SWISS RE APPOINTS LOCAL HEAD

Swiss Re has appointed Trent Thomson, pictured, as its Australia and New Zealand Head from November 1.

The reinsurer says the appointment is currently pending regulatory reviews, but if passed, will see Mr Thomson take responsibilities as Branch Manager of Swiss Re Asia, Australia Branch, Managing Director for Swiss Re Life and Health Australia and Country President of Australia and New Zealand.

Mr Thomson holds 25 years of experience in underwriting, portfolio management, client sales and leadership roles. He joined Swiss Re in 2004 and currently is Property and Casualty head in Australia and New Zealand.

Mr Thomson fills the role after predecessor Sharon Ooi left in July to join Hannover Re as a member of its Group Executive Board.

“With deep understanding of the market, coupled with his proven experience, Trent is well-positioned to lead the team in delivering high-quality services to support our clients’ success in this important market,” Swiss Re CEO Reinsurance Asia Paul Murray said.

360 NAMES CEO

360 Underwriting Solutions says Jason Clarke has been appointed as CEO of its Australian business, joining from QBE where he has held several senior roles during a 32-year career with the insurer.

As CEO Australia and Director, starting on November 1, he will be responsible for 360’s Australian business which currently writes more than $350 million in gross written premium (GWP).

Mr Clarke has focused on commercial lines and intermediary distribution at QBE, and most recently was working with Group CEO Andrew Horton on the establishment of a global distribution function.

Prior to this he was Chief Customer Officer, Commercial Lines, playing a significant role in developing QBE’s dominant position in the Australian broker channel.

“To have someone of [his] calibre join 360 is a watershed day in our journey,” 360 Underwriting Solutions co-founder Denis Morrissey said.

Fellow co-founder Chris Lynch says “the time was right to invest in our Executive Leadership capability to enable us to achieve the goals and aspirations we have for the business” as 360 expects to write more than $400 million in GWP next year.

The underwriting agency says it is making other structural changes to strengthen the business.

Mr Morrissey, who is MD and Chairman, will oversee group performance, the central group services functions and continue to drive growth opportunities for the business.

Mr Lynch, as CEO New Zealand and Director, will establish the 360 brand there and be responsible for the performance of the New Zealand business as well as opportunities in other growth markets.

360 was aquired by AUB at the end of 2020, and AUB’s underwriting agencies division profit is rising.

STEADFAST BUYS INSURANCE HOUSE

Steadfast Group has entered into an agreement to acquire Insurance Brands Australia (IBA) for $301 million.

IBA is one of Australia’s largest privately owned insurance distribution businesses, established in 1983 and predominantly focused on the SME sector, Steadfast says.

The deal involves an initial payment of $276 million followed by a further $25 million subject to meeting fiscal 2023 performance criteria.

“The acquisition of IBA is consistent with our prudent and successful acquisition strategy,” Steadfast said in a statement released with its annual financial results.
IBA, which was previously branded as Insurance House, has a network of more than 400 insurance professionals across more than 70 locations.

IAN WREAKS HAVOC

Insured losses from Hurricane Ian have been estimated at $US42-57 billion ($65-88 billion) including impacts after landfalls in both Florida and South Carolina, modelling company Verisk says, making it one of the worst to hit the US.

The estimate includes wind, storm surge and inland flood onshore property impacts, but excludes losses to the government-backed National Flood Insurance Program.

Wind damage of $US38-51 billion ($59-79 billion) comprises the majority of the estimate, while the impacts from the second South Carolina landfall represent about 1% of the total, the company says.

Wind impacts were more severe around where Ian made landfall in southwest Florida, and included significant loss of roof covers in residential homes and torn up membranes in commercial structures, while extensive damage was also seen to elements of building components and cladding.

“Storm surge also caused massive destruction to communities along the western coast of Florida where Ian made landfall,” the estimate says.

Residential construction in the areas is mostly on slabs that provide little elevation above the ground. Several rows of beachfront homes collapsed due to storm surge and in some cases, homes were dislodged from their foundations.

Several manufactured home parks in the affected areas also saw massive damage including loss of roofs, damage to wall siding and near total destruction.

Verisk’s figure excludes any potential impacts of litigation or social inflation that could cause the total insured industry loss to exceed $US60 billion ($93 billion).

FLOOD LOSSES MOUNT

Insured losses from Australia’s costliest ever flood have reached $5.45 billion from around 234,000 claims, the Insurance Council of Australia (ICA) said.

