Insurance Adviser - June 2021

JUNE 2021

RISKY BUSINESS

Cyber security dangers in a work-from-home world

REINVENTING TO SURVIVE

CONNECTING EFFECTIVELY WITH CLIENTS

AFCA’s John Price shares his insights

Tailoring solutions for Australia’s SMEs

QPIB

Enhancing the reputation of a fantastic profession

WE ARE YOUR VOICE

THANKS FOR VOTING US

1ST IN 23 CATEGORIES 2020 NIBA Broker Market Survey

OVERALL

BEST BROKER EXPERIENCE

Is a trusted partner* Underwriting overall satisfaction Is a brand that delivers on promises

Overall satisfaction*

Overall opinion versus other insurers*

Responsiveness

Work with me to find a solution for my client

Understand underwriting for my client’s needs

Have expert knowledge in specific product areas

Are comfortable having complex or challenging conversations

Communicate when underwriting appetite has changed

Takes ownership for resolving my business issues and follows through on commitment

Willingness to negotiate for the benefit of my client

Takes the time to learn about my business and client needs

Strong product knowledge and technical expertise

ACCOUNT MANAGEMENT

Account management overall satisfaction

Responsiveness to my needs and the needs of my clients

PRODUCT EXPERIENCE

Underwriting flexibility

Ability to tailor a policy to suit my client’s needs

Product coverage and wording that suits the needs of my client

Policy conditions and cover

CLAIMS EXPERIENCE

BRAND EXPERIENCE

Staff are knowledgeable about what the product covers in the event of a claim

Develops and maintains strong relationships

* Liberty Specialty Markets shares the first place ranking with other insurers in these categories.

The independent NIBA Broker Market Survey was conducted from July to August 2020 and compared 18 general insurers in Australia.

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).

CONTENTS June 2021

ACN 006 093 849 ABN 94 006 093 849

FEATURES

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

22

A SENSE OF COMMUNITY

Insurance Adviser magazine is published by NIBA

Publisher

An interview with CBN CEO Richard Crawford

Dallas Booth, CEO, NIBA T: (02) 9964 9400 E: dbooth@niba.com.au W: niba.com.au

Communications Manager Tiffany Eastland

NIBA Editor Tanaya Das

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 QPIB

A statement of professionalism NIBA.COM.AU / 3

CONTENTS June 2021

FEATURES 28 ENSURING SUCCESS AFCA’s John Price shares his insights

32 RISKS IN THE

VIRTUAL WORLD

Shining a spotlight on cyber security insurance

IN EVERY ISSUE NIBA CEO welcome..................................... 6 Representation............................................. 8 Why be a NIBA member?......................... 10 Insurance journey: David Harry............58

NEWS

Industry bulletin........................................ 12 Regulatory reminders................................14

PROFESSIONALISM

AFCA case study......................................... 16 Claims handling update........................... 18 Legal analysis: BI test case....................... 19 Impacting professionalism: Education and training.............................20

40 CHARTERING A PATH INTO THE UNKNOWN

Keep your SME clients up and running 4 / INSURANCE ADVISER JUNE 2021

EVENTS

Forthcoming events...................................54

REFERENCE

Community hub .........................................46 Insurer strength ratings ..........................56

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CEO / Welcome

NSW WORKERS COMPENSATION – SOME SERIOUS CHALLENGES STILL TO BE RESOLVED

F

ollowing a major expose by the ABC Four Corners program, significant media coverage, Parliamentary inquiries and a major Government-sponsored inquiry into the NSW Workers Compensation scheme, two major reports were released recently. They were: • The report from the NSW Parliament’s Legislative Council Standing Committee on Law and Justice following the Committee’s 2020 review of the Workers Compensation Scheme; and • The report on the Independent Review of icare and the State Insurance and Care Governance Act 2015 by the Hon Robert McDougall QC. Both reports were released on 30 April 2021.

The Report from the Standing Committee on Law and Justice was unanimously approved by all members of the Committee. This does not happen very often. A key paragraph from the chair’s foreword to the Report was as follows: This review undoubtedly highlighted the need for significant leadership and cultural change at icare. It is clear that the icare board must govern icare appropriately and have experience in personal injury management or workers compensation. Senior executives at icare must also demonstrate the high standard and level of responsibility expected of public sector officials.

The Report went on to make a series of findings about the management of workers compensation in New South Wales and made nine recommendations for the future management and oversight of the scheme.

The McDougall Report was commissioned by the NSW Government. The key conclusion in the Report was set out in the Executive Summary, as follows: When icare was established, it set about an enthusiastic program of change. Although that program was wellintentioned, its execution was, in a word, sloppy. In hindsight, it is clear that icare sought to change more than was necessary to achieve its statutory purposes and implemented its changes far too quickly and without adequate testing.

After considering a range of matters in considerable detail, the Report made 33 detailed recommendations.

It is important to note that significant change has already started to occur, with the appointment of a new chair and members of the icare board, and a new Chief Executive Officer of icare, Richard Harding. Under Harding’s leadership, a major program of reform is being developed and implemented.

NIBA will work with Harding and his executive team at icare to implement much-needed changes to the operation of the workers compensation scheme, especially in the areas of underwriting and premiums, injury and claims management.

Insurance brokers share the concerns of many of their employer clients regarding the need for a well-managed, efficient and effective workers compensation scheme which delivers the necessary care and support for injured workers, and charges appropriate premiums to NSW employers.

Why does this happen? Why was it allowed to occur?

6 / INSURANCE ADVISER JUNE 2021

icare is not the insurer of the NSW workers compensation scheme.

The scheme has a formal legal title, and is a legal entity called the Nominal Insurer. Workers compensation risks are insured by the Nominal Insurer, not by icare. icare manages the Nominal Insurer arrangements, but Nominal Insurer assets and liabilities are not carried on the icare balance sheet. In fact, the assets and liabilities of the NSW Nominal Insurer are not carried on the state’s balance sheet either. This is clearly stated in the annual financial accounts of the Nominal Insurer.

So, we have the situation where the workers compensation liabilities for most private sector employers in NSW are carried by a legal entity that is not owned by the state, or by the organisation that manages its affairs. Who, exactly, is responsible and accountable for the operation of workers compensation in New South Wales?

The McDougall report considered these issues in some detail.

The report notes that the Nominal Insurer operates within the NSW public sector but does not go on to assess the full lines of accountability and responsibility in relation to the business and its operations.

While the operational issues and challenges are now being addressed by icare and the State Insurance Regulatory Authority, I believe much more detailed consideration needs to be given to the overall accountability mechanisms that need to be in place to ensure the mistakes of the past five years are not repeated. This should include detailed consideration of the roles, responsibilities and accountabilities of: • The minister ultimately responsible for the operation of the scheme; • NSW Treasury, as the government agency advising the minister on these matters; • The icare Board, including its role and powers and relationship with the minister to whom it is responsible; • The icare Chief Executive Officer and the executive team; and • The State Insurance Regulatory Authority.

I hope I am wrong, but I do fear if clear accountability and responsibility is not implemented in relation to the NSW Nominal Insurer, the mistakes of the past may well be repeated.

DALLAS BOOTH Chief Executive Officer, NIBA

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NEWS / Representation

WE ARE YOUR VOICE!

There is a lot happening at the present time. The following are a few key developments that insurance brokers need to be aware of.

Small Business Insurance

Last month NIBA met with members of the Insurance Council of Australia (ICA) and the Council of Small Business Organisations Australia (COSBOA) to discuss SME Insurance issues. It is hoped that this roundtable will signal greater cooperation between the organisations on what has become an extremely important issue for NIBA and its members.

Add-on insurance

Following our submission seeking exemptions for brokers under the new add-on insurance legislation, Treasury has sought more information from NIBA as to insurance products that would be impacted by the legislation and the potential for harm to Australian consumers.

NIBA will continue to work with Treasury over the coming months to ensure that brokers and their clients are not negatively impacted by the changes which are scheduled to commence in October this year.

ASBFEO Small Business Insurance Inquiry

NIBA recently responded to the Australian Small Business and Family Enterprise Ombudsman’s report into small business insurance issues.

The report identified “widespread market failure in regards to the availability and affordability of essential small business insurance products.”

While NIBA welcomes the final report and the renewed focus on small business insurance issues, it rebuked a number of recommendations, most importantly the recommendation that the ban on commissions be extended to general insurance brokers.

8 / INSURANCE ADVISER JUNE 2021

NIBA’s response highlighted that this recommendation was made without any evidence of client detriment and under the incorrect assumption that removing commissions would reduce costs to small business owners.

The response highlighted that in a hardening market, insurance brokers play an even more critical role in helping small businesses navigate the insurance landscape and ensuring their cover remains appropriate to their level of risk.

Emergency Services Funding in NSW & TAS

NIBA continues to encourage all brokers with clients in New South Wales and Tasmania to visit the Emergency Services

Funding Hub on the NIBA website. NIBA has prepared materials for both NSW and Tasmanian members to provide to clients, including a template letter that brokers and clients can send to their local MP, calling for the abolition of insurance-based taxes and a more equitable system for the funding of state fire and emergency services.

The Role and Value of Insurance Brokers

NIBA continues to meet with State and Federal Members of Parliament, Ministers as well as business and consumer groups to promote the Deloitte report on the Economic Value of Insurance Broking and the Value of Brokers more broadly ahead of the 2022 review into the intermediated insurance industry.

CONTACT NIBA

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

NIBA / Member Benefits

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

“Having a strong professional association has always been incredibly important to me. NIBA tirelessly advocates as the one voice for the whole broking fraternity, regardless of the size of brokerage or cluster group affiliations. It provides an avenue to bring us all together, to share ideas and experiences, to learn from each other and become the best professionals we can be.”

NIBA PRESIDENT DIANNE PHELAN Group Operations Manager at BJS Insurance Group Pty Ltd

WELCOME TO NIBA

NIBA is thrilled to have the following new principal members on board: • Bellrock Broking (NSW) Pty Ltd • Professional Risk Underwriting Pty Ltd t/a Prorisk from Victoria

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 state and national level to ensure that your interests are represented.

10 / INSURANCE ADVISER JUNE 2021

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

PROGRESS OF THE CODE REVIEW

T

he Independent Reviewer of the Insurance Brokers Code of Practice, Marigold Magnaye, has provided an update into the progress of the Code review.

In February 2021, the Discussion Paper seeking submissions on the NIBA Code of Practice Review was released. It was a longawaited release, with the benefit of having significant key stakeholder input and was informed by the findings from the Hayne Royal Commission, regulatory responses, and the results of other key Codes of Practice in the financial services industry.

