INSURANCEBUSINESSONLINE.COM.AU ISSUE 9.06
GETTING READY FOR STORM SEASON
How the industry can prepare for the effects of La Niña
A ROCKY POLITICAL LANDSCAPE
Insuring political risk during a time of instability
MARINE RISK IN THE AGE OF COVID-19
What’s in store for the sector in 2021 and beyond?
BETTER TECH FOR BROKERS JAVLN CEO Dale Smith on how insurance technology is changing to make brokers’ lives easier
BROKERS ON UNDERWRITING AGENCIES Which underwriting agencies got top marks from brokers this year?
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What is insurance with insight? The funny thing about insight, is it rarely has much to do with sight at all. In fact, some of the most valuable insights come from asking the right questions and listening carefully to the answers. And right now, it’s never been more important to work closely with our brokers supporting Australian businesses. That’s why, at Vero, we asked brokers what they needed from us as an insurance provider. Not surprisingly, they said they needed a hand. A hand finding their customers tailored policies in a challenging market. A hand helping their customers reduce and recover from risk, by getting them back on their feet as soon as possible. And a hand making those sometimes difficult conversations with their customers much easier, with tools and content covering the latest insurance topics. So rest assured, we’re not just an award-winning insurer offering business insurance. We’re offering much more. And that’s insurance with insight. To learn more, visit vero.com.au/broker today.
Insurer is AAI Limited (ABN 48 005 297 807) trading as Vero Insurance.
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ISSUE 9.06
CONNECT WITH US
CONTENTS 38
Got a story or suggestion, or just want to find out some more information? @InsuranceBizAU facebook.com/InsuranceBusinessAU
UPFRONT 02 Editorial
The benefits of focusing on employees’ mental health
04 Statistics
Key data that should be on your radar
06 News analysis FEATURES
FROM FIRES TO FLOODS
20 SPECIAL REPORT
BROKERS ON UNDERWRITING AGENCIES Brokers name the best underwriting agencies in Australia across 11 different product categories
PEOPLE
DELIVERING VALUE AT SCALE JAVLN CEO Dale Smith on why brokers need to get on board with the latest advancements in insurance technology
16
Can the industry apply the lessons of last summer’s bushfires to a projected season of severe flooding?
At a time of rising global tensions, how are insurers approaching political risk?
08 Intelligence
Suncorp introduces a month-to-month car insurance option
10 Insurer update
Why HDI Global’s managing director sees a silver lining in the pandemic
12 Underwriting agencies update Inside Ryno Underwriting’s rebrand to ShieldCover
42 PEOPLE
A BIG HEART FOR SMALL BUSINESS
Don McLardy reveals how his brokerage stepped up to help pandemic-affected small businesses in Melbourne
14 Opinion
Getting in front of an expected wave of catastrophe claims is the best way to contain it
PEOPLE 48 Other life
On the court with insurance executive and all-abilities basketball coach Andrew Spurr
44 FEATURES
RIDING THE WAVES OF MARINE RISK
The COVID-19 fallout has put marine insurance in the spotlight – so where does the sector go from here?
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UPFRONT
EDITORIAL
Prioritising mental health
T
ake a moment. Take a breath. It’s human nature to sometimes need to step away from a situation and restore our mental health. It’s not always easy to escape our mental demons – especially when they’re triggered by something as complex and overbearing as a global pandemic – but it’s something we all need to do, and it’s something all employers must acknowledge. The coronavirus has disrupted life as we know it, causing mass uncertainty, distress and anxiety. On top of questions pertaining to the virus itself, people around the world are trying to get by on reduced hours and wages while also caring for their families, homeschooling their children and hitting pause on normality by social distancing. The COVID-19 pandemic, while the dominant force shaping our lives today, has only exacerbated an issue that has been top of mind for many organisations, including those in the insurance industry, for some time, which is that it’s in everyone’s best interest when people are as mentally healthy as possible.
Happy and healthy employees are typically more engaged and more able to perform to their best of their ability It’s not just systemic events like pandemics or natural catastrophes that put a strain on mental health; often, the triggers are much more personal and can be tied to an individual’s perceived identity. That’s why it’s critically important for companies to embrace differences and to allow employees to be their authentic selves in the workplace. In September, Dive In – the festival for diversity and inclusion in insurance – welcomed more than 10,000 insurance professionals from around the world to virtual events focused on the development of inclusive workplace cultures. Many inspiring personal stories were shared, including one of a transgender woman in the US who suppressed her true identity for decades and suffered several mental health crises and an attempted suicide as a result. When she introduced her authentic self to the world and the workplace, her mental health improved dramatically – and so did her professional performance. The business case for supporting a mentally healthy workforce is simple: happy and healthy employees are typically more engaged and more able to perform to their best of their ability than those who are struggling with their mental health. Although it might be hard to quantify, this will inevitably have a positive impact on a company’s bottom line over time, making prioritising mental health a win-win scenario. The team at Insurance Business
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EDITORIAL Managing Editor Paul Lucas Editor Bethan Moorcraft Journalists Brendan Day, Tom Goodwin, Alicja Grzadkowska, Ryan Smith, Ksenia Stepanova, Mia Wallace News Writers Lyle Adriano, Terry Gangcuangco, Roxanne Libatique, Gabriel Olano Copy Editor Clare Alexander
ART & PRODUCTION Designer Cess Rodriguez Production Coordinator Kim Kandravy Traffic Coordinator Kristine Jamir
SALES & MARKETING General Manager Peter Smith Commercial Development Manager Sophie Knight Global Head of Media Marketing Lisa Narroway
CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil
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Insurance Business is part of an international family of B2B publications, websites and events 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 gemma.powell@keymedia.com T +44 20 7193 0935 Insurance Business Asia peter.smith@keymedia.com.au T +61 2 8437 47OO
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CONTRIBUTORS Damien Gilhooley, Peter Mitchell
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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DUAL would like to say Thank you to our Supporting Brokers for nominating us.
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We make brokers’ lives easier with innovative solutions for traditionally complex insurances SYDNE Y
out s the
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MELBOURNE
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BRISBANE
Tel: 1300 769 772 www.dualaustralia.com.au DUAL Australia Pty Limited Part of the DUAL International Group Registered in Australia under ABN No. 16 107 553 257
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UPFRONT
STATISTICS PROTECTION GAPS REACH NEW HIGHS
2 Canada
15 MOST RESILIENT COUNTRIES IN THE WORLD
11
0.81 0.70
Austria
0.69 0.64
2019 Resilience Index 2020 Resilience Index (projected)
$1.24trn
14 UK
COVID-19 DEALS A BLOW TO GLOBAL RESILIENCE
Combined global insurance protection gap for mortality, health and natural disaster risks in 2020, up from $1.2trn in 2019
0.74 0.41
5 US
0.80 0.58
The COVID-19 crisis has sent the global economy into recession at a time when countries around the world already had less shock-absorbing capacity than they did before the last major global economic meltdown, according to a Swiss Re Sigma report. Government stimulus packages have helped soften the impact of the pandemic, but these come at the expense of resilience, which Swiss Re estimates will fall by 20% in 2020 compared to 2019 levels. The insurer expects its Resilience Index in virtually all countries to worsen in 2020; however, Australia’s Resilience Index is projected to drop only slightly, and the country has moved up from number 11 to number 10 on Swiss Re’s list of the world’s most resilient countries.
$588bn
Global health protection gap for 2020, up from $559bn in 2019
13 Chile
0.66 0.65
WHERE TO FOCUS POST-PANDEMIC
$427bn
Global mortality protection gap for 2020, up from $420bn in 2019
Incumbent insurers and insurtechs generally agree on which areas of the insurance business need the most focus once the COVID-19 pandemic subsides. Both types of companies plan to put an increased emphasis on crisis-proofing their business processes, improving the digital experience and prioritising real-time responses.
Insurers
Insurtechs
100% 80% 60%
$227bn
Global natural catastrophe protection gap for 2020, up from $222bn in 2019 Source: Sigma Resilience Index 2020, Swiss Re; all figures in US$
4
40% 20% 0%
94%
89%
Digital experience
90%
91%
Crisis-proof processes
87%
85%
Responding in real time
86%
79%
Being a caring partner
70%
74%
Insurance as a utility
Source: World Insurtech Report 2020, Capgemini and Efma
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LIFE SCIENCES FIRMS FACE D&O PRESSURE
3 Finland
12
0.80 0.67
South Korea
The pandemic has made renewals challenging for life science companies’ D&O cover, according to Willis Towers Watson. The sector is seeing heightened underwriting scrutiny of D&O exposures, on top of the continued firming of primary and excess rates.
0.67 0.66
6 Norway
0.76 0.65
PROJECTED D&O RATE INCREASES FOR LIFE SCIENCE COMPANIES MAXIMUM INCREASE
8 Sweden
4
0.71 0.68
Netherlands
10
9
0.71 0.66
0.71 0.69
1
90%
70%
7
60%
Denmark
50%
0.72 0.69
Switzerland
100%
80%
Australia
Germany
40%
15
0.84 0.80
MINIMUM INCREASE
0.75 0.75
110%
New Zealand
0.66 0.55
30% 20% 10%
Publicly traded pharmaceutical and biotechnology companies
Public medical Private pharmaceutical device and other life science companies companies
Source: Life Sciences Insurance Marketplace Realities, Willis Towers Watson
Source: Sigma Resilience Index 2020, Swiss Re
TOP DRIVERS OF CYBER INSURANCE SALES
CAPTIVES WRITING MORE CYBER RISK
Headline-grabbing cyber losses continue to motivate businesses to purchase cyber insurance, according to a recent survey from PartnerRe and Advisen. Sixty-eight per cent of brokers ranked this as one of their clients’ top three reasons for purchasing cyber insurance, compared to just 56% a year prior.
Captive insurers are increasingly writing cyber risk, according to Marsh’s recent survey of captive regulators around the world, who noted that this exposes captives to considerable risks, as well as more complicated governance and compliance.
News of cyber-related losses experienced by others
Regulatory changes
Experiencing a cyber-related loss
Breadth of coverage
16%
54% Required by a third party
Cost
46% Increased education
14% Risk mitigation services
41% Board or senior management demand
35%
NEW AREAS OF RISK THAT CAPTIVES ARE WRITING MORE FREQUENTLY
31%
68%
10% Good salespeople
9% Source: Cyber Insurance – The Market’s View, PartnerRe and Advisen
30% Cyber
21%
3%
Professional indemnity
27% Employee benefits
9%
Property
6%
Terrorism
3%
Environmental liability
Tenant liability
Source: Marsh 2020 Captive Landscape Report
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UPFRONT
NEWS ANALYSIS
Insuring geopolitical instability Between trade war threats, civil unrest and divergent responses to COVID-19, the global geopolitical landscape is more uncertain than ever. So how are insurers approaching political risk right now?