The new estimate for the catastrophe, which devasted northern NSW and Queensland in the early months of 2022, creeps toward the $5.57 billion insured-loss bill from the 1999 Sydney hailstorm which for two decades has held the title of most expensive Australian catastrophe in normalised terms.

ICA says 54% of all the claims are now finalised.

CEO Andrew Hall says insurers have been working hard to settle claims.
“Insurers are geared up and working through the current claims as quickly as possible,” Mr Hall said. “We are confident this momentum will continue leading into summer.”

Claims closure times are being impacted by the high volume and a shortage of experts, builders and materials, ICA says, as well as the complexity of government recovery programs. The ICA wants Queensland, NSW and the Federal Government to expedite build-back and buy-back programs.

“To ensure Australians continue to have access to affordable insurance protection, we must increase investment in the resilience of our built and natural environments, and, in parallel, address the underlying cause of more severe weather events,” Mr Hall said.

LA NINA RETURNS

The Bureau of Meteorology says Australia has entered a La Nina weather event, increasing the likelihood of floods this spring and summer.

It is the third La Nina in a row – and the last one only ended in June.

“Tropical Pacific sea surface temperatures have been cooling since June and are now at La Nina thresholds,” the bureau said.

“Models indicate this La Nina event may peak during the spring and return to neutral conditions early in 2023.

“La Nina events increase the chances of above average rainfall for northern and eastern Australia during spring and summer.”

Meanwhile, a negative Indian Ocean Dipole (IOD) event continues and “all surveyed climate models agree” that negative IOD conditions are likely to continue into late spring.

A negative IOD event is typically associated with above average spring rainfall for much of Australia.

“When a La Nina and negative IOD combine, it further increases the likelihood of above average rainfall over Australia, particularly in the eastern half of the continent,” the bureau warns.

LLOYD’S REMEMBERS QUEEN ELIZABETH II

Lloyd’s has rung the historic Lutine Bell in honour of Queen Elizabeth II, who has died at the age of 96 after becoming Britain’s longest-reigning monarch.

“We often talk about Lloyd’s rich history and proud moments, forgetting for just how many of those Her Majesty was either present or reigning,” Chairman Bruce Carnegie-Brown said.

“We were lucky to call her a friend and regular visitor to Lloyd’s and I am sure every one of us will cherish the memories we had together.”

Mr Carnegie-Brown said the Queen had been a shining role model and that the world was united not just in grief and respect, but in love, admiration and indebtedness.

“Our thoughts and prayers will remain with the Royal family as they mourn, and we will now ring the Lutine Bell in Honour of Her Majesty Queen Elizabeth II,” he said during a ceremony.

Two minutes silence was observed after the bell was struck once.

The Lutine Bell, which sits in the Underwriting Room atrium, is used to mark a range of significant occasions. It was rung when Lloyd’s closed the underwriting room due to covid and in celebration following the 2013 birth of Prince George, the first child of the Duke and Duchess of Cambridge, among other events.

The bell was salvaged from the wreck of the Lutine in 1858 after the vessel sank in 1799. Traditionally it was sounded to alert brokers and underwriters to news regarding an overdue ship, with one strike representing bad news with the loss of a vessel, and two for a safe arrival.

Queen Elizabeth II laid the foundation stone for Lloyd’s previous Lime St building in 1952, months after her accession to the throne and in 1986 officially opened the current One Lime St building.

The Queen in 2014 visited the Underwriting Room to unveil a plaque commemorating the market’s 325th anniversary, with the bell rung twice to mark the occasion.

MOTOR CLAIMANTS ‘SHORT-CHANGED’

A consumer group has warned that car insurance customers are being caught short at claims time by rapidly rising vehicle prices.

Those worst affected are insureds with agreed value policies that have not been reviewed since the covid-induced price increases, who have suffered a total loss.
Most motor insurers allow customers to choose between setting an agreed value for their vehicle, or selecting market value.

Agreed value has been preferred by many, as it provides certainty, with market value enabling the insurer to dictate a payout based on its assessment of a vehicle’s worth.

But with prices rocketing, and agreed value amounts usually dropping on renewal to account for depreciation, it has become a minefield for customers who don’t actively reassess sums insured on renewal.

Acting Senior Solicitor for Financial Rights Legal Centre Marianna Zaunders says a significant number of consumers have sought advice on the issue over the past two years.