Significantly, the Discussion Paper included input from NIBA in the form of a draft proposed amended Code of Practice.

The release of this document has offered valuable transparency to key stakeholders and other interested parties on NIBA’s thinking which has allowed submissions to address and identify key areas where progress can be made.

Magnaye said, “Ten submissions were received in total from brokers, other industry or representative bodies, the Consumer Federation of Australia (CFA), and the Insurance Brokers Code Compliance Committee (IBCCC). It is clear there is great interest in the NIBA Code of Practice across the board, and a belief that industry codes

have an important role to play in establishing good practices, values, and a culture that a profession seeks to reflect.”

Submission suggestions relating to implementation of the revised Code of Practice and how brokers and customers can be supported in this process have been welcomed. The practical implementation of

a Code and successfully embedding it in an industry remains the benchmark for an effective “living Code”.

She added, “The most detailed submissions were provided by the CFA and the IBCCC, and the message is clear that more is expected of the revised Code of Practice in order to meet consumer expectations. NIBA’s directors are taking on board these submissions and I am working with CEO Dallas Booth and the Association’s board to consider their feedback and NIBA membership buy-in on the key issues arising and how a revised Code fits within the strategic plans for the profession.”

Magnaye also clarified the next phase of the Code of Practice Review will be an iterative process, keeping lines of communication open between NIBA and key stakeholders on the key issues, “I am grateful for the ongoing assistance offered by the NIBA Board, the CFA, and the IBCCC to progress the review.

“The Code Review remains on track, with the intent being to close expectation gaps through focused consultation in the coming months. These next few months will be critical in determining the timing and content of the revised Code,” she concluded.

BUDGET 2021-22 OVERVIEW FOR INSURANCE BROKERS The federal budget for 2021-22 delivered by the treasurer Josh Frydenberg has addressed many of the concerns being faced by small businesses.

The National Insurance Brokers Association (NIBA), CEO, Dallas Booth welcomed the budget and said, “Measures including tax cuts for small businesses, incentives to invest in your business, significant support for regional areas, targeted industry packages and more will not only help insurance clients but also broking businesses.”

He added that what insurance brokers do is more than just procure policies,

they are trusted advisers for business owners. “There is continued support for many sectors, regions and communities that face significant challenges and brokers need to tell clients about every bit of help available.”

This budget also implements measures announced by the Government in its response to the recommendations of the Royal Commission into National Natural Disaster Arrangements.

On the disaster mitigation funding announcement, Andrew Hall, Insurance Council of Australia CEO said, “Insurers look forward to working

with the Government and other stakeholders on the design and implementation of the cyclone reinsurance pool ahead of its implementation mid-2022.”

Booth added, “We at NIBA fully support these measures and look forward to working with the ICA to ensure that all Australians have access to insurance cover that is affordable.”

You can read more about the support available to business on the government’s website at budget.gov.au/2021-22/ content/download/glossy_jobs.pdf, or scan the QR code above.

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

12 / INSURANCE ADVISER JUNE 2021

NEWS / Industry Bulletin

MCDOUGALL REVIEW INTO ICARE HANDED DOWN The recommendations of the fast-tracked Insurance and Care NSW (icare) and State Insurance and Care Governance Act 2015 Independent Review have been handed down by retired Supreme Court Judge Robert McDougall.

The review offers an independent assessment of the issues and challenges facing icare and the workers’ compensation scheme and McDougall examined issues raised over the past year.

The review states icare’s push for change was well-intentioned but was conducted too quickly which led to poor execution and failures in areas including procurement, cost management, probity and conflicts management. It concludes that, once all relevant recommendations have been implemented, “… the result should be a workers’ compensation system in this State that delivers fairly to injured workers the full measure of their statutory entitlements, and does so efficiently and at the least cost possible to employers.”

Treasurer Dominic Perrottet said McDougall’s objective and constructive approach would enable the government to focus on implementing the review’s recommendations, delivering a stronger and better workers’ compensation scheme.

“We know there is still more work to be done and these recommendations will form the bedrock of a better and stronger worker’s compensation scheme.”

Key recommendations from the Review include: • icare should be bound to a procurement and probity framework equal to that of other government agencies; • icare prepare and publish a plan for cultural change which addresses key risk factors, and reports annually to the Treasurer on its progress; • The icare Board include one or more members who possess extensive public sector experience and workers’ compensation insurance experience; • SIRA develop an accelerated plan for implementation of the findings of its Healthcare Review and release it publicly; • There should be a further independent cultural review of icare by 2023.

Minister for Digital and Minister for Customer Service Victor Dominello welcomed the review and said work would start immediately on the recommended changes.

“The State Insurance Regulatory Authority (SIRA) is committed to working with icare and the industry to drive down costs and deliver better health outcomes for injured workers,” Dominello said.

You can access a full copy of the review on the government’s website: nsw.gov.au/sites/default/files/2021-04/ Independent-Review-Report.pdf, or scan the QR code.

REINSURANCE POOL TO COVER CYCLONE AND RELATED FLOOD DAMAGE IN NORTHERN AUSTRALIA

A

$10 billion reinsurance clients at affordable rates. The market pool to underwrite cover has been extremely difficult, and the for cyclone and cycloneunderlying causes of these issues delivers fairly to injured workers the full related flood for privately owned were well identified by the ACCC.” measure of their statutory entitlements, homes, strata corporations and Booth added that NIBA looks and does so efficiently and at the least cost small businesses, and a $40 million forward to working with the Federal possible to employers.” investment in making older strata Government, the Insurance Council Treasurer Dominic Perrottet said buildings more resilient to extreme of Australia and the Association’s McDougall’s objective and constructive weather events, will be established members in northern Queensland approach would enable the government to offer northern Australians more and northern Australia more to focus on implementing the review’s affordable and accessible home and broadly to develop and implement recommendations, delivering a stronger and business insurance. this important solution. better worker’s compensation scheme.

The reinsurance pool would The Government is also “We know there is still more work to cover cyclone and related flood announcing a plan to specifically be done and these recommendations will damage in northern Australia from reduce insurance costs for strata form the bedrock of a better and stronger 1 July 2022, and would be backed by properties, by committing $40 worker’s compensation scheme.” a $10 billion government guarantee, million for the North Queensland Key recommendations from the Review reducing insurance premiums Strata Title Resilience Pilot include: across northern Australia by over Program, to start in 2022. · icare should be bound to a procurement $1.5 billion for households, strata Strata properties face some of and probity framework equal to that of other and small businesses over 10 years. the worst insurance affordability government agencies; Prime Minister Scott Morrison pressures in Northern Australia. The said, “We believe in the future of ACCC noted that, in 2018-19, the northern Australia. This means we average strata premium was $6,800 need to take further action to boost in North Queensland, compared the resilience for Australians to live with the Australian average of and work in northern Australia.” only $3,300. Strata residents have Treasurer Josh Frydenberg few options other than to pay said a Treasury-led Taskforce will this because strata properties are continue work on this to develop required to hold insurance under the final design of the reinsurance Queensland legislation. pool in close consultation with Like Booth the Insurance Council industry, with details to be finalised of Australia (ICA) CEO Andrew Hall following that consultation process. also welcomed the announcement, “More affordable insurance “Governments at all levels need means peace-of-mind for hundreds to look at other impediments to of thousands of Australians across lower premiums, including the northern Australia, knowing that elimination of State insurance their economic livelihoods are stamp duties and levies, improving protected,” he said. resilience standards in building The National Insurance Brokers codes and land planning decisions, Association (NIBA) CEO, Dallas and lifting investment in mitigation Booth welcomed this announcement, infrastructure and household “Insurance brokers in northern resilience programs.”

Australia have been working very “We look forward to working hard in recent years to obtain with the Government on the appropriate insurance cover for their consultation and design process.”

NIBA.COM.AU / 13

NEWS / Upcoming Regulatory Changes

UPCOMING REGULATORY CHANGES

October is fast approaching and with it a raft of sweeping regulatory changes that all brokers need to be aware of. These changes will affect almost every broker, so it is critical that NIBA members have a thorough understanding of the changes and the impact they will have on their business.

Claims handling as a financial service: These reforms make insurance claims handling and settling services a financial service; therefore, these activities must operate under an Australian Financial Services (AFS) licence.

Those insurance brokers acting for insurers need to identify if and when they may be providing a claims handling and settlement service on behalf of insurers and discuss the matter with the relevant insurance company and must take steps to either obtain a claims handling endorsement on their AFS licence or become an authorised representative of the insurer.

Brokers who have authority to provide these services but act on behalf of the client while doing so, will be exempt from the new regime under the claimant intermediary exemption.

This is the last opportunity for brokers caught by the regime to apply for a variation. Brokers have until 30 June to apply to ASIC for a variation of their AFS licence, after which a transition period will commence from 1 July to 31 December. During this time claims handing and settling services can only be provided if a complete application was lodged by 30 June, and it has either been granted or is still pending. From 1 January 2022 claims handling and settling services can only be provided if the application has been granted or if

the insurance broker is covered by the claimant intermediary exemption.

It is important for members to note that ASIC may reject applications if they do not contain sufficient information or are incomplete. Rejections occurring close to the deadline may mean that the applicant has insufficient time to rectify and re-submit their application before the cut-off date.

NIBA has previously provided information to its members on this issue, which can also be accessed from the Media Hub on the NIBA website under “Members only content”.

It is important for members to note that ASIC may reject applications if they do not contain sufficient information or are incomplete.

Hawking of financial products: Complex new provisions relating to the “hawking” of insurance products will take effect on 5 October. The provisions do not apply when an insurance broker is giving personal advice to a retail client,

14 / INSURANCE ADVISER JUNE 2021

Reference Checking and Information Sharing: The new provisions will require AFS licence holders to comply with new reference checking and information sharing protocols which will shortly be released by ASIC. These requirements will apply to authorised representatives of life risk brokers, and do not apply to representatives giving advice only in relation to general insurance products. The new rules take effect on 1 October.

Breach reporting and remediation: Detailed new laws in relation to breach reporting and remediation take effect on 1 October. All member principals will need to thoroughly review their breach monitoring and reporting processes and procedures prior to this date to ensure the policies and processes are compliant.

but they will apply to insurance brokers operating under a general advice model.

The provisions will prevent the unsolicited marketing and sale of financial products to retail clients. The definitions and concepts are difficult and complex, NIBA is currently seeking clarity from Treasury and will provide further information to members in relation to these changes.

Duty to take reasonable care not to make a misrepresentation: These reforms relate to a newly defined category of “consumer insurance contracts”. They apply to insurance obtained wholly or predominantly for the personal, domestic, or household purposes of the insured.