THE GEOPOLITICAL climate is the most turbulent it has been for several decades. From the threat of a full-scale trade war between China and the United States to the rise of global movements protesting matters from racial injustice to climate change, the current global political environment has no shortage of contentious issues. The evolution of political risk over the last six months has primarily been driven by the COVID-19 pandemic and the response to it, says Jeremy Shallow, head of specialty at
concern is the political instability element of the crisis,” says Tarun Chopra, president and CEO of Clements Worldwide. “The pandemic and the response – or the lack of response, depending on the country and the region – is putting a lot of pressure on governments, economies and households. This originally started with the perceived shortage of food, where there were lines of people looking to stock up, and then its impact on jobs and medical supplies. And that creates a source of political discontent and, in some cases, civil unrest.”
“From an insurance perspective, the general concern is the political instability element of the [COVID-19] crisis” Tarun Chopra, Clements Worldwide ArgoGlobal. While on some levels, the crisis has created a sense of the world uniting against a single ‘enemy,’ it has also been used as an opportunity for attack, Shallow points out, and the impact on people’s sense of security has been significant. “From an insurance perspective, the general
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When examining the current geopolitical landscape, there’s no denying the impact of COVID-19, says John Minor, national practice leader for political risk at Aon. The pandemic has had a profound and severe impact on virtually every economy in the world. In addition to the staggering loss of life, it has
impacted everything from healthcare infrastructure to economic production. “COVID has led to an unprecedented amount of government interference on economies,” Minor says. “That has had a huge impact on the geopolitical landscape. So, at least in the immediate short term, over the last six months, governments have intervened by shutting down aspects of the economy and forcing people to stay at home and businesses to shut down. And that has had a huge impact on a lot of economies around the world.” Minor says the immediate impact of government intervention in economies is being seen right now. In the long term, however, the question remains how this will continue in certain countries, particularly those that have elected populist leaders promoting protectionist policies. “In a way, COVID takes the more unseemly aspects of this to create a fear of the outsider, and so it almost reinforces an isolationist kind of mentality and sentiment,” Minor says. “And it really bolsters those populist and nationalist
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THE EVOLVING GEOPOLITICAL RISK LANDSCAPE
60% Percentage of countries that have been exposed to some form of civil unrest or riots in 2020
1 Australia’s risk tier, as rated by A.M. Best, indicating that it has a very low level of political risk
197 policies or those who promote them. But the big question is whether COVID, or the next virus, is going to continue to be used to justify isolationism and protectionism, both of which have a direct impact on cross-border trade and investment.” COVID-19 could amplify the current wave of populist backlash to globalisation, Chopra
attention, despite not having occurred yet, because they are relevant from a general business and economic perspective, as well as from an insurance perspective,” he says. “The insurance industry is looking to protect people and protect assets, and any discriminatory actions by governments towards foreign investors will have far-reaching implications on this.”
“The big question is whether COVID is going to continue to be used to justify isolationism and protectionism” John Minor, Aon says, because a lot of countries are trying to secure their borders and put some level of export and import controls in place, which could have implications on foreign ownership of local companies or the confiscation of assets by local governments. “These are the kinds of risks that require
Shallow notes that with each new crisis, there is an expectation that it will spur increased interest in political risk products, but it doesn’t always directly follow. Political risk has been through a considerable growth period in the last couple of decades, he says, but the opportunity for higher penetration
Number of countries that have seen their economic risk increase since January 2020, according to Marsh JLT Specialty
41% Percentage of Australian businesses that rated ‘changes in legislation and regulation’ as the country’s top risk at the start of 2020 Sources: A.M. Best, Aon, Marsh JLT Specialty, Allianz
rates remains huge. “The scale of the impact of this event has certainly highlighted significant underinsurance across the board,” Shallow says. “However, the challenge with converting that into new policies is that almost every company is under financial pressure at the moment. Brokers and underwriters need to convince clients of the worth of increasing spending on insurance – even at a challenging time – to protect themselves in the future.”
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UPFRONT
INTELLIGENCE CORPORATE ACQUIRER
TARGET
PRODUCTS COMMENTS
AIA Group
CommInsure
The sale of CommInsure to AIA represents the latest phase of CBA’s divestment of its life insurance business
Claim Central
Livegenic
Livegenic is now wholly owned by Claim Central, which has been a key investor since 2017
Hg
Hyperion Insurance Group
Hyperion, the parent firm of underwriting agency DUAL, has sealed a major investment from the UK-based private equity firm
NRMA
Elenium Automation
NRMA has invested around $10m to back airport check-in kiosk provider Elenium’s plans to take its technology beyond airports
Lloyd’s launches parametric IT downtime policy
Lloyd’s of London’s has rolled out Parametrix Insurance, a pioneering parametric IT downtime product designed for SMEs. Led by Tokio Marine Kiln and supported by other members of the product innovation facility at Lloyd’s, Parametrix will automatically pay out upon the trigger of a critical IT service disruption such as such as a cloud outage, network crash or platform failure. Parametrix co-founder and CEO Yonatan Hatzor noted that “critical technology downtime has become the fastest-growing risk for businesses today, whether you are a technology company or not”.
DUAL parent gets new shareholder
UK-based private equity firm Hg is pouring money into Hyperion Insurance Group, the London-headquartered parent of underwriting agency DUAL, which it has valued at approximately US$5bn (A$7bn). Hg is coming onboard the international insurance group as a growth partner alongside General Atlantic and CDPQ, which invested in 2013 and 2018, respectively. Hyperion’s management team and employees, however, remain the largest shareholder block in the firm; more than 1,000 individuals own shares. Hg noted that “in conjunction with an additional debt raise and existing resources, the investment will provide Hyperion with up to US$1.5bn to accelerate its growth with both selective acquisitions and investments in data and technology”.
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AIA rolls out extension to crisis recovery product
AIA Australia has introduced an extension to its Priority Protection Crisis Recovery insurance, designed to offer more protection over a longer period at a lower cost. AIA’s original crisis recovery insurance pays a lump sum when someone is diagnosed with a specified crisis event, such as cancer, a stroke or a heart attack; the extension provides long-term cover for more serious events that generally require additional care and financial support. The extension must be taken out with the crisis recovery product, but it will be treated independently, and customers can tailor the sums insured for each type of cover.
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PEOPLE Suncorp rolls out monthto-month car insurance
Suncorp Group has introduced a new car insurance proposition designed to respond to the way people have altered their travel due to the COVID-19 pandemic. Suncorp’s Bingle Go policy offers month-to-month coverage from a smartphone app and includes a mobility bonus feature that lets customers earn a 20% discount off their insurance premiums by travelling on foot, bike or mass transit instead of driving. The product uses telematics technology from Suncorp’s longtime partner, Trov, to detect the mode of transport and travel distance to help determine qualifying journeys.
CFC addresses IP exposure in M&A transactions
Specialist insurer CFC Underwriting has launched a new insurance solution aimed at addressing the intellectual property infringement risks facing companies undertaking a merger or acquisition. Leveraging CFC’s existing IP and mid-market M&A insurance products, the new policy is designed to fill the coverage gap in traditional transaction liability insurance policies, which sometimes include qualifiers on IP representations and warranties relating to issues that occurred before the M&A activity and do not provide protection for future allegations of IP infringement.
Swiss Re, Hitachi partner on digital risk solutions
Swiss Re Corporate Solutions has teamed up with Hitachi Europe to develop digital risk solutions. Their first offering will focus on the manufacturing machinery and transport industries, insuring against business interruption while helping customers embrace AI and new technologies to maximise productivity, increase automation, implement contactless operations and reduce downtime. Swiss Re Corporate Solutions CEO Andreas Berger said this will enable Swiss Re to “price risk more precisely, ensure effective payout mechanisms and provide a seamless risk management experience.”
NAME
LEAVING
JOINING
NEW POSITION
Nick Hawkins
N/A
IAG
Managing director and CEO
Kimberley Jonsson
N/A
CHU Underwriting Agencies
Chief executive
Jack Joubert
N/A
Hollard Commercial Insurance
Chief executive
Clarisse Kopff
Allianz France
Euler Hermes Group
CEO and management board chair
Tulsi Naidu
N/A
Zurich Insurance Group
CEO, Asia-Pacific
Richard Pryce
N/A
QBE Insurance Group
Interim group CEO
John Robertson
N/A
icare NSW
Chair
Karen Te Maipi
N/A
Club Marine
Chief executive
QBE names interim group CEO
While QBE Insurance Group looks for its next boss, Richard Pryce is taking the helm as interim group chief executive. Pryce, who has been with QBE since 2012, became the group’s CEO for European operations in 2013 before taking on the international chief executive post last year. His credentials include more than three and a half decades spent in the London insurance market. “I would like to thank Richard for accepting this interim role as we conduct an extensive search for a permanent replacement,” said Mike Wilkins, who is back to being the non-executive chair of QBE after serving as executive chair following the abrupt departure of CEO Pat Regan in September.
Zurich chief executive makes regional shift
After serving as Zurich’s UK chief executive for four years, Tulsi Naidu will become CEO for Asia-Pacific starting in January 2021. She is takes over from Jack Howell, who has been tapped to head the insurance group’s newly formed Global Business Platforms unit. Prior to her four-year stint as Zurich’s CEO for the UK market, Naidu held a number of executive roles at Prudential. “I am honoured to be asked to take on the role of CEO of APAC, and I’m really looking forward to this next challenge, which represents a significant growth opportunity for the group,” Naidu said.
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UPFRONT
INSURER UPDATE NEWS BRIEFS IAG hands over $138m to settle class action lawsuit
IAG has paid $138m to settle a class action against two of its subsidiaries, Swann Insurance and Insurance Australia, regarding add-on insurance products sold through auto and motorcycle dealers. “IAG exited these business areas with the sale of Swann’s rights to distribute through motor vehicle dealers in August 2016, and the cessation of distribution through motorcycle dealers in the financial year ended 30 June, 2018,” IAG said in a statement. The insurer anticipates the settlement will have a net after-tax impact of less than $50m.