“Policyholders are finding that they are underinsured and short-changed,” she tells insuranceNEWS.com.au.

Most car insurers pay cash, rather than having to find you a replacement car, although this can sometimes be added as a specific benefit.

While a consumer can dispute an insurer’s assessment of market value, it’s much harder to do that for agreed value.

If the value has been listed in renewal documents then the consumer has effectively approved it.

Ms Zaunders says there must be a “compelling reason” to dispute the policy terms as set out – and consumers therefore should read renewal documentation carefully.

“Look at what you are insured for and make sure it’s adequate,” she said.

The past 18 months or so in the insurance industry has been a little like watching a freeway accident happening in slow motion, with unexpected challenges of varying sizes speeding in to add to the carnage.

The fact that insurers have been able to record a profit of sorts and brokers are still able to find cover for their clients is admirable, but the underlying issues – the semi-trailers of trouble joining the pile-up – are getting bigger and heavier.
In this edition of Insurance News magazine we haven’t tried to cover the whole ghastly tangle in one article. Nobody could – there’s too many issues and too much complexity. But reading each article will give you some powerful insights into just how tough things are on so many fronts.

Reinsurance? Less capital, premium rises, more restrictions and growing competition for cover. Profitability? Yes, but not enough to fill an investor with confidence. Premiums? Some balance returning, but nothing’s going down in price. Customers? Uneasy at best. Employees? Still in strife.

We also feature professional perspectives in this edition that illustrate how the issues are global and will require some ingenuity to navigate through. Jennifer Richards, Aon’s Australia Chief Executive – a South African by way of the US – shows how the mega-broker is shifting its focus to keep pace with a changing world.

And Andrew Bart, who learned the loss adjusting ropes locally but now runs a major global operation, adds his own observations.

And then there’s the 2022 Insurance News Wellness Survey, which digs deep into the hopes and fears of the most important component of any industry: the employees.

We might have expected this year’s survey would reflect a workforce freed from covid lockdowns and happily embracing new working models, and in some cases that has happened.

But for others the nightmares of the past couple of years are still raw. While we’re no longer locked up or virus-obsessed and focusing on flexible and family-friendly work systems, our survey shows that not everyone wants to work from home, and many professionals are worried about the damage being done to teamwork, mentoring and training.

And the troubling mental health aspects uncovered in last year’s survey are still there. This needs immediate attention, but with everything as confused and confusing as it is right now, we doubt it will get the serious reaction it obviously needs.

Nothing’s easy at present, and it’s going to be like this for quite a while yet. Solutions to many of the industry’s issues will emerge in time, but in this unpredictable and volatile time in the world’s history we shouldn’t think we can accurately predict what’s going to happen next.

— Terry McMullan

Want to know what’s happening in every major class of insurance? Taylor Fry’s annual assessment will tell you

By John Deex

The last financial year was tough going for general insurers, swamped with catastrophe claims and facing an inflationary environment AND a shortage of materials, labour and staff.

But the industry has shown “admirable resilience” by continuing to make profits despite those challenges, actuarial consultancy Taylor Fry says.

Its latest annual Radar report – a class-by-class assessment of the general insurance industry – draws on Australian Prudential Regulation Authority data to show that insurers increased profits after tax to $985 million in FY22, from $552 million in FY21.

But, Taylor Fry Principal Win-Li Toh warns, some classes only made a profit due to prior-year releases. And the industry’s 3.1% return on capital is well below target levels.

“I think that the industry has been pretty resilient, and there’s a lot of opportunities as well,” Ms Toh tells Insurance News.

“Despite a really challenging landscape with a lot of floods and natural peril costs, and a lot of availability and affordability issues, insurers have showed admirable resilience.”

Meanwhile, reinsurers sustained local losses of $62 million in FY22, following profits of $369 million in FY21, and Taylor Fry says there is more trouble coming.

“Reinsurers bore the brunt of the worst climate-related claims,” Ms Toh says.

“With a third La Nina event now underway in the Pacific, there seems little relief ahead.

“La Nina typically brings elevated flood levels, which means potential for natural peril losses that will put pressure on reinsurance premiums.”

For insurers, householders stands out as the only unprofitable class, with Taylor Fry warning about the future commercial viability of the class if weather events do worsen as expected.

Other ongoing challenges for insurers include the competing needs of profitability and affordability, and inflationary pressures.