Where the new definition applies, the insured only has a duty to take reasonable care not to make a misrepresentation to the insurer before entering the consumer insurance contract. The changes relate to insurance contracts entered into on or after 5 October.

For non-consumer insurance contracts, the existing provisions in sections 21 and 22 of the Insurance Contracts Act (duty of disclosure obligations and misrepresentation provisions) apply.

NIBA will provide more information on these reforms to members.

Design and Distribution legislation: The new legislation requires every financial services product covered by the regime to have a corresponding ‘target market determination (TMD)’.

The products captured under the regime include all products that currently require a Product Disclosure Statement.

It is crucial that broker firms who use “broker wordings”, or their own schemes –

NEWS / Upcoming Regulatory Changes

where the broker has been involved in the design of the policy and the development of the cover that is provided, work closely with the insurer/underwriter to determine how the Design and Distribution obligations will operate in respect of those policies, who will be responsible for the preparation of the Target Market Determination, and how the product review obligations will be implemented.

NIBA strongly encourages firms to obtain legal assistance for this process, in order to ensure they are meeting the new legislative obligations. There is no room for complacency, the legislation will take effect on 5 October.

ASIC has released a regulatory guide, RG 274 Product design and distribution obligations, outlining their interpretation of the obligations, compliance expectations and their approach to administering the obligations.

have a system for managing and resolving complaints and disputes, preferably before they are elevated to AFCA. ASIC has issued a new regulatory guide, RG 271 Internal dispute resolution, setting out their dispute resolution standards and requirements. A number of the standards and requirements set out in the RG are enforceable, so it is critical that members are aware of the new obligations.

NIBA has previously provided information to its members on this issue, which can also be accessed on the Media Hub on the new NIBA website under “Members only content”.

The requirements only apply to complaints received on or after 5 October. For complaints received by firms before 5 October 2021, Regulatory Guide 165 Licensing: Internal and external dispute resolution applies.

“ASIC has issued a new regulatory guide, RG 271 Internal dispute resolution, setting out their dispute resolution standards and requirements. A number of the standards and requirements set out in the RG are enforceable, so it is critical that members are aware of the new obligations.”

Deferred sales model for add-on insurance products: These reforms implement an industry-wide deferred sales model for add-on insurance products. The legislation introduces a complex array of obligations which defer the insurance transaction for a period of four days.

The legislation applies to any insurance product sold incidentally to a primary good or service e.g., insurance sold in conjunction with the rental of a motor vehicle, travel insurance purchased after the purchase of a travel product. The reforms do not apply to comprehensive motor insurance, or products recommended by financial advisers in a very limited personal advice situation.

NIBA is currently liaising with Treasury to seek exemptions for a number of broker products where the immediate supply of cover provides genuine protection for consumers.

The legislation is due to take effect on 5 October.

ASIC Regulatory Guide 271 – Internal Dispute Resolution: It is a condition of every AFS licence that the licence holder

NIBA.COM.AU / 15

PROFESSIONALISM / AFCA Case Study

THE IMPORTANCE OF CLEAR COMMUNICATION WITH CLIENTS ABOUT COVER Insurance brokers should make clients aware of sub-limits applicable to particular types of loss and have detailed records of engagement and instructions on such matters.

Key lessons

In these specific circumstances, the broker was not found liable to cover the complainant’s loss arising from an allegedly inadequate business insurance policy where: • the loss arose out of the client’s own failure to adequately inform the broker about their needs; • the client had raised no concerns about the extent of the policy’s coverage prior to the loss suffered after being given the opportunity to do so; and • the evidence (despite there being no contemporaneous file notes) supported the view that the broker had incepted the policy in accordance with the client’s instructions given at the time.

To seek to avoid such disputes, brokers could consider how they make customers aware of sub-limits applicable to particular types of loss and/or better record engagement and instructions on such matters.

Facts

The complainant was a service station operator who had arranged business insurance through the broker. On two separate occasions the service station suffered a robbery of stock tobacco and money, leading to the complainant lodging claims with his insurer.

Although the claims were accepted by the insurer they were restricted by the monetary limits allowed by the business insurance policy which the complainant alleged were insufficient for his needs and this led to the dispute.

The complainant’s case

The complainant alleged that: • The broker did not incept the policy in accordance with his wishes or needs and had instead provided incorrect information about the cover which had resulted in the complainant’s loss.

16 / INSURANCE ADVISER JUNE 2021

• The policy provided cover for “Property in your physical or legal control” for up to $250,000 and the complainant said this led him to believe he was covered for hundreds of thousands of dollars.

However, the insured amounts for Theft were limited to $5,000 for Contents and stock and $20,000 for Tobacco. The policy also limited cover for money on the premises outside business hours to a maximum of $2,000.

• The complainant also said that the broker told him it would cover “hundreds of thousands of dollars” worth of stock under the policy. There was no contemporaneous written evidence regarding this discussion.

The broker’s case

The broker submitted that: • It had not failed to properly discharge its duty to the client and that in the telephone discussion: o the complainant was advised of the various covers in Business Insurance policy and the complainant instructed the covers he required and the relevant sum insureds; o relevant questions were asked to determine the level of cover required such as the total amount of stock he would have in store at one time and also maximum amount of stock vulnerable to theft/burglary incidents; o different claim scenarios were explained and the complainant instructed the broker the sum insured they required for each type of cover; o the complainant confirmed that he did not need money cover for outside business hours as he would not leave money on premises after business hours. o the complainant was premium conscious and instructed those levels

BY MARK RADFORD

Principal, Radford Lawyers

of cover which would fall under his affordable premium limit.

• The quotes were sent out the following day and the broker wrote to the complainant noting that he needed to read the quotations carefully to ensure it met his needs; and • No amendments to the policy were requested by the complainant.

There were however no contemporaneous notes regarding any conversations with the client.

The AFCA decision

Despite there being no contemporaneous file notes of the conversation with the client, AFCA found that the broker had fulfilled its duty in asking relevant question to the complainant and incepting the cover based on his instructions because: • There was no evidence the broker represented the cover applied in the manner suggested by the complainant • There was no evidence from the complainant that: o he outlined to the broker a specific need for increased cover for contents and stock, or money on the premises; o the cover offered did not meet the needs he outlined in the discussions with the broker. There was no evidence as to what these needs specifically were or that he made his needs clear to the broker at any time prior to the loss.

• In contrast, the broker’s recollections were consistent with the documents issued and the fact no concern was raised by the complainant about the various sums insured.

Finally, ACFA noted that even if the broker had not incepted the policy in accordance with the complainant’s wishes, there was not enough evidence to suggest that he incurred a loss which exceeded the amount paid by the insurer.

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PROFESSIONALISM / Claims Handling and Settling Services

AN OVERVIEW OF CHANGES

Schedule 7 of the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (FSRA) and regulations, make “claims handling and settling services” (CHSS) a NEW financial service under Chapter 7 of the Corporations Act 2001 (‘Corporations Act’) and apply certain requirements of Chapter 7 to those providing CHSS.

C

HSS captures a broad range of claims activities, from an initial inquiry before an insurance claim is lodged to the formal lodgement, assessment and settlement of an insurance claim in relation to both retail and wholesale clients.

It only catches insurance products subject to the Corporations Act, not discretionary arrangements or self-insured retentions.

structured to fit within the retail client exemption in section 911A(2)(el).

When considering whether you provide services to wholesale clients for the purposes of the above exemption, remember that the law has extended the retail client definition for CHSS to apply to third party beneficiaries (not just contracting insureds) that are provided with the retail client type of cover in the Act.

Does an insurance broker need an AFS licence?

When does an insurance broker need to apply for an AFSL/variation to AFSL?

n insurance broker entity can be only A caught if they are acting on behalf of insurers in providing CHSS. There is no obligation on an insurance broker to hold an AFS licence if it only acts for insureds in providing CHSS. Note that a separate company in a broking group that is not an insurance broker as defined above (e.g., underwriting agency) will need to consider its position separately. This article only covers insurance brokers.

Where an insurance broker is acting on behalf of an insurer in providing CHSS, they must: • obtain an AFS licence for CHSS/vary an existing AFSL to cover CHSS – but only for the CHSS they provide for the insurer (which might be very limited); or • act as an Authorised Representative (AR) of a person that has an AFSL for CHSS; e.g., get the insurer to appoint you as its AR for the limited CHSS you may provide for them; or • fall within one of the relevant exemptions – for insurance brokers, this would typically only be likely to be where they only provide CHSS in relation to wholesale clients for an APRA regulated insurer that is acting under the APRA regulated insurer wholesale client exemption.

For insurance brokers acting for Lloyd’s Underwriters for retail client business, an AFSL covering the CHSS will be expected and the arrangement will need to be

18 / INSURANCE ADVISER JUNE 2021

The obligation to obtain an AFSL/AFSL variation for CHSS won’t apply before the end of 30 June 2021.

ASIC has however asked all persons seeking to rely on the transition period to lodge the application as soon as possible as rejections occurring close to the 30 June 2021 deadline may mean that the applicant has insufficient time to rectify and re-submit their application and may not be able to access the transition period as a result if ASIC rejects it.

Who do you have to appoint as your representatives in relation to CHSS if you get an AFSL/vary for CHSS? Typically, an insurance broker: • would only need to authorise any employee/director providing a CHSS as their representative – not an Authorised Representative; • could appoint another AFSL holder with CHSS to act for them under their own AFSL and not that of the broker; • would need to appoint as their Authorised Representative anyone that will provide CHSS on their behalf that is within the category of persons required to get an AFSL( see s911A(2)(ek)) but does not wish to get the AFSL. This may not be possible if that person holds an AFSL but it does not cover CHSS; and

BY MARK RADFORD

Principal, Radford Lawyers

• would only need to appoint persons who are not within the above CHSS AFSL categories or who are exempt under the lawyer licensing exemption, as their representative not as an AR. The transition period provides that licensees can give notice of Authorised Representatives under s916A during the transition period authorising them to provide claims handling and settling services after the end of that transition period (the same applies regarding an authorised representative giving notice to individuals under section 916B).

What are some of the key obligations on insurance broker AFSL holders?

• If you access the transition period as noted above the new obligations apply to claims made after 1 January 2021 but only from the end of the transition period (i.e. 1 January 2022).

• The Chapter 7 general licensing obligations under section 912A of the Corporations Act will apply – the extended retail client definition will need to be taken into account regarding CHSS. Internal dispute resolution system relevant to CHSS must take into account the new retail client definition for CHSS. Claims AFSL holders are responsible for the CHSS conduct of their representatives.