Suncorp partners with Queensland emergency service
Suncorp has been selected by the Queensland State Emergency Service (SES) as its principal community partner. The two organisations will work together to help communities during natural disasters, support the rollout of community engagement and education campaigns, fund equipment for SES volunteers, and advance volunteerism across the state. Suncorp Group CEO Steve Johnston said the multiyear partnership is crucial to protect Queenslanders from the increasing risk of natural disasters, including during the upcoming 2020 storm season.
Tech-first insurer hopes to disrupt SME insurance market
QBE Insurance Australia and workplace safety technology platform SafetyCulture have joined forces to launch Mitti, a technology-first insurance company “aimed at disrupting the SME insurance market” by challenging the traditional insurance
model. Mitti will leverage SafetyCulture’s risk mitigation technology to identify and then alleviate potential business risks. “By supporting more businesses to manage their risks, Mitti will help create safer workplaces for their customers and employees,” said QBE Ventures chief executive James Orchard.
ASIC takes Allianz to court over travel insurance
ASIC has commenced civil penalty proceedings against Allianz Australia Insurance and its subsidiary, AWP Australia, alleging that Allianz failed to correctly disclose the basis upon which premiums were calculated on certain travel insurance products sold between 2015 and 2018 on three Expedia websites. ASIC also alleged that Allianz/ AWP allowed the sale of insurance to customers who were ineligible to make claims under the policies and that the companies allowed Expedia to use a quote from the Department of Foreign Affairs and Trade about the importance of purchasing travel insurance.
AXA XL unveils new carbon management strategy
AXA XL has launched a carbon management strategy aimed at accelerating the company’s contribution to a more sustainable and less carbonintensive economy by 2050. AXA XL has committed to decarbonising its operations to reach the goal of limiting global warming to below 1.5° Celsius, in line with the Paris Agreement. To do so, the company has identified three “key levers” of decarbonisation: energy consumption, people movement (travel and vehicle fleet) and resources consumed. Within each area, the company has established targets, including a 25% reduction of greenhouse gas emissions.
The silver lining of the pandemic HDI Global’s managing director reveals why he’s confident about his team’s prospects post-crisis
Stefan Feldmann, HDI Global’s managing director in Australia, has found a silver lining in the current crisis. “If the pandemic has taught us anything, it is that the HDI Global SE Australia team is best when we are close to our clients and brokers,” says Feldmann, who also serves as ASEAN & Australasia regional head for the insurer. Impressed by how the firm’s staff stayed highly present for customers and partners while quickly adapting to a work-fromhome environment, Feldmann believes the experience has only made the team tighter. Additionally, he finds it encouraging to see how well many businesses in Australasia have adapted to the new circumstances. “As Albert Einstein said, ‘In the middle of every difficulty lies opportunity’,” Feldmann says. “I strongly believe our economies have a realistic opportunity to emerge stronger from this pandemic. On the other hand, we are very much aware that there are long-term effects and that we also have customers who are facing financial challenges, particularly cash flow challenges. “Businesses that were also affected by the tragic bushfires at the beginning of the year are doing it particularly tough during the ongoing COVID-19 pandemic. That’s why we are actively looking for ways to assist these clients during this difficult time.” Examples include the complimentary legal advice from Meridian Lawyers that the
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company offers to bushfire-affected firms, as well as HDI Risk Consulting’s business continuity management system, which provides access to engineers and experts from a wide range of technical disciplines. “We were set up to, first and foremost, look after our clients, and we view the ongoing COVID-19 pandemic as an opportunity for us to demonstrate our true nature of caring for our staff, clients and brokers,” Feldmann
“We view the ongoing pandemic as an opportunity for us to demonstrate our true nature of caring for our staff, clients and brokers” says. “This has been the guiding principle for everything we do and motivated us to develop and explore new ideas.” Citing HDI Global’s “new business drive” and continued portfolio growth, Feldmann adds that the company has been expanding its workforce and recruiting underwriters and policy administration staff. “Some new talent started with us working from home from day one, and this has been made possible by a lot of communication going on all levels,” he says. “Overall, I feel that as a team, we have grown closer together during this crisis – among ourselves as well as with our brokers and clients. This makes me very confident that we will emerge stronger out of this pandemic.”
Q&A
Jack Joubert
The evolution of SME insurance
CEO HOLLARD COMMERCIAL INSURANCE
Years in the industry 10+ Fast fact Joubert, the former CFO at Hollard Commercial Insurance, took over as CEO in an acting capacity in July before officially assuming the role two months later
What changes, if any, do you foresee taking place in the SME insurance market? There will be some short-term effects, such as that seen by commercial motor insurance, where there has been a reduced claims cost, as there are fewer cars on the road at this time. However, these temporary benefits have been partially offset by lower premium income due to some businesses closing during these tough economic times. Over the longer term, insurers need to consider the more permanent impact of COVID-19 on small business budgets and requirements. This will likely lead to a simplified product range that will need to evolve with the ever-changing risk appetites of small business owners.
Do you expect SMEs’ approach to insurance to be different moving forward? Over the past few months, we have seen business owners changing how they operate and diversifying their business offering by, for example, increasing their online presence. This diversification will change risk profiles and needs. Insurers will need to consider these when underwriting them, while products will have to evolve to ensure they remain relevant to changing consumer needs. The pace of digital change and the need for innovative products and automated processes have been highlighted by the pandemic. Moving forward, we will need to simplify overly complex products and processes, which often add unnecessary costs and burden.
What major adjustments have you made to your offerings at Hollard Commercial Insurance? We have embarked on a simplification strategy. We are reassessing the long-term viability of all products, systems and processes to ensure our proposition remains relevant to the customer and we are able to remain agile in responding promptly to the needs of our brokers. We recognise the months ahead are going to be a very trying time for our SME clients, the insurance industry and the broader economy. Considering these economic headwinds, we have put together a number of initiatives to assist our brokers and their clients, such as assistance for unoccupancy and extension of credit terms. We are fortunate that our business, with the help of our partners, has remained resilient in the face of these difficult times. Our agile nature and our ability to pivot quickly have helped us. Our brokers have been amazing partners in dealing with some of the challenges of the pandemic. Furthermore, our staff have been absolute stars, and they have been able to maintain our very high service standards while working remotely. We are mindful that there are still a lot of unknowns, so we are carefully monitoring and tracking multiple business metrics while considering carefully what the impact of legislative measures will be – and, in the meantime, trying to ensure we focus on our core business.
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UPFRONT
UNDERWRITING AGENCIES UPDATE
An underwriting agency reborn Ryno Underwriting has rebranded as ShieldCover as part of its growth strategy within the broker market
Going forward, the intermediary-focused business will be known as ShieldCover, while Ryno will be a specialist motor brand for consumers. Rynenberg says the company wants Ryno to continue its market share in the direct motor space and to be able to give it 100% focus, while also giving the same amount of attention to brokers via Shield. “It’s kind of a five-year strategy to build our brand into a leading underwriter that can
“The name that we’ve chosen reflects what we want to provide to the intermediary market”
October marked Ryno Underwriting’s rebirth as ShieldCover. “We felt, from a strategic point of view, that we needed to split our business and have Ryno Motor as a dedicated businessto-consumer business that deals directly with the public,” explains founder and MD Greg Rynenberg. “And as for the broker and intermediary market, we wanted them to deal with a new brand – and that brand, we felt, would be better served if it was under Shield.” Ryno Underwriting launched in 2019 as an independent underwriting agency for
NEWS BRIEFS
liability, property, and accident and sickness policies, following Dawes Underwriting Australia’s purchase of the future rights to the Ryno Insurance motor portfolio. Retaining the name, though, came with slight complications. “Motor insurance used to be our primary binder with London and Lloyd’s,” Rynenberg explains. “And we sold that binder 12 months ago to Dawes, but the Ryno name remained because we also had a lot of direct clients that we used to deal with in the motor sector. So we were getting a lot of confusion.”
CHU announces leadership succession plan
CHU Underwriting Agencies CEO Bobby Lehane, who took the helm in 2015, has announced that he’s leaving the company in March 2021. He will be replaced by Kimberley Jonsson, who has been with CHU for 15 years and most recently was in charge of its business in NSW and ACT. “I could not be more pleased with the progress, growth and indeed the development of CHU over the past five and a half years,” Lehane said. “Having Kim succeed me in the role is the perfect ending to this chapter of my career.”
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provide the blue-collar industry and the hotel industry liability insurance that is meaningful, secure and is cutting-edge,” he says. However, Rynenberg concedes that it’s a big thing to drop his nickname, Ryno, from the underwriting agency’s branding. “But I think for our underwriting to grow and be professional and be seen as its own identity, it needed to happen,” he says. “And while there’s a tug at the heartstrings of letting your name go … from a professional point of view, I think ShieldCover is about protecting clients’ interests and providing that shield of protection. I think that gives me a lot of satisfaction that the name that we’ve chosen reflects what we want to provide to the intermediary market.”
Solution launches commercial legal protection
Solution Underwriting Agency has introduced commercial legal protection to help SMEs address legal matters not covered by their other insurance policies. The product, which includes access to targeted legal advice, is designed to help SMEs defend and pursue potential legal disputes before they arrive at litigation. Solution Underwriting director Anita Lane said the new policy will “allow small businesses to potentially deal with issues that could be resolved earlier and not lead to full-on litigation”.
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Q&A
Natasha Gale
The lowdown on legal expense insurance
General manager ARAG SERVICES AUSTRALIA
Years in the industry 20+ Fast fact A veteran of the financial services sector, Gale has also worked for Allianz, Wesfarmers and Westpac
Since launching last year, what trends have you observed in legal expense insurance (LEI)? Launching a new product in a perfect market is difficult – launching a new product during the worst drought in 80 years, the onset of the most devastating bushfire season and a pandemic that has brought a halt to any economic growth has been challenging, to say the least! What we have seen since launching in July 2019 is a desire from our broker partners to provide better solutions to their clients and smarter ways to ensure the right cover and protection is in place in these challenging times. The hardening insurance market has delivered buoyancy and an increase in profitability for some brokers; however, while this is excellent for premium growth and profitability, we are finding that with a significant increase in deductibles and reduced capacity for reinsurance, clients are bearing the impact of a tightening market. We have seen an increase in SMEs looking to include LEI as part of their risk management strategy, while reviewing or downsizing other insurance covers that have been impacted by the hardening market. There has also been increasing interest in our private offering aimed at families and individuals; the uncertainty around employment and tenancy is front of mind for many. Our most recent claims have been in relation to employment, so it’s something we see as a valuable addition to other domestic insurances. Legislative changes have also created new challenges recently in NSW – changes to the work health and
360 Commercial gets new executive director
Paul Riordan has been named executive director of 360 Commercial. Riordan previously held senior distribution, underwriting and strategic relationship management roles at both Allianz and Vero. Denis Morrissey and Chris Lynch, co-owners and directors of 360 Underwriting Solutions, said Riordan “will add significant experience and depth to our commercial offering, as well as enhancing our commercial motor proposition as we continue to look for ways of providing holistic solutions for our broker partners’ commercial customers”.
safety [WH&S] legislation have made it an offence for insurers to cover breaches to the Work Health and Safety Act. In response to this, ARAG now offers WH&S cover for businesses, and we now have cover for legal costs incurred through investigations and prosecutions against WH&S matters.