“The lingering effects of Covid-19 and consequences of war in Ukraine, such as labour shortages and supply-chain disruption, are leading to rising interest rates and higher inflation,” Ms Toh says.

Underlying drivers of affordability and availability constraints differ for each class of business, and the solutions are often “multi-faceted”.

“This adds further intricacy to the problem,” she says. “In navigating these high-stakes uncertainties, a collaborative, considered and proactive effort by all stakeholders will be vital.”

Tackling the threat of cyber and adapting insurance to offer appropriate protection throws in a further complication.

“No one is immune from the fallout of these issues,” Ms Toh says. “They impact insurers, government and the community.”

These are the key findings for each of the major insurance classes:

Domestic motor

FY22 was challenging, with domestic motor insurers facing major losses from east coast floods and an inflationary environment.

But motor insurers delivered strong gross written premium (GWP) growth – up 8%, to counter these pressures (an average 4% premium rise and 4% increase in risks written).

Competition continues to intensify with challenger brands making inroads, and established insurers need to continue innovating on product and price.

While severe weather is likely to continue to have an impact, loss ratios should also be boosted by working from home becoming entrenched.

Commercial motor

This was a sector that managed to remain profitable despite claims costs rising due to supply chain issues.

GWP increased 12%, thanks partly to an 8% rise in average premium, but cost pressures are expected to continue with increased use of technology in vehicles, and labour and production shortages impacting the cost of repairs and wait times for customers.

Householders

Taylor Fry says more frequent and costly natural disasters “threaten the ongoing viability of householders insurance”, especially in flood-prone regions.

Multiple floods and high repair costs proved a loss-maker for insurers in FY22, despite a 6% increase in average premiums. Combined ratios remained above 100% for the third consecutive year.

The report notes the introduction of the Federal Government’s Cyclone Reinsurance Pool, but says this is “only one part of the solution”.

Other areas that need consideration include reducing taxes on insurance, mitigation for existing properties, cross subsidisation between low-risk and high-risk homes, and improving building standards and planning.

Ongoing collaboration between all parties is required, the report says, to keep insurance available and affordable, adding: “Insurers are asking themselves, can I continue to offer household insurance in its current form and if so, at what price?”

Commercial property

Underwriting results have improved over the past 12-18 months but concerns remain regarding the profitability of this class.

While the combined ratio has been below 100% for six quarters, reported net loss ratios benefited from reserve releases, and there were significant reinsurance recoveries from natural peril events.

Over a longer period, commercial property has delivered negative insurance margins with an average combined ratio above 100% over the past seven years.

Insurers responded to high natural peril claims and uncertainty over Covid-19 business interruption losses by increasing premiums by an average of 16%

Travel

Travel insurance has returned to “sustainable profitability” despite a range of “teething problems” as it ramps back up after covid.

Many staff left the industry during border closures and lockdowns, leaving a shortage of claims managers in particular. Taylor Fry says this is “creating a potential logjam” and putting additional pressure on the staff that remain.

Long queues at airports, cancelled flights and lost bags increase the potential for complaints.

But covid impacts on journeys should lessen as the pandemic becomes endemic, and real opportunities will open up for travel insurers that are successfully weathering the storm.

Public and products liability

The public and products liability market continues to harden, Taylor Fry says, contributing to affordability concerns for SMEs while providing relief to insurers experiencing increasing claims costs due to higher regulatory activity and litigation.

These affordability issues pose reputational risks towards insurers and the industry, as average premiums increased by 13%.

Public liability for the tourism and leisure sector has been particularly hard hit, with many businesses “unable to continue operating in the same way”.

“If affordability concerns are not addressed, then this may result in a level of distrust towards insurers and pose reputational risks for the industry.”

Professional indemnity and directors’ and officers’

Premium growth is outstripping claims growth, leading to improved underwriting profits which could see increased appetite from insurers.

However, Taylor Fry expects insurers to remain selective, given concerns with particular sectors.

And some of the government reforms that led to a drop in the number of class actions could be wound back.

Cyber remains an issue as attacks become more sophisticated and challenges with definitions mean “silent cyber” – cyber-related losses stemming from policies that were not specifically designed to cover cyber risk – continues to be a concern.

Compulsory third party (CTP)

Competition remains strong in the privately underwritten CTP schemes, the report says.

In the NSW scheme, competition has put downward pressure on premiums and the regulator has started a process to recover past excess profits.