No FSG obligation applies.

The AFSL holder or their representative must provide a Cash Settlement Fact Sheet to insureds who are retail clients if they are offering to settle all or part of a claim using a cash payment (i.e. not repair or replacement) where the cash payment is not the only option legally available to the client to settle the claim, or the part of the claim.

Liability limited by a scheme approved under Professional Standards Legislation.

ANALYSIS / Legal

‘TESTING’ FOR COVID-19: THE CURRENT SPREAD

As the quest to ascertain the extent to which business interruption losses are covered by insurance continues, it is useful to reflect on the current position, both at home and abroad.

BY CLANCY O’DONOVAN

Senior Associate, DLA Piper Australia

T

he UK Supreme Court’s judgment in January 2021 was the first non-appealable decision in a test case to be handed down globally – a terminus yet to be reached in Australia.

Since delivery of that judgment, the UK Financial Conduct Authority (FCA) has continued to closely monitor insurers’ assessment and resolution of business interruption claims.

In January 2021, the FCA issued a “Dear CEO” letter, directing insurers to reassess and pay valid claims as soon as possible. In March 2021, the FCA published a list of over 400 wordings, held by over 200,000 policyholders, which are considered “in principle, capable of responding to the COVID-19 pandemic”.

This list is accompanied by a ‘policy checker’ developed by the FCA, which small businesses can use to check whether their policy “may cover business interruption losses”, together with guidance as to the types of evidence and methodologies which policyholders may use in support of their claims. The FCA continues to collect and publish data from insurers relating to their acceptance and settlement (including initial or interim payments) of business interruption claims.

In Australia, the extent to which business interruption cover is available for loss flowing from the pandemic continues to be explored via both ‘organised’ test case proceedings and satellite litigation. The ‘Quarantine Act Test Case’, initiated in August 2020 by the Australian Financial Complaints Authority (AFCA) and the Insurance Council of Australia (ICA) was decided in favour of policyholders by the NSW Court of Appeal in November 2020.

Insurers’ application for leave to appeal that decision to the High Court is expected to be heard in the next couple of months.

In the meantime, a further test case, dubbed the ‘second test case’, has been commenced in the Federal Court. Also, a product of joint effort by AFCA and the ICA, the second test case presently comprises nine sets of proceedings, issued by five different insurers, seeking declarations relating to the operation of certain policies. Broadly speaking, it is anticipated that the second test case will involve consideration of the three main species of insuring provisions (which were also considered in the FCA Test Case), being: • Disease Clauses’ (which provide cover for business interruption resulting from the occurrence of disease within the vicinity, or a specified radius, of insured premises) • ‘ Prevention of Access Clauses’ (which provide cover for business interruption resulting from access to, or use of, insured premises being prevented due to restrictions imposed by, or the action, advice or order(s) of an authority) and • ‘ Hybrid Clauses’ (which broadly reflect a blend of the first two types of clauses and respond to business interruption resulting from closure of insured premises due to the occurrence of disease within a vicinity, or a particular radius, of insured premises).

The Federal Court has indicated that it intends to hear the second test case in September this year, with any ensuing appeal to the full court to be heard in November.

In addition to the ‘organised’ test case proceedings presently being conducted, ‘stand alone’ litigation has been commenced, seeking to determine how certain policies respond to business interruption loss sustained by particular insureds.

Earlier this year, it was reported that a ‘Jetts Fitness’ franchisee in Victoria had commenced proceedings, challenging its insurer’s decision to decline indemnity for business interruption loss sustained as a consequence of government-ordered lockdowns in 2020.

Similarly, in August 2020, entities associated with The Star Casino commenced proceedings against their insurers, seeking a declaration of cover.

The matter is now part heard.

Furthermore, it was reported in April 2021 that another insurer has commenced Federal Court proceedings against the liquidator of Educational World Travel, seeking a declaration that its policy does not respond to loss sustained by the business as a result of the pandemic.

The proceedings are expected to test the operation and interpretation of exclusion clauses which refer to the Quarantine Act 1908 (Cth), in the context of Victorian law.

Whilst there are a number of different proceedings on foot, advancing simultaneously and at different stages, the current ‘state of play’ places the insurance industry on a trajectory whereby the extent to which cover is available for business interruption loss caused by the pandemic is likely to be substantially clearer by the end of this year, or in the early part of next year.

NIBA.COM.AU / 19

PROFESSIONALISM / Training

EDUCATION AND TRAINING MASSIVELY IMPACT PROFESSIONALISM

BY SHEILA BAKER

Executive General Manager, Compliance and Customer Experience, Gold Seal Practice Management

I

t is a bit hard not to notice, if you are an insurance broker, that there are many changes afoot. For starters, the market has hardened, and many brokers have never seen a hard market before.

Then there are all the changes necessitated by a workforce that is doing its best to bounce back from a global pandemic and recession. More locally, there is a “tsunami” of change in regulation and legislation – and we are being bombarded with changes big and small.

This massive amount of change on the regulatory scene is, of course, the outcome of the Hayne Royal Commission bringing a renewed and reinvigorated focus on customers and their expectations. It also brings new minimum standards and even a new definition of professionalism – that relentless customer focus means the principle of “my obligations are fulfilled if I meet the minimum standard” is changing to “my obligations are fulfilled if my customer agrees that they are”.

Therefore customer expectation has become paramount – it is the ultimate arbiter of professionalism.

In addition to the global and regulatory scene, most brokers will now be aware that there are many issues at work relating to broker education and training.

This may be causing intermediaries to wonder whether they should even be thinking about education when things are in such a state of flux. But in fact, you will find your education and training providers are hard at work updating their materials – but what can you do in the meantime?

The future scenario is one where the customer’s needs are the broker’s drivers.

We need to look beyond compliance to the very best we can be. So, broking principals need to be asking: is education that

20 / INSURANCE ADVISER JUNE 2021

promises a speedy or cheap pathway to being qualified the best for brokerage employees? Will it meet the new world standards of professionalism?

This is one of the times brokers absolutely should not drop the reins on learning. In fact, if anything, it is when we should go at it even harder because staying abreast of change and information is one way you can be more in control and have the knowledge to make good business decisions – to maintain your professionalism and your position as trusted advisor to your clients.

With all this change, some of you may be wondering if currently available programs have been rendered out of date. It is true that there are changes to the skills packages, which govern what RTOs are required to teach contentwise. If you are currently studying for your Diploma of Insurance Broking, you have been studying under the package entitled FNS15. It needs to be “taught out” or in other words the RTOs need to stop enrolling students and students need to have completed it by November 2021. The new package, FNS20, is substantially different. If you allow the time period to elapse on the previous package, chances are brokers will need to complete a bridging module before being able to move forward – in simple language, more work.

But if the education providers are on pause while they update their materials, how can you “go at it harder”?

Unless they relate to the fundamental principles of your work, many – or most – regulatory matters are not covered by education – they are covered by continuing professional development (CPD) modules or skills modules that are nimbler and can be more readily brought to market, such as Code training or compliance modules. Often delivered online, they are all allocated points or hours so brokers can use that avenue to remain compliant with points required by their chosen CPD program. CPD programs are designed to address the skills that fill the gap between education and experience, and the regulations clearly set out that not only must you learn to a minimum standard (e.g., Diploma) but your skills must also be maintained to an adequate level.

You could draw a comparison to driving skills here – you go to a school to learn to drive, you get your licence and start driving – and then you might go to an advanced driving course to hone your skills.

Just like advanced driving programs, CPD modules are a great way to fill skills, knowledge and points gaps in times when structured learning may be paused – or any time really, to keep knowledge and skills up to date and maintain the professionalism you bring to your clients.

This is one of the times brokers absolutely should not drop the reins on learning. In fact, if anything, it is when we should go at it even harder because staying abreast of change is the one way you can be more in control.

ADVERTORIAL / ARAG

LEGAL EXPENSE INSURANCE IS THE NEW BLACK IN INSURANCE

A

s a leader in the Legal Expense Insurance (LEI) space, ARAG Australia offers brokers a key point of difference in a hardening market.

ARAG is a specialist in LEI, and is the largest in this category in Europe, making them the right choice for LEI. In addition, their resource materials for risk management may make a policy worthwhile even without a claim. This comes in the form of a legal helpline and resource documents available through our customer portal. And while most of the market only provides coverage for defence, ARAG also covers pursuit claims.

ARAG National Business Manager & former Broker, Brad Smith says, “Brokers are in a unique and trusted position to provide their clients with this new level of risk management. Brokers are increasingly finding that legal expense insurance (LEI) is an important product to have in their arsenal.”

One of the most attractive features of LEI is the pursuit and defence offering – filling potential gaps in coverage, insuring risks that a business or individual might be forgiven for thinking they were protected against, but probably are not. We often refer to legal insurance as the “missing piece of the jigsaw” because it fits so well with other commercial and domestic insurance to provide a complete package.

The growth opportunity of Australia’s LEI sector can be modelled on the European market where one in three European households and many SMEs hold an LEI policy. For younger markets like Canada and Australia, recent growth has been much more rapid. The Australian market has responded positively, with strong interest and growth.

But if the recent growth is encouraging, the scale of the opportunity for brokers here is boundless. Based on the European statistics that the non-life insurance account for $972bn of the GWP, of this $18bn is for LEI. This makes LEI around two per cent of the market, but you might be surprised to

Legal insurance market growth at 13 per cent.

– European Insurance Overview, 2020 find that General Liability is only eight per cent of the GWP. Not only is LEI a large market in context, it is growing at a healthy rate of 13 per cent a year. Transferred to the Australian market of almost $45bn annual non-life GWP, the theoretical market potential of two per cent in LEI would be $900m.

Clearly, the Australian LEI market is not going to achieve this level of penetration overnight. However, our current trajectory suggests that the appetite and interest in the LEI market is strong. LEI offers brokers a unique opportunity to differentiate themselves in a very competitive and hard market by offering this new level of risk management.

ARAG believes that every business and individual has the right to legal representation, regardless of their financial situation. Why should businesses buy LEI? Business owners understand that risk management is an important tool for protecting the very future of their business.

The potential legal risks businesses face vary, depending on the size and nature of the operation, which is why a wide-ranging legal insurance policy is invaluable, especially to SMEs. For example, businesses with more employees are inevitably much more likely to face a dispute with one of them than

those with only a few. Similarly, businesses operating in a heavily regulated sector are much more likely to face action or intervention from a regulator.