How crucial has LEI been during the pandemic? As businesses and individuals scramble to adapt to the changing economic conditions, flexibility in work arrangements, redundancies and reduced working hours, and revision of employment contracts have seen a need for businesses and individuals to protect themselves against employment disputes as they navigate their way through this pandemic. Providing support through our document centre and legal information helpline means clients can get instant support, documentation and general counsel without having to make a formal claim.
How would you describe your relationship with your insurer, HDI Global Specialty Australia? The partnership with our capacity provider, HDI Global Specialty Australia, is very productive. Their Australian team is specialised and focused on underwriting agencies such as ourselves, which is of great value for ARAG. The partnership in Australia reflects the good understanding and cooperation of the two brands globally, enhanced by the common German background.
ProRisk unveils association liability policy
ProRisk has continued its product launch spree with the rollout of an association liability policy. The new policy includes comprehensive commercial crime and statutory liability cover, complimentary legal advice and contract reviews, and access to a whistleblower hotline. The policy also features a single excess applied across all coverage sections, as well as flat deductibles, and is “unique in the association liability market,” according to ProRisk executive director Hamish McDonald Nye.
High Street makes $25,000 donation to local charity
High Street Underwriting Agency has donated $25,000 to Wesley Mission Queensland, which provides a range of services to the local community near High Street’s Brendale headquarters. “We are proud to give back in some small way by donating money to fund very worthwhile and necessary causes,” said High Street CEO Blair Whittle. “The team at Wesley Mission is on the front line helping the community, and the least we can do is support them financially where we can.”
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UPFRONT
OPINION
GOT AN OPINION THAT COUNTS? Email ibo@keymedia.com.au
Managing ongoing waves With customer expectations at an all-time high and an unprecedented storm season ahead, proactive management of catastrophe claims is paramount, writes Damien Gilhooley of Gallagher Bassett SUMMER – and, accordingly, storm season – is just around the corner. In the wake of the Hayne royal commission, customer expectations are arguably at the highest they’ve ever been – and, combined with the fact that many customers will be lodging claims for the first time in a post-COVID world, many claims consultants are viewing it with some trepidation. From a customer perspective, there’s often an elevated level of anxiety associated with peak claim events. The disruption and impact of the loss or damage to the customer’s personal possessions and assets can be significant. Additionally, there’s often a perception that the claims process is needlessly complex. But this is also an opportunity for brokers, claims consultants and insurers alike to demonstrate their value to their clientele. Proactive management of the customer’s claim can both streamline and speed insurer response – and, in turn, lessen the disruption to the customer’s life – while also having a positive flow-on effect to all parties involved in the claims process. This proactive approach is a critical feature of any successful event response management. There are some broad principles that can be applied: a structured approach to managing incoming claims, the inventory, the GICOP and client requirements; juggling phone, triage and claims teams and dealing with personnel issues simultaneously; and being able to react and adapt to each individually as the waves of incoming priorities ebb and flow. There’s no question that this can be chal-
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lenging when the phone’s ringing off the hook and new claims are piling up, but if you have the fundamentals in place, then you’ll have a substantially easier time dealing with the workplace challenges that inevitably occur during disaster seasons. It’s an approach that we’ve worked hard to utilise internally. Currently, Gallagher Bassett is the only specialist claims expert in Australia
• The pool of likely talent for such short periods is limited to entry-level candidates; experienced candidates are more likely to be secured via longer-term engagements. • Initial high attrition is likely due to the fast-paced and frenetic nature of event response deployments. • Short-term surge deployments put added pressure on seconded managers required to step in to additionally focus on the current scenarios. • There are generally inadequate ingrained event management disciplines able to be leveraged from short-term teams. A common frustration raised by customers in complex claims scenarios is that they have to repeat their circumstances to multiple claims consultants who may action their claim from time to time. The retention of a personal association with the customer cannot be overstated, particularly with the more complex claims; accordingly, the retention of a core permanent event response team and the adop-
“The retention of a personal association with the customer cannot be overstated, particularly with the more complex claims” and New Zealand to have a permanently structured catastrophe team. Experience has taught us that a combination of long- and short-term deployment of teams represents the best operating model to cater for the flexible nature of short and legacy event management. Relying solely on short-term deployment – where resources are allocated only for the duration of the event – can pose significant risks compared to the retention of a core experienced event management team. • Multiple insurers are recruiting from the same geographic market pool of resources, diluting the available expertise. • People available and willing to accept short, temporary assignments for a couple of months’ duration are difficult to secure.
tion of a case-managed approach to complex catastrophe claims will have a significant impact on the customer service experience. Ultimately, a failure to juggle and effectively manage competing customer, client and stakeholder expectations will lead to additional waves of escalated complaints. Once these waves of calls, emails, GICOP deadlines and escalations gain momentum, they can be difficult to contain, leading to unwanted disputes, media exposure and increased customer attrition. Remaining ahead of the waves is the key to disciplined event management. Damien Gilhooley has been with Gallagher Bassett for more than 20 years and is currently the general manager of integrated claims solutions.
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UPFRONT
GOT AN OPINION THAT COUNTS? Email ibo@keymedia.com.au
OPINION
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PEOPLE
EXPERT SPOTLIGHT
DELIVERING VALUE AT SCALE Dale Smith of JAVLN sat down with IB to share his thoughts on how technology is reshaping the insurance space and how it can be improved in the future
THE INSURANCE industry has been starved of innovation, and historically, technology has improved by increments rather than leaps and bounds. But it doesn’t have to be that way – and, in the view of Dale Smith, CEO of JAVLN, it absolutely shouldn’t. “Insurance is ready for disruption by modern software and modern vendors,” Smith says. “At the moment, we’ve got an industry where brokers are being completely underserviced, and it’s just totally unsustainable. As a collective, tech providers need to be delivering a lot more value and support.” It’s a situation that has been apparent for more than a decade, but Smith believes it’s been particularly underscored by the COVID-19 pandemic. “It’d be an understatement to say that it’s had an effect,” he says. “But I think it’s highlighted and reinforced how much we rely on tech and, in turn, some of the shortcomings with the current tech baseline.”
Finding efficiencies Of course, these shortcomings raise questions of their own. How will the need for better tech shape the insurance industry – and specifically the broking arena – in the future? It’s a question Smith has spent a great deal of time pondering since he founded JAVLN in 2014. “There’s no question that we’ve seen how tech can enhance the industry,” he says. “Automation is probably the most obvious one – no one needs to be filling out huge
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stacks of paperwork anymore. Quotes should take a fraction of the time they currently do, with data entry of the same information many times on the same risk. At JAVLN, we’ve seen how this small change using tech can drive efficiency and profitability within a brokerage.” Smith points to how this can be extrapolated further with tools such as JAVLN’s own platform. “Yearly renewals can be hugely timeconsuming for any broker,” he says. “Obviously you need to be making regular connections with your client base, but the truth is that
sations with those clients about the sort of renewals they need. But do you need to do that with every single one of your home and contents clients? Maybe not. Automation is very valuable.” There are other considerations, too. Smith points to EY’s recent State of the Nation insurtech report – among the many salient points, the one that stuck with him most was related to connectivity between brokers and insurers. The technology exists to connect them directly, so why is there still such a heavy
“At the moment, we’ve got an industry where brokers are being completely underserviced, and it’s just totally unsustainable. As a collective, tech providers need to be delivering a lot more value and support” you don’t need to be going through your entire book. Most renewals are routine, and when you start utilising automation, you can simplify your processes considerably.” Configuration is key, Smith says – the platform allows for either complete or partial automation, depending on insurance class. “For example, you might have a class like commercial motor that can be complex with adds, moves and changes,” he says. “So you might need to have more in-depth conver-
reliance on tired legacy platforms for this? “Aggregators have a really important role to play for the consumer market,” Smith says. “You’re always going to have your price comparison websites and the like. But from a broking perspective, it’s baffling that we’re still relying on such antiquated tech that is expensive in terms of consuming resources and also expensive commercially.” JAVLN, Smith says, is eager to address these concerns. Current commercial soft-
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PROFILE Name: Dale Smith Title: CEO Company: JAVLN Based in: Auckland, NZ Years in the industry: 6
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PEOPLE
EXPERT SPOTLIGHT ware typically requires brokers to request one quote from one insurer at a time – a laborious process that slows down both the broker’s work and their ability to deliver timely turnarounds to clients. It’s no longer fit for purpose, Smith says, and better tech tools have been available for some time. “In 2020, it’s just dead in the water,” he says. “You can’t expect clients to be happy with that level of service just because it’s been the default mode for so many years.” By contrast, Smith explains, JAVLN enables multiple quotes at a time – a substantially more seamless experience. “The tech’s there – our own platform is proof of that,” he says. “What we need to see now is a greater pickup among insurers and brokers alike.”
“You don’t want to be stuck with the modern equivalent of a black-and-green-screen 286,” Smith says. “If you haven’t already invested in cloud-based, multi-device tech, you need to be looking at it now.” Of course, Smith isn’t blind to the obstacles brokers face on these fronts. New tech brings new challenges, and he understands why people have concerns about making changes that might seem drastic at face value. “Cybersecurity and regulatory changes are probably the two biggest considerations at this stage,” Smith says. “You always need to be operating above and beyond best practice. Tech needs to be protected, client data needs to be private, and regulatory changes need to be enacted straight away.”
“You always need to be operating above and beyond best practice. Tech needs to be protected, client data needs to be private, and regulatory changes need to be enacted straight away” Getting up to speed Certainly, it’s an approach that has yielded dividends for JAVLN. In early 2020, the company was selected by Amazon Web Services as the first Australasian insurance platform software provider to be represented on the global AWS Marketplace. It’s an achievement of which Smith is justifiably proud. “Today, they’re effectively our hosting partner across multiple data centres in Australia,” he says. “We’re working together on lots of good initiatives across technology and business, and we want to be an important part of their presence in insurtech.” These are considerations that go beyond just JAVLN’s own successes, though, Smith says. How brokers and insurance companies decide to engage with tech both now and into the future has broader implications, particularly around future hiring. New, younger talent will be looking for tech that mimics the functionality they have on the devices they use outside of the office.