In South Australia drivers have more choice than ever with Youi entering the CTP market. Five private underwriters now compete for $300 million in annual premium.

Insurer profits in Queensland were under pressure over the year as wage inflation increased claims costs. Reduced traffic volumes over much of Australia due to the impact of the east coast floods and the ongoing covid effect provided some offset.

Workers’ compensation

FY22 was the most profitable year on record for workers’ comp insurers, with an underwriting result of $489 million, up from $111 million in FY21.

This was driven by a 20% increase in GWP, reserve releases and a reduction in the expense ratio.

However, inflationary storm clouds are brewing, the report says, with the industry gearing up for an increase in mental health claims and preparing for proposed reform of the Western Australia scheme.

Taylor Fry also warns that gig economy employees represent a “blind spot” for most schemes.

Lenders mortgage insurance

Insurers have enjoyed strong underwriting performance over the past 12-18 months, boosted by strong economic fundamentals and soaring property prices.

Rising numbers of new home loans last year resulted in high levels of written premium, boosted by low claims and reserve releases.

Interest rate rises may contribute to increased claims, but Taylor Fry says the market is likely to “continue performing strongly” if unemployment stays low.

An already concentrated LMI market has been “further rationalised” with the sale of Westpac LMI to Arch in August last year

Aon’s Australia Chief Executive Jennifer Richards has stepped up as clients grapple with a mass of pressing issues

By Wendy Pugh

If ever there was a pivotal period of time for taking over the leadership of Aon Australia, from both a company and markets perspective, it was probably when Jennifer Richards stepped into the top role.

Ms Richards, who joined Aon and moved to Sydney from New York a decade ago, became the group’s Australia Chief Executive in October last year, just months after the company decided against pursuing a merger with rival Willis Towers Watson.

US regulatory hurdles had proved too high for a deal that would have created the world’s largest broker, and Aon, having outlined the benefits of the combination, turned its attention instead to drawing from within to drive innovation and greater benefits to clients.

Ms Richards says the company changed its focus towards four client needs: navigating new forms of volatility, rethinking access to capital, addressing the under-served, and building a resilient workforce.

“We reset our operating model around our refreshed value proposition to the market, which we call the Aon story, which is really our mantra for what we do, how we do it and why we do it,” Ms Richards tells Insurance News.

Aon is in the business of helping clients to make better decisions, she says, with the company focused on realising opportunities to partner with organisations to give greater clarity and confidence around that process and to allow them to protect and grow their businesses.

Ms Richard’s appointment to the top position came as clients already had plenty to deal with amid the pandemic and supply disruptions, while one of Australia’s worst flooding natural catastrophes in history was just around the corner.

Businesses are also now facing accelerating inflation and rising interest rates – an overall picture that has created the most volatile environment Ms Richards has seen in a career that has included a close-up view of the Global Financial Crisis (GFC) in 2008.

Ms Richards was born in Johannesburg, grew up in Toronto and worked in New York after law school, practicing as a mergers and acquisitions (M&A) attorney with international firm Sidley Austin.

The pathway in 2004 turned to insurance and a position at AIG, where her expertise was tapped at a time when products were being designed that supported M&A transactions.

“I ran North America for those products. And then, during the financial crisis, they called me over to the financial lines side of the business, in the financial institutions group, to help remediate their book,” she says.

AIG was among companies to sustain heavy losses during the Global Financial Crisis. As impacts spread, a number of advanced economies entered their deepest recessions since the Great Depression in the 1930s and governments and central banks took drastic action in response.

“I saw what I thought was going to be the most volatility in my career at that period of time,” Ms Richards says. “But I don’t think that anything matches the complexity of the forces that we’re feeling right now.”

Currently, concerns about a return to recession have emerged for many economies, echoing that time, while inflation is surging at a pace not seen for decades, difficult global labour markets are creating additional strains and the war in Ukraine has added to supply chain pressures.

“Layer on top of that the seismic forces of climate change, and the natural catastrophes that we’ve experienced in Australia, and I think it actually makes the complexities that we faced in the GFC almost pale in comparison,” Ms Richards says.

“Financial risk is occurring at the same time that we’re seeing fundamental risk in the market, which is unsettling.”

Ms Richards says the US, Australia, the UK and Canada are all highly competitive and sophisticated insurance markets, and clients are facing similar inter-related problems, reflected in Aon’s interlinked focus areas.

