Insurance Adviser April 2022 issue

APRIL 2022

BUILDING RESPECT

Interview with Gary Okely, recently appointed NIBA VicePresident

DRIVING FUTURE VALUE

NIBA President, Dianne Phelan discusses the value and future of broking

TENACITY, TRANSPARENCY, RESULTS Interview with Stella Pruscino, recently appointed NIBA Director

Plus PROFESSIONAL INDEMNITY The waiting game ENERGY INSURANCE The threat from within

WE ARE YOUR VOICE

opportunities bids

acquisitions claims Before & after

challenges insights catastrophes big decisions learnings

Welcome to QBE, where insurance isn’t just a one-off commercial transaction, it’s a dependable relationship that guides and protects us through life. It’s why businesses across Australia rely on our experience to cover what matters, before & after and every moment in between.

Find out more at qbe.com/au/brokers Insurance issued by QBE Insurance (Australia) Ltd. ABN 78 003 191 035, AFSL 239545. Subject to underwriting approval.

Terms and conditions apply (including exclusions and limitations).

CONTENTS April 2022

ACN 006 093 849 ABN 94 006 093 849

FEATURES

Insurance Adviser magazine is the monthly magazine of the National Insurance Brokers Association (NIBA).

20

DRIVING FUTURE VALUE

Insurance Adviser magazine is published by NIBA

Publisher

Philip Kewin, CEO, NIBA T:!(02) 9459 4305 E:!pkewin@niba.com.au W: niba.com.au

Dianne Phelan, NIBA President discusses recent NIBA Board changes and the value and future of broking

Communications Manager Wendy Martin

Editorial enquiries

E:!editor@niba.com.au

National Sales Manager Tony May E:!tmay@niba.com.au

Design

Citrus Media www.citrusmedia.com.au NIBA gives no warranty and makes no representation that the information contained in this magazine is, and will remain, suitable for any purpose or free from error.

To the extent permitted by law, NIBA excludes responsibility and liability in respect of any loss arising in any way (including by way of negligence) from reliance on the information contained in this magazine or otherwise in connection with it.

The contents of Insurance Adviser are protected by copyright and NIBA reserves its rights in this regard.

24

BUILDING RESPECT Gary Okely, NIBA Vice President shares his views on attaining widespread recognition for the strategic role brokers play in advising their clients.

NIBA.COM.AU / 3

CONTENTS April 2022

FEATURES 27 TENACITY,

TRANSPARENCY, RESULTS Stella Pruscino, recently appointed NIBA Director shares her views on a commitment to professional development to achieve a bright broking future

30 ENERGY INSURANCE The threat from within

IN EVERY ISSUE

NIBA CEO Welcome...................................... 6 Representation ................................................ 8 Why be a NIBA member? ............................ 10

40 PROFESSIONAL

NEWS

The waiting game

Industry Bulletin.......................................... 12

PROFESSIONALISM

Quality of Advice Review Update ............... 17 AFCA Case study ......................................... 18

EVENTS

Forthcoming Events ..................................... 55

REFERENCE

Community Hub .......................................... 46 Insurer Strength Ratings .............................. 56 Insurance Journey: Heather Blanco ............ 57

4 / INSURANCE ADVISER APRIL 2022

INDEMNITY

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CEO / Welcome

BROKERS GO ABOVE AND BEYOND IN CHALLENGING TIMES

A

s we go to print, Australia has officially entered election mode, although the unofficial campaign has been underway for some time now.

Everyone has their views as to how the Government has performed over the past nine years in meeting the challenges of drought, bushfires, a global pandemic and more recently floods.

It has been an extremely challenging time for all. No doubt time will tell and by May 21 or shortly thereafter depending on how close the election is, we will see how the Government has been judged and which party or parties Australians feel are best equipped to steer us through what we hope are calmer waters.

Reflecting on our own industry, a recent survey commissioned by the Insurance Brokers Code Compliance Committee (IBCCC) showed that insurance brokers have gone above and beyond in assisting their clients during these difficult times. Not only have they dealt with their own pressures in managing their businesses and assisting their staff through the pandemic, but brokers have maintained strong communication with their clients, kept them informed, assisted with variations and premium funding arrangements to continue cover, whilst managing an increased workload due to higher claims and a more challenging market for obtaining renewals.

This is indeed something brokers should be very proud of, and further endorsement of the powerful impact brokers have on the community, both financially and emotionally.

This will no doubt be a strong consideration in terms of the Quality of Advice Review, which is now well underway. The final Terms of Reference were released on 11 March, with an issues paper released on 25 March. In her foreword, the independent reviewer, Michelle Levy stated “the Quality of Advice Review provides an opportunity to enhance the regulatory framework for financial advice so that more people are able to access affordable financial advice when they need it and in the form they want. High-quality financial advice should enhance our financial security and wellbeing”.

Our belief is that this can only be achieved if clients are afforded the option of paying for that advice in the way that suits them, be it commission, fees or a combination of both. No market in the world successfully operates without such choice.

The key is transparency, which I will address later.

The Quality of Advice Review is extremely comprehensive in its scope. There are many aspects that give rise to the improvement of the regulatory framework, but of course there are also some areas where our representation needs to be particularly strong and focused. The obvious one is the review of general insurance commissions. Under “other exemptions” the issues paper states “The review will consider other remaining exemptions from the definition of conflicted remuneration as per Recommendation 2.6 of the Financial Services Royal Commission.” While the Royal Commission didn’t uncover any issues in relation to poor consumer outcomes, as a result of general insurance commissions, commissioner Hayne deemed it necessary to review all aspects in relation to existing exemptions of conflicted remuneration.

This has always been a topic of debate. In his recent report commissioned by the Insurance Council of Australia (ICA), in

6 / INSURANCE ADVISER APRIL 2022

relation to accessibility and affordability of insurance, industry consultant John Trowbridge stated “replacing commissions with fees for service would have a questionable impact on total costs paid by the client because of the range of variables involved. It may lead to lower prices, but not necessarily to lower total costs to the client. It also has potential downsides already alluded to. In today’s environment, it would almost certainly adversely affect access and availability of advice and insurer choice for some.”

In 2020, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) released its Insurance Inquiry Report.

The report stated “for many small businesses, their broker is a key business relationship and vital to them accessing the insurance they need. However, for others the issue of conflicted remuneration has led to a belief that their broker is not operating in their best interests.” As such, the ASBFEO recommendation was to ban “conflicted remuneration”. In response to this, Mr Trowbridge in the ICA Report stated that “full and clear disclosure of broker commissions and charges was an important starting point “in relation to the rectification and elimination of conflicts.”

It is for this very reason we have introduced new higher standards in the 2022 Insurance Brokers Code of Practice, including the banning of all volume-based commissions, profit-sharing arrangements and preferential remuneration, such as overrider commissions. And, for all individual and small business clients, we have introduced the requirement to disclose, in advance the full amount of commissions the broker will receive, irrespective of whether the broker is operating under a personal or general advice model. This is a further enhancement to the original Code wording where the disclosure was required for Retail Clients, which may not always apply to a small business. As such, based on industry feedback and the intent of the Board, we have further strengthened the wording to ensure the disclosure requirements apply to all individuals and small businesses, irrespective of whether they were purchasing a retail or wholesale product.

We believe these steps are a natural progression in our profession and will serve to ensure all clients feel comfortable that the broker is acting in their best interests in addressing their insurance needs. This is also an important component in addressing any concern that may arise in the Quality of Advice Review irrespective of which political party is in power.

Responses to the issues paper for the Review are due by Friday 3 June 2022, and NIBA will be seeking input from Members in the formulation of its response.

PHILIP KEWIN Chief Executive Officer, NIBA

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NEWS / Representation

WE ARE YOUR VOICE!

The following is an overview of some of the things NIBA has been examining on behalf of members.

ASIC Incidental Retail Cover

Last month, NIBA provided feedback to ASIC on two class relief proposals following campaigning by NIBA and the ICA. As part of the consultation, ASIC sought feedback on proposed relief that would see an incidental product that is provided to a retail client within a bundled business contract be deemed to be provided to a person as a wholesale client.

NIBA’s feedback highlighted the confusion and complexity that currently exists, which ASIC’s proposed relief measures aim to address.

Cyclone Reinsurance Pool

Last month, NIBA provided a submission to the Senate Economics Legislation Committee review of the Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022. NIBA’s submission was generally supportive of the draft legislation, however, the submission raised several concerns that, in NIBA’s view, should be addressed prior to the legislation being passed.

This includes the classification of aged and residential care properties as commercial properties, the 48-hour damage period, mitigation and long-term viability of the fund, and the lack of policy mechanisms to encourage insurers to return to the Northern Australian Market.

NIBA’s concerns were shared by several other organisations including the Northern Australia Insurance Lobby and the Northern Territory Chamber of Commerce.

Following the recommendation of the Senate Committee, the legislation was

8 / INSURANCE ADVISER APRIL 2022

passed on 29 March, with the legislation coming into effect on 1 July 2022.

To read NIBA’s full submission, visit www.niba.com.au/submissions.

Quality of Advice Review

As part of the Quality of Advice Review, Treasury has released an issues paper seeking feedback on a range of issues affecting the general insurance, life insurance and financial advice sectors.

In addition to considering whether the “exemption from the conflicted remuneration ban results in poor quality advice and consumer outcomes”, the review will also consider issues such as underinsurance, the impact of regulation and compliance on the provision of

affordable advice, personal, scaled and general advice models and whether current disclosure documents should be amended.

NIBA has been working hard behind the scenes over the past few months, preparing for the review. NIBA is currently working with Treasury to facilitate data collection to better inform Treasury’s view as to the types of arrangements that exist between insurers and intermediaries, as well as preparing our own response to the review.

Submissions to the issues paper close on 3 June 2022, with a final report to be provided to the government by 16 December 2022.

Request for member feedback

NIBA is working hard to gather success stories from members to support its upcoming submission to the Quality of Advice Review.

This may be a claim that was originally denied by the insurer, but through your advocacy and knowledge of the policy, the claim was eventually accepted. Or it could be a time you went above and beyond to assist a client.

If you would like to provide an example, please do so in writing to NIBA’s Policy and Research Manager, Allyssa Hextell at ahextell@niba.com.au

CONTACT NIBA

As always, brokers who have questions about these or any other government or regulatory matters should feel free to contact NIBA CEO Philip Kewin at: pkewin@niba.com.au

IN HOUSE MANAGEMENT FOR FINANCIAL LINES CLAIMS More walk, Less talk

Maya Lazarus

Wade Cadman

Brooklyn Claims Manager

Underwriting Manager, Financial Lines

Maya.Lazarus@

Wade.Cadman@brooklynunderwriting.com.au

www.brooklynunderwriting.com.au

NIBA / Member Benefits

WHY NIBA MATTERS TO ME Members share why NIBA is important to them and the broking industry.

“NIBA is a pivotal part of the broking industry and is so important for the profession. By acting as advocates for brokers, NIBA is protecting our future.

With the ever-evolving changes to government regulations that can affect our industry, NIBA empowers brokers to uphold the highest standards of professionalism while ensuring we act in the best interests of our clients.’’

PAT MCCOLE Client Manager – National, Aon

WELCOME TO NIBA NIBA is thrilled to have the following new Principal Member on board: • Credit Insurance Brokers Pty Ltd – NSW

ABOUT NIBA OUR MISSION

NIBA is the one voice for insurance brokers in Australia, representing their interests and promoting high standards of professionalism and competence.

OUR OBJECTIVES Representation

We represent the interests of members and their clients to governments, regulators, industry stakeholders, the media and the community in a manner that is respected and relevant. We have forged strong relationships at a state and national level to ensure that your interests are represented.

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Professionalism

We set and promote high standards of professional practice for insurance brokers for the benefit of their clients and the community through the development of professional standards, QPIB, CPD accreditation and the Insurance Brokers Code of Practice.

Community

We provide members with opportunities to meet, share, grow and prosper, and build professional networks with the wider intermediated insurance community that will last throughout whole careers.

GET IN TOUCH!

Whatever your age, or level of experience, NIBA ha s brokers’ best interests at the core of everything we do. Fin d out what we can do to help be nefit your business and your tea m at niba.com.au/membe rship

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NEWS / Industry Bulletin

NIBA LAUNCHES CLAIM SUPPORT INITIATIVE

T

he National Insurance Brokers Association (NIBA) has today launched a Claims Support initiative, whereby NIBA members are offering to advise and assist victims of the recent floods with their insurance claims.