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The good news, Smith says, is that this doesn’t tend to be nearly as daunting a project as most businesses imagine it to be. “I don’t think people should be put off by their fears around changing tech,” he says. “Let us walk you through the architecture and take you through the transition. Once you’ve seen it like that, you start to realise how it enables efficiencies in other areas of the business, too.” Looking to 2021 and beyond, JAVLN has big plans on the horizon. The company is now in nine countries across the APAC region, and it’s beginning to set its sights on the UK – not to mention continuing to provide support for brokers and insurers as its offerings expand. “We’re growing in multiple international markets, and obviously we want that to continue,” Smith says. “We’re in a good place. We’ve got the right tech that meets the market’s needs and wants, and the resources. Everyone’s seen companies that haven’t quite balanced that intersection quite as well as they could, so I consider us very fortunate.”
JAVLN AT A GLANCE
YEAR FOUNDED 2014
HEADQUARTERS Auckland, NZ
SERVICES Improving business efficiency through automation, connectivity and customer experiences; streamlining back-office processes; improving response times; reducing documentation creation and generation; enhancing visibility of client information
RECOGNITION Finalist for Hi-Tech Emerging Company of the Year at the NZ Hi-Tech Awards
ACHIEVEMENTS First Australasian insurance provider to partner with the Amazon Web Services Marketplace
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intelligent insurance software.
The complete insurance solution. Automation
Time Savings
Powerful administrative hub including end to end full policy management, document and claims management.
Automated personalised quotes, renewals, payment reminders with SMS/Email & CRM capabilities.
Reduction in repetitive data entry, with allocated workows and task management for increased productivity.
Client Portal
Policy Lifecycle
Quality Data
Quote Online
Allow 24/7 online access for clients to their account, claims and policy information improving the customer experience.
Quality data insights, integrated insurance accounting and receipting.
Provides clients and prospects the ability to quote, compare and buy insurance online 24/7.
Multi Insurer
SaaS Solution
Compliance
Cloud hosted software that can be accessed anytime, anywhere from any device.
World class data protection, auditability, governance and security.
Multi-insurer quote and bind capabilities producing comparison documents for customer consideration.
Wtih the implementation of JAVLN software, Mariner Marine Insurance has increased their revenue by 62% and operating costs by 0%.
Since enabling JAVLN we are experiencing a 15% increase in productivity without increasing any operating costs.
Mariner Marine Insurance, Aaron Mortimer, Managing Director
Trans-West Insurance Brokers, Pieter Versluis, General Manager
JAVLN intelligent insurance software.
JAVLN intelligent insurance software.
for more information contact us 1800 000 106 | sales@javln.com | javln.com
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SPECIAL REPORT
BROKERS ON UNDERWRITING AGENCIES
BROKERS ON UNDERWRITING AGENCIES 2020 Brokers reveal which Australian underwriting agencies are best in class
FOR THE past six years, Insurance Business has reached out to readers to uncover Australia’s standout underwriting agencies and find out what distinguishes them as leaders in their field. Once again, IB gave brokers the chance to provide feedback on agencies across 11 product categories, from construction and cyber to product liability and professional indemnity. We also asked brokers to single out their favourite products and tell us what’s most important to them in their dealings with underwriting agencies. During what’s turned out to be a horror year for the world, Australia’s insurance industry has not remained untouched. Natural disasters swept across the country
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in the early months of the year, swiftly followed by the COVID-19 pandemic. Though signs of stability are beginning to emerge, it’s difficult to say with any certainty how 2021 will look. The only thing that’s certain is that it will be different. With that said, this year’s survey reveals a remarkable consistency in what brokers are seeking from underwriting agencies. Every year since the inception of the Brokers on Underwriting Agencies survey, brokers have ranked coverage as the most important aspect of their relationship with underwriting agencies. Commission structures remain firmly ensconced at the bottom of their priorities; though some of the heat directed at commis-
sions during the financial services royal commission has faded, it’s clear that they are not a driving force. The biggest surprise among this year’s results was broker support, which fell several places on the list of priorities. Perhaps this is something brokers have come to see as a default expectation, rather than a prospective deal-breaker. Yet these are the sorts of eccentricities and shifts that the Brokers on Underwriting Agencies survey looks to highlight, along with recognising those agencies that have delivered exceptional service and products to brokers and their clients. Read on to discover which underwriting agencies have distinguished themselves among their peers in 2020.
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WELCOME FROM UAC
METHODOLOGY Insurance Business reached out to brokers via our online newsletter and Twitter, asking them to name the top three underwriting agencies in 11 product categories. The categories chosen were those deemed by IB to have the most significant number of market participants in the Australian agency space. Survey respondents were also given an opportunity to name the best insurance product provided by an agency over the last 12 months. Responses to that free-form question were used to determine the medal winners in the Brokers’ Pick category. Additionally, respondents were asked to share their thoughts on which aspects of their dealings with underwriting agencies were most important and what agencies can do to win more of their business in the next 12 months.
$1.4bn
Approximate net profit after tax of Australia’s general insurance industry
60,000
Approximate number of people employed in Australia’s general insurance industry
$171.1m
Average amount Australian insurers pay in claims each working day Source: APRA
The Underwriting Agencies Council is proud to sponsor the 2020 Brokers on Underwriting Agencies survey. UAC is also proud of all its members who have been rated highly by the broking fraternity. Despite difficult times, agencies have shone through to help brokers with myriad risk placements. The close relationship between agencies and their supporting brokers is the key to success in the agency sector. Agencies offer brokers specialist product knowledge and outstanding service targeted towards their clients’ specific needs. “By accessing the agency market, brokers get tailored solutions that meet their clients’ risk profiles,” says UAC general manager William Legge. “The great diversity of agencies that have been awarded in this survey attests to agencies’ skills across a broad array of products.” Broker rankings and feedback from the survey are important to help underwriting agencies hone their offerings to brokers, increase their professionalism and expand their product ranges to fill specific niches. Although UAC’s ability to assist its agency members to broaden their reach into the broking market through the expo circuit has been somewhat curtailed by the COVID-19 pandemic, the UAC website (uac.org.au) continues to give brokers a variety of avenues to reach out to agencies with hard-to-place risks and source alternative security. Congratulations to every award-winning agency for your exceptional service to the broking community.
William Legge General manager, UAC
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BROKERS ON UNDERWRITING AGENCIES ACCIDENT & HEALTH
“Amazing service provided” DUAL AUSTRALIA
AFA AHI INSURANCE Accident and health is a field dominated by direct business – so to attract the attention of brokers, an agency must truly, in the immortal words of Judas Priest, be “delivering the goods”. So perhaps it’s not so surprising that this year’s winners remain unchanged from previous
years. It’s a clear indication that brokers understand the power of loyalty – and that once they decide they like something, there’s compelling reason to stick with it. AHI’s winning streak remains unbroken; the agency claimed gold in its core specialty
for the sixth year in a row, winning praise from one broker for the “amazing service provided”. AFA again retained silver, also for the sixth consecutive year. Rounding out the list once again was DUAL Australia, which repeated its bronze-medal performance from 2019.
WHAT ARE BROKERS LOOKING FOR IN AN UNDERWRITING AGENCY? 2020
2019
2018 4.60 4.63 4.61
Coverage Overall service levels
4.47 4.48 4.47
New business turnaround times
4.42 4.46 4.42 4.42 4.53 4.47
Claims turnaround times
4.34
Broker support
4.25 4.24 4.27
Premium stability 3.46
Commission structures
3.59 3.52
1 Not important
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4.55 4.49
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2
3 Somewhat important
4
5 Very important
Accident & Sickness
It’s Personal
Consistency Creates Credibility
1300 728 997 www.afainsurance.com
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BROKERS ON UNDERWRITING AGENCIES CONSTRUCTION
ATC INSURANCE SOLUTIONS
“They are very knowledgeable and flexible with underwriting, and claims have been fantastic” SURA MECON INSURANCE
In 2020, it’s more important than ever to build on solid foundations, and the lack of change in the construction category from last year suggests that these companies’ reputations with brokers have indeed been carefully constructed. MECON Insurance once again took home the gold for the sixth consecutive year and also
secured a spot among the Brokers’ Picks for best products. “They are very knowledgeable and flexible with underwriting, and claims have been fantastic,” wrote one respondent. “Very good service, and rates are always competitive,” said another, who also highlighted MECON’s “speedy response to most enquires”.
After making its debut on the podium with bronze in 2018, ATC Insurance Solutions climbed to silver in 2019 and retained that spot again for 2020. SURA likewise secured bronze for the second year in a row. It’s a compelling indication of the favour that both companies continue to enjoy among brokers.
BROKERS ON PRODUCTS IB asked brokers whether underwriting agencies’ product range and pricing had improved or worsened over the last year. Looking back at recent years reveals another slight decline in broker sentiment in this area, though brokers’ comments remained largely positive on the whole, with many indicating they’re aware of the strain caused by COVID-19.
Have products and pricing improved or worsened? Improved significantly
“Due to COVID, appetite has decreased and rates have increased” “Liability is still competitive, so pricing is still sharp; product range has broadened, in my view, as more underwriters are offering products; scope of cover has perhaps reduced with the harder market” “More products available, like cyber and legal expenses”
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No difference
4%
2020
Worsened
4%
2019
Worsened significantly
31% 29% 29%
4%
“We are seeing more skilled underwriters and impressive products coming from agencies” “Products are expanding, and whilst pricing is increasing, generally this is appropriate”
Improved
29% 27%
4%
34%
8%
2018
13%
1%
44%
33%
8%
2017
13%
2% 0%
37%
10%
20%
30%
40%
41%
50%
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BROKERS ON UNDERWRITING AGENCIES CYBER & INFORMATION DIRECTORS & TECHNOLOGY OFFICERS
DUAL AUSTRALIA
EMERGENCE INSURANCE GROUP
BROOKLYN UNDERWRITING
SOLUTION UNDERWRITING
DUAL AUSTRALIA
HIGH STREET UNDERWRITING AGENCY
The cyber insurance space is among the fastest-moving in the entire insurance industry – a necessity, given the ever-evolving nature of technology. Yet this doesn’t mean that broker trust is something that can be taken for granted; reliability is critical in a constantly changing world. So it’s not too surprising that this year’s winners in cyber and information technology are identical to 2019. Emergence Insurance Group grasped gold in this category for the third year in a row and also took out one of the Brokers’ Picks for 2020, making it clear that the company has continued with its efforts to build and maintain broker relationships. “Easy to place and great claim experience,” one respondent said of Emergence, while another highlighted the company’s “support with respect to product training”. DUAL Australia also received its third silver medal in as many years and was lauded for its “excellent product and good pricing”. Brooklyn Underwriting likewise retained bronze for the third year in a row.