Navigating volatility, such as around natural catastrophes and environmental concerns, is related to rethinking access to capital – which might include options such as parametric insurance – and those issues are connected to areas where clients may be struggling to find cover. Aon is also looking to help clients manage issues resulting from a tough labour market.

“What I’ve been asked to do, in terms of taking the Australian business forward, is address those four client needs through our capability in Australia,” she says.

Before taking up the top job Ms Richards headed the Australian specialties business, gaining insights into how Aon could help clients address emerging risks related to climate change, cyber, directors’ and officers’ (D&O), supply chain, and employee attraction and retention, among other areas.

“I’ve spent the past few years really expanding and growing our specialties propositions,” she tells Insurance News. “My background is quite aligned to our growth strategies around further specialisation, to help solve clients’ new and emerging needs, in particular, as we face the volatile environment that we’re all witnessing now.”

Ms Richards says parts of the market have softened or are stabilising, with D&O no longer the difficult area of a few years ago and some competition re-emerging. But experiences across geographies and classes of business are divergent.

“We’re seeing an unintended consequence of the increased regulatory burden actually driving pricing further up.”

For some clients, tough conditions are continuing and repercussions from this year’s record-breaking floods are still emerging.

“There’ll be occupations that are going to be really challenged by virtue of the impact of natural catastrophes based on location, and based on occupancy,” she says. “I think that we’ll have to see how it plays out, but we certainly think there’ll be a further extension of this two-speed insurance market around risk selection and differentiation.”

Construction is one of the industries caught in the cross-currents, with rising costs and delays leading to larger claims, and impacts from bankruptcies in the sector. Elsewhere, supporting clients with the insurance they need amid the energy transition is another element of today’s complex times.

Aon’s presence in Australia includes branch offices across the nation. The firm has a strong focus on the SME sector, as well as providing advice to the major enterprise and top corporate sectors more typically associated with large global players.

“What we’ve been known for is quite a strong proposition across every segment rather than focusing only on the large end of town,” she says. “We have been highly diversified across the various segments, as well as across the geography with our 30 branch offices.”

In looking at under-served customer needs, Ms Richards says there are some industries – such as in the equine area – where very specific propositions that address particular needs resonate with clients. Cyber stands out as an area where demand is high and insurers are cautious.

“Events like the one that Optus unfortunately just suffered really highlight the growing importance of that cover,” she says. “We’re starting to see [cyber] rates stabilise, but risk selection is also pronounced; and if the clients don’t have the right levels of security in their business, getting cover in place can be really challenging.”

Regulation is also part of the changing environment in Australia as insurers deal with the volume of new rules introduced following the Hayne royal commission. The extra requirements, many of which came into effect from late last year, also bring increasing costs for underwriters.

“We’re seeing an unintended consequence of the increased regulatory burden actually driving pricing further up,” Ms Richards says. “It may also be protecting customers at the same time, but it is having that consequence of driving cost and in turn hampering new product development, which is a concern.”

The Quality of Advice review which began earlier this year has also flowed from the Hayne royal commission, but Aon is encouraged by consultation paper proposals released in late August. A final report is due to be delivered to the Federal Government by December 16.

Ms Richards says the consultation paper focuses on how to make it easier for consumers to access quality advice before purchasing products, such as general and life insurance. The document has avoided a potential alternative approach that could have involved a knee-jerk response leading to more regulation.

“It was really heartening to us that we’re really trying to get to the crux of the issue, of how we ensure that people get better advice,” she says. “I think at the end of the day, that’s what we’re looking to drive.”

She says Aon in Australia has seen tremendous growth over the past few years, while the company overall has sought to strengthen connections across the Asia-Pacific region and globally, and invested in digitisation as it focuses on “delivering the entire firm” in a holistic way in addressing client needs.

“I feel really fortunate to have been able to lead the business through a period of high growth and also high investment in the business and in our capability,” Ms Richards says.

Battered by the weather, insurers still came through for their shareholders. But additional trials lie ahead

By Bernice Han

Like a wounded soldier in combat, the Big Three listed general insurers – IAG, Suncorp and QBE –and by extension the industry, carried varying bruises as they headed into the most recent earnings season.

Catastrophe after catastrophe has been the feature of the past few years, including the costliest insured flood disaster yet, the $5.45 billion New South Wales/Queensland deluge in February and March.

Yet IAG rebounded from the 2020/21 loss of $427 million with a full-year profit of $347 million for the year to June 30.