Prevention is an important part of our offering with access to ARAG’s Legal telephone helpline and legal document centre. ARAG believe having access to such tools is important because SMEs in particular can often be discouraged from seeking advice on day-to-day legal matters by the prohibitive cost of a lawyer’s time and, like most risks having the right practices and policies in place is usually a business’s best defence.

“The majority of our claims have been associated with employment or contract disputes. These clients had legal bills that would normally not have been budgeted for in their cashflow. Having sound legal advice to pursue and/or defend their legal rights is just a phone call away, and is critical in helping businesses stay on top of the changing legal and regulatory environment.

LEI also indemnifies the business against the legal costs of some of the most common legal disputes,” says Natasha Gale, General Manager, ARAG Australia.

Advising commercial clients on the cover that they need is rarely an easy job, especially when talking to small or medium-sized businesses that may have limited experience, or in the current market be looking at ways to reduce overheads and costs. The team at ARAG are here to help you with all your – and your clients’, LEI questions.

For further information, visit arag.com.au

LEI offers brokers a unique opportunity to differentiate themselves in a very competitive and hard market by offering this new level of risk management.

NIBA.COM.AU / 21

INTERVIEW / Community Broker Network

A SENSE OF COMMUNITY

Insurance Adviser magazine recently sat down with Community Broker Network (CBN) CEO, Richard Crawford, to reflect on what has been a tremendously successful demi-decade.

Insurance Adviser: It’s been nearly five years since CBN was formed – to what do you attribute its success?

Richard Crawford: At the beginning we were given a fabulous legacy. The organisations that came together to form Community Broker Network were tremendous businesses – Westcourt, National Adviser Services, and the CGU community. They all had a strong heritage and were great organisations.

We have been very clear on our purpose.

We are here to develop a successful authorised representative (AR) community and we have a great team of people in CBN dedicated to this.

The AR model has really come to the forefront, because it means brokers are able to spend their time doing what adds value to the client, which is giving advice and providing service. They can outsource all other elements that simply add cost or complexity to their business.

And also I think you can’t help good timing – customers need insurance advisers, there’s no doubt about that. You can’t buy insurance with hope, and that’s what’s at risk of happening in a market without advisers, so there’s certainly market demand.

IA: Looking ahead, what are CBN’s focus and strategic priorities for the next five years?

RC: These are exciting times. In the future, much more emphasis is going to be on using data and insights to improve risk management and reduce the cost of insurance.

Technology is going to ensure that the delivery of insurance advice and products keeps pace with changing customer expectations around timeliness, quality and ease. It will also help us monitor and review the quality and compliance of business operations.

The final part is that people really do make the difference. So for us, it will be

22 / INSURANCE ADVISER JUNE 2021

about fostering talent and capability in our industry. We think of ourselves as one giant incubator or hothouse of good people.

Every day we have community members approaching us with great ideas, and the more we can foster that innovative thinking and turn ideas into reality, the more we can rapidly evolve and stay relevant.

IA: How does CBN differ from other general insurance authorised representative networks in Australia, and what do you offer your community members?

RC: The real difference is that we’re genuinely interested in the individual’s aspirations. As a business, we’re very much focused on our community members – at the end of the day, what we’re here to do is help them achieve their vision and success.

In the current market we certainly advise brokers on market access for hard to place and complex risks, and we also have what we call our partnering service. If an AR is a smaller operator and they need a holiday, or if ill health strikes them or a staff member, they can essentially ring up and we’ll take over the day-to-day management of their clients and their book of business for an hour, five hours, a week, or whatever it takes – in some cases six months if need be.

We offer our community members a complete proposition. When an AR joins us, we provide the platforms and technology on which they operate, but we also work with them on their business plans as needed, helping brokers establish a long-term vision and clear short-term strategies for their business.

Furthermore, through Steadfast and NIBA we connect our community members to important sources of information and education, which helps support both the principals and their staff.

RICHARD CRAWFORD

CEO, Community Broker Network

IA: What competitive advantage does CBN offer its authorised brokers?

RC: In the first instance, we help our authorised brokers determine which markets they should be working in. By providing a range of tools and resources, we can help them sharpen their focus on the market best suited for them. So, when they get in front of a client, they’re in front of the right client, supported by the right tools and resources, and the right products and advice for that client.

IA: How does CBN approach compliance and ensure that their authorised brokers are following best practice?

I think that compliance is part of a system for ensuring client outcomes. So, from our perspective, it’s about understanding, it’s about executing, and it’s about reviewing. The understanding comes from formal education, but also from being constantly updated and connected with advice around what best practice looks like, and how to ensure brokers are operating to the best of their ability.

We make sure our brokers have the tools and resources they need to be compliant. Currently, we have a dedicated working party solely focused on change management in relation to the new regime that’s coming through.

Finally, we audit all of our network members.

We’ve got over 550 licensed advisers in our community, so we are diligent about reviewing their operations on a regular basis.

IA: What do you look for in a broker who is interested in becoming an AR of CBN? RC: I think it’s a combination of a few things; firstly, we look to see if they have a vision for the future and some drive and ambition to get there; secondly, we look for people who really have a strong orientation towards insurance; and thirdly, we look for people who are committed to putting their clients’ best interests first.

BE PART OF NIBA Advertise with the most influential and trusted voice in the Australian intermediated insurance industry ·Insurance Adviser

· Insurance and Risk website · Broker Buzz · Need a Broker website · Targeted eDMs · NIBA events (Annual Convention)

WE ARE YOUR VOICE Contact Tony May National Advertising Sales Manager E: tmay@niba.com.au

FEATURE / QPIB

24 / INSURANCE ADVISER JUNE 2021

FEATURE / QPIB

Two broking leaders and long-standing Qualified Practising Insurance Brokers (QPIBs) explain why it’s important for brokers to make this statement of professionalism.

BY TIFFANY EASTLAND

F

or some time, the National Insurance Brokers Association (NIBA) has been encouraging its members to upgrade their membership to Qualified Practising Insurance Broker (QPIB) status. Why? Because those four letters – Q, P, I, B – tell the industry, your peers and your clients that you hold professional membership of your trade association. Even more importantly, it says that you are highly qualified and that you have sufficient experience to provide professional and trusted advice to your clients to protect their business from risk.

Eric Harris, Service Delivery Leader – APAC, Aon, has been a NIBA Board Director for nearly a decade. He has served as both President and Vice President, and held various positions on the State, Education and Finance committees.

It’s evident that Harris has achieved a tremendous amount in the 36 years he has worked in the insurance industry, and according to the industry leader, it’s the QPIB designation that has been instrumental to his success.

“I have been a QPIB since 1992. At that time, I was working in a development role and wanted to give prospective clients the confidence that they could rely on my advice.

“I also wanted to stand out,” he added.

Like Harris, fellow NIBA Board Director, Rebecca Wilson, has had an impressive career in insurance broking. The Managing Director of Austbrokers ABS was the 2010 recipient of the national Warren Tickle Memorial Award for Young Professional Broker of the Year.

NIBA.COM.AU / 25

FEATURE / QPIB

“IF ALL BROKERS APPLY TO BE A QPIB, I BELIEVE THIS WOULD FURTHER ENHANCE THE REPUTATION OF OUR FANTASTIC PROFESSION.” REBECCA WILSON Wilson says being a QPIB has supported her credibility when meeting clients, “It is a professional qualification that supports the importance of insurance broking,” she says.

“Insurance Brokers work incredibly hard and have immense pride in our profession, I believe the qualification showcases the experience and commitment of a broker.”

Harris agrees, “Being a QPIB should be a priority for all brokers. It’s a way to demonstrate your commitment to professionalism, and it says that you have the skills and knowledge to advise clients on their needs.”

He says the study he completed to achieve QPIB status has given him the skills to be able to help clients and achieve results for his firm.

Both Harris and Wilson believe it’s important for the entire broking profession to get behind the QPIB designation.

With more and more brokers holding the professional designation of QPIB, this ultimately raises the profile of the profession and helps clients to see the value of using a broker in their business.

“In the current climate, it’s crucial to demonstrate to clients that we are professionals in insurance broking, not just insurance. QPIB is the most effective means of communicating this.

26 / INSURANCE ADVISER JUNE 2021

“We need to lift the perception of the industry – promoting QPIB will help achieve that,” explains Harris.

Wilson concludes, “If all brokers apply to be a QPIB, I believe this would further enhance the reputation of our profession.”

WHO MAY APPLY?

To become a QPIB, you should meet the following criteria: 1. Have completed a Diploma of Insurance Broking; 2. Have a minimum of 4 years’ experience as an insurance broker; and 3. Have participated in continuing professional development (CPD) in the 12-month period prior to the date of your application.

HOW DO I APPLY?

Upgrading your QPIB status is easier than you might think. On the basis that you meet the above criteria, you can register online within the Membership section on the homepage of niba.com.au.

When you apply, you will be required to provide a copy of your CV or a letter from your employer indicating that you have a

minimum of four years’ experience, a copy of your qualifications and evidence of your ongoing CPD.

HOW MUCH DOES IT COST TO BE A QPIB MEMBER?

If your employer is a NIBA Member Principal, there is no charge for QPIB membership! The cost forms part of your company’s annual membership.

If your employer is not a NIBA Member Principal and you wish to apply as an individual, the cost is just $154 per annum, including GST.

GET IN TOUCH!

If you are unsure wh ether you are able to apply for QPIB membership, or requir e assistance in the application pro cess, please contact NIBA Memb ership Manager, Audi Witsen at awitsen@niba.com.au .

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

ING IS

U

RA

K

ER

QPIB

S

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

D PRAC IE T F I

IN

QPIB – A STATEMENT OF PROFESSIONALISM

• QUA L

– CRAIG ANDERSON, 2018 YOUNG PROFESSIONAL BROKER OF THE YEAR

NCE BR

O

28 / INSURANCE ADVISER APRIL 2021

INTERVIEW / John Price, AFCA

Connection with clients will ensure success John Price, Lead Ombudsman, Insurance at the Australian Financial Complaints Authority (AFCA), shares his insights on complaints handling and discusses ways intermediaries can improve their internal dispute mechanisms.

BY TANAYA DAS

W

ith his extensive experience in dispute resolution while he was at Financial Ombudsman Service (FOS) and now at AFCA, John Price has been observing trends in complaints about insurance advice.

Over the years, he has seen only a relatively low number of insurance broker disputes in spite of the number of intermediaries that are out there. “The disputes tend to relate to the quality of the advice given and the nature of the insurance,” he says. “Usually, the complaint will be that the insurance does not cover the risks that the insured person had sought. They blame the broker for failing to obtain appropriate cover.”