Specialised insurance for directors and officers is an increasingly important consideration for all businesses; as Australian society continues to grow more litigious and more accountability is placed on senior members of staff, it’s critical to have tools at hand in case the worst occurs. Emerging as the broker favourite for the sixth year in a row, DUAL Australia has shown itself to be a powerful force within the D&O space. In fact, it’s been an impressive year all round for DUAL, which claimed seven medals across various categories in this year’s Brokers on Underwriting Agencies survey, up from six last year. It’s a testament to both DUAL’s strength as a company and its trust among brokers across a host of products. Solution Underwriting rose to silver this year in the D&O category after claiming bronze in 2019, while High Street Underwriting Agency made its debut on the podium for D&O in 2020, taking home the bronze medal.
Broker trust isn’t something that can be taken for granted; reliability is critical in a constantly changing world
As more accountability is placed on senior members of staff, it’s critical to have tools at hand in case the worst occurs
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BROKERS ON UNDERWRITING AGENCIES MANAGEMENT LIABILITY
“Good cover, reasonable price and can place out-of-the-box or heavier risks” DUAL AUSTRALIA
BROOKLYN UNDERWRITING
Employees also need to be protected against the exposures that naturally arise as the result of running a business. While often under appreciated, management liability fulfils an invaluable function for the wider business community, particularly given the rise in litigation in Australia. After claiming silver two years in a row,
SOLUTION UNDERWRITING AGENCY Brooklyn Underwriting finally took out the top spot in management liability for 2020. One respondent praised Brooklyn for having a “good team to deal with, good cover, reasonable price and can place out-of-the box or heavier risks”. DUAL Australia moved down to silver after five years of consecutive gold medals – an
impressive feat and a testament to the agency’s dominance. One broker raved about DUAL’s “excellent cover, quick turnaround and flexibility to accommodate clients’ needs”. Solution Underwriting Agency made it back onto the podium in this category after missing out in 2019, claiming the bronze medal for the third time overall.
NOT-FOR-PROFIT “Responsive and collaborative underwriting process. Innovative. Solution-focused” DUAL AUSTRALIA
COMMUNITY UNDERWRITING AGENCY
Given the broad range of coverage and incredible precision in terms required, the not-forprofit space presents a bracing challenge for any underwriter. And because not-for-profits play such a critical role in Australian society, insuring them goes beyond rote coverage – it’s also a form of community service.
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ASR UNDERWRITING AGENCIES
This category has been dominated by two main players: Community Underwriting Agency and DUAL Australia. This year is no exception, and both companies retained their gold and silver medals, both for the fifth year in a row. “Responsive and collaborative underwriting process. Innovative. Solution-
focused,” one respondent said of Community Underwriting Agency, which also won praise for its “great assistance, reasonable pricing and superb turnaround time in quotes”. Absent from the podium in the not-forprofit category in 2019, ASR Underwriting Agencies returned in 2020 to claim bronze.
For the fifth consecutive year, brokers across Australia have voted us the best underwriting agency to provide solutions to their Not for Profit clients. Your ongoing support helps us make a real difference to the way that insurance is provided to the sector. We would like to acknowledge all NFP’s, associations and community groups that have worked tirelessly to support those in need during this challenging year.
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BROKERS ON UNDERWRITING AGENCIES PRODUCT LIABILITY
BROOKLYN UNDERWRITING
HIGH STREET UNDERWRITING AGENCY
PROFESSIONAL INDEMNITY
MIRAMAR UNDERWRITING AGENCY
BROOKLYN UNDERWRITING
DUAL AUSTRALIA
HIGH STREET UNDERWRITING AGENCY
The unique and sensitive exposures of product liability present brokers with intensely challenging prospects – they must be aware of their clients’ specific needs, equip them with the relevant policies and have the foresight to spot issues before they occur. High Street Underwriting Agency returned to the top spot for product liability in 2020, claiming its fifth gold in six years. “The service has always been exceptional, and High Street are always willing to look at every risk that comes across my desk and are fast to advise whether they can or can’t assist,” said one broker, who added that “premiums are always reasonable as well and have been stable, in my opinion, over the past 12 months”. In its second year on the podium in this category, Brooklyn Underwriting slipped from gold to silver. Yet the company’s following remains strong; one broker raved about Brooklyn’s “easy online quoting and competitive premium”. Rounding out the medal winners, Miramar put in a strong show for 2020, winning the bronze medal and making its fourth overall appearance in this category.
Professional indemnity coverage is on the rise across a number of sectors throughout Australia. Safeguarding one’s professional reputation is critical for numerous reasons, and in recent years, Australian workers have been choosing to invest in professional indemnity coverage to protect themselves. As business needs shift, it’s critical for insurers in this area to work alongside clients to change with the times. DUAL Australia once again secured the top spot in professional indemnity; one broker highlighted DUAL’s “excellent platform to quote, broad spectrum of occupations to insure, great policy coverage and first-class claims service”. The silver and bronze medals, meanwhile, saw a bit of a shake-up this year. Brooklyn Underwriting slid into second place; one broker highlighted Brooklyn’s continued coverage of structural engineers and building surveyors as the reason for their vote. And High Street made a return to the podium after being absent in 2019, taking out the bronze.
“Always willing to look at every risk that comes across my desk and are fast to advise whether they can or can’t assist”
“Excellent platform to quote, broad spectrum of occupations to insure, great policy coverage and first-class claims service”
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BROKERS ON UNDERWRITING AGENCIES PROPERTY
“Pleasant to deal with and a fantastic online quoting platform” AXIS UNDERWRITING SERVICES
PEN UNDERWRITING
Property insurance is a far broader field than its name might suggest – after all, it can cover anything from a private home all the way to a football stadium. So brokers are looking for underwriting agencies that can offer a similarly broad range of capacity while still bringing a personalised touch. Rising from bronze last year to secure gold
HIGH STREET UNDERWRITING AGENCY in 2020, Pen Underwriting has gathered considerable momentum during its five years of appearances in this category. Axis was knocked down a spot to silver this year – but its achievement is nothing to be sniffed at, especially considering that Axis has appeared in the property category every year since it was introduced and took out
gold four years in a row. One Axis fan described the agency as “very competitive for hard-toplace risks”. High Street Underwriting Agency is making its debut in this category in 2020, taking out bronze and earning praise from brokers for being “pleasant to deal with” and having “a fantastic online quoting platform”.
PUBLIC LIABILITY
“They look at risks that others won’t” HIGH STREET UNDERWRITING AGENCY
BROOKLYN UNDERWRITING
Public liability coverage can span a wide range of areas, including libel and slander, dishonesty, loss of documents, good Samaritan acts, PR expenses, and bodily injury – making it critical for just about any business that interacts with the general public. Brooklyn Underwriting marked its fourth
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DUAL AUSTRALIA
year among the winners in public liability in 2020, taking out the gold for the first time. “They look at risks that others won’t,” one respondent said of Brooklyn. In its sixth year on the medal podium in this category, High Street Underwriting Agency earned its first silver. “They have upgraded the
online quoting system, they have expanded the occupations able to be quoted, and the service standard has significantly increased,” said one happy broker. Rounding out the medal winners was DUAL, which made the podium in this category for the first time with the bronze.
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BROKERS ON UNDERWRITING AGENCIES STRATA COVER
“Happy to work directly with the broker on complex clients” CHU UNDERWRITING AGENCIES
STRATA UNIT UNDERWRITERS
Strata has been a topical issue this year, particularly in the wake of discussions around landlords’ versus tenants’ rights during the COVID-19 pandemic. Although there’s no definitive answer, the truth is that strata cover is still very much a necessary consideration. Given the need for reliability in this category, it’s not surprising to see no major
STRATA COMMUNITY INSURANCE
shake-ups among the medal winners this year. Strata Unit Underwriters has risen to the top spot for the first time – an impressive achievement, considering that the company just debuted on the podium two years ago. CHU Underwriting Agencies remains competitive, however, despite falling from gold to silver. One respondent noted that CHU is
“happy to work directly with the broker on complex clients and come up with solutions that can be outside the square.” Another praised CHU for “great broker interaction/ service and product”. Strata Community Insurance also retained its spot on the podium, claiming bronze for the second year in a row.
BROKERS ON TURNAROUND TIMES Insurance Business asked brokers whether underwriting agencies’ turnaround times for claims and new business quotes had improved or worsened during the last year. Just over 30% reported at least some improvement, down from 2019, when more than 40% of respondents said turnaround times had improved. Accordingly, the number of respondents who felt that turnaround times had worsened overall also increased, leaping up from 19% in 2019 to 30% this year. Certainly COVID-19, coupled with pre-existing market conditions, has had an impact on turnaround times. The shift to working from home has also likely played a significant role, as normal workflows have been disrupted. One respondent noted that “hardening market and COVID conditions have meant blowouts are occurring in response times with some agencies”.
Have turnaround times improved or worsened over the last year? Improved significantly Improved No difference Worsened Worsened significantly
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3%
6% 26%
24%
16% 36%
2020
2019
6% 36% 36%
9%
21 YEARS
YOUNG 2 DECADES
STRONG Our team is proud of our proven track record in delivering peace of mind to the Australian strata community. Continuing to focus on innovation to deliver simple solutions to a complex world.
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BROKERS ON UNDERWRITING AGENCIES
BROKERS’ PICK In addition to voting for the top underwriting agencies across 11 product lines, brokers also named the top insurance product provided by an agency in the past 12 months. Here are the Brokers’ Pick winners for 2020 CHU Underwriting Agencies Residential Strata Insurance Plan For the sixth year in a row, CHU Underwriting Agencies’ Residential Strata Insurance Plan made the list of brokers’ favourite products. Respondents spoke extremely highly of CHU: “CHU are easy to deal with. They have taken quoting online to make dealing with new business very easy. Claims are handled well, and I have built a very good relationship with their staff,” said one respondent. Another broker praised CHU’s “great overall coverage, with a number of enhanced benefits in comparison to other providers”. And the power of one simple endorsement can’t be overlooked: “They are the best.”