The intention of this initiative is to support members of the community who have suffered loss, as a result of the recent floods, and who do not currently have an insurance broker and require assistance with their insurance claim.

The support and assistance of participating brokers will be provided as a community service on a pro bono basis.

NIBA CEO Philip Kewin says the NIBA Board has given careful thought to how best to support the people who have lost so much as a result of the recent floods.

“Many people are unsure where they stand in relation to insurance,” he added. “We know the insurers and the Insurance Council of Australia (ICA) are responding to the immense challenge, and we hope that the Claims Support initiative will help the victims of these floods.”

Victims of the recent floods in NSW and QLD can access this service through NIBA’s Need a Broker hotline – 1300 53 10 73. A member of the team will put them in touch with an insurance broker to help them with their insurance claim.

“The NIBA Board and I would like to thank all members who have volunteered their professional services to assist the victims of the recent floods in NSW and QLD,” said Kewin.

If any member would like to be involved in the Claims Support initiative, please contact NIBA at info@niba.com.au

$268 MILLION BUDGET ANNOUNCEMENT TO PROTECT AGAINST IMPACTS OF EXTREME WEATHER

N

IBA welcomes the Federal Government’s 2022-23 budget announcement of $268 million to protect Australians from the impacts of extreme weather. $150 million per year has been allocated in the 2022-23 budget to the Government’s Emergency Response Fund (ERF) for recovery and post-disaster activities to support affected communities over the next two years. The ERF will deliver additional recovery and post-disaster resilience projects in the heavily impacted Northern Rivers region of NSW.

This funding is in addition to the $75 million the Queensland and NSW Governments will each receive from the ERF in 2021-22 to spend on projects, where funding is most needed, in agreement with the Federal Government.

The 2022-23 budget also includes: • $800,000 for the Regional Small Business Support Program to support small businesses impacted by the recent flood event in NSW and Queensland in two Rural Financial Counselling Service regions until 30 June 2023.

• $116.4 million boost for the Black Summer Bushfire Recovery Grant

Program, funding 524 community projects with a total program investment of $390 million.

• $1.7 million to Emergency Management Australia to integrate with the National Resource Sharing Centre, to better share resources and capability information across states and territories and the Commonwealth during large-scale disasters. $10 million has also been allocated to support the mental health of school-aged children in the Northern Rivers region affected by the recent flood event. This will be provided over a 4-year period from 2021-22.

For all the latest news about the support for flood affected residents and businesses in NSW and QLD, please visit niba.com.au/articles

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NEWS / Industry Bulletin

ADDITIONAL SUPPORT PACKAGE FOR QUEENSLAND

A

$771 million disaster relief assistance package has been announced to help affected Queenslanders with cleanup efforts.

Queensland’s largest ever extraordinary disaster assistance package will fast-track remaining clean-up efforts and help affected Queenslanders whose homes have been ravaged by floods during the unrelenting 2021-22 flooding season.

The $741 million Resilient Residential Recovery Package will provide Queenslanders whose homes have been badly damaged by flooding with a range of options that may include retrofitting, house raising or the voluntary buy-back of homes at high risk from future floods.

Meanwhile a $30 million Clean-Up Package will support councils and agencies with the clean-up of flood-related debris including commercial, building and housing debris that’s not normally eligible for reimbursement.

This package builds upon the $558 million grants package announced earlier this month to help small businesses, primary producers, and not-for-profit organisations rebuild from the floods, as well as initial clean-up and recovery payments to the hardest hit councils.

“It is the biggest single disaster support package in Queensland’s history and it reflects not only the immediate challenge in terms of cleaning up and rebuilding but the longer-term need to increase resilience in Queensland communities.”

As part of this proposal, the Queensland Government has also advised the Commonwealth that it will lift its Category A Structural Assistance Grants from up to $14,684 to up to $50,000 for eligible Queensland households to assist those with significant structural damage to their homes.

Information on disaster assistance can be found on the Queensland Reconstruction Authority’s website at qra.qld.gov.au

NEW SUPPORT PACKAGE FOR NSW FLOOD AFFECTED RESIDENTS AND BUSINESSES

T

he Federal and NSW Governments will provide $742 million to further support primary industry, businesses, rural landholders, Councils and residents affected by the catastrophic flooding event across NSW, as part of the next round of support.

This is in addition to the almost $1 billion in emergency response and relief already provided through joint funding packages between the Federal and NSW Governments. Direct Federal disaster relief payments are in addition to these packages.

The fourth phase of support for jointly 50/50 funded programs includes: • $100 million for a small and medium-sized businesses package in the seven highly impacted local government areas (LGAs).

•

$35 million for Rural Landholder Grants of up to $25,000, for impacted landholders.

• $150 million for the primary industry sector targeted at assisting primary producers to protect supply chains, and boost recovery and rebuilding efforts.

• $142 million to provide assessment of properties and the demolition of those found to be uninhabitable across disaster declared LGAs. Further details about the NSW Government support packages are on the NIBA website, www.niba.com.au/articles People in NSW requiring disaster recovery support are urged to contact Service NSW on 13 77 88 or nsw.gov.au/floods

For breaking news and updates curated specially for insurance brokers please visit: niba.com.au/articles

NIBA.COM.AU / 13

NEWS / Industry Bulletin

BROKERS SHOW TRUE VALUE IN CHALLENGING TIMES ACCORDING TO IBCCC REPORT

T

he IBCCC has released a report outlining its findings from an Own Motion Inquiry into how Subscribers to the Insurance Brokers Code of Practice responded to the COVID-19 pandemic and extreme weather events during 2020.

The inquiry by the Insurance Brokers Code Compliance Committee found that many Code subscribers had embraced their position as an intermediary between client and insurer, often going ‘above and beyond’ to get good outcomes for clients in 2020.

The inquiry was based on information from 427 responses to a questionnaire in the 2020 Annual Compliance Statement (ACS) and from follow-up video conferences with 46 Code subscribers.

Subscribers were asked about the impact of

COVID-19 and of extreme weather events that occurred from 2019 to 2020, including bushfires, storms, hail and flooding. The report noted that much of the impact and lessons from the pandemic also applied to extreme weather events, such as changes in work environments, issues with getting cover and delays in claims processing due to the volume of claims.

The inquiry found that brokers had demonstrated an understanding of the importance of having a resilient business, underpinned by a resilient workforce, when overcoming tough times. Almost two-thirds reported they had or were developing a resilience policy during 2020; others said they rely on other policies and procedures for managing unexpected challenges and disruptions. A number implemented support mechanisms for

employees to improve wellbeing during this period.

NIBA CEO, Philip Kewin said, “The report reinforces the value brokers bring to their clients. Faced with their own challenges of running their own businesses through the pandemic, the findings demonstrate that brokers were able to adapt and stay in close communication with their clients, and as the report identified, “going above and beyond” helping clients identify where they were covered, what support was available and finding ways to ensure they were able to retain their insurance.”

“The role brokers can play in resilience and mitigation is also highlighted and will continue to be an evolving dynamic,” Kewin added.

A copy of the report is available on the IBCCC website.

For breaking news and updates curated specially for insurance brokers please visit: niba.com.au/articles

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NEWS / Industry Bulletin

CYCLONE REINSURANCE POOL LEGISLATION PASSED

O

n Tuesday 29 March, the Federal Government’s Cyclone Reinsurance Pool legislation was passed through the Senate, paving the way for the establishment of a Reinsurance Pool to cover property damage, as a result of a declared cyclone event and/or related flooding.

In light of the flooding in parts of Queensland and Northern New South Wales, an amendment was proposed by the Greens to expand the Reinsurance Pool to provide

broader flood cover, however, the majority of the Senate voted against it, citing possible delays to the 1 July 2022 implementation date.

The idea, however, has not been ruled out entirely with Labor indicating that they would be willing to consider the expansion of the pool during the statutory review process.

The pool, which will be operated by the Australian Reinsurance Pool Corporation (ARPC), will provide reinsurance cover for domestic and small business properties, as well as mixed-use strata properties when

at least 50 percent of floor space is used for residential purposes.

With the legislation now passed, the industry has called on the ARPC to release its pricing schedule to allow insurers sufficient time to communicate with policyholders as to the level of relief they will receive.

The Federal Government has previously announced that policyholders could receive a premium discount of up to 46 per cent with even greater discounts flagged for strata properties.

QUALITY OF ADVICE REVIEW ISSUES PAPER RELEASED

T

he independent reviewer appointed to oversee the Federal Governments’ Quality of Advice Review has released an issues paper, calling for industry and public feedback on a range of issues affecting the general insurance, life insurance and financial advice sectors.

The paper which was launched by the independent reviewer, Ms Michelle Levy, late last month argues that quality and accessibility, and affordability are not mutually exclusive concepts but rather can both be supported by a simpler regulatory system.

These comments are in keeping with the review’s objective of determining how changes to the regulatory framework could better enable the provision of high-quality, accessible and affordable financial advice.

In addition to considering the regulatory framework surrounding advice, including carveouts from conflicted remuneration and safe harbour obligations, the review will also consider issues such as underinsurance, personal, scaled, and general advice models and whether current disclosure documents should be amended.

Submissions to the issues paper close on 3 June 2022, with the final report to be provided to the Government by 16 December 2022.

NIBA has been working hard behind the scenes over the last few months, preparing for the review. Regularly engaging with Treasury, the review secretariat, as well as current and Shadow Cabinet Ministers. To find out more about how you can support NIBA’s advocacy work surrounding the Review, visit www.niba.com.au/advocacy/.

For breaking news and updates curated specially for insurance brokers please visit: niba.com.au/articles

NIBA.COM.AU / 15

NEWS / Industry Bulletin

INDEPENDENT REVIEW OF STRATA INSURANCE PRACTICES RELEASED

I

ndustry expert John Trowbridge has released an independent consultation paper to review current strata insurance practices. The independent review, which has been commissioned by the Steadfast Group, will be undertaken in three phases to evaluate the strata insurance-related elements of strata management, insurance broking and insurance underwriting.

The independent consultation paper is the first phase of the review and outlines the disclosure practices of intermediaries and is aimed at overcoming the limited understanding of current practices.

John Trowbridge said, “The market structure for strata insurance is different from that of all other insurances because of the multi-owner nature of strata properties and the participation of strata managers in the chain from insurer to client.”

“This paper is aimed at generating an understanding of current practices, a critique of those processes and

proposals for improved future practices,” added Trowbridge.

The second phase of the independent review will include possible reforms to remuneration and other intermediary practices and the third phase will include competition, affordability and availability of strata insurance.

CLOSING DATE FOR SUBMISSIONS AND DISCUSSIONS If you wish to respond to any of these questions or to any other aspects of the paper, please contact Mr John Trowbridge, john@trowbridge.com.au.

Closing date for submissions and completion of discussions is Wednesday 20 April 2022.

Once submissions have been received and any discussions held, a subsequent report will be prepared with findings and proposals or recommendations for stakeholders.

A copy of the independent consultation paper is available at niba.com.au/articles/

EXTENSION OF APPRENTICESHIP WAGE SUBSIDY PROGRAMS UNTIL 30 JUNE 2022

T

he Federal Government has announced an extension to the Boosting Apprenticeship Commencements (BAC) and the Completing Apprenticeship Commencements (CAC) wage subsidy programs until 30 June 2022.

The benefits provided by the BAC and CAC wage subsidies are:

BAC •

Employers receive a 50% wage subsidy of the eligible Australian apprentices’ wage in the first year, at a maximum value of $7,000 per quarter, per apprentice.

CAC •

Employers receive a 10% wage subsidy of the eligible Australian apprentices’ wage in the second year, at a maximum value of $1,500 per quarter, per apprentice.

• Employers receive a 5% wage subsidy of the eligible Australian apprentices’ wage in the third year, at a maximum value of $750 per quarter, per apprentice.

For more information about these programs, please contact the NextGen Jobs team.