DOCUMENT EVERYTHING AND KEEP EXTENSIVE FILE NOTES

Price believes that the biggest takeaway for brokers in relation to insurance disputes

is that they must be absolutely clear about asking questions, meticulous about keeping a record of all their interactions with different stakeholders, and diligent about confirming instructions – not just to avoid disputes, but also to ensure that their clients are protected.

He adds that when insurance brokerrelated disputes come into AFCA, what the ombudsman looks for are contemporaneous notes. “We are looking for confirmation of the instructions provided, for communication between the broker and the insured to understand exactly what was being sought,” he says.

“The common factor where brokers are unsuccessful in these claims tends to be when they fail to take accurate and comprehensive notes.”

Price stresses that neglecting to properly record the instructions given and confirm them with clients is a recipe

NIBA.COM.AU / 29

INTERVIEW / John Price, AFCA

for a dispute. His three key takeaways for brokers are: “Even though a relatively small number of disputes come in each year, insurance brokers need to be very careful to make sure they maintain accurate records.

Not just casual diary notes but detailed records of the conversations being held.

“Brokers need to provide confirmation of these conversations to their client, so that the client has the opportunity to correct any error, or clear up any misunderstanding.

I think that’s most vital.

“The third thing that brokers need to do is properly research what products are available. If an intermediary has access to only a limited pool of policies then they need to let the insured know that there may be other products out there in the market outside of their own range.

“Being a good broker has a lot to do with effective communication. In fact, all of it deals with sharing information efficiently and making sure that there are very clear channels and interactions between the parties.”

IMPROVING THE ADVICE PROCESS TO BENEFIT CUSTOMERS

Price believes that improving the advice process also falls within the realm of how people communicate effectively in the modern world and take utmost advantage of all the technology we have access to today.

He says, “We have found over the last 12 months that it is quite easy to communicate digitally and keep a detailed record of all interactions.

“It is important for brokers to not simply send renewals to their clients and just ask them to check it for accuracy, but to spend time earning their dues and talking to their clients to make sure that the cover being offered is still fit for purpose.

“Advice and advice processes should be continually improved to minimise not just consumer complaints, but any kind of disservice to them.”

DESIGN AN EFFECTIVE INTERNAL DISPUTE RESOLUTION PROCESS

Price thinks that an effective internal dispute resolution (IDR) process involves listening to what the client is saying when they mention any sort of dissatisfaction, “One must not simply dismiss client feedback and must resist the urge to be

30 / INSURANCE ADVISER JUNE 2021

“Culture is something that is constantly evolving, it is the way you work, and it seeps into everything you do. It is of enormous importance if a broker wants to be seen as a trusted adviser.” defensive. The reality is mistakes are made by financial professionals, by brokers, and when they are made, the important part of an effective IDR process is to recognise the misstep and remedy it. The aim of any IDR process is to recognise, rectify and remediate efficiently and effectively.

He truly believes that a good IDR procedure can be made better with technology as more people become comfortable with the online world. “I think we simply don’t know how far technology will go, but we do know that it will assist people in dispute resolution, artificial intelligence may make it better but a good IDR system will harness technology to ensure clients receive the best that brokers have to offer,” he says.

“I think there is a world of remedies that could occur but the basics will remain the same. And that is a person when dissatisfied with the service they have

received will seek an independent body such as AFCA, to try to resolve that for them.”

TREAT CLIENT RELATIONSHIPS LIKE LONG-TERM PARTNERSHIPS Price states that financial firms including brokers need to look at the relationship with their consumers carefully, “Financial advice is essentially a service and client relationships need to be more of a partnership. And trust is the most important factor in any relationship.

“The industry needs to be sustainable in the long run and needs to offer service that is fit for purpose and value for money.

A broker needs to demonstrate that they provide a service with real value and their efforts are gaining access to products that are fit for purpose and affordable.”

He believes that insurance brokers need to understand their client needs and look

into the future to innovate: “Insurance intermediaries have the opportunity to work with insurers and develop products that are tailor-made for various clients.

Whether it is designing products that have limited form of cover and meet the niche need of their client.”

KEEPING A CLOSE EYE ON CORPORATE CULTURE

The culture in many of the organisations in the financial industry was closely scrutinised at the Royal Commission and was seen to be of utmost importance in managing conflicts of interest. Price is of the belief that individual brokers must ensure at every step to act in the best interests of their clients. “Financial organisations including brokerages need to continue looking at their culture. It is a central driver of fairness in the relationship between the parties and in the delivery of financial services,” he says.

“When I talk about culture, I mean way more than just saying a service provider is

a consumer-centric organisation, or that consumers are at the heart of entity. They are just words; culture is something that is constantly evolving, it is the way you work, and it seeps into every little thing you do. It is of enormous importance if a broker wants to be seen as a trusted adviser. In the long run the best way to safeguard one’s business is to be truly accountable and transparent.”

Culture is internal and external, says Price: “It is the way organisations treat people, it is the way they expect to be treated, it is how they educate, engage, influence and inspire. Culture is central to fairness, sustainability and innovation in the relationship.”

THE BROKER OF THE FUTURE IS AGILE AND ALERT Price is very clear on the kind of broker who will flourish as an industry player in the future. “A successful insurance broker is not the person sitting down at noon each day having a two-to-three-hour lunch and occasionally talking to clients on the phone.

The broker of the future will be a hardworking person who is actively informing, updating their clients and actively looking at ways to improve the offering that they have for their clients,” he says.

Price believes brokerages that adapt and use technology to its fullest, to provide the best service possible, will thrive: “This includes using data analytics, actuarial information and the latest technology to identify the best possible products for people and delivering that in the most efficient way.”

He absolutely rejects the idea that artificial intelligence can ever replace a good insurance broker. “It does not provide a personal experience,” he says. “And I think that is the one thing that insurance brokers in particular can do; provide a personal experience and communicate to people with empathy and understanding.

“Having that connection with people is a very, very important thing and connection with clients will ensure the survival of the industry,” he concludes.

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COVER STORY / Cyber Security

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Cyber security has emerged as an industry sector fraught with risk for brokers.

BY NINA HENDY

NIBA.COM.AU / 33

COVER STORY / Cyber Security

I

nsurance brokers are grappling with the increasing number of claims relating to cyber security breaches as the work-from-anywhere culture becomes an entrenched part of our post-COVID-19 world.

One of Australia’s largest privately owned wine companies, Taylor’s Wines, a hacking attempt to Parliament House and a ‘significant and complex’ hit to Nine Entertainment are among the high-profile cyber-attacks since March. It does not bode well for small businesses scrambling to protect their cyber systems.

In many ways, the high frequency of media reports is proof that the insurance industry and brokers have been behind the curve when it comes to understanding cyber risk and the risks data breaches and authorised intrusions pose, points out Ben Di Marco, Cyber Specialist for Willis Towers Watson.

“Across the general finance industry, we have seen a significant uptick in cyber-related events over the past 18 months. There has been a sizeable increase in the severity of payload used against financial services firms, including an increase in social engineering attacks, and steps taken to undertake financial payment-related frauds against clients, once the organisation has been compromised,” Di Marco says.

Insurers are by no means immune.

Pan-American Life Insurance Group was struck by a cyber-attack that crippled computer networks in March this year, crippling communications. The attack left policyholders with only an emergency email and a phone service to enquire about health and other benefits.

Emergence Insurance CEO Troy Filipcevic notes a significant uplift in claims activity this year. “The main claims have been business email compromise and ransomware, which has become more severe and sophisticated,” he says.

It is only the tip of the iceberg.

Underwriter Rob Collyer says the past 12 months have seen some major markets in this space reduce capacity and dramatically increase rates as a direct result of growing claims frequency, together with an increased severity of losses being sustained.

“This, together with an increased awareness of cyber risks and exposures through the new working-from-home environment has led to a marked increase in interest in cyber insurance, which I don’t see slowing down any time soon,” 34 / INSURANCE ADVISER JUNE 2021

“ACROSS THE GENERAL FINANCE INDUSTRY, WE HAVE SEEN A SIGNIFICANT UPTICK IN CYBERRELATED EVENTS OVER THE PAST 18 MONTHS.” BEN DI MARCO, CYBER SPECIALIST FOR WILLIS TOWERS WATSON the Underwriting Development Manager for Nova Underwriting says.

An increase in ransomware-related losses with ransom demands increasing and attacks becoming more sophisticated have been of particular concern. Human errorrelated claims are also on the rise through phishing emails and social engineering fraud, Collyer says.

“It’s not just about the payment of a ransom anymore – incident response costs, business interruption and data loss expenses all now come into play,” he says.

This has led to an uptake on social engineering cover, along with more excess opportunities stemming from a reduction in capacity as holding underwriters reduce the limits being offered.

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COVER STORY / Cyber Security

“Whilst post-incident response services remain a key part of any cyber product, we are seeing a growing need for pre-incident services as clients look for more ways to ensure they have an appropriate level of risk management in place.

“The level of risk management in place certainly helps in keeping a cap on the premium, but can also mean the difference between obtaining cyber cover and not,” Collyer says.

Bolting on advisory services

Many agree that the answer lies in taking a lead role in educating clients.

Aon reveals it has invested heavily by hiring experienced cyber practitioners to educate clients on how their cyber risk is being underwritten by insurers, embedding advisory services into the insurance transaction.

Chris McLaughlin, Director, Cyber Solutions Group says this has enabled the insurer to get a much better understanding of how clients managed and protected critical assets, and understand how clients quantified the balance sheet exposure to a cyber incident.

New-look cyber needs The need for virus protection, firewalls and regular off-site back-ups has been replaced by: 1. Education and training for clients 2. A need for multi-factor authentication for remote access 3. Intrusion detection measures 4. A business continuity and disaster recovery plan 5. Mandatory security and privacy training for staff

36 / INSURANCE ADVISER JUNE 2021

“WE’RE SEEING A GROWING NEED FOR PREINCIDENT SERVICES AS CLIENTS LOOK FOR MORE WAYS TO ENSURE THEY HAVE AN APPROPRIATE LEVEL OF RISK MANAGEMENT IN PLACE.” ROB COLLYER, UNDERWRITING DEVELOPMENT MANAGER, NOVA UNDERWRITING Its proprietary assessment tool helped it better understand its clients’ control environment.

“As the cyber insurance market has hardened significantly over the last four months, our clients are embracing both of these approaches and we are more often supporting our clients in more comprehensive submissions to try and mitigate some of the significant increases we are seeing in premiums.”

In response to growing demand for cyber cover, Filipcevic reveals Emergence has brought claims handling and incident response in-house “This allows us to have cyber security experts be the main port of call. This is imperative to providing the insured with competent instruction on what to do and how we manage the response on behalf of the insured,” he says.

