CEO / Welcome
A CELEBRATION OF INSURANCE BROKING
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arlier this year, one of my contacts in the London insurance market made a very strong comment about the importance of insurance brokers needing to be at the centre of issues relating to climate change and associated challenges. His comment surprised me a little, but the more I thought about it, the more correct I believed he was. There is now very strong evidence from a wide range of national and international scientific centres of excellence that climate change is real, and is most likely going to result in major issues and challenges for all areas of society in the coming years. As recently as 3 September 2021, the Australian Prudential Regulation Authority (APRA) issued an information paper on a project called Climate Vulnerability Assessment (CVA). The primary purpose of the project is to help regulated entities understand and manage the financial risks associated with climate change. Initially, the project will focus on the five major Australian banks. APRA Chair Wayne Byres said, “APRA began the CVA program in the banking sector due to its centrality to the Australian financial system, as well as the potential impacts associated with climate risk across the portfolios, from household mortgages to business exposures.”
Why is this important for insurance brokers?
and insurance brokers have to be able to inform and advise their clients on the current and likely future impact of weatherrelated events on their risk exposure and their insurance needs. We will cover these matters at the forthcoming NIBA Convention. I urge all insurance brokers to pay close attention to these presentations. It is highly likely the issues discussed will be directly relevant to the conversations you will have with your clients over the next 5-10 years.
Farewell, and thank you
This is my last column as NIBA CEO. I will leave the role on 31 October 2021 and hand over the keys to the office to our incoming CEO, Phil Kewin. It has been a real honour and a privilege to have had the opportunity to serve the Board and members of NIBA for the past 10 years. I have enjoyed the role immensely, and I will let others determine whether I have left the organisation in a better place over that period. I’d like to express my very sincere appreciation to the Presidents I have had the privilege to work with during the past 10 years: David Duffield, David Wyner, Graham Stevens, Tim Wedlock, Eric Harris, and Diane Phelan. Each has been a strong support, providing deep industry knowledge and wise counsel, whenever needed. The regular “how is it going”, “is everything OK” chats were really appreciated. I am also very grateful for the support I have received from all NIBA Directors. The NIBA Board is a wonderful institution, and the foundation on which all the good work of NIBA is based. Yes, some big and powerful organisations are represented around the board table, but the brands were always left outside the boardroom door, and regardless of the issue being discussed, the question was always: What is best for insurance broking in Australia? Finally, I want to sincerely thank everyone I have had the pleasure of working with over the past 10 years. Please give your encouragement, support, and wisdom to Phil. I am sure he will do a great job and will take NIBA to new heights in the coming years. I look forward to catching up with as many members as I can once lockdowns finish, and borders are re-opened. See you then.
For some time now, we have been describing the central role of insurance brokers as advising and assisting their clients in the areas of risk, risk assessment, risk management, and risk financing. Of course, insurance brokers also play a leading role when an insured event occurs, and a claim needs to be made under the client’s policy. Large weather-related events have become a significant feature of the Australian experience in the past 10 years, including cyclones, floods, fires, storms, and drought. All these events have given rise to multi-billion-dollar losses, and the Australian community has been very well served by the insurance companies and their associated reinsurers. However, in many cases, the insurers are quite rightly asking the question: what is the correct approach in the future, with major weather events becoming more frequent and more expensive? Around Easter this year, the Australian Academy of Science published a paper that raised the prospect of parts of Australia becoming uninsurable. These concerns have manifested themselves in the insurance issues being experienced across northern Australia, leading to the Australian Competition and Consumer Commission (ACCC) reports and the Federal Government’s announcement of a Cyclone Reinsurance Pool. Insurance brokers sit in the middle of all of this. They are working with clients on a regular basis to help them understand, manage, and insure their risks. Insurance brokers also have a key role to play when insurance is becoming difficult to obtain or is more costly than the client is prepared to pay. DALLAS BOOTH The Australian experience with weather and other Chief Executive Officer, NIBA natural disasters is something we all have to fully appreciate,
6 / INSURANCE ADVISER OCTOBER 2021