For breaking news and updates curated specially for insurance brokers please visit: niba.com.au/articles

16 / INSURANCE ADVISER APRIL 2022

PROFESSIONALISM / Quality of Advice Review Update

QUALITY OF ADVICE REVIEW UPDATE

NIBA has been working hard over the past few months preparing for the upcoming Quality of Advice Review.

In addition to working with Treasury to facilitate industry data collection, and meeting with the Federal Minister for Finance, Michael Sukkar MP to discuss the review, NIBA has also enlisted the help of our members to brief Federal MPs and Senators on the role insurance brokers play in ensuring all Australians have access to quality risk advice.

To assist members with these conversations, NIBA has developed a Member Advocacy Pack to guide members through these interactions. Members who would like to be involved can do so by contacting NIBA’s Policy Manager, Allyssa Hextell at ahextell@niba.com.au.

TERMS OF REFERENCE

NIBA previously provided a submission to the Treasury’s Quality of Advice Review draft Terms of Reference. The draft Terms of Reference, which were released late last year, highlighted the Quality of Advice Reviews’ focus on issues affecting the affordability and accessibility of advice.

In particular, it focussed on how changes to the regulatory framework could better enable the provision of high-quality, accessible and affordable financial advice.

After consulting with members, NIBA identified no major issues with the Review’s draft Terms of Reference, however, took the opportunity to encourage a holistic review of the advice sector.

NIBA’s submission noted that previous Reviews into various aspects of the

provision of advice had neglected to consider issues relating to the provision of insurance and risk management advice.

The submission argued that given the increase in the rate of underinsurance in many parts of Australia, and the difficulties consumers face when trying to obtain appropriate insurance, it is vital that risk advice is considered under the general umbrella of financial advice, not just in relation to recommendation 2.6 of the Royal Commission.

ISSUES PAPER

Late last month, Treasury released an issues paper seeking feedback on a range of issues affecting the general insurance, life insurance and financial advice sectors.

The issues paper expands on the Terms of Reference, which were released earlier in the month.

Broker commissions will be an important issue for NIBA and its members, with the review seeking to determine

whether ‘the exemption from the conflicted remuneration ban results in poor quality advice and consumer outcomes’. The review will also consider whether there are more targeted ways to address consumer harm than banning commissions.

Focusing on issues relating to availability and affordability, the review also raises such issues as underinsurance, the increasing cost of compliance, which is ultimately borne by clients, and whether the current regulatory framework, including disclosure documents, could be amended to promote access to quality, affordable advice.

While the issues paper asks several questions for feedback, the independent reviewer Michelle Levy has indicated that the paper is just one part of the consultation process. Submissions to the issues paper close on 3 June 2022, with a final report to be provided to the government by 16 December 2022.

“Given the increase in the rate of underinsurance in many parts of Australia, and the difficulties consumers face when trying to obtain appropriate insurance, it is vital that risk advice is considered under the general umbrella of financial advice, not just in relation to recommendation 2.6 of the Royal Commission.”

NIBA.COM.AU / 17

PROFESSIONALISM / AFCA Case Study

OPERATING UNDER A GENERAL ADVICE MODEL

This is a good example of where a broker has successfully operated under a general advice model by properly informing the complainant that only general advice and not personal advice was being provided and acting consistently with this. In such a case, the onus is on the complainant to ensure they have adequate insurance in place for their needs.

KEY LESSONS •

•

•

•

Make sure the client is clearly informed they are only being given general advice. That is, you are not taking into account their objectives, financial situation or needs, including on each renewal. It is important to act consistently with this, so you don’t lead them to believe otherwise.

Make sure you tell the client, including on each renewal, to check that the policy is accurate and that the sums insured are appropriate. Warn them that they could be underinsured if they fail to do so.

If you acquire details from the client relevant to their circumstances and the insurance in question, this may lead them to reasonably believe they are receiving personal advice unless you clarify otherwise.

If the complainant ever asks you to comment on the adequacy of the cover in place, to stay within the general advice model you need to clearly advise you are not able to do so, or if you wish to provide personal advice proceed on that basis.

BACKGROUND FACTS

The complainant had purchased income protection insurance through the broker in 2016. In May 2021, the complainant had made a claim on the policy due to illness, which was accepted by the insurer, entitling them to a weekly payment of $700.

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However, the complainant complained that the weekly benefit was well below his actual pre-disability income and sought compensation from the broker regarding the difference between the policy’s weekly benefit amount and his actual weekly predisability income.

The complainant alleged that the broker had breached its duty of care by failing to arrange income protection insurance with an appropriate level of cover causing him a loss.

The complainant stated that: • he had declared his income to the broker every year • the broker should have informed him that: o!the weekly benefit amount provided by the policy was well below his real weekly income, such that he was significantly underinsured o!as a result, the policy was not fit for its intended purpose (to cover actual loss of income), and o!the complainant could and should have increased the weekly benefit amount • after the insurer had confirmed his claim was to be covered, he asked the broker if the benefit amount could be increased, only for the broker to advise that moving forward, the amount could be increased, but not for the purpose of the claim.

The broker argued that it was not in breach of its duty of care to the complainant and not liable for the complainant’s loss because the policy was set up and renewed

BY MARK RADFORD

Principal, Radford Lawyers

in a general advice model as the complainant instructed and the broker had not advised on suitability. In such a case, the onus was on the complainant to ensure he had adequate insurance in place for his needs.

Of note, the broker provides the following relevant information in support (in relevant email correspondence): • the complainant had been informed that the broker had been operating under a general advice model and the broker had emailed a quote to the complainant on the same day recording a proposed weekly illness benefit amount of $700, and included a general advice warning in the email • the complainant had accepted the income protection quote without requesting any changes • on 12 April 2016, the broker had emailed the complainant a copy of the income protection policy schedule and certificate of insurance, the broker’s financial services guide and the broker’s tax invoice: o!this email had also included a link to important notices relating to the policy o!the documents and important notices included a number of general advice warnings. The email had also informed the complainant ‘it is essential that you take the time to read the information and contact us if any aspect requires clarification’.

• prior to the expiry of each annual policy, the broker had emailed the complainant an offer to arrange

PROFESSIONALISM / AFCA Case Study

•

•

automatic renewal of the policy, including confirmation that the weekly benefit was $700, which the complainant had never amended: o!the email had also requested that the complainant make sure the details ‘are correct, sums insured appropriate, and you are aware of the important information/notices which can be viewed and/or printed via the links below’. A general advice warning and a statement that the broker relied on the complainant to ensure the information it held was accurate and complete, requesting the complainant to notify the broker of any changes in circumstances, had also been included. for the policy period in which the complainant had made the illness claim, the broker’s renewal email had included the following: o!‘We have prepared this policy using the information you have provided. We have not independently verified the information you have provided. We rely entirely on you to ensure the information you provide us is accurate and complete. Please review the attached information and contact us if it is inaccurate or incomplete in any way. If any of your information is inaccurate or incomplete, our policy may not be appropriate for you, and you may not be able to rely on your insurance.’ the complainant had never asked the broker for personal advice on

•

the level of income protection he should have taken out, and the broker received from the complainant turnover (but not income) figures, but these had only been provided for the purpose of his public liability insurance.

•

•

AFCA DECISION

AFCA was not persuaded that the broker had breached its duty of care to the complainant and concluded that the broker had provided general advice rather than personal advice.

The complainant was told it was up to him to make sure the cover was adequate and met his needs and did not increase the benefit amount despite having the opportunity to do so.

AFCA noted the following in support of its conclusion: • the broker had not acquired the details of the complainant’s income and only had details of his turnover • those details had been provided for the purpose of his public liability insurance, a coverage very different to and separate from his income protection insurance

• •

•

the broker had informed the complainant that it was providing general advice in relation to his income protection insurance and was not taking into account his objectives, financial situation or needs the broker had told the complainant to check that the policy was accurate and that the sums insured were appropriate and warned that he could be underinsured if he failed to do so at no stage had the complainant ever asked the broker to comment on the adequacy of the cover in place although the complainant had referred to requests for verification of income by an accountant, these requests related to the insurer’s proof of claim requirements rather than the setting up and renewal of the policy by the broker the fact that the benefit amount could be increased, did not establish that the broker should have advised the complainant to do so as the broker had operated under a general advice model.

“The broker argued that it was not in breach of its duty of care to the complainant and not liable for the complainant’s loss because the policy was set up and renewed in a general advice model as the complainant instructed and the broker had not advised on suitability.”

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COVER STORY / Driving Future Value

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Driving future

value

As Australia emerges from one of the most tumultuous periods in recent history, the NIBA Board has set the agenda to help brokers do what they do best – deliver for clients.

BY MICHELLE DUNNER

A

ppointed at the mid-point of Australia’s worst COVID-19 -related restrictions in February 2021, which impacted brokers and their clients across the board, and during a seemingly entrenched hard insurance market, NIBA President Di Phelan could be forgiven for thinking the challenges facing insurance brokers could not get any greater.

“It was certainly a busy year,” Di recalls. “We had some critical projects, which have now come to fruition, but the many hurdles and barriers all brokers have had to face means a changing agenda is now the norm.”

One of Di’s first ‘big ticket items’ on becoming President was finding a replacement for long-serving NIBA Chief Executive Officer Dallas Booth. “This was a daunting task and certainly not one I completed alone,” she says. “The subcommittee charged with the responsibility embarked on an extensive process which led to the appointment of Philip Kewin and the Board is delighted with the smooth transition that ensued – a credit to both Dallas and Phil. The experience Phil brings to the role means that he has been able to hit the ground running since taking over from Dallas in November and I could not have hoped for a better outcome.”

With the new 2022 Insurance Brokers Code of Practice, which was launched on 1 March and coming into effect on 1 November, Di urges brokers to engage with the

implementation guidance and support NIBA has put in place to ensure compliance. The heightened regulatory scrutiny on the industry, however, is just beginning.

“The work NIBA is now undertaking on the Federal Government’s Quality of Advice Review is our next vital project,” Di says. “We need all our members to respond when we seek input and action as the review progresses.

Successful outcomes for both projects by the end of the year is certainly a key objective for us.”

Di says the words “resilient and proud” come to mind when she thinks of how brokers responded to the challenges of the pandemic and extreme weather events “When the pandemic hit, many brokers moved to completely working from home within a few days, while being inundated with client queries,” she says. “Many clients were so scared of losing their businesses overnight and I know there was an immediate reaction of people wanting to cut costs without a thought to the risk involved.

“But brokers maintained their focus on clients and what would help them through this. We should all be so proud of the way brokers went above and beyond and adapted to the change thrust upon them.

“The challenging hard market, which we all continue to experience, just added another layer of difficulty. I’m not just referring to the issues created by a retracting market in some segments and premium increases, but also challenges brokers are facing when claims occur and NIBA.COM.AU / 21

COVER STORY / Driving Future Value

NIBA Board changes At the Annual General Meeting on Tuesday 22 February 2022, the Board reappointed Dianne Phelan as NIBA President. “I am proud to continue to serve as the Association President and thank the Board for their continued confidence in me,” said Di. Gary Okely was elected as NIBA Vice President. The NIBA Board also thanked former Vice President, Ward Dedman for his significant contribution to the Board. Ward did not stand for re-election as WA Director and the Board will consider the appointment of an interim Director in due course.

“It was with great sadness that the Board accepted Ward’s decision not to stand for reelection. He has been a long-standing Board member who has given his time freely for the betterment of insurance broking in Australia.

He has always been a proactive Board member and was a great support to me during the last 12 months, as Vice President. We will miss Ward’s valuable contribution and cannot thank him enough for the time he has dedicated to NIBA. Whilst sad to lose Ward, Gary has also been a long-standing Board member who has already contributed so much to the Board, including chairing the Finance Committee. Gary brings a wealth of knowledge and Board experience to the Vice President role and I look forward to working more closely with him over the next twelve months,” Di added.

Stella Pruscino from Edgewise Insurance Brokers has been appointed to the NIBA Board and replaces Graham Stevens as the VIC Divisional Director who has retired from the Board after 15 years of service. The NIBA Board acknowledges Graham’s service to NIBA and is appreciative of his enduring commitment to the Board.