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COVER STORY / Cyber Security

“BY EDUCATING SMES ON CYBER SECURITY AND PRIVACY CONTROLS, BROKERS CAN NOT ONLY HELP THEIR SME CLIENTS MITIGATE THOSE RISKS BUT IMPROVE THEIR PROFILES FROM AN INSURANCE STANDPOINT.” EDWARD OSBOURNE OF SPARKE HELMORE LAWYERS

Legal eagle

Edward Osbourne of Sydney’s Sparke Helmore Lawyers agrees that insurance brokers need to collaborate with cybersecurity experts and educate clients.

“By educating SMEs on cybersecurity risks and encouraging them to improve their cybersecurity and privacy controls, brokers can not only help their SME clients mitigate those risks but improve their profiles from an insurance standpoint – fewer and less costly claims,” Osbourne says.

There is also a need to shift cultural behaviours, with many organisations relying on an outsourced or managed 38 / INSURANCE ADVISER JUNE 2021

service provider to address their cyber security needs, without understanding the providers’ capabilities. “In some circumstances, the organisation hasn’t built the internal confidence and capabilities to test what they are being told and ensure that they can align cyber security to their business needs,” Di Marco says.

Risk identification is also commonly underdone, as organisations fail to align risks to the specific circumstances of the business, internal tolerances and situational awareness, Di Marco adds.

“When this is done properly, you can get a tailored understanding of the needs

of the business, which gives the general framework a cyber security strategy should hang off,” he says.

The most marked factor in determining whether significant financial business lost can be avoided is whether or not the organisation can recover from a cyber event quickly, Di Marco says.

“Many of the catastrophic cyber event case studies have occurred not simply because of an intrusion, but more fundamentally because the organisation didn’t have the correct investments across back-ups, redundancy and incident response capabilities,” Di Marco concludes.

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FEATURE / SME Solutions

INTO UNKN While SMEs across the remarkable fortitude to vital that brokers are and educating clients on

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NIBA.COM.AU / 41

FEATURE / SME Solutions

F

or the two-million-plus smallto-medium enterprises across Australia, the past 18 months have been the toughest on record.

From shutdowns to lockdowns, pivots to PPE, the strain SMEs have been under has been – to use a 2020 buzzword – unprecedented.

But Australian business owners are a tough bunch. Thanks to a good dose of resilience and determination, aided of course by government bailouts and a pandemic control strategy that has, in the main, kept a lid on a lot of potential disruption, the SME community has largely emerged strongly.

Australian Small Business & Family Enterprise Ombudsman Bruce Billson says, “Australian small businesses have definitely had a challenging 12 months, but it seems they are optimistic.

According to new figures from Roy Morgan, business confidence has reached a seven-year high, which is extraordinary when just a year ago we were in the midst

“A LOT OF BUSINESSES HAVE PIVOTED TO AN ONLINE MODEL, AND THAT ONLINE PRESENCE BRINGS SIGNIFICANTLY DIFFERENT EXPOSURES TO THEIR PREVIOUS EXPOSURES.” CHRISTIAN GARLING, MANAGING DIRECTOR OF FTA INSURANCE

42 / INSURANCE ADVISER JUNE 2021

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of the biggest economic downturn since World War 2.”

This has, of course, been affected in large part by the trades businesses are in.

While some entities have been able to continue trading, adopt a different channel to market or add new strings to their bows, others have been fundamentally impacted – cafes or businesses that have traditionally relied on the international tourist trade, for example, have had a tougher hand to play than most.

And how they’ve played that hand potentially opens them up to risk.

“A lot of businesses have pivoted to an online model,” says Christian Garling, Managing Director of underwriting agency FTA Insurance. “And that online presence brings significantly different exposures to their previous exposures, which might have been more bricks-and-mortar-related.

“For example, events companies are doing more and more online events, and their exposure there isn’t going to be covered by any of their other products.”

And it’s not just the way businesses offer their services, but what they offer too.

“In days gone by, you wouldn’t have thought about touching base with a hairdresser client, for example, every quarter to see if their business had changed, but today you have to,” says Anthony Pagano, Head of Commercial Intermediaries at Vero.

“They may have diversified into other beauty services, such as piercings and tattoos, or they may be visiting clients at home.

“They may now be importing products from overseas – and if they are, they take on responsibility as a manufacturer, which opens them up to different exposure.”

A change in revenue flows may lead to a change in structure, and restructures can prove to be a challenge for brokers.

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FEATURE / SME Solutions

“It’s an area that’s causing a lot of confusion,” Garling says. “Businesses need different policies in place to accommodate that restructure, and brokers need to understand how to appropriately insure that restructure and provide the right runoff cover for different insurance. It’s a difficult little area.”

A CONTINUAL EDUCATION

We’re in a hard market, with premiums typically rising. For SMEs, it’s not necessarily a well-timed increase – if indeed there’s ever such a thing. But insurance brokers have a huge part to play in not only guiding their clients through the coming years, but educating them too.

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“Insurance brokers are uniquely placed as advocates and pathfinders to help their small-business clients find the right-fit insurance solutions,” Billson says.

“Brokers are well-equipped to not only ensure small businesses have the right level of insurance coverage, but they can also advise them on risk-management strategies, which can ultimately make the small-business client a more attractive proposition to insurers.”

Pagano says it’s important to talk to clients regularly about how they can think about their business differently, and increase their knowledge of insurance as a product, and an industry.

“BROKERS ARE WELL-EQUIPPED TO NOT ONLY ENSURE SMALL BUSINESSES HAVE THE RIGHT LEVEL OF INSURANCE COVERAGE, BUT THEY

CAN ALSO ADVISE THEM ON RISK-MANAGEMENT STRATEGIES.” BRUCE BILLSON, AUSTRALIAN SMALL BUSINESS & FAMILY ENTERPRISE OMBUDSMAN

44 / INSURANCE ADVISER JUNE 2021

“We encourage brokers to educate SME clients about sums insured, underinsurance, the direct and indirect consequences of natural catastrophes…

“It’s important, too, for SMEs to understand the whole proposition of insurance – that the many pay for the few. We’ve had bushfires, cyclones, floods, hailstones – you name it – over the past 18 months, and premiums have gone up, regardless of whether people have been affected or not.”

And dealing with that extreme weather, and the consequential direct and indirect impact, is going to be an increasing feature of life for SMEs.

FEATURE / SME Solutions

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“THE GOLDEN OPPORTUNITY FOR BROKERS IS TO BE THE CLIENT’S ADVOCATE – AND TO DO THAT YOU HAVE TO STAY IN REGULAR CONTACT. THAT’S NOT TO SAY IT HAS TO BE FACE-TO-FACE, BUT EVEN SENDING REGULAR NEWSLETTERS ABOUT WHAT’S GOING ON IN THE INDUSTRY, EMERGING TRENDS, LESSONS LEARNED, MINIMISING RISK OR A CLAIM TO AVOID WILL BENEFIT.” ANTHONY PAGANO, HEAD OF COMMERCIAL INTERMEDIARIES AT VERO

“We recently saw the Category 3 Cyclone Seroja hit the west coast of Australia – the same parallel of latitude as Brisbane,” says Adam Squire, Head of Claims at Gallagher. “The majority of buildings in these areas aren’t built to cope with that level of weather event!”

While extreme weather certainly isn’t a new phenomenon for Australia, Squire believes the incidences and intensity of weather events have increased significantly over the years.

“I’ve worked in claims for more than 20 years, and weather-related incidents seem to be happening more regularly, with more intensity. The majority of them have seemed to hit less densely populated areas, but as time goes on that could well change.”

“Gone are the days when it was satisfactory to meet up with a client once a year to talk through their renewals,” says Anthony Pagano, Head of Commercial Intermediaries at Vero.

“The golden opportunity for brokers is to be the client’s advocate – and to do that you have to stay in regular contact.

That’s not to say it has to be face-to-face, but even sending regular newsletters about what’s going on in the industry, emerging trends, lessons learned, minimising risk or a claim to avoid will benefit.”

Billson says, “Staying in close contact with customers through social-media channels and digitisation has been a common thread for small businesses that were able to survive and even thrive in the COVID crisis. Research shows that SMEs with advanced levels of digital engagement are 50 per cent more likely to grow revenue and earn 60 per cent more revenue per person.”

46 / INSURANCE ADVISER JUNE 2021

The 5 habits of highly effective brokers

The Vero SME Insurance Index celebrated its 10th anniversary this year, and in it, it identified the tasks undertaken by brokers with satisfied clients.

1. Provide in-depth analysis on insurance options available 2. Check up on business changes 3. Provide information on changes to insurance or regulatory requirements 4. Advocate on clients’ behalf 5. Provide cost-effective options

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NIBA / 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 calendars to meet, share, learn and grow with your industry peers at NIBA events across the country.

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

REGISTER NOW ON THE NIBA WEBSITE FOR YOUR STATE’S GALA LAUNCH

2021 NIBA WA GALA LUNCH WHEN: Friday, 9 July 2021 WHERE: Crown Perth REGISTER NOW: niba.com.au/event/ 2021-niba-wa-gala-lunch/

2021 NIBA QLD GALA LUNCH WHEN: Wednesday, 14 July 2021

WHERE: Royal International Convention Centre REGISTER NOW: niba.com.au/event/ 2021-niba-qld-gala-lunch

2021 NIBA NSW GALA LUNCH

WHEN: Friday, 16 July 2021 WHERE: Doltone House Jones Bay Wharf

REGISTER NOW: niba.com.au/event/ 2021-niba-nsw-gala-lunch

2021 NIBA SA GALA LUNCH

WHEN: Friday, 23 July 2021 WHERE: Adelaide Convention Centre REGISTER NOW: niba.com.au/event/ 2021-niba-sa-gala-lunch/

DISPLAY ADVERTISING INDEX – JUNE 2021 Liberty..............................................IFC Zurich....................................................5 Technosoft........................................... 7 ANZIIF..................................................9 Focusnet...............................................11 CBN......................................................17

ARAG....................................................21 QPIB....................................................27 Agile......................................................31 Emergence........................................35 Nova.....................................................37 Brooklyn............................................ 39

Vero..................................................... 43 UAC..................................................... 45 Ebix......................................................47 Broker Co-op...................................55 NIBA Mentoring.......................... IBC CGU...............................................OBC

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

54 / INSURANCE ADVISER JUNE 2021

The Leading Network for independent insurance brokers Broker Co-op, an Australian cluster group formed exclusively for independent brokers, launched on 20 April 2021. As a co-operative, every dollar generated by Broker Co-op is used to deliver the services our members want.

