROKERAGE OF THE YEAR

This award recognises the best international brokerage operation in Australia. Criteria include client retention, customer service proposition, financial results (including total revenue, percentage of new business, and growth in client and staff numbers), staff development and retention, and the business’s value proposition and strategy around stakeholder engagement.

FINALISTS • Aon • Gallagher • JLT

TO BE ANNOUNCED ON THE NIGHT …

AUSTRALIAN BROKER OF THE YEAR This award recognises the best broker in the Australian insurance industry. Criteria include client retention, customer service proposition, lead generation, contribution to the overall business, relevant financial results and contribution to the Australian insurance industry. The finalists in this category will be drawn from the winners of the following categories: Broker of the Year – International, Broker of the Year – Independent (20+ Staff), Broker of the Year – Independent (Less Than 20 Staff), Broker of the Year – Specialist, and Authorised Representative of the Year.

AUSTRALIAN BROKERAGE OF THE YEAR The award recognises the best brokerage business operating in the Australian insurance industry. Criteria include client retention, customer service proposition, financial results, staff development and retention, and the business’s value proposition and strategy around stakeholder engagement. The finalists in this category will be drawn from the winners of the following categories: International Brokerage of the Year, Brokerage of the Year (20+ Staff), Brokerage of the Year (6–20 Staff), Brokerage of the Year (1–5 Staff) and Specialist Brokerage of the Year.

THE LAUW AWARD FOR

AUSTRALIAN YOUNG GUN OF THE YEAR

AWARD SPONSOR

AWARD SPONSOR This award recognises the best broker under age 35.

Criteria include demonstrated career progression and professional development, contribution to the nominee’s business, relevant financial results, and overall customer service. The finalists in this category will be drawn from the winners of the following awards: Young Gun of the Year – Independent (Less Than 20 Staff), Young Gun of the Year – Independent (20+ Staff), and Young Gun of the Year – International.

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INSURANCE BUSINESS AWARDS FINALISTS 2O18 AWARD SPONSORS

Gallagher Bassett are Australia’s claims management experts. Managing claims is all we do – and we do it with singular focus and passion. GB partners closely with brokers to provide customised claim and risk-mitigation solutions that improve service and outcomes.

Founded in 2005, London Australia Underwriting offers brokers and their clients quality products backed by first-class service.

With one of the most experienced under­writing teams in the market, we are able to innovate where required and think outside the square.

XL Catlin provides property, casualty, professional, and specialty products to industrial, commercial, and professional firms, insurance companies, and other enterprises throughout the world.

Contact Andrew Spilsbury 07 3005 1908 andrew_spilsbury@gbtpa.com.au gallagherbassett.com.au

Contact Declan Rye 02 8912 6403 declan.rye@lauw.com.au lauw.com.au

Contact Iselle Gonzalez 02 8270 1719 iselle.gonzalez@xlcatlin.com xlcatlin.com

JAVLN has created innovative business software applications that deliver powerful solutions to a variety of industry sectors. We have a world-leading software-as-a-service insurance platform to help brokers successfully engage with clients and improve operational efficiencies. Our insurance platform has out-of-the-box tools that enable insurance products and policies to be sold online.

Contact Dale Smith 0011 64 9580 2848 dale.smith@javln.com javln.com

K2 Recruitment is one of Australia’s most progressive recruitment agencies, providing HR consultancy, executive and specialist recruitment services. K2 Recruitment’s expertise ensures it is able to quickly identify and source the best and most appropriate candidates for clients in the insurance sector.

Contact Alistair McClymont alistair@k2.net.au k2recruitment.com.au

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www.insurancebusinessonline.com.au

Lloyd’s is the world’s specialist insurance and reinsurance market. Led by expert under­ writers and brokers in more than 200 territories, the Lloyd’s market develops the essential, complex and critical insurance needed to underwrite human progress. In 2017, Lloyd’s underwriters wrote A$2.3bn of business in Australia Contact 02 8298 0700 lloyds.com

Bringing together a family of leading niche underwriting agencies that are all experts in their areas of focus, SURA gives insurance brokers and our shared clients access to the industry’s most innovative products, people and ideas under one roof.

Contact 02 9930 9500 sura.com.au

ASSOCIATE SPONSOR

Young Insurance Professionals Australia & New Zealand [YIPs] is the largest independent non-profit young insurance professionals organisation in Australia and New Zealand.

Contact info@yips.org.au yips.org.au

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FEATURES

VIRTUAL WORKFORCE

How to build a virtual workforce From cutting costs to freeing up brokers to meet clients, ditching the office has a lot to offer if you can get it right, explains virtual working expert Ruth MacKay

THE TRADITIONAL boundaries of officebased work no longer apply in the modern business environment. Thanks to the proliferation of mobile technology, professionals can now work from home, on the road, in their favourite café or almost anywhere there is a good internet connection. Never before have workers had so much autonomy over when, where and how they work.

