AUCKLAND FLOOD ‘COULD SET RECORD’
Extreme flooding in New Zealand’s North Island at the end of January will be the largest ever weather-related claims event for Auckland – and likely for the whole of New Zealand, the Insurance Council of New Zealand (ICNZ) says.
Insurers have already received thousands of claims after the floods, which have killed four and were described by New Zealand’s Prime Minister Chris Hipkins as “unprecedented”.
“It is in no doubt the largest single extreme weather event this country has faced,” ICNZ CEO Tim Grafton said. “This is a very significant event which will result in a lot of claims.”
Auckland, where home values average more than $NZ1.3 million ($1.2 million), received around 75% of its typical summer rainfall in just 15 hours, landslides were threatening properties and thousands were without power.
“The tragic loss of life and the vision of the damage to Auckland is devastating,” IAG MD and CEO Nick Hawkins said.
IAG says it may review its estimate for annual natural peril costs in response to the floods.
Suncorp is sending additional claims management resources from its Australian operations to help its local team and speed up the claims process.
LOYAL STAFF ‘PENALISED’
Loyal insurance staff are being financially penalised after employers lured new hires with attractive offers that exceeded the average salary increases awarded to existing staff, recruiter Hays says.
The latest Hays Salary Guide found 56% of Australian insurance professionals surveyed said they would benefit financially from changing jobs. In New Zealand, the figure was 61%.
Factors driving insurance industry turnover are uncompetitive salaries, lack of promotional opportunities and negative mental health and well-being impacts. The survey found just 43% of insurance employees in Australia intend to remain with their current employer beyond this financial year.
The top five insurance roles employees need to fill in Australia are claims assessors, underwriters, contact centre agents, brokers and technical claims managers.
Hays says high offers made to new staff last year are now “fuelling pay equity concerns” for tenured employees, who may “pay a price” for their loyalty.
“Generally, reinsurance returns have been insufficient for a number of years and now this is probably one of the strongest price corrections we have seen in a decade – or even more than a decade.”
Hannover Re Australian Branch Managing Director Michael Eberhardt
BUSINESS INTERRUPTION DEMAND RISING
Business interruption insurance demand could be set for growth, despite legal battles and confusion during the covid pandemic, with wordings clarified and more firms aware of the product’s importance, a global group of lawyers says.
Global Insurance Law Connect (GILC) Chairman and Sparke Helmore Partner Gillian Davidson says the pandemic has focused the market on the need for policy clarity and a proliferation of policies that clearly exclude or include pandemic cover is providing more certainty.
“Despite some short-term pressures on pricing caused by global inflation, a recent wave of cases in Asia, including a potential new variant in China, and ongoing legal challenges hanging over from the pandemic, the outlook for business interruption insurance as a class is more positive than it has been for some years,” Ms Davidson says.
GILC members have reported a noticeable growth in demand for BI coverage since the outbreak of the pandemic and a report released by the group with insights from 19 countries suggests the class could see a period of growth and stability, particularly in more traditional areas of cover, such as property damage.
UAC NAMES CEO
The Underwriting Agencies Council (UAC) has appointed Jenny Bax, pictured, who has held senior positions at Ansvar Insurance, Allianz and QBE, as its inaugural CEO.
Ms Bax, who has more than 30 years’ industry experience, takes up the UAC role as the demand for specialist underwriters continues to increase. The peak body has more than 130 agency members who write combined annual gross written premium approaching $10 billion.
Chairman Heath Amber says Ms Bax is a respected industry leader who has vast national experience across broker, agency, distribution and business development.
“UAC members are going from strength to strength and Jenny’s appointment is the right time to escalate UAC’s dynamic market position,” he said today.
UAC advertised for a CEO last year after GM William Legge announced he would be retiring in December following 11 years in the role.
S&P WARNS ON CAT IMPACT
Property and casualty insurers’ ability to absorb additional natural catastrophes could be tested in the case of severe downside scenarios involving an escalation of events such as fires and floods, S&P Global Ratings says.
For the next two to three years Australia-based insurers, governments and banks should be able to absorb the equivalent of the worst blows from natural disasters in the past decades, given prudent risk management and solid balance sheets and profitability, the report says.
But sensitivity analysis suggests the creditworthiness of insurers, governments and banks would weaken if the frequency and intensity of events “materially” increase.
“Our scenario analysis suggests that our ratings on many insurers, governments, and banks would be at risk if the direct financial impact from bushfires and floods were two to three times worse than in the past two decades, or if major disaster events were to become recurrent,” S&P says.