Independent insurance brokers across the nation are invited to join as founding members before 31 July 2021.

A VOICE

NO FEES

Members retain their independence and have a say in what services they need to run their business, service their customers and improve their bottom line.

Members do not pay joining or annual membership fees.

Members will have access to a full suite of cluster services provided at no cost, including Professional Indemnity insurance.

To request a copy of our Membership Offer or to express your interest in becoming a Broker Co-op member: Visit

www.broker.coop

Email

join@broker.coop

Applications to join as a foundation member close on 31 July.

AGGREGATION OF AGREED SERVICES Broker Co-op aggregates the procurement of key services to its member brokers through partnerships with key suppliers.

INSURER STRENGTH RATINGS

S&P GLOBAL

AUSTRALIA

INSURER FINANCIAL STRENGTH RATINGS

The following is a list of S&P Global Ratings insurer financial strength ratings assigned to insurance companies in Australia and New Zealand. Ratings at 1 May, 2021.

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

RATING

NON-LIFE INSURERS AAI Ltd.

A+/POSITIVE

AIG Australia Limited

A/CreditWatch Negative

Allianz Australia Insurance Ltd.

AA-/STABLE

BHP Billiton Marine & General Insurances Pty Ltd. A/STABLE Chubb Insurance Australia Ltd.

AA-/STABLE

Great Lakes Insurance S.E (Australia Branch)

AA-/STABLE

Hallmark General Insurance Co. Ltd.

BBB+/STABLE

Insurance Australia Ltd.

AA-/STABLE

Society of Lloyd's

A+/STABLE

Medical Insurance Australia Pty Ltd.

A-/STABLE

QBE Insurance (Australia) Ltd.

A+/STABLE

QBE Insurance (International) Ltd.

A+/STABLE

Hallmark General Insurance Co. Ltd. (NZ Branch) BBB+/STABLE

Zurich Australian Insurance Ltd.

AA-/STABLE

IAG New Zealand Ltd.

AA-/STABLE

LENDERS MORTGAGE INSURERS

Society of Lloyd's

A+/STABLE

Genworth Financial Mortgage Insurance Pty Ltd.

A/NEGATIVE

Medical Insurance Society Ltd.

A-/POSITIVE

QBE Lenders' Mortgage Insurance Ltd.

A/STABLE

Southern Cross Benefits Ltd.

A/STABLE

Southern Cross Pet Insurance Ltd.

A/STABLE

Westpac Lenders Mortgage Insurance Ltd.

A/CreditWatch Negative

Teleco Insurance (NZ) Ltd.

BBB+/STABLE

LIFE INSURERS

Vero Insurance New Zealand Ltd.

A+/POSITIVE

AIA Australia Ltd.

A+/STABLE

Vero Liability Insurance Ltd.

A+/POSITIVE

AMP Life Ltd.

A-/NEGATIVE

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

NEW ZEALAND

RATING

NON-LIFE INSURERS AA Insurance Ltd.

A+/POSITIVE

AIG Insurance New Zealand Ltd.

A/CreditWatch Negative

Chubb Insurance New Zealand Ltd.

AA-/STABLE

QBE Insurance (Australia) Ltd. (New Zealand Branch) A+/STABLE

HEALTH INSURERS Southern Cross Medical Care Society

A+/STABLE

NIB NZ Ltd.

A-/STABLE

LENDERS MORTGAGE INSURERS Genworth Financial Mortgage Insurance Pty Ltd. (NZ Branch)

REINSURERS A/NEGATIVE

General Reinsurance Australia Ltd.

AA+/STABLE

LIFE INSURERS

General Reinsurance Life Australia Ltd.

AA+/STABLE

Asteron Life Ltd.

A+/POSITIVE

Hannover Life Re of Australasia Ltd.

AA-/STABLE

Hallmark Life Insurance Co. Ltd. (NZ Branch)

BBB+/STABLE

Munich Reinsurance Co. of Australasia Ltd.

AA-/STABLE

Medical Life Assurance Society Ltd.

A-/POSITIVE

RGA Reinsurance Co. of Australia Ltd.

AA-/STABLE

Westpac Life-NZ-Ltd.

A+/NEGATIVE

SCOR Global Life Australia Pty Ltd.

AA-/STABLE

Resolution Life New Zealand Ltd.

A-/NEGATIVE

Swiss Re Life & Health Australia Ltd.

AA-/NEGATIVE

*For the S&P Global Insurer Financial Strength Ratings Definitions visit: https://www.niba.com.au/resource/standardandpoors.pdf Copyright © 2021 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 thirdparty 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

56 / INSURANCE ADVISER JUNE 2021

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.

INSURER STRENGTH RATINGS

NEW ZEALAND

BEST’S

FINANCIAL STRENGTH RATINGS

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/STABLE

Co-operative Life Limited

B++/STABLE

DPL Insurance Limited

B++/STABLE

Fidelity Life Assurance Company Limited

A-/STABLE

Foundation Life (NZ) Limited

A-/STABLE

General Reinsurance Life Australia Limited (New Zealand Branch)

A++/STABLE

LIFE, ANNUITY AND ACCIDENT

Kiwi Insurance Limited

A-/STABLE

General Reinsurance Life Australia Ltd.

Lifetime Income Limited

B- u/NEGATIVE

Momentum Life Limited

B++/STABLE

Partners Life Limited

A- u/DEVELOPING

Pinnacle Life Limited

B/STABLE

The following is a list of AM Best Financial Strength Ratings (FSRs) assigned to insurance companies in Australia and New Zealand. Ratings as at 9 May, 2021.

Contact: Scott Ryrie, Co-CEO A. M. Best Asia-Pacific (Singapore) Pte Ltd. Board Member and Commercial Director for Asia Pacific Tel: +65 6303 5007 Email: scott.ryrie@ambest.com

AUSTRALIA

RATING A++/STABLE

PROPERTY/CASUALTY Ansvar Insurance Limited

A-/NEGATIVE

First American Title Insurance Company of Australia Pty Limited

A/STABLE

General Reinsurance Australia Ltd

A++/STABLE

Guild Insurance Limited

A-/NEGATIVE

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

A+/STABLE

Pacific International Insurance Pty Limited

B++/NEGATIVE

Beneficial Insurance Limited

B++/STABLE

The Hollard Insurance Company Pty Ltd

A-/STABLE

Brightsideco Insurance Limited

B/STABLE

The New India Assurance Company Limited (Australia Branch)

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

Health Services Welfare Society Limited

B+/STABLE

Mitsui Sumitomo Insurance Company Limited (New Zealand Branch)

A+/STABLE

New Zealand Medical Professionals 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 Insurance 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.

PROPERTY/CASUALTY

NIBA.COM.AU / 57

INSURANCE JOURNEY / David Harry

IT’S ALL ABOUT THE REWARDING RELATIONSHIPS

The 2020 NSW/ACT Young Professional Broker of the Year, David Harry from Aon, revels in his role as an insurance broker because he truly enjoys using his knowledge and skills to build rewarding relationships with his clients and fellow professionals.

“W

hen I finished school, it came as no surprise to my parents that I didn’t have my career planned out and for a few years I was trying to figure out what I wanted to do.

This led me to a couple of different roles until I made my way into the corporate world. In my previous role I worked at Hewlett Packard for close to three years and really enjoyed my time there. Being in the corporate space ticked a lot of boxes for me personally and professionally, but I was still searching for something I was passionate about and where I felt I could best use my skillset.

An advertisement for an insurance broking role at Aon immediately caught my attention and while I had zero broking or insurance experience, I made the decision to pursue the opportunity. A great decision it was as I’m now seven-and-a-half years in and have enjoyed every bit of my time as an intermediary.

I chose this profession because the thought of being able to specialise in insurance, and to use that knowledge to assist others and be there to help when they need it most, appealed greatly. The complexities and importance of insurance made me want to become a specialist in the field. It is a people-driven industry and relationships are at the heart of what we do. I definitely wanted to be a part of that. There is obviously the cliché about falling into insurance, however I simply did not know of our world.

My role prior to broking was in a project management team where we looked after print services and roll-out of various contracts.

There were definitely some transferrable skills and I would deal with clients directly, although it was very different from what I do now. I am definitely way more invested in my client’s wellbeing as an insurance broker.

PROUDLY SUPPORTING

58 / INSURANCE ADVISER JUNE 2021

When you think about it, almost every part of life has insurance behind it. To be involved in something so important is both interesting and exciting to me. There’s always so much to learn, and it’s such a rewarding and varied industry. It can be complex, it is critical for organisations and people, it is a huge part of our economy and, in terms of a career, offers so much more than most can comprehend.

The value of relationships both internally and externally is one of my biggest takeaways from my time in insurance broking. There are so many great people in our profession and building these relationships helps one develop one’s own skillset, keep on top of trends in the industry, gain valuable insights, share experiences, meet possible mentors and clients – the list goes on. Building a network gives one the resources to assist in our day-today work, career and, importantly, establish a

long-term relationship with someone and in many cases a lifelong friendship.

I always encourage people to be a part of our industry in any way they can. I think it’s about raising awareness of our profession and highlighting the rewarding journey(s) one can take by being a part of this wonderful profession. I can not speak for everyone, however am happy to share my own experiences to date and how much I have and continue to enjoy what we do, and who we do it for and with. So, if there is opportunity to promote, support or encourage others into our profession then I will always do so.

If there was anything I would change, it would simply be entering into our profession earlier. Otherwise, I am happy with the journey and have the outlook that each role or change played its part in a great learning experience.”

FOUR QUICK QUESTIONS Favourite film? Man on Fire (I am a massive Denzel fan).

Favourite book? I am not a big book reader, I must admit. I am all about reading the news as well as finance and sports articles.

Favourite tipple? A social beer or two.

Favourite pastime? Playing sport with my mates. I grew up playing rugby league then soccer and cricket for years and years – now it’s golf! And of course, time spent with my family (wife and two young boys.)

Share your insurance journey. Email editor@niba.com.au

MENTORING

NIBA Mentoring – Promoting Professional Development for 10 Years

WHAT WILL THE PROGRAM DO FOR YOU? For more information and to express interest visit www.niba.com.au/mentoring

UNDERINSURANCE. NO MEAN FEAT FOR AMBITIOUS BROKERS. 75% of customers* haven’t updated their property sum insured. Let’s flip the script and help them review their cover. When you work with CGU, you get access to data and insights like these that help you better serve your customers.

We’ve been backing ambitious brokers for 165 years.

Contact your Account Partner for your customer insights.

Insight based on FY20 CGU Business Package Property Cover portfolio data.