Emergence Insurance Cyber insurance Marking its fourth year among the Brokers’ Pick winners, Emergence Insurance has clearly established itself as a key player in the cyber insurance space, marking itself out as a broker favourite in the process. “The broker support provided by Emergence is incomparable,” one respondent said. “Not only are the resources they provide super helpful, but they are more than happy to speak with you on the phone until your queries are cleared up … It is great to have such faith in a product that I know my client is going to have the coverage they require come claim time.”
MECON Insurance Construction insurance Given the uncertainties that have surrounded the construction industry this year in the wake of COVID-19, securing the endorsement of a Brokers’ Pick in this year’s survey is no small feat. Yet MECON Insurance has proved itself worthy, thanks to “their professionalism, fantastic underwriting service and exceptional claims service,” according to one broker. Another praised MECON for “speedy turnaround” and being “great to talk to”, demonstrating the personal touch the agency brings. Finally, one enthusiastic broker noted that “wording is pretty much best-inclass. MECON’s team is easy to deal with, and claims service is top-notch.”
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HOW UNDERWRITING AGENCIES CAN WIN OVER BROKERS IB asked brokers how underwriting agencies can earn more of their business over the next 12 months. Here’s what they had to say: “Consistency of pricing and availability of markets” “If they can keep a broad appetite for the type of risks they are willing to write and keep premiums stable in these very uncertain times, then they will retain and grow their business” “Stable pricing, increased ability to write different risks, ease of service” “Turnaround times and more broker engagement” “Be less rigid” “Proactive underwriting, being available to chat through a risk and assisting with the more challenging placements”
FEATURES
SECTOR FOCUS: NATURAL DISASTERS
From fires to floods Australia has barely recovered from the devastating Black Summer bushfires, and now La Niña is presenting a new weather-related threat to the country. How can brokers and insurers prepare? WHEN IT comes to natural disasters, the bushfires that raged across Australia’s eastern seaboard for much of last summer have been discussed at great length, particularly now that the warmer months of the year are fast approaching once more. The so-called Black Summer was the worst bushfire season on record and directly resulted in 33 fatalities and somewhere between 24m and 40m hectares of burnt land across Australia. According to health experts who fronted a royal commission this past May, almost 450 people also died as a result of smoke inhalation during this time. For the insurance industry, the financial cost of the bushfires was immense. According to the independent catastrophe firm PERILS, the industry suffered peak losses of approximately $1.86bn each week, 70% of which were incurred in New South Wales.
Confronting climate change According to Peter Cheesman, head of APAC analytics at Aon, the bushfires acted as a kind of wake-up call for any insurers that had ignored the severe effects that climate change can – and will – have. “Insurers should already understand the implications of this recent fire activity on their portfolios and have some knowledge of what causes these conditions to occur and how exposed they are,” Cheesman says. “Looking ahead over the short term, i.e. the next 10 years, property damage from bushfires is likely to continue to be driven by natural variability
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in the climate system. Insurers may look to better understand the impacts of these climate drivers on their portfolio. The now active La Niña phase of ENSO [El Niño-Southern Oscillation] in Australia is a good example.” Ben Crowther, head of strategic risk for NSW and Queensland at Marsh, echoes Cheesman’s emphasis on the need for both insurers and their clients to understand changing weather patterns. “Looking forward, communication and our reliance on technology to inform us and to keep us connected is pivotal,” Crowther
A new threat While the Black Summer taught insurance professionals some valuable lessons about the damage that bushfires can cause, a number of industry experts are now more focused on the potential fallout from other severe weather events such as cyclones and floods. The reason for this is simple: the active La Niña weather pattern. La Niña is typically associated with higher rainfall and cooler daytime temperatures for much of Australia. The last La Niña event lasted from 2010 to 2012 and was one of the
“Looking ahead over the next 10 years, property damage from wildfires is likely to continue to be driven by natural variability in the climate system”
BLACK SUMMER DEVASTATION BY THE NUMBERS
24m to 40m Hectares of land burnt
3,000+
Buildings destroyed
Peter Cheesman, Aon says. “The scale of the impact isolated so many communities, and that heightened the emotion and fear for everyone affected and of those who could not reach them. It also highlighted the need to know our capabilities and vulnerabilities well ahead of the event. While the scale could not have been predicted, it did shine a light on the importance of equipment and supplies so as not to be caught short.” Crowther adds that the royal commission showed that “many bushfire risk management plans were out of date” and highlighted that while companies need to have current response plans, “company personnel need to be familiar with the adopted strategies”. “Regarding business interruption coverage, there needs to be an understanding of revenue streams, understanding of how these revenue streams may be impacted directly and indirectly, and the need to explore how an insurance program can be aligned with these risks,” he says.
most significant weather events in recorded Australian history, according to the Bureau of Meteorology (BOM), as the immense rainfall it brought helped to ease severe droughts in many parts of the country. Though the BOM expects this current La Niña phase to be less extreme than its predecessor, it nevertheless holds the potential to bring about an increase in tropical cyclones, an earlier monsoon season and more intense flooding. As Insurance Business reported last year, modelling from the firm Climate Valuation found that these weather events are expected to become more and more severe due to climate change, and homes in flood-prone areas like Townsville in north Queensland could soon become uninsurable due to flooding risks. According to Scott Leney, head of risk management for Asia-Pacific at Marsh, extreme weather events such as floods and bushfires – as well as their underlying causes –
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Direct deaths from the bushfires
$2bn
Insured losses caused by the bushfires
$3.6bn
Estimated economic impact on the tourism, hospitality, agriculture and forestry industries Source: Royal Commission into National Natural Disaster Arrangements
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FEATURES
SECTOR FOCUS: NATURAL DISASTERS
THE EXTENT OF THE LA NIÑA THREAT Six of the wettest springs on record for eastern Australia occurred in La Niña years
Rainfall during La Niña years has been 22% higher than average since 1900
Twelve out of 18 La Niña events since 1900 have resulted in flooding are increasingly a point of focus for the insurance industry. “In this day and age, you can’t help but be exposed to conversations about climate and associated changes in weather patterns,” Leney says. “There’s generally more pressure on companies to demonstrate that they’re aware of the impact climate change can have on their business resilience. Though there’s not much you can do to prevent extreme
clients can be prepared for, even if they can’t necessarily avoid them. “In 2011, we had the largest floods on record in our area, so it’s a weather event that many of us are well acquainted with,” Coe says. “There are expectations that there might be a couple of extra cyclones this year, and there’s really nothing you can do about them – what matters is their severity and whether you have a few roof shingles taken
“Though there’s not much you can do to prevent extreme weather events like floods and hailstorms, there are plenty of measures businesses can take to reduce the damage they can cause” Scott Leney, Marsh weather events like floods and hailstorms, there are plenty of measures businesses can take to reduce the damage they can cause.” David Coe, managing director of Northwest Insurance in the Queensland town of Bundaberg, echoes that sentiment, describing cyclones and floods as events that
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off or have your house flattened. “My advice to my clients is that as we move into this weather phase, they need to continue to be sure that they’re insured against these kinds of natural disasters. Though COVID-19 has affected the bottom line of a lot of businesses, maintaining
The onset of monsoon season typically begins two weeks earlier in La Niña years Double the number of tropical cyclones make landfall in La Niña years Source: Bureau of Meteorology
proper coverage in these areas is essential.” ANZIIF CEO Prue Willsford notes that the particularly devastating nature of last summer has prompted the insurance industry to engage in much-needed conversations about mitigation. Both she and Leney commended the Insurance Council of Australia (ICA) for its proactive approach to dealing with natural disasters and climate change. “They’ve been increasingly active in terms of providing a coordinated response to natural disasters,” Willsford says. “They collaborate with the industry, learn from past experiences and work to improve the overall landscape. Though providing insurance against these disasters can be difficult for the industry in terms of affordability, the ICA’s done an incredible job in difficult circumstances.”
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PEOPLE
BROKER INSIGHT
A big heart for small business McLardy McShane CEO Don McLardy tells IB about the unconventional step his brokerage took to help local small businesses weather the COVID-19 pandemic
COCO BOSSARD was running a successful wine tour business, combining her French background with her love of Victorian wineries in the Yarra Valley, Mornington Peninsula and Ballarine Peninsula. But when the COVID-19 pandemic hit, “in mid-March I had to shut down, so it has been six months since my last tour,” Bossard says. Her partner, Lincoln Busby, was struggling to find shifts as a casual high school teacher, adding to the couple’s financial woes. With no end in sight to the COVID-19 restrictions in Victoria, the couple tapped into their entrepreneurial spirit and came up with what they hoped was a pandemic-resilient new business: La French Box, a subscription service offering French food, wine and other delicacies. The resolve Bossard and Busby showed in launching La French Box in the middle of the pandemic – and their commitment to work all hours to keep it alive – is indicative of the small business fighting spirit that Don McLardy, CEO of insurance brokerage McLardy McShane, was thinking about when he came up with a new way to offer a helping hand. McLardy joined forces with his good friend, 3AW morning co-host Russel Howcroft, to offer free 30-second ad slots to small businesses on the top-rated radio station. “I rang Russel and said, ‘I’m terrified about this whole situation with small business, particularly in Melbourne’,” McLardy says. “The
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impact on small business is just horrific. In the lockdown part of Melbourne, why don’t we give airtime to businesses that will only survive if they get a bit of traffic now? What if McLardy McShane sponsors 30-second ads for businesses to get on the radio and say, ‘Look, this is what I do. If you want to help me, this is how we do it.’?” Busby was listening to 3AW, heard about the opportunity and entered La French Box. To the couple’s surprise, their business was selected, and the ad generated plenty of business for the new venture. “We have had people calling, emailing and ordering boxes,” Bossard says, but she adds that she’s holding out hope that COVID-19 restrictions will be lifted by December so she can restart Coco’s Tours during her busiest season of the year.