This brings a long list of benefits to the forward-thinking companies that are using virtual workforces to maximise their competitive advantage, attract and retain the best talent, and become first-choice employers, all while cutting overhead costs and increasing productivity.

However, running a successful virtual workforce requires a completely new management philosophy. Traditionally, the manager’s role was to supervise, direct and interact face-to-face with employees.

For most managers, that was easy. With employees at their desks from nine to five, managers could stop by at any time and check in. Now they’re asking: “How can we maintain solid oversight while allowing our employees the freedom to work virtually?”

That’s a good question, and one that can only be answered with solid planning, training and a top-down understanding of how to implement, integrate and manage a virtual workforce designed to address the

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challenges of doing business in the 21st century. Follow these four steps to build an effective virtual workforce that will take your business to the next level.

STEP 1 Evaluate Not every business is the same, so there is no one-size-fits-all virtual workforce that you can simply drag and drop into play. Some businesses will be more suited to a virtual workforce than others, as will certain business units within your company. Take some time to carefully evaluate your business for strategic fit by considering the following: How might a virtual workforce increase your competitive advantage? Consider how a mobile workforce might be able to outpace your competition by providing your clients with on-location service.

How will a virtual workforce impact your market position? Without the overhead drain of maintaining a bricks-and-mortar office, you may be able to offer discounts to high-value clients or become a lowercost provider.

Will a virtual workforce open entry into new markets? Having employees stationed around the country and even around the globe, operating in a range of

time zones, may open up new opportunities to expand your territory and enter new markets.

What is your competition doing? If they have moved or are moving to a virtual workforce, you are definitely at risk of being left behind the eight ball.

STEP 2 Assess Virtual workforces offer a range of potential benefits, but they also require investment in key areas to ensure maximum effectiveness. As with every business decision, you must assess the benefits against the costs to determine if a virtual workforce is the right fit for your organisation. Here’s some food for thought to get you started: POTENTIAL BENEFITS The reduction in employee commuting time increases flexibility and improves work–life balance. This leads to reductions in staff attrition and associated recruitment and training costs.

Fewer in-office distractions can improve employee productivity and boost motivation and engagement.

Cutting overhead costs may offer an opportunity to rethink your pricing structure and

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company’s units.

Sales and IT have worked with all areas of management to identify the most effective management of software, hardware and support.

Each business unit has clearly written policies that can be easily distributed to your virtual employees.

improve your competitive advantage.

chain to prevent resistance.

During your pilot program, look for gaps that might require training, new technology or infrastructure. Also, recruit staff – either internally or externally – with the attributes required to work virtually. Plan out the scope, tasks, timing, resourcing, costs and acceptance criteria (use these as the basis for your ongoing management metrics) so that the transition is as seamless as possible.

Be disciplined in completing the plan, and after a meaningful period (this should represent at least one complete business cycle), measure outcomes to goals. This will enable you to construct a new project plan that offers solutions to the gaps in the initial cycle.

This may be improved by utilising relevant outside expertise.

STEP 3 Implement

STEP 4 Launch Your pilot project will have lessened the overall risk while gaining much-needed support for the virtual model across your organisation. With all your evaluations, assessments and planning in place, it’s now time to pick a specific date to launch – because the only way you can identify what will work and what will need improvement is by doing it.

Training and support will be needed to assist employees as they transition to the new technology and work philosophy.

Once your evaluation and assessment are complete, it’s time to enter the implementation stage. Running a pilot program provides a positive pathway to transitioning to a virtual workforce in one part of your business without impacting overall operations.

Most important, you must have the various business units take full ownership of the transition to ensure they have clearly identified both the opportunities and the risks within a virtual workforce. Also, your managers will need to be trained and motivated so they are up to the challenge of effectively leading their virtual employees. To run a successful pilot project, ensure that:

Resources may be required to ensure buy-in up and down the management

Software and hardware selection and application are approved by all of the

Staff stationed in various locations offers the potential to improve client relationships via face-to-face visits.

POTENTIAL COSTS Investment in new software and hardware technology to support the virtual model will be required.

Initial management training will also be required to convert to virtual workforce management practices and techniques.

Ruth MacKay is the founder and managing director of Ourtel Solutions, where she manages a 100% virtual workforce. She is passionate about helping businesses gain a competitive advantage, improve profits and retain top talent by leveraging proven virtual workforce models. MacKay is also the author of the new book The 21st Century Workforce. For more information, visit ourtelsolutions.com.