“The enormous commitment and passion Graham has for insurance broking and NIBA is evident to us all, and I am extremely grateful that Graham was willing to share this commitment and passion with NIBA. He has served as the President of not only NIBA, but also the World Federation of Insurance Intermediaries and has represented Victoria on the NIBA Board for longer than most others. His contributions and many qualities will be sorely missed. Whilst sad to lose Graham, I am excited to welcome Stella to the NIBA Board and look forward to working with her. Commitment to NIBA is not new for Stella who has been a long serving member of the Victorian NIBA Committee, chaired this Committee and has been a passionate advocate for the great work that this Committee does, not just for Victoria but all states with driving initiatives, such as the traineeships,” Di added.

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the difficulty in trying to resolve matters and obtain the best possible outcome.

“In these times, the conversations with clients can be difficult; why has a premium increased so dramatically or why they haven’t been invited to renew their policy when there haven’t been any claims. These discussions take place across the country every day.

“Brokers have had a prolonged period of being the bearers of bad news and shouldering client frustration.

They have had to build a level of resilience that might not have been there two years ago. That saying of ‘what doesn’t break you makes you stronger’ is never truer than right now.

“It is heartbreaking to watch the devastation people are going through with the flood emergency, not once but in many cases twice. Even if the insurer’s claims teams were fully resourced, that will not be enough to repair the damage in a timely manner when trades and supplies are insufficient to cover the demand. Helping clients to navigate through this time will require even more resilience and I have no doubt that brokers will continue to rise to these challenges.”

Looking at what NIBA needs to do to support the industry’s professional standing and evolution, Di says the Board is constantly looking for ways to support broker professionalism. “The 2022 Insurance Brokers Code of Practice is an example of this,” she says. “We recognise that for insurance broking to be a

Ward, former NIBA Vice-President who retired from the NIBA Board this year after seven years of service, says a lot of NIBA’s work “goes unsung”. “NIBA has elevated the understanding of the role brokers play in the awareness, management, mitigation and transfer of risk.

There remains a lot more to be done, but we’ve made great headway in recent years.

“I’m particularly proud that NIBA has a strong strategy that will stand the industry in good stead as we make these key transitions. We operate in a complex and sophisticated market and the broad role brokers need to play takes a lot of skill, knowledge, determination and organisation.”

Those sentiments are echoed by Edgewise’s Graham Stevens, who also retired from the NIBA Board this year after 15 years of service and is a former President. “We have a lot of issues that NIBA needs to play a key role in so that brokers can continue to do a sensational job for their clients. In times as we’ve just gone through you can count on brokers to do what they do best – look after the client.

“NIBA’s performance on advocacy, particularly in the past few years, has been strong; we’ve certainly needed that given the regulatory scrutiny.

“If I had one wish for the industry at the moment it is that brokers truly recognise the work NIBA does for them. We must also ensure we fund NIBA appropriately because we have several battles coming over the hill that need to be fought.”

“We should all be so proud of the way brokers went above and beyond and adapted to the change thrust upon them.”

– DI PHELAN, NIBA PRESIDENT profession we must promote and support education and qualifications that go beyond the law.

“The drive for all brokers to hold the minimum education standard of a Diploma of Insurance Broking and reinvigorating the importance of being a Qualified Practising Insurance Broker (QPIB) is very dear to my heart. For QPIB to be a qualification that is recognised by clients as being one that demonstrates an individual’s level of experience and study, and an ongoing commitment to education and professionalism can only be a good thing for insurance broking in Australia.”

EBM Chief Executive Officer, Ward Dedman agrees and says ensuring the continued professionalism of the industry is a core value for everyone who has served on the NIBA Board. “When I look at all the people who’ve volunteered to contribute to NIBA over the years, it has never been about personal gain or individual company benefit. There’s a real desire to improve and make sure our value is well understood in the community.”

BROKER OF THE FUTURE

Di Phelan says NIBA’s strategy review in late 2020 documented the vision for the broker of the future. “There is no doubt in my mind that the role of an insurance broker will become more critical, but it is likely to look somewhat different by 2025 than it does right now.

“AI will be a challenge and will no doubt be used by competitors and new entrants into insurance, as they try to replicate the advice and risk management services brokers already provide.

“But AI won’t be at the client’s premises, walking around with them, seeing things that the client did not think were relevant or forgot to mention. AI won’t build relationships that span over decades. There is a place for AI and it can and should be embraced by brokers, to improve their efficiency, to provide services that might not otherwise be possible.

“I think risk management will become even more important and there are opportunities for brokers to be at the forefront of product change as well. Parametric insurance has been around for quite a while but is only recently something that is talked about quite often as a possible solution.

“Brokers need to be open to finding and exploring different solutions and forms of risk management. But to be able to do this, we need to have willing partners who have an appetite for change, as well as develop and provide solutions to our clients’ major problems with availability and affordability top of mind.”

NIBA.COM.AU / 23

COVER STORY / Building respect

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Building

respect New NIBA Vice-President Gary Okely has a clear ambition for the industry – to receive greater acknowledgement across the broader community for the breadth and depth of its advisory services.

BY MICHELLE DUNNER

O

ver his long career, Gary Okely has seen the broking industry mature and transform, and credits NIBA in playing a key role to drive continuous professionalism. But the challenge he sees ahead is to attain widespread community recognition for the strategic role brokers play in advising their clients.

“Our industry goes from helping families, to advising the country’s biggest corporations,” Gary says.

“When I look at the impact of the work we do with businesses of all sizes, our services and advice have significantly progressed.

“As well as advising on risk protection, brokers bring risk management advice, actuarial knowledge, claims management and expertise. We have evolved into professional advisers rather than insurance transactors.

“I believe that we should be given the same respect as the big advisory firms such as KPMG or PwC. The work we do is of equal standard and individual clients see us as their trusted advisers, but we need to build this reputation more across the general population. That will allow the broking industry to gain greater respect, recognition and be recognised as a career choice that is attractive to the next generation of talent.”

Now the Head of Public Sector for JLT Risk Solutions (part of Marsh McLennan), Gary says mentoring younger brokers remains a priority for the industry. “Reflecting back over my career, I was fortunate to have numerous senior people offer their time to guide and support initiatives that I was working on. Formal and informal

mentoring programs remain equally as important today as the industry faces new challenges, and we work together to drive further improvements for our clients.

“People who joined the industry over the past decade had not experienced a hard market cycle, so when that started three to four years ago and then the pandemic hit, real support was needed to learn from the more senior advisers.”

“People who joined the industry over the past decade had not experienced a hard market cycle, so when that started three to four years ago and then the pandemic hit, real support was needed to learn from the more senior advisers.”

Gary says the learnings from times like when HIH collapsed in March 2001 (still Australia’s biggest-ever corporate failure) were very valuable when advising clients during the recent hard market. “When HIH collapsed, access to insurance for a huge number of people became virtually impossible to obtain, particularly for things like liability insurance for community events, which became almost uninsurable overnight,” he says.

NIBA.COM.AU / 25

COVER STORY / Building respect

I did; that experience put things on a much more serious footing for me.”

Gary has spent a considerable part of his career working with public sector entities and not-for-profits.

“There have been significant issues and challenges with local government for many years, which initially was seen as a challenging risk for insurers – many of whom walked away from the sector. One of the things I’m very proud of is being involved with creating and developing mutual risk products for the local government sector.

“It was a very successful model and offers value to both clients and insurers and has been expanded well beyond local government. As part of working with governments, I was asked to look at the not-for-profit sector – mainly community level organisations like table tennis clubs, progress associations. A grouped approach there also helped enable affordable, easy-to-utilise insurance.”

Gary encourages everyone working in the industry to live by the mantra of always putting their client first.

“Having a deep understanding of your client’s business and their needs comes before anything else. Without that, it is challenging to match the right protection and services to their needs.”

“It changed our industry forever because you could no longer have a transactional approach; you had to differentiate the risk and that meant understanding your clients’ businesses in detail. It reinforced the value and professionalism of brokers in advising clients and finding a solution to protect that business.”

Based in Adelaide, Gary says the South Australia insurance market provides ‘brilliant development opportunities’. “Being a small market economically, you have to find innovative and effective solutions to win and retain clients. The other side of working in a smaller economy is that professionalism is critical. There is nowhere to hide and your reputation for doing the right thing, or not, is very quickly known.

“Taking the knowledge you get in a place like Adelaide and applying it to a larger marketplace has been enormously successful for a lot of very senior people in our industry.”

Moving to Hong Kong with JLT in 1990 was another formative experience for Gary. “I think it was the moment I truly realised I had a career in insurance, not just a job. Up to that point I’d been in the industry seven years and was basically just having fun with what 26 / INSURANCE ADVISER APRIL 2022

“Having a deep understanding of your client’s business and their needs comes before anything else. Without that, it is challenging to match the right protection and services to their needs.

“The other thing I would say to anyone starting out in our industry is to be inquisitive and answer ‘yes’ to everything. Take every opportunity you can.”

Having served on the NIBA Board for several years, Gary says he didn’t anticipate becoming Vice-President, but is excited about NIBA’s ongoing role in building a sense of community and identity for the industry.

“Our business is very relationship oriented, and we suffered during COVID-19 in not being able to get together. NIBA has always helped to create a community that facilitates networking, educates and advocates for the industry. Industry advocacy has been and will continue to be a particularly critical focus as we progress through the various stages of financial services reform and heightened regulatory scrutiny.

“I’m very excited to take the Vice-President role. It’s an exciting time ahead, with both NIBA and the industry being made up by some great people. We all have a lot to look forward to.”

Tenacity, transparency, Tenacity, Transparency, Results / COVER STORY

results After more than 30 years in the insurance industry, Stella Pruscino says a commitment to professional development remains fundamental to a bright future for broking.

BY MICHELLE DUNNER

W

ith demand for talent in the insurance industry reaching a peak, recently appointed NIBA Director, Stella Pruscino says the issue is not so much about the mooted “great resignation” but, rather, the “great exhaustion”.

The Melbourne-based Account Director and shareholder at Edgewise Insurance Brokers has come through the city’s prolonged lockdowns with her passion for the industry undimmed. Now, Stella is keen to assist NIBA in taking the promotion of broking as a profession to new heights and attracting the best and brightest.

“NIBA has always played a strong role here,” she says.

“But we are seeing an enormous need to attract and retain talent, especially after what we’ve all gone through over the last two years.

“I’m proud that NIBA is addressing this; with sub-committees being set up among the different state chapters to work together on attracting talent and upskilling people within the industry.”

Having progressed through the ranks to become one of the industry’s most knowledgeable advisers, Stella knows the value of mentoring and support. “COVID-19 changed all that; we need to find a way of continuing to develop people while we work in a hybrid environment,” she says. “Being around peers, having access to mentors five days a week is very important. When I look at the graduates who’ve come into the industry in the last couple of years, they haven’t had the same guidance, the same formal training and development. How we respond to this is a big challenge.”

The talent issues have come at a time of unprecedented claims activity. “It has been two years of confronting unknowns, with a landscape that changes from one week to the next,” Stella says.

“Even just looking at what we saw in Victoria, we had bushfires leading into COVID-19, then the earthquake in Melbourne and storms. The demand on the supply chain across the industry is something I’ve never seen before;

“The demand on the supply chain across the industry is something I’ve never seen before; tradies were being asked to head to NSW and Queensland when there were five-month-old earthquake claims not finalised here.” tradies were being asked to head to NSW and Queensland when there were five-month-old earthquake claims not finalised here.

“Brokers have been at the forefront of managing client expectations – as well as the insurers, the assessors, the supply chain delays. They’ve had to negotiate additional consideration for businesses trying to rebuild before the indemnity periods run out.

NIBA.COM.AU / 27

COVER STORY / Tenacity, Transparency, Results

28 / INSURANCE ADVISER APRIL 2022

“And on top of that, we’ve had to deal with a significantly enhanced compliance regime – Target Market Determinations and the focus on remuneration in terms of commissions versus fees. These have all placed demands on brokers we haven’t seen before.

NIBA’s role is to help brokers navigate through the changes and ensure all brokers are represented from the internationals through to the independents.”

But opportunity has come out of crisis. “The benefit of all we’ve been through is the ability to demonstrate the importance of what a broker does. We’ve seen brokers really step up and I think we’ve ultimately shown as a profession we have moved away from the transactional to become partners in risk management and offer bespoke solutions.”

Since starting her career with Marsh in the 1990s, Stella has lived by a mantra: “Don’t accept what you see at face value,” she says. “Dig down, understand your client.