McLardy McShane’s success has been built on helping the owners of small to medium-sized businesses, and McLardy says stories like Bossard’s strike a personal chord. “The resilience of small businesspeople is extraordinary,” he says. “People will find a way to survive and will try and come back. That’s what small business is about. They haven’t got the wherewithal of big companies. They rely on nous and surviving week-to-week, and a lot of these people are in survival mode.” McLardy, who teamed up with good friend Mike McShane in 2007 to form one of Australia’s top insurance brokerages, which boasts more than $170m in written premium income, says the company’s culture is built on supporting the communities it operates in. McLardy McShane sponsors football clubs and community initiatives and has raised more than $2.6m
MCLARDY MCSHANE’S HELPING HAND McLardy McShane’s ad giveaway to small businesses is just the latest philanthropic initiative from the brokerage, which has raised more than $2.6m for charity as part of its mission to help improve Australians’ physical and social wellbeing. Don McLardy’s longstanding friendship with late AFL and Demons legend Jim Stynes led McLardy McShane to become supporters of the Reach Foundation, which Stynes co-founded. The foundation runs group workshops designed to develop social and emotional wellbeing in young people. McLardy McShane also teamed up with another AFL Legend, Neale Daniher, to hold a charity golf event at Portsea Golf Club that has now raised more than $300,000 for FightMND, an organisation seeking a cure for motor neurone disease.
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FAST FACTS: MCLARDY MCSHANE
Established in 2007 when close friends and business associates Don McLardy and Mike McShane brought their insurance broking businesses together
Serves the general insurance needs of businesses of all sizes
Makes sure its branches are at least 50% owned and operated by local insurance professionals who work with and support their local community
“The resilience of small businesspeople is extraordinary. People will find a way to survive and will try and come back. That’s what small business is about” for charitable causes, including the Reach Foundation, to help young people achieve social and emotional wellbeing through workshops and other skill-building activities. With such close ties to the community, McLardy is well aware just how much pain the COVID-19 pandemic is inflicting.
“I think it is underestimated the impact that it has had on businesses and people,” he says. “I am in an area on the Mornington Peninsula. Around Sorrento, Rye and all of the beachside towns an hour out of Melbourne, they are all completely shut down. There are ‘for lease’ signs everywhere. Any small business, aside
Part of the Steadfast group, one of the largest broking networks in Australia
Won Brokerage of the Year (20+ Staff) at the 2018 Insurance Business Australia Awards
from a coffee shop, local butcher, local grocery, are all closed. How many of those will get back in business? We’ll find out in time. “I think there is a horrendous cost here we haven’t yet had to deal with, but we will have to deal with,” he adds. “I’m not sure how that will pan out.”
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FEATURES
SECTOR FOCUS: MARINE INSURANCE
Riding the waves of marine risk World trade has been heavily disrupted by the COVID-19 outbreak, and marine insurance has found itself on the front line of global events. Daniel Morrison and Michael Sullivan of NTI share their thoughts about the sector’s future and how brokers can benefit
AFTER MORE than 20 years in the industry, Daniel Morrison has been privy to some largescale changes in the marine insurance space. But right now, he says he’s witnessing the biggest state of change he’s ever seen in his career. As national cargo product manager at NTI, Morrison is keenly aware of the shifts in the industry that have occurred during 2020 as a result of the COVID-19 pandemic. “I don’t think we really know the full effects just yet,” he says. “Obviously there have been major delays and backlogs, which causes further supply chain issues and impacts the ability of businesses to service their own clients. It’s complex.” Businesses dealing in perishables have been the most heavily affected, Morrison says, but he also believes that the situation has highlighted numerous other issues within the industry that were already bubbling beneath the surface. “Globally, the industry has to look at some significant changes in the ways it does business,” he says. “The commoditisation around
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cargo insurance in particular has meant the competitiveness has been geared solely around pricing for years, and that’s rendered it unprofitable.” Nonetheless, Morrison says it’s an exciting time to be in the field. A shift away from
pretty tradition-heavy environment,” he says. “That offers certain benefits because it means that there’s been a lot of precedents set by previous claims and legal cases. You’ve got experience to draw on.” The downside, Sullivan explains, is that
“The commoditisation around cargo insurance has meant the competitiveness has been geared solely around pricing for years, and that’s rendered it unprofitable” Daniel Morrison, NTI purely price-based competition also means more opportunities for businesses to shine on other fronts. “Once the wheels start squeaking, new solutions start getting innovated,” he says. Mike Sullivan, national manager of marine claims at NTI, agrees. “Marine is a
insurers and brokers can spend too much time leaning on that tradition, rather than proactively looking for ways to push the business forward. “There’s no question COVID-19 has been inconvenient for everyone, to say the least,” Sullivan says. “But we have seen that it’s
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really sped up investment and embrace of digital processes. Things are getting streamlined, even in complex areas like marine, and we’re starting to see it spur a wider movement towards better service standards as the conversation shifts away from being solely price-based.”
Starting the conversation So how can brokers best leverage the current
uncertainty to their advantage? And what sorts of conversations do they need to be having with existing customers to ensure that their needs are being met during these times of upheaval? First and foremost, Sullivan sees it as a conversation about the future of the client’s business, rather than insurance. What sorts of changes are they making to adapt to the new environment? How are they being
affected by wider supply chain issues? Have they shifted to an e-commerce model or enhanced their current offering? These are complex questions to wrestle with, but they’re conversations that need to be had prior to making insurance decisions, Sullivan says. The ease of doing business under new circumstances is a prime consideration. “At the moment we’re seeing tensions in trade between China and a good chunk of
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FEATURES
SECTOR FOCUS: MARINE INSURANCE
the rest of the world,” he says. “There’s no question that will present an issue for people trading in that area, and of course, cargo insurance follows the trade. We’re going to see businesses reducing their current exposures by investing in new supply chains. Couple that with the increased push for initiatives like click and collect, and there’s clearly going to be new considerations in play moving forward.” Morrison stresses the importance of communication between all of the parties involved in the insurance process. “Brokers perform a critical service in terms of translating policies to customers and then making sure they understand the nature of their coverage,” he says. “Additionally, they liaise with insurers to ensure that we understand the needs of the customer and the products we offer are actually keeping pace
ABOUT NTI With five decades of experience in the insurance industry, NTI is the company you can count on to protect your clients’ transport and logistics assets. Their award-winning combination of tailored products and services, experienced people, accredited repair and recovery networks, and industry advocacy have seen them become Australia’s leading specialist insurer. Yet insurance is just a piece of paper – a promise. It’s not until your clients really need them that you understand the NTI point of difference. For more information, visit nti.com.au.
On the horizon Looking ahead to the next 12 to 18 months, Morrison believes that there will likely be a hardening in marine pricing and likely some reduced capacity. “There’s a pricing war at the moment,” he says. “I don’t think it’s going to last that long, though. Insurers losing money isn’t a viable long-term solution, and it only reduces
“[COVID-19 has] really sped up investment and embrace of digital processes. Things are getting streamlined, even in complex areas like marine” Mike Sullivan, NTI with the requirements in the field.” To this end, NTI works to communicate with brokers as extensively as possible, aiming to provide easier and faster access to current updates about the industry. “We use a variety of means, like webinars, LinkedIn updates and articles,” Morrison says. “We also run training sessions and participate in conferences. It’s not just about making people aware of who NTI are – it’s about fostering wider connections within the broking industry and helping them offer the best possible service.”
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competition within the field.” The recovery of the Australian economy will also play a critical role. At the time of writing, numerous government protections are in place for businesses, but as these wind down, there will be greater clarity into which companies are effectively equipped to survive. “Everything’s in a state of flux at the moment,” Morrison says. “It’s going to be difficult to see significant change in such a short timeframe, but I think new opportunities will emerge out of it.” Sullivan believes there won’t be a full
return to normal until around mid-2021. “It’s certainly going to be a different environment,” he says. “Couple that with the wider concerns about a recession, and I think we’ll probably see the landscape looking very different by this time next year.” Future waves of COVID-19 also remain a concern, but Sullivan doesn’t believe disruptions will be as significant moving forward. China was the first country affected, and it also controls five of the largest ports in the world, he notes. “It was akin to the effect of a car crash on a freeway,” Sullivan says. “Even though the mess is cleared up relatively quickly, there’s still a big flow-on impact. Given that they seem to have moved well past the effects of the disease now, I don’t think we’ll have the same problem again.” Despite all the change, both men remain certain of one thing: marine insurance will have an important role to play in Australia’s economic recovery. The country’s heavy reliance on exports means that insurance is essential – exports rely on credit, and banks won’t provide loans to companies that aren’t able to secure insurance. “Insurance is critical,” Morrison says. “It’s essential that we have a viable and competitive insurance industry in place to guarantee that businesses can get the coverage they need. We’re very much looking forward to helping be part of that process.”
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Free Roadside from Australia’s Specialist Insurer. At NTI, we’re always asking how we can help our customers and partners. We know that transport operators and truck owners have been instrumental in keeping Australia moving during 2020 – even while many of them are dealing with new routes, altered freight tasks, and constantly changing paperwork on borders. So, here at NTI, we’re taking action. We’re providing a FREE Truck Assist Roadside Essentials Plan to all eligible vehicles on NTI Transport Pack and Yellow Cover policies. Together, let’s say “thank you” to the transport industry for keeping Australia moving.
Visit partner.nti.com.au to redeem this offer for your clients, today.
Insurance products are provided by National Transport Insurance, a joint venture of the insurers Insurance Australia Limited trading as CGU Insurance ABN 11 000 016 722 AFSL 227681 and AAI Limited trading as Vero Insurance ABN 48 005 297 807 AFSL 230859 each holding a 50% share. National Transport Insurance is administered on behalf of the insurers by its manager NTI Limited ABN 84 000 746 109 AFSL 237246. This FSG was prepared on 18 November 2019. © 2019 NTI Limited.
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PEOPLE
OTHER LIFE
TELL US ABOUT YOUR OTHER LIFE Email ibo@keymedia.com.au
Spurr says the all-abilities basketball court is designed to be a safe environment where conflicts are few and far between
300+
Number of all-abilities basketball games Spurr has coached
87
Total number of players he’s coached over the span of a decade
3
Number of grand finals Spurr’s teams have won
COACHING ALL ABILITIES Insurance executive Andrew Spurr might be the coach of an all-abilities basketball team, but he’s the one who’s learned a thing or two IT’S BEEN 10 years since Andrew Spurr, head of casualty at Berkshire Hathaway Specialty Insurance Australia, became involved in all-abilities basketball. He first got into the sport as a parent in search of an activity for his son, who has mild autism, and has since spent a decade coaching junior teams.
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“Having this ‘other life’ does allow me to switch off from the workday and enter into a completely different mindset and appreciate the simple things that we take for granted,” says Spurr, adding that the experience has taught him patience and the value of understanding team members, be it in basketball or in the corporate setting.
“As with any form of management or leadership role, communication with your team and others is a critical element,” he says. “What I have taken from this coaching role into my work life is that everybody is different, and to get the best out of any individual and team, you need to be able to understand what drives each person.”
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