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FEATURES

RISK MITIGATION

Reducing flood risk FM Global’s Lyndon Broad reveals how businesses can mitigate weatherrelated risks in the midst of flood season NATURAL DISASTERS have wreaked havoc on the lives and businesses of many Australians over the past few decades. Queenslanders in particular are continuing to recover from Cyclone Debbie, which caused billions of dollars in 2017.

Globally, the costs associated with extreme weather – including flooding, hurricanes and other events – are rising sharply. Moody’s Estimates puts the cost from last year’s hurricanes Irma and Harvey to cities such as Houston and Miami at between $US150bn and US$200bn, while Hurricane Maria is estimated to have caused insured losses of between US$40bn and US$80bn, primarily in Puerto Rico.

So how can your clients protect themselves as we face another flood season in Australia?

And, more broadly, how can their businesses reduce their exposure to extreme weather events in Australia and globally?

The key is to be well prepared. That means understanding where and how a business is exposed and taking steps to mitigate the risk.

At FM Global, we’ve developed an emergency checklist to help businesses facing immediate or near-term risks from flooding. The checklist features simple, practical steps to help clients reduce damage from a flood and its impact on business continuity. These steps include: • Assign a manager to keep your emergency response (or equivalent) team members updated. This involves reviewing authorised (primarily government) sources of information regarding critical information such as predictions of flood peak levels and when these are forecast to occur.

• Relocate items that are valuable or critical to continued operation outside predicted

flood zones. This might include servers, storage devices, networking equipment, testing and quality-control equipment, dies and patterns, drawings, records, and tapes.

You should also move any vehicles that might be needed once the flood recedes, including forklifts and plant trucks.

• Reduce fire risk by shutting down electricity and gas, and install barriers around sprinkler risers, yard valves and hydrants.

• Place filled sandbags around entry points and protection equipment, and fill empty storage tanks – including above-ground and buried tanks – to stop them from floating.

An emergency checklist can help a business navigate its way safely through a flood and be developed into a more comprehensive Flood Emergency Response Plan [FERP]. FM Global’s full checklist of pre- and post-flood items and FERP are available on our website. The FERP should be integrated with broader business continuity and disaster recovery planning to minimise disruption to production and, most importantly, to customers.

FM Global has also developed an interactive flood map so businesses can immediately identify whether they (or their supply-chain partners) are operating in zones prone to inundation. This map can enable executives and risk managers to evaluate and take measures to address the hazard presented by flooding. For example, it helps facilitate planning to relocate plants, facilities and offices out of flood-prone areas.

Of course, a business cannot properly mitigate flood-related risks unless its planning extends beyond its own facilities and operations.

Businesses must be aware of and plan for the risk flooding can present to their supply chain.

The globalised nature of many modern supply chains means flooding that affects suppliers in distant locations can cause severe knock-on effects to a business. Consequently, a flood risk assessment should account for events that might compromise production or operations of just one participant in the supply chain. This means identifying options for sourcing alternative services or supplies in the event of disruption.

“A business cannot properly mitigate flood-related risks unless its planning extends beyond its own facilities and operations” A business might also choose to consider providing flood risk assessment and management assistance to all supply-chain participants to further mitigate risk.

By taking immediate action to minimise the risk and impact of a flood, businesses can greatly reduce potentially catastrophic effects and position themselves and their supply-chain partners for a prosperous future.

Lyndon Broad is operations manager for FM Global ANZ. His accreditations include a degree in mechanical engineering and a diploma in loss adjusting.

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PEOPLE PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email ibo@keymedia.com.au

2003

Year of the inaugural World Indoor Lacrosse Championship

5

Australia’s final ranking in the 2003 event, which Liu played in

21–4

The final score in the match that saw Canada win the 2003 event

A GAME PLAYER Alexander Liu’s sporting prowess took him all the way to the World Indoor Lacrosse Championship ALEXANDER LIU has long been a keen sportsman. Currently vice president of professional liability at Allied World in Singapore, Liu plays football twice a week and is also a runner and golfer. But his most impressive sporting achievement to date is competing in the 2003 World Indoor Lacrosse Championship as part of

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the Australian team.

According to Liu, lacrosse requires “the perfect blend of technical and physical prowess – think ice hockey, but with the ball in the air”.

Liu describes the championship event as “amazing, if not completely daunting ...

We were a band of ‘part-timers’ playing

against real professionals from the major leagues in the US and Canada. We were comprehensively beaten, but it sure was fun!”

Since he moved to Singapore, however, Liu’s lacrosse-playing has waned. “It’s just too hot to wear a helmet and full pads,” he says.

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