Suncorp’s group-wide net profit was $681 million, a slump of 34%. The Insurance Australia division suffered a 68.2% decline in net profit after-tax to $174 million.

QBE, which reported its half-year results, says net profit has tumbled 66% to $US151 million in the six months to June 30.

Since the February/March floods catastrophe the industry has been working at full capacity to process the 234,000 claims. Latest Insurance Council of Australia (ICA) data says the industry has finalised 54% of all claims, paying out about $2.81 billion to date.

The industry’s efforts have been hampered to a large extent by factors beyond its control: tight supplies of motor parts and building materials caused by pandemic disruptions and an acute shortage of tradies and builders.

This in turn has led to significantly higher procurement costs for insurers as the industry competes with other sectors for supplies and repairers.

At the same time the industry is still dealing with claims from floods that inundated the same parts of New South Wales and Queensland last year, and also claims from other recent natural catastrophes. Covid restrictions in the states and territories during the pandemic contributed to delays in post-catastrophe rebuilding works.

Last financial year the industry received 380,760 catastrophe claims costing about $6.41 billion, including the $5.45 billion February/March floods, according to the ICA. Since 2019 11 insurance catastrophes have been declared, costing the industry more than $13 billion.

Taking into account what insurers have faced, analysts say the industry has come through despite the very testing conditions. At the industry level, Australian Prudential Regulation Authority (APRA) data shows general insurers recorded a combined net profit of $924 million for 2021/22. The earnings represent just a 0.3% rise from the prior 12-month period, and that boils down principally to poor investment results causing a $2.8 billion hole mainly from unrealised losses on interest-bearing assets.

Drill deeper into the data, say analysts, and you’ll see the industry is actually on a stronger footing than the headline profit number and investment losses indicate.

“Overall, the industry’s underwriting results held up well despite the obvious challenges facing insurers over the past 12 months,” Principal Consultant at investment consultancy Frontier Elie Saikaly tells Insurance News. “In fact, most insurers are in a better financial position now than they were this time last year.”
The APRA figures show underwriting profit more than quadrupled to $6.3 billion as insurers raised rates in response to the numerous natural catastrophes.

Gross earned premium grew 11.4% to $60.4 billion, the result of “larger increases” observed in householders, domestic motor and fire and industrial special risks (ISR). Importantly for the industry, gross incurred claims went up at a slower pace, by 6.6% to $45.2 billion.

Among the Big Three, IAG improved to an underwriting profit of $1.01 billion after a $571 million loss a year earlier, Suncorp’s underwriting earnings almost doubled to $1.1 billion, as did QBE’s, which achieved a $US1.19 billion profit in the June half from $US642 million.

“When you break down the numbers, in my mind it’s actually a good performance for the industry,” KPMG Insurance Partner Scott Guse tells Insurance News.

“If you look at the underwriting result, which is the key insurance metric, it’s actually gone up quite significantly. This means that insurers are sticking to their underwriting discipline.”

Mr Guse says underwriting discipline is “really important” and the industry has stuck to it, going ahead with rate increases because “they had to” as a result of more catastrophic events.

“And they’re not relying on the investment returns to supplement their profitability,” he says.

Looking ahead, inflation and its compounding effects loom as key headwinds for the industry as economy-wide cost pressures are not likely to ease until at least the end of 2023.

The industry has so far been able to push through with rate adjustments in response to growing disaster claims and also to cover for higher costs of reinsurance programs.

Reinsurance rates have gone up at recent renewals and will continue to trend upwards as reinsurers brace for more extreme weather-related events in Australia.

And the industry already fears more floods this spring and summer after the Bureau of Meterology confirmed a La Nina event is under way for summer – the third straight year of the rain-inducing weather pattern which caused the east coast floods over the last two years.

Against a backdrop of slowing economic growth as higher interest rates start to bite, analysts say insurers may find it hard to press on with charging customers higher premiums. Consumer affordability is emerging as a concern, particularly as households battle inflation.

“Persistent inflation remains a key risk,” Fitch Ratings Director Kanishka de Silva tells Insurance News.

“If inflation persists, then the extent to which insurers can meaningfully pass on those costs would be another consideration, especially in light of affordability issues.”

Fitch has done some modelling on what it would mean for the industry assuming inflation peaks at 8% this year, before moderating to 4.5% next year and 3.25% in 2024.

“We estimate that such a scenario is likely to add about 4-5 percentage points to the insurers’ combined ratios,” Mr de Silva says.