Find out what their drivers and motivations are. That is what has driven me to look for something different, to find the best possible solution.

“I’ve always been passionate about what I do – in the industry and the things I’ve been involved with outside insurance. When my boys started playing sport, I had to do more than just drop them off at Auskick. I volunteered, became the coordinator and then the coach. Every time I’ve not been happy with the way things have unfolded, my attitude is you step in and try to change it.

“That’s what led me to joining the NIBA Victorian Committee nine years ago. Don’t point fingers from the outside – get in there to be part of the decision making.

One thing that was evident to me very early on was a need to get broad opinions around the table, so we worked on restructuring the Committee to get representation from every group, be it international, cluster or independent – every aspect of broking.”

Looking over her career to date, Stella counts her presentation at a global OECD conference on terrorism as among her proudest moments. “If anyone in the industry wants to talk about terrorism insurance, I’m very likely the first person they think of,” she says. “I presented on the Terrorism Insurance Act at the conference, which was in Canberra, and the perceived gaps. Every three years they call for a review of the Act and I submit a paper on the need to include non-physical damage – and I did that again just recently. I believe in a constant approach until we achieve what needs to be achieved. If you care about something enough, you have to keep pushing that barrow until you see an outcome; I won’t rest until we get a solution for the gaps that currently exist in this cover and we have parity with the likes of Pool Re.” Stella says she is proud to give back to the industry through her involvement with NIBA. “NIBA gives us all

“I believe in a constant approach until we achieve what needs to be achieved.

If you care about something enough, you have to keep pushing that barrow until you see an outcome.” a voice – there’s so much work it does in the background, championing issues on behalf of all brokers. The learning and development opportunities it provides as well are hugely important.”

Upskilling is close to Stella’s heart. “I completed the Australian Institute of Company Directors course and have been on not-for-profit boards over the last nine years. It has been incredibly valuable for me to be able to understand client needs on governance and risk, and to be able to communicate in their language. It takes my interaction away from being purely about insurance to a business discussion. This is a skill that holds true for clients at all levels – from Board members to sole traders.”

For the new generation of advisers coming into the industry, Stella offers a key piece of advice. “Trust those around you and ask questions. When I started, I was told I needed to learn to walk before I could run. I was so gung-ho, I wanted to consume all the information I could at once but the lesson was I need to learn patience – so that when I inevitably got to a hurdle, I wouldn’t trip over it. Knowledge is one part of that, but having the right people around you is also very important in getting back up and going again. I’ve been blessed with mentors such as Graham Stevens who has challenged and guided me over many years. Relationships are key, with peers, insurers, third-party providers and clients.

“Everything we do needs to continuously revolve around how we can add value for our clients. We have the opportunity to build communities by creating links between clients that may have no direct insurance involvement but deliver value to the client and how they manage and build their businesses.

“And within broking, we can constantly improve and give our people as much opportunity as possible.

Just recently the NIBA Victorian Committee discussed Diversity and Inclusion (D&I) with a view to working with other states to look at additional programs we can implement. D&I means different things to different people – it might be gender, or race, or getting a working mum back to job share with other working mums. For me, D&I is the basis of equality – providing everyone with equal opportunity should be a natural part of every business.”

NIBA.COM.AU / 29

FEATURE / Energy Insurance

30 / INSURANCE ADVISER APRIL 2022

THE THREAT FROM WITHIN Renewables is an emerging market like few others. Protecting clients from risks known and unknown is a challenge for the industry.

As is protecting the market from possibly its biggest threat – which is also its biggest asset.

BY MARTIN WANLESS

NIBA.COM.AU / 31

FEATURE / Energy Insurance

R

enewable energy is in the spotlight worldwide. From declarations and promises at the national and international level to how we use renewable energy in our own lives day-to-day, it’s a sector that’s growing rapidly – and isn’t going to slow down any time soon.

Of course, that brings with it numerous challenges – after all, almost every facet of renewable energy is evolving, improving, changing and innovating every day – and that makes it a challenging sector to insure.

But it’s a challenge that the industry’s stepping up to.

Take equipment, for example.

“For the actual renewable electricity generation equipment, there is a relatively high turnover of new models,” says David Walker, Principal Risk Engineer, General Insurance at Zurich.

“This year’s latest design is superseded within the year by the next enhancement in the highly competitive equipment suppliers’ market. Each new model variant is looking to deliver more efficiency or higher energy output compared to the last.

“This makes it difficult for the insurance industry to track designs or manufacturing defects.”

Daniela Zaccone, Principal, Power & Renewable Energy, Marsh Specialty, says that the world is looking towards Australia to lead the way to a greener future, and as such there are a lot of prototype projects heading to our shores.

32 / INSURANCE ADVISER APRIL 2022

“THE INCREASED INVESTMENT IN THIS SECTOR IS ATTRACTING CONTRACTORS, NOT OTHERWISE INVOLVED, WHO ARE LOOKING TO CAPITALISE ON THE GROWTH TRAJECTORY AND EXPAND INTO THIS INDUSTRY TO ENGINEER OR BUILD PROJECTS FOR OWNERS.” – MATT LANGHAM, PLACEMENT DIRECTOR, NATIONAL POWER & UTILITIES PRACTICE LEADER AT AON “We’re seeing offshore wind turbines and some of the largest battery projects in the world,” she says.

“These require sophisticated risk engineering analysis and working with insurers at the head office level to ensure the technology and support are available at a local level to mitigate this risk.

“Certain off-shore wind technology is quite new and comes with its own profile and set of risks – essentially, it’s a niche within a niche.”

Naturally, when a sector such as renewable energy emerges, companies across the board see it as fertile ground – an opportunity for expansion.

Cynics may say to cash in.

In insurance terms, the sector’s so dynamic and fast-moving it’s probably

only comparable to cybersecurity (which, of course, also affects renewables – more on that shortly), and one of the challenges comes from contractors who may not have the requisite experience needed to work in the complex renewables sector.

“The increased investment in this sector is attracting contractors, not otherwise involved, who are looking to capitalise on the growth trajectory and expand into this industry to engineer or build projects for owners,” says Matt Langham, Placement Director, National Power & Utilities Practice Leader at Aon. “The experience and capability of key contractors undertaking the works are of critical importance,” he says.

Advancing renewables.

Together.

Liberty Specialty Markets is part of a community of committed people and organisations supporting the adoption of renewable energy.

Every technological advancement brings new challenges, and we’re pleased to have helped ensure the smooth implementation of Australia’s hydrogen” facility at Hydrogen Park South Australia.

We look forward to being part of where green energy goes from here.

libertyspecialtymarkets.com.au Liberty Specialty Markets is a trading name of Liberty Mutual Insurance Company, Australia Branch (ABN 61 086 083 605) incorporated in Massachusetts, USA (the liability of members is limited).

For Mutual Advantage

FEATURE / Energy Insurance

“GEOPOLITICAL LANDSCAPE SHIFTS CAN DRIVE UP COST OR AFFECT LOGISTICS, AND WE THEN EXPERIENCE LONGER LEAD TIMES ON PARTS.” – DANIELA ZACCONE, PRINCIPAL, POWER & RENEWABLE ENERGY AT MARSH SPECIALTY

“We have seen several claims and delays on renewable energy projects as a result of faulty workmanship, and extended delays attributable to contractors going bankrupt during the construction process.”

Zaccone says, “It’s a huge risk, as you’re potentially dealing with inexperienced contractors and poor workmanship.”

Langham continues, “Project owners and insurers alike now understand the importance of undertaking a detailed due diligence exercise on key contractors prior to the financial close of their projects.”

Major considerations have to come from a cybersecurity perspective too, with the sector being so reliant on technology.

34 / INSURANCE ADVISER APRIL 2022

“That also has implications from a power grid perspective,” says Abby Hodge, Senior Account Manager at Bellrock.

“Where there are breaches, the roll-on effect – both upstream and downstream – can be huge. Prior to COVID-19, cyber was still in its infancy for renewables – today it’s significant.”

THE SUPPLY CHAIN EFFECT

Supply chains barely seem to have been out of the news ever since COVID-19 struck and the Ever Given got stuck – and this is affecting renewables significantly too, with key equipment lead times ballooning out due to full manufacturing queues and logistics delays causing a significant knock-on effect.

These manufacturing queues have also been

impacted by COVID-19 delays reducing the available workforce to fulfil orders.

“Delays in procuring equipment and reinstating damage are causing insurers to incur disproportionately higher claims values compared to prior years,” says Langham. “Insurers are closely watching declared indemnity periods and waiting periods applicable to cover given this predicament.”

“The products, in particular wind turbines, are incredible sizes, sometimes four to five megawatts, so logistics and installation are critical considerations clients need to be aware of,” says Hodge.

“Clients can’t rely on traditional transit methods as specialist equipment may be needed to transport or install. This may not be readily available, which will have a flowon effect and may delay start up.”

Zaccone points to the war in Ukraine as another example of how the supply chain can impact the industry.

“Geopolitical landscape shifts can drive up cost or affect logistics, and we then experience longer lead times on parts. Not only does it increase costs, but it can also take longer to build a project.”

THE THREAT WITHIN

It’s the ultimate irony in renewables that one of the biggest threats to the sector comes from the very thing it’s reliant upon to fuel the whole thing in the first place. It’s a modern-day Dr Jekyll and Mr Hyde.

But inclement weather is one of the critical issues in this sector – and, as we’ve again seen over recent months, poses risks that are difficult, if not impossible, to mitigate against.

FEATURE / Energy Insurance

“Despite renewables being seen as generating electricity from the weather, extreme weather events are just as bad, if not worse than flat weather events,” says Walker.

“Hot weather will degrade solar panel efficiency and wind turbines will turn out of high winds to shutdown.”

“A feature common to wind farms and hydro schemes is that the electricity generation is typically some distance away from urban populations. Connecting the electricity from the generation to the network requires many kilometres of poles and wires. Extreme weather can challenge this, with the ever-present bush fire exposure, but also heavy rain washing out poles or mild earthquake tremors causing the poles to slide down hillsides.”

36 / INSURANCE ADVISER APRIL 2022

Zaccone agrees, “the resilience of projects is critically important.”

“An event that was once a one-in-500year event is now a one-in-100-year event.

From flood levels and lightning strikes to hail damaging solar plants, the weather poses huge risks,” she says.

Of course, new projects need to be built with this in mind, however, Walker is concerned this isn’t par for the course.

“A more emerging concern, and common to all new construction projects, is that the civil design guidance is based on current weather knowledge and current building regulations,” Walker added.

“At Zurich, we are finding on new construction projects, compliance with the building codes does not necessarily take

“DESPITE RENEWABLES BEING SEEN AS GENERATING ELECTRICTY FROM THE WEATHER, EXTREME WEATHER EVENTS ARE JUST AS BAD, IF NOT WORSE THAN FLAT WEATHER EVENTS.” – DAVID WALKER, PRINCIPAL RISK ENGINEER, GENERAL INSURANCE AT ZURICH

FEATURE / Energy Insurance

TIPS FOR BROKERS IN THE RENEWABLES SPACE “COMPLIANCE WITH CURRENT BUILDING CODES WILL NOT NECESSARILY BE ADEQUATE FOR THE PROJECT OVER THE LIFE OF THE ASSETS. WHAT MIGHT NOT BE CONSIDERED TO BE IN A FLOOD ZONE TODAY, MIGHT BE TOTALLY DIFFERENT 10 YEARS FROM NOW.” – DAVID WALKER, PRINCIPAL RISK ENGINEER, GENERAL INSURANCE AT ZURICH into account local land topology. An example came up recently where a new build was compliant with the building regulations but being next to a rural hillside and dried out creek bed, suggested that there may be additional work required to validate the civil design.’’

“Generation assets typically have a design life from 20 to 40 years. Similarly, compliance with current building codes will not necessarily be adequate for the project over the life of the assets. What might not be considered to be in a flood zone today, might be totally different 10 years from now.”

Langham says it is critical to ensure the facilities are designed to mitigate sitespecific natural hazard exposures.

“Depending on the specific exposures, this can include having a detailed bushfire management plan and adequate fire 38 / INSURANCE ADVISER APRIL 2022

breaks for those projects exposed to bushfires, raising key equipment above one-in-100 flood zones for those projects in flood-prone areas, designing critical equipment to withstand high wind in those exposed projects and having adequate hail management plans for solar projects.

“Even those projects that are not modelling as having above normal exposure to specific perils need to keep these events in mind when constructing their facilities, given the client change phenomenon causing a rapid increase in severity and number of incidents and changing weather patterns.”

It’s certainly a challenging environment, but one that brings huge rewards – and helping to get it right will play a critical role in the world as a whole, achieving the aims and ambitions that future generations will thank us for.

Aon’s Placement Director, National Power & Utilities Practice Leader Matt Langham says understanding your client’s business is never more important in an industry that is continually evolving.

“Some clients own and construct projects in critical natural catastrophe zones – how are they mitigating this risk in the facility design at the outset, and how do they manage this risk during the life cycle of the project? Some clients are contracting unproven, prototypical technology for use in their projects – how do we get insurers comfortable with the technology risk, lead times for spare parts, and the strength of the underlying manufacturer’s warranty?

“It is critical risk advisors who are involved at the start of a project’s life cycle, well before contract tendering commences, to help guide clients through the design phase, to ensure a proper understanding of insurable vs. uninsurable risks, through to contract tendering (and making sure contracts are structured in a prudent manner) and then into program placement.”

Nominations now open for the 2022 Broker of the Year Awards The 10th annual Broker of the Year Awards, proudly sponsored by QBE, are now open for nominations. If you know a colleague or peer who is excelling within the industry, this is your time to show them the recognition they deserve. The Broker of the Year Awards are a fantastic opportunity for top performers. All state winners will receive a $2,000* prize towards their professional development and the national Stephen Ball Broker of the Year Award winner will receive $10,000* for their personal development.

Don’t miss this opportunity. Nominations close Friday 22 April.

Visit the NIBA website for more details about the nomination process and eligibility criteria:

niba.com.au/niba-awards *Conditions apply.

Proudly sponsored by

The waiting game

FEATURE / Professional Indemnity

Professional indemnity continues to be a tough gig, with many professions being difficult to place, capacity and limits reducing, and premiums increasing. Something needs to change – but we could be in for a long wait.

BY MARTIN WANLESS

40 / INSURANCE ADVISER APRIL 2022

NIBA.COM.AU / 41

FEATURE / Professional Indemnity

F “We’ve noticed some insurers have been reviewing their IT books and declining renewals that have been on their books for many, many years.”

– CHRISTIAN GARLING, MANAGING DIRECTOR AT FTA INSURANCE 42 / INSURANCE ADVISER APRIL 2022

or certain professions, simply getting professional indemnity cover is proving increasingly difficult.

Of course, a challenging market for anyone associated with the construction industry is – unfortunately – only to be expected.

But that’s certainly not the end of the story.

“There are other sectors also facing the same issue but aren’t going noticed as much,” says Ben Hastie, Managing Director, Resilium Insurance Broking.

“An emerging key business risk is ‘Silent Cyber’, which refers to cover for losses caused by a cyber event included in non-cyber policies, including professional indemnity. It has led to some uncertainty as to what it will mean for PI insurance going forward – whether cyber-related events may now be excluded under PI policies, which could in turn lead to potential gaps in cover.”

Cyber is an area highlighted by FTA Insurance’s Managing Director Christian Garling as one that is becoming increasingly difficult.

“We’ve noticed some insurers have been reviewing their IT books and declining renewals that have been on their books for many, many years,” he says.

“Recently, we had a local, Australian-based insurer who declined a client that had been on their books for 10 years – they just said sorry, we’re not doing it anymore. They are declining risks that sound non-core or don’t fit the cyber appetite.”

Brokers who place Cyber and IT policies with separate specialist insurers won’t be caught having to replace both policies by this changing of appetite.

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FEATURE / Professional Indemnity

“The biggest challenge in the professional indemnity market continues to be in the consulting engineers and construction industries.”

– MATTHEW MCPHEE, NATIONAL UNDERWRITING MANAGER AT BERKLEY INSURANCE AUSTRALIA

Building and construction is, however, still a tough, tough sector – and one that shows no signs of easing any time soon, particularly as insurers become increasingly concerned with the financial health of the companies involved.

“The biggest challenge in the professional indemnity market continues to be in the consulting engineers and construction industries,” says Matthew McPhee, National Underwriting Manager at Berkley Insurance Australia.

“Claims against structural and civil engineers are difficult and extremely expensive to defend. Similarly, claims against design and construction entities, arising from design/advice errors, are expensive to defend and even more expensive to settle.”

And that continues to impact capacity, appetite and premiums.

“The biggest impact on clients is the increase in PI premiums and availability of cover for structural and civil engineers and design and construction entities,” says McPhee. “As the availability of PI cover has reduced, premiums have increased significantly resulting in higher costs to clients that may not be able to be passed on to the end consumer.”

PLAYING THE LONG GAME

The long tail that naturally comes with professional indemnity policies is putting the brakes on any significant capacity recovery.

“It can be six to 10 years from when you write your policy to when you find out the final cost associated with the policies written in that period, so a change in legislation or a change and exposures doesn’t necessarily flow through the loss ratios for a number of years, and therefore doesn’t flow through the pricing for that period of time either,” says Garling.

PROFESSIONAL INDEMNITY CLAIMS IN ACTIONS

Matthew McPhee of Berkley Insurance Australia describes two recent professional indemnity claims – one successfully defended, another declined.

SUCCESSFULLY DEFENDED CLAIM

The insured was named in a cross claim by a building company in relation to a dispute between the building company and one of their clients. The allegation was that the insured’s drawings and the structural/civil engineers were not fit for purpose, which the insured categorically denied. BIA defended the insured and successfully maintained that not only were the drawings and design absolutely fit for purpose, the insured had not breached their professional duty to the builder or its client. The court found the designs were fundamentally sound and dismissed the allegations against the insured.

44 / INSURANCE ADVISER APRIL 2022

CLAIM DECLINED

The insured received a letter from an aggrieved client in 2019 who complained of errors in the advice they received. The insured took a PI policy with the insurer for the first time in 2020, and as they had never held PI previously, a retroactive date of inception of cover was placed on the policy. In late 2020, the insured received a writ from the aggrieved client claiming damages as a result of the alleged error in the advice provided. The writ referred to the earlier complaint letter when detailing the alleged losses they had incurred. The claim was denied as the matter was a prior known circumstance. That is, the insured knew about the matter before the policy was taken out. Also, the advice that led to the claim was given prior to the retroactive date on the policy.

“QPIB represents competence and the will to strive for excellence.”

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Apply online at niba.com.au or email NIBA Memberships Manager Audi Witsen – awitsen@niba.com.au

D PRAC IE T F I

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QPIB – A STATEMENT OF PROFESSIONALISM

• QUA L

– CAITLIN CARSON, 2019 YOUNG PROFESSIONAL BROKER OF THE YEAR

NCE BR

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FEATURE / Professional Indemnity

“Conversely, when exposures are reduced, it also takes time for those savings in losses to flow through before actuaries and insurers can start to rely on those savings.

“That’s why the insurers that are in it at the moment have got the experience of the loss ratios and know what’s needed to be achieved in premiums to make a profit, which is why we’re at the place right at the moment where everybody is making a sufficient profit, bearing in mind the risk of the professions they’re ensuring.”

Increased capacity and new entrants to the market who are willing to take on that risk are the only routes to changing that status quo, and that’s more likely to happen in the Lloyd’s market than in the local, APRA approved, regulated market.

“It’s quicker and easier to get, and there are fewer barriers to entry,” says Garling.

“But, by the same token, Lloyd’s are still maintaining a fairly tight grasp of their capacity and then not allowing large numbers – or even small numbers – of new players to come in.”

THE NEED FOR A LONG-TERM STRATEGY For brokers, getting renewals in early – particularly where there’s a potential for a change in appetite – is critically important. Increases in turnover, for example, can significantly change insurers’ appetites – and the limits they’re prepared to offer – and, for everyone’s sake, time is needed to find a suitable solution.

“Brokers should always plan, and work, to a schedule that allows for insurer delays and, if anything, act early on

46 / INSURANCE ADVISER APRIL 2022

“Conversely, when exposures are reduced, it also takes time for those savings in losses to flow through before actuaries and insurers can start to rely on those savings.”

– CHRISTIAN GARLING, MANAGING DIRECTOR AT FTA INSURANCE

FEATURE / Professional Indemnity

“The immediate impact of what’s going on in this sector is that rates continue to increase, which in turn leads to coverage being unaffordable, particularly for smaller clients.”

– BEN HASTIE, MANAGING DIRECTOR AT RESILIUM INSURANCE BROKING

48 / INSURANCE ADVISER APRIL 2022

renewals,” says Hastie. “They should also stay in regular touch with underwriters and clients alike, sharing any market status changes with clients as well as other helpful information.

“Having a clear plan of your client’s needs, using a visual description on layers for complex programs, helps to demonstrate in simple terms the reasoning behind your advice.”

However, Hastie foresees things getting more challenging over the coming years, particularly for small businesses.

“The immediate impact of what’s going on in this sector is that rates continue to increase, which in turn leads to coverage being unaffordable, particularly for smaller clients, meaning that some of them cannot trade,” he says.

“That’s a pretty tough situation to be in, and not good for the broader community. I’m a firm believer that, fundamentally, insurance is there to service commerce and industry, and should not be a reason that businesses cease to trade.”

Garling believes that some businesses may be forced to merge with others in order to continue trading.

“We’ll probably see a bit of aggregation in industries,” he says. “Smaller insureds that can’t afford the premium will merge with larger insureds who can afford the premium, and that will hopefully allow for a better quality control among those organisations.”

Until then, we’ll sit and wait.

COMMUNITY HUB

COMMUNITY HUB APRIL 2022

INDEX

The COMMUNITY HUB is your space to showcase your products and services to a specialist audience.

AB Phillips .................................................... 49 ASR Underwriting ..................................... 50 AIBI ................................................................... 51 Australasia Underwriting ........................ 51 Tudor Insurance Brokers .......................... 51

Liberty Special Markets............................ 51 Moran Insurance Brokers........................ 52 MGA Insurance Group............................. 52 Affinity Insurance Brokers ..................... 53 QPIB ................................................................. 53

Pollard Insurance Brokers....................... 54 Wellington Underwriting Agencies.... 54 Newline Group ........................................... 54

WANT TO ADVERTISE IN THE INSURANCE ADVISER? If you’re a NIBA member with a product or scheme you’d like to promote to a broker audience in our Community Hub section, please contact Tony May E: tmay@niba.com.au

COMMUNITY HUB

50 / INSURANCE ADVISER AUGUST 2021

COMMUNITY HUB

�aibi

Adult Industry Business Insurance

WE TOUGH INSURANCE For hard to place business we offer a solution Our Favourite Property Risks Vacant Properties EPS Risks / Distressed or Difficult Occupations Remote and Timber Pubs North Australian Risks Wineries / Woodworkers Waste Recyclers / Plastics Manufacturing Lead / Follow / First Loss / Excess of loss.

Our Favourite Liability Risks Asbestos Removal/Demolition Contractors/Earthmoving Abattoirs / Seafood Processing / Food & Beverage Services to the Mining Industry / Welding & Fabrication Chemicals & Fertiliser Manufacturing Railway Equipment / Industrial Machinery & Equipment The AU Team Alan Mackay Frank Van Rooy Simon Bidey

Property Liability Underwriting

03 9559 3316 03 9559 3310 03 9559 3317

Email Contact: firstname@australasiaunderwriting.com.au isit our AustralasiaUnderwriting.com.au

ebsite:

Benefits of dealing with LSM:

Demolition and Asbestos Removal Liability Insurance Contact us for a confidential review of your clients insurance needs.

$20M Asbestos Liability now available insurer Local claims and underwriting service working closely with you to meet your clients business needs Automatic addition of Errors & Omissions coverage when Asbestos Liability is purchased

service@tudorinsurance.com.au

You can also apply for enhancements when you purchase this policy - coverage for Statutory Fines & Penalties, coverage for Shoring & Underpinning and coverage for transportation of asbestos (clean-up-costs)

(03) 9707 3033

15% commission of all placements

Tudor Insurance Australia Cameron McKerchar tudorinsurance.com.au

NIBA.COM.AU / 51

COMMUNITY HUB

52 / INSURANCE ADVISER APRIL 2022

COMMUNITY HUB

AFFINITY EQUINE, ADVENTURE & LEISURE LIABILITY Abseiling Agistment Archery Bush Walking Camping Campsites Canyoning Caving Team Building

Mountain Biking Orienteering/Rogaining Paddle Boarding Pony Rides Fishing & Boat Cruises Paintball & Skirmish Riding Schools Four Wheel Driving Flying Fox Horse Carriage Driving Rock Climbing Ropes Course Horse Trainers Rowing Sailing Kayaking Equine Events Equine Therapists

Sea Kayaking Scuba Snorkelling Snow Skiing Swimming Trail Running

1300 130 535

“My QPIB designation gives my clients peace of mind that I’m a trusted professional.”

Apply online at niba.com.au or email NIBA Memberships Manager Audi Witsen – awitsen@niba.com.au

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QPIB Campaign Print.indd 4

D PRAC IE T IF

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QPIB – A STATEMENT OF PROFESSIONALISM

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– CRAIG ANDERSON, 2018 YOUNG BROKER OF THE YEAR

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25/1/22 12:48 pm

NIBA.COM.AU / 53

COMMUNITY HUB Wellington Underwriting Agencies specialise in labour hire/recruitment, complex liability risks and niche property solutions.

Labour Force includes Broadform Liability, Professional Indemnity and Management Liability and has been developed for: • labour hire companies • recruitment companies • group training and registered training organisations Our Combined General Liability wording has been tailored for complex risks including: • construction • manufacturing • rail • resource sector; and • other hard to underwrite risks Wellington’s Property capabilities are focussed on niche exposures including: • catastrophe-exposed properties • mining sector

Contact our Underwriters today or visit our website at

www.wellingtonu.com.au

Key Liability Industries:

Key PI Occupations:

Key FI Occupations:

• Alternate & Complementary medicines • Automotive • Biotechnology • Clinical Trials / Research • Defence – machinery, weaponry & protective equipment • Life Science / Pharmaceuticals • Medical & Surgical Devices (including invasive implants) • Medical Cannabis • Medical Equipment / Products • Mining • Rail, Products, Maintenance, Locomotive Engineering, operators, Rolling Stocks & Engine Manufacturers • Tyres – new, re-threading, lugging, repair & sales • Universities • Veterinary Medicines

• Accountants • Architects • Engineers • Environmental Consultants • Insurance Brokers / Underwriting Agencies • Law Firms • Management Consultants • Miscellaneous Risks • Real Estate Agents • Valuers

• Fund Managers/Investment Managers • Insurance Companies • Managed Investment Schemes • Excess lines for Financial Planners

Key D&O • Insured firms can be not-for-profit, privately held or publicly traded • Side A/DIC placements • Medical Cannabis risks • All industry sectors, both commercial and financial, are underwritten

Key Crime Commercial Crime Insurance is also offered alongside other Financial Lines products

Linda Sepala Underwriting Manager - PI

Underwriting Manager – D&O & FI

PH: 03 9998 1900

Newline Australia Insurance Pty Ltd ABN 81 118 089 651 50 INSURANCE PO/Box 16208 ADVISER Collins StMARCH West 2022 VIC 8007 PH: 03 9999 1901 FAX: 03 9670 0045 newlinegroup.com.au info@newlinegroup.com.au

NIBA / Forthcoming Events

STAY UPDATED!

NIBA EVENTS

NIBA stages a variety of educational and social events across Australia for the whole intermediated insurance community.

EVENTS UPDATE Mark your calendar to meet, share, learn and grow with your industry peers at NIBA events across the country.

SOLD OUT!

kers surance Bro In A IB N 2 2 20 ars ctice webin Code of Pra r scheduled fo The webinars l and Thursday 27 Apri ver Wednesday ld out, howe 5 May are so ing ars and learn in b e w r e h furt s will be opportunitie due scheduled in . course

Check out what’s happening close to yo u and registe r via the events cale ndar at niba.com.a u/ events

Please note in light of COVID-19, NIBA will continue to follow and implement national and state health authorities’ recommendations.

NIBA / UAC Vic Underwriting Expo.

At the Expo, underwriters will exhibit their services to the local broker market and network with fellow industry colleagues. The exhibition is free to attend and offers 2 CPD points to attendees.

2022 NIBA Vic Gala Lunch

WHERE: Crown Melbourne WHEN: Friday 20 May | 12:00 pm – 3:30 pm This year’s NIBA Vic Gala Lunch will return to Crown Melbourne and follow up on last year’s sold out lunch. The event’s keynote will be delivered by famed Australian explorer, James Castrission (pictured below). James’ keynotes and workshops emotionally engage audiences through metaphor, creating a powerful platform to explore mindset, leadership, team dynamics and decision-making.

2022 NIBA WA Gala Lunch

WHERE: Crown Perth WHEN: Friday 8 July The annual NIBA WA Gala Lunch offers a chance to celebrate and unwind after the end of the financial year with up to 500 members of the WA insurance community.

2022 NIBA Qld Gala Lunch

WHERE: Brisbane Convention and Exhibition Centre WHEN: Wednesday 13 July This years’ NIBA Qld Gala Lunch offers brokers the chance to reconnect and celebrate the best talent in the Qld market.

Prior to the lunch, kickstart your day at the NIBA breakfast before walking through the NIBA UAC Qld expo.

2022 NIBA NSW Gala Lunch

WHERE: Crown Melbourne WHEN: Friday 20 May | 7:45 am – 9:30 am CPD: 1 CPD point Prior to the NIBA / UAC Expo, join us in the Garden Room for a light continental breakfast and panel discussion hosted by the Victorian Young Professional Committee. This session offers 1 CPD point to attendees.

WHERE: Doltone House Hyde Park WHEN: Thursday 21 July Join us at Doltone House Hyde Park for a magical afternoon celebrating the industry’s best in broking. The event’s keynote will be delivered by Australian paralympic wheelchair racer and leading coach Louise Sauvage OAM, who is often regarded as the most renowned disabled sportswoman in Australia. She won nine gold and four silver medals at four Paralympic Games and eleven gold and two silver medals at three IPC Athletics World Championships.

2022 NIBA / UAC Vic Underwriting Expo

2022 NIBA SA Gala Lunch

SAVE THE DATE FOR YOUR STATE’S 2022 GALA LUNCH! 2022 NIBA Vic Breakfast

WHERE: Crown Melbourne WHEN: Friday 20 May | 9:00 am – 10:30 am or 10:30 am – 12:00 pm CPD: 2 CPD points After the breakfast concludes head through to the River Room for the

WHERE: Adelaide WHEN: Friday 22 July NIBA’s SA Gala Lunch will bring together all facets of the intermediated insurance industry to celebrate the end of the financial year and look forward to the year ahead.

DISPLAY ADVERTISING INDEX – APRIL 2022 QBE ......................................................... IFC Vero ...............................................................5 CGU ..............................................................7 Brooklyn ..................................................... 9 Technosoft ................................................. 11

Liberty .......................................................33 Ebix............................................................. 35 UAC ............................................................ 37 Broker of the Year ................................39 CBN ...........................................................43

QPIB ..........................................................45 NIBA Mentoring .................................... 47 CGU ..................................................... OBC

If you’d like to advertise your products and services through NIBA, please contact Tony May today on (02) 9459 4303

APRIL 2022 INSURANCE ADVISER / 55

INSURER STRENGTH RATINGS

S&P GLOBAL

INSURER FINANCIAL STRENGTH RATINGS

AUSTRALIA

RATING

NON-LIFE INSURERS AAI Ltd.

AA-/STABLE

Achmea Schadeverzekeringen N.V.

A/STABLE

AIG Australia Limited

A/NEGATIVE

The following is a list of S&P Global Ratings insurer financial strength ratings assigned to insurance companies in Australia and New Zealand.

Ratings as at 1 April 2022.

Allianz Australia Insurance Ltd.

AA-/STABLE

Allied World Assurance Co. Ltd.

A-/POSITIVE

Berkshire Hathaway Specialty Insurance Company

AA+/STABLE

Contact: Craig Bennett, S&P Global Ratings, 03 9631 2197

BHP Marine & General Insurances Pty Ltd.

A/CreditWatch Negative

Chubb Insurance Australia Ltd.

AA-/STABLE

Factory Mutual Insurance Company

A+/STABLE

Great Lakes Insurance S.E (Australia Branch)

AA-/STABLE

Hallmark General Insurance Co. Ltd.

BBB+/STABLE

Insurance Australia Ltd.

AA-/STABLE

NEW ZEALAND

RATING

NON-LIFE INSURERS AA Insurance Ltd.

AA-/STABLE

AIG Insurance New Zealand Ltd.

A/NEGATIVE

Society of Lloyd's

A+/STABLE

Aioi Nissay Dowa Insurance Co., Ltd

A+/STABLE

Liberty Mutual Insurance Company Limited

A/STABLE

AA-/STABLE

Medical Insurance Australia Pty Ltd.

A-/STABLE

Mitsui Sumitomo Insurance Company Limited

A+/STABLE

The North of England Protecting and Indemnity Association Limited

A+/STABLE

Allianz Australia Insurance Limited Berkshire Hathaway Specialty Insurance Company

AA+/STABLE

Chubb Insurance New Zealand Ltd.

AA-/STABLE

QBE Insurance (Australia) Ltd.

A+/STABLE

Factory Mutual Insurance Company

A+/STABLE

QBE Insurance (International) Ltd.

A+/STABLE

Great Lakes Insurance SE

AA-/STABLE

Sompo Japan Insurance Inc.

A+/STABLE

Hallmark General Insurance Co. Ltd.

BBB+/STABLE

Southern Cross Benefits Limited

A/STABLE

Tokio Marine & Nichido Fire Insurance Co., Ltd.

A+/STABLE

Hannover Life Re of Australasia Co. Ltd.

AA-/STABLE

XL Insurance Company SE

AA-/STABLE

IAG New Zealand Ltd.

AA-/STABLE

Zurich Australian Insurance Ltd.

AA-/STABLE

Society of Lloyd's

A+/STABLE

LENDERS MORTGAGE INSURERS

Medical Insurance Society Ltd.

A-/POSITIVE

Mitsui Sumitomo Insurance Co. Ltd (New Zealand Branch)

A+/STABLE

Southern Cross Benefits Ltd.

A/STABLE

LIFE INSURERS

Southern Cross Pet Insurance Ltd.

A/STABLE

AIA Australia Ltd.

A+/STABLE

Resolution Life Australasia Ltd.

A-/STABLE

Challenger Life Company Ltd.

A/STABLE

Hallmark Life Insurance Co. Ltd.

BBB+/STABLE

MetLife Insurance Ltd.

A+/STABLE

Westpac Life Insurance Services Ltd.

A+/STABLE

Teleco Insurance (NZ) Ltd.

BBB+/STABLE

The North of England Protecting and Indemnity Association Limited A/NEGATIVE Tokio Marine & Nichido Fire Insurance Co. Ltd. (New Zealand Branch) A+/STABLE Vero Insurance New Zealand Ltd.

AA-/STABLE

Vero Liability Insurance Ltd.

AA-/STABLE

QBE Insurance (Australia) Ltd.

A+/STABLE

Zurich Australian Insurance Ltd.

AA-/STABLE

HEALTH INSURERS Southern Cross Medical Care Society

A+/STABLE

NIB NZ Ltd.

A-/STABLE

LENDERS MORTGAGE INSURERS

Arch Lenders Mortgage Indemnity Ltd.

A/NEGATIVE

Genworth Financial Mortgage Insurance Pty Ltd.

A/STABLE

QBE Lenders' Mortgage Insurance Ltd.

A/STABLE

REINSURERS Aspen Insurance UK Ltd.

A-/STABLE

Berkley Insurance Company

A+/STABLE

General Reinsurance Australia Ltd.

AA+/STABLE

General Reinsurance Life Australia Ltd.

AA+/STABLE

Hannover Life Re of Australasia Ltd.

AA-/STABLE

Hannover Rück SE

AA-/STABLE

HDI Global SE

A+/STABLE

HDI Global Specialty SE

A+/STABLE

Genworth Financial Mortgage Insurance Pty Ltd. (NZ Branch)

A/STABLE

Munchener Ruckversicherungs-Gesellschaft (Munich Reinsurance Company)

AA-/STABLE

QBE Lenders’ Mortgage Insurance Ltd.

A/STABLE

Munich Reinsurance Co. of Australasia Ltd.

AA-/STABLE

Pacific Life Re (Australia) Pty Ltd

AA-/STABLE

QBE Blue Ocean Re Ltd.

A+/STABLE

RenaissanceRe Europe AG

A+/STABLE

RGA Reinsurance Co. of Australia Ltd.

AA-/STABLE

LIFE INSURERS Asteron Life Ltd.

AA-/STABLE

Hallmark Life Insurance Co. Ltd. (NZ Branch)

BBB+/STABLE

Medical Life Assurance Society Ltd.

A-/POSITIVE

SCOR Global Life Australia Pty Ltd.

AA-/NEGATIVE

Resolution Life New Zealand Ltd.

A-/STABLE

SCOR Reinsurance Co. of Australiasia Ltd

AA-/NEGATIVE

Resolution Life Australasia Ltd. (New Zealand Branch)

A-/STABLE

Swiss Re Asia Pte. Ltd., (Australia Branch)

AA-/NEGATIVE

Swiss Re International SE

AA-/NEGATIVE

Swiss Re Life & Health Australia Ltd.

AA-/NEGATIVE

Transatlantic Resource Company

A+/CreditWatch Positive

REINSURERS HDI Global Specialty SE

56 / INSURANCE ADVISER APRIL 2022

A+/STABLE

INSURER STRENGTH RATINGS

BEST’S

NEW ZEALAND

FINANCIAL STRENGTH RATINGS

The following is a list of AM Best Financial Strength Ratings (FSRs) assigned to insurance companies in Australia and New Zealand.

Ratings as at 4 April 2022.

Contact: Mr. Scott Ryrie Managing Director & Co-CEO A. M. Best Asia-Pacific (Singapore) Pte Ltd. Tel: +65 9636 3678 Email: scott.ryrie@ambest.com

AUSTRALIA

RATING

LIFE, ANNUITY AND ACCIDENT General Reinsurance Life Australia Ltd.

A++/STABLE

PROPERTY/CASUALTY

RATING

COMPOSITE Quest Insurance Group Limited

B/STABLE

LIFE, ANNUITY AND ACCIDENT American Income Life Insurance Company (New Zealand Branch)

A/STABLE

BNZ Life Insurance Limited

A u/NEGATIVE

CIGNA Life Insurance New Zealand Limited

A u/POSITIVE

Co-operative Life Limited

B++/STABLE

DPL Insurance Limited

B++/STABLE

Fidelity Insurance Limited

A-/STABLE

Fidelity Life Assurance Company Limited

A- /STABLE

Foundation Life (NZ) Limited

A-/STABLE

General Reinsurance Life Australia Limited (New Zealand Branch)

A++/STABLE

Kiwi Insurance Limited

A- u/DEVELOPING

Momentum Life Limited

B++/STABLE

Partners Life Limited

A- u/DEVELOPING B/STABLE

Ansvar Insurance Limited

A-/STABLE

First American Title Insurance Company of Australia Pty Limited

A/STABLE

General Reinsurance Australia Ltd

A++/STABLE

Pinnacle Life Limited

Guild Insurance Limited

A-/NEGATIVE

PROPERTY/CASUALTY

Pacific International Insurance Pty Limited

B++/NEGATIVE

Accuro Health Insurance Society Limited

B+ /NEGATIVE

The Hollard Insurance Company Pty Ltd

A-/STABLE

A+/STABLE

The New India Assurance Company Limited (Australia Branch)

Aioi Nissay Dowa Insurance Company, Limited (New Zealand Branch)

B++/STABLE

Beneficial Insurance Limited

B++/STABLE

Brightsideco Insurance Limited

B/STABLE

Consumer Insurance Services Limited

B+/STABLE

First American Title Insurance Company of Australia Pty Limited (New Zealand Branch)

A/STABLE

FMG Insurance Limited

A/STABLE

General Reinsurance Australia Ltd (New Zealand Branch)

A++/STABLE

Mitsui Sumitomo Insurance Company Limited (New Zealand Branch)

A+/STABLE

New Zealand Medical Indemnity Insurance Limited

B+/STABLE

Pacific International Insurance Pty Ltd (New Zealand Branch)

B++/NEGATIVE

Police Health Plan Limited

A-/STABLE

Provident Insurance Corporation Limited

B /STABLE

The Hollard Insurance Company Pty Ltd (New Zealand Branch)

A-/STABLE

The New India Assurance Company Limited (New Zealand Branch)

B++/STABLE

Tokio Marine & Nichido Fire Insurance Company Limited (New Zealand Branch)

A++/STABLE

Tower Limited

A-/STABLE

Union Medical Benefits Society Limited

A/STABLE

Virginia Surety Company, Inc. (New Zealand Branch)

A/STABLE

Rating Disclosure: Use and Limitations: A Best’s Credit Rating (BCR) is a forward-looking independent and objective opinion regarding an insurer’s, issuer’s, or financial obligation’s relative creditworthiness. The opinion represents a comprehensive analysis consisting of a quantitative and qualitative evaluation of balance sheet strength, operating performance and business profile or, where appropriate, the specific nature and details of a security. Because a BCR is a forward-looking opinion as of the date it is released, it cannot be considered as a fact or guarantee of future credit quality and therefore cannot be described as accurate or inaccurate. A BCR is a relative measure of risk that implies credit quality and is assigned using a scale with a defined population of categories and notches. Entities or obligations assigned the same BCR symbol developed using the same scale, should not be viewed as completely identical in terms of credit quality. Alternatively, they are alike in category (or notches within a category), but given there is a prescribed progression of categories (and notches) used in assigning the ratings of a much larger population of entities or obligations, the categories (notches) cannot mirror the precise subtleties of risk that are inherent within similarly rated entities or obligations. While a BCR reflects the opinion of A.M. Best Rating Services, Inc. (AMBRS) of relative creditworthiness, it is not an indicator or predictor of defined impairment or default probability with respect to any specific insurer, issuer, or financial obligation. A BCR is not investment advice, nor should it be construed as a consulting or advisory service, as such; it is not intended to be utilised as a recommendation to purchase, hold or terminate any insurance policy, contract, security, or any other financial obligation, nor does it address the suitability of any particular policy or contract for a specific purpose or purchaser. Users of a BCR should not rely on it in making any investment decision; however, if used, the BCR must be considered as only one factor. Users must make their own evaluation of each investment decision. A BCR opinion is provided on an “as is” basis without any expressed or implied warranty. In addition, a BCR may be changed, suspended, or withdrawn at any time for any reason at the sole discretion of AMBRS.

S&P GLOBAL RATINGS (PAGE 56)

*For the S&P Global Insurer Financial Strength Ratings Definitions visit: https://www.niba.com.au/resource/standardandpoors.pdf Copyright © 2022 S&P. This material is reproduced with the permission of S&P. Reproduction of this the S&P Information in any form is prohibited without S&P’s prior written permission. Neither S&P, its affiliates nor any of their third-party licensors: (a) guarantee the accuracy, completeness or availability of the S&P information, or (b) make any warranty, express or implied, as to the results to be obtained

by Insurer Financial Strength Ratings or any other person from the use of the S&P information or any other data or information included therein or derived therefrom, or (c) make any express or implied warranties, including any warranty of merchantability or fitness for a particular purpose or use, or (d) shall in any way be liable to Insurer Financial Strength Ratings or any recipient of the S&P information for any inaccuracies, errors, or omissions, regardless of cause, in the S&P information or for any damages, whether direct or indirect or consequential, punitive or exemplary resulting therefrom.

Ratings are statements of opinion, not statements of fact or recommendations to buy, hold, or sell any securities. S&P Global (Australia) Pty. Ltd. holds Australian financial services licence number 337565 under the Corporations Act 2001. S&P Global credit ratings and related research are not intended for and must not be distributed to any person in Australia other than a wholesale client (as defined in Chapter 7 of the Corporations Act). Ratings are based on information received by Ratings Services. Other divisions of S&P Global may have information that is not available to Ratings Services.

NIBA.COM.AU / 57

INSURANCE JOURNEY / Heather Blanco

THE “FIVE BY FIVE” RULE

With 25 years’ experience in the insurance industry, Heather Blanco says emerging insurance advisors can benefit from a simple mantra that has underpinned her long and successful career.

W

hen Heather Blanco moved into broking, she quickly realised the insurance industry would provide the pathway to fulfil her goals and ambitions.

Now the Chief Executive Officer of SUREWiSE, Heather says her approach to personal and professional development over her career can be summed up simply: “Life is short, so don’t sweat the small stuff,” she believes.

“If I was giving my younger self a piece of advice, I’d say apply the ‘five by five’ rule.

If it’s not going to matter in five years, don’t spend more than five minutes being upset about it. And, if you make a mistake, don’t beat yourself up; this is how we learn.”

Heather’s first role in broking was with the Police Credit Union in Adelaide. “That’s when I knew insurance wasn’t going to be just a job for me.

“PCU Insurance Brokers (a division of Donnelly Insurance Brokers) offered me a real opportunity to advance not just my skill set but my career within the industry.

I worked under two exceptional mentors and leaders, Michael Donnelly and Lyn Blackwood, who invested heavily in their young team and taught me the importance of values and integrity. It’s something that has always stayed with me.”

One of the most rewarding aspects of the industry is the ability to make lifelong friendships. “I’ve been very fortunate to have had so many wonderful highlights, particularly the opportunities to travel early in my career to Singapore for an insurance conference when I was part of the IBNA group.

“Through my role with PCU (Donnellys) and De Conno and Blanco Insurance Brokers, and most recently through my move to SUREWiSE, I have made lifelong friendships. SUREWiSE has grown exponentially from where we began as Steadfast Brecknock Insurance Brokers, through to our merger with IC Frith SA and Newmarket Grand West. We have taken the best of both businesses to reach where we are today, and I am proud to

PROUDLY SUPPORTING

58 / INSURANCE ADVISER APRIL 2022

say we now have a team that holds shared values and integrity that transcends across the business.”

Over her career, Heather has worked with a range of organisations, from very large multinationals to industry-specific brokerages. One thing has, however, remained constant in terms of delivering for clients.

“Essentially, all clients want the same thing – honest, professional advice. Then, when something goes wrong, and they need to make an insurance claim, they want us to act promptly. They need to trust that

FOUR QUICK QUESTIONS What would you eat for your last meal?

Crab linguine Best live show you’ve ever seen?

Ed Sheeran at the Adelaide Oval.

He is a humble and talented performer who had me mesmerised for the whole concert.

What three things would you take with you to a desert island?

My family, a blanket (I get cold easily) and chocolate.

Dream holiday destination?

New York

their broker has their best interests at heart and their claim will be processed quickly and efficiently, meaning minimal disruption to their lives.

“I firmly believe that at every organisation I’ve worked with, by building relationships with our clients, myself and my team have been able to deliver exceptional advice and the best insurance outcomes for our clients. The three key attributes an adviser can have, for me, are integrity, good communication skills and empathy. I’ve always strived to embody these myself and foster them with my teams.”

There have, however, been barriers Heather has worked to overcome. “Being a woman in the industry has posed many challenges as there is still unconscious bias thriving in workplace cultures,” she says.

“This is something that we all need to work on to be better by creating gender balance and diversity.

“There is a lot of noise around inclusion and diversity but a lack of real action and progress. Most women will tell you that they want to be given the role because they are the best person for the job, not a number filling the quota. Fortunately, I have been supported by Steadfast in my role here at SUREWiSE.” The talent shortage is also a key issue, but Heather believes this may help address gender balance. “There’s no doubt we are facing a skills shortage, and this may work in favour of women, in opening up opportunities they may not have been considered for previously.”

An important aspect of broking is forging strong links to local communities. Heather has several passions outside of work. “I used to volunteer as a netball coach, which I really enjoyed but don’t have the time now due to studies. Two years ago, I started a law degree at the University of South Australia and that takes up a lot of my free time.

“But when I can take a break from the books, I’m a complete cyber nerd and am always listening to podcasts and subscribing to all IT news outlets.”

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