Fitch says rising claims from a “prolonged high” period of prices will have the greatest effect on general insurers’ financial performance and earnings.

“At the same time, pressure on affordability will mean that insurers may not be able fully pass on the higher claim costs without a drop in business retention,” Mr de Silva says.

The Big Three focused as much on inflation as they did on other aspects of their business when they released their results, assuring shareholders that they have the upper hand over spiralling prices.

IAG Chief Executive Nick Hawkins says inflation is a “big topic as you can imagine within our organisation” but insists the group “has a good handle” on the challenge.

Its Direct Insurance Australia division, comprising mainly of IAG’s personal lines brands, has gone ahead with motor rate rises of 7-9%, and in some states by up to 11%, while the Home portfolio is seeing adjustments of 8-10%. And at its commercial-focused Intermediated Insurance Australia business, an inflation taskforce has been established within its pricing department to tackle the cost pressures.

“We are comfortable that we are getting insight into what’s happening with inflation,” Mr Hawkins says. “We’re repricing…there might be some small timing differences but I think we can manage that.”

Suncorp says inflation as a result of global supply chain disruptions from the pandemic, including the lockdowns in China and increased oil prices from the Russia-Ukraine war, may cause increases in claims in the short-term.

But the Queensland-based insurer says its repairer relationships in Motor and a Home panel reset will help the business manage the inflation challenge.

“We are very confident we will provide some protection to our business relative to the industry levels of inflation that we obviously see coming through at the moment,” Chief Executive Steve Johnston says.

“Alongside a comprehensive pricing response, we aim to meet the challenge of inflation and protect margins and returns while continuing to deliver the valuable products our customers have come to expect.”

Analysts say investment is an area where the prospects appear brighter for the industry after sub-par results in the last few years.

While rising interest rates would dampen economic activity, heightening consumer affordability fears, the flip side is it gives insurers a better chance to improve returns from their investments.

Mr Saikaly of Frontier says based on the APRA data, Hollard was the only major insurer whose investment portfolio outperformed the annual inflation rate, and only two other insurers earned a positive return on assets.

“The key takeaway from my perspective is that all insurers except one produced an investment result which was less than claims inflation for the financial year,” Mr Saikaly says.

“We think that’s something that insurers need to keep an eye on – the performance of their investment portfolios versus inflation.”

He says apart from raising premiums, the industry should also consider reviewing its investment portfolio to include higher-yielding assets to handle rising claims costs.

“Repricing premium is one tool to hedge the inflation risk,” Mr Saikaly says. “The other lever is ensuring the investment portfolio works harder to keep pace with inflation. Insurers should regularly test their investment portfolios to see if they can hedge some of those higher inflation risks.”

He says the $2.8 billion in unrealised losses on interest-bearing investments was the result of “one of the worst years” for fixed income markets.

“The industry has mostly suffered mark-to-market or paper losses for now,” Mr Saikaly says. “If insurers hold bond portfolios for the long term they should get a return of their capital.”

APRA’s regulatory framework ensures that insurers invest most if not all policyholders’ funds in fixed income and cash assets to back their insurance liabilities dollar for dollar.

Mr Saikaly says where insurers could perhaps take a little bit more risk is to allocate more of their shareholders’ funds into private or unlisted assets such as infrastructure and niche real estate.

“They can use shareholders’ funds to optimise returns as it is excess capital,” he says.

APRA regulations allow the industry to have “small” holdings of unlisted assets, but because such investments are illiquid, not every insurer is comfortable with it.

But Mr Saikaly believes insurers “should test their liquidity requirements, and if they can tolerate some illiquidity in their investment portfolio, they should pursue a more diversified investment strategy to achieve that.”

Brokers on a roll

The listed Australian brokering groups – Steadfast, AUB and PSC Insurance – put on quite a show this earnings season and have set their sights on scaling new heights after adding new acquisitions to bring more firepower to their businesses.

At Steadfast Group, the country’s largest broking network, underlying revenue cracked the $1 billion mark for the first time, rising 26.2% to $1.14 billion.

Underlying net profit grew 29.3% to $169 million for the 2021/22 financial year. And Steadfast believes it can do even better, projecting $190-202 million in underlying net profit for this financial year.

The business also announced on the day of its earnings results a $301 million agreement to acquire Insurance Brands Australia (IBA), the parent company of independent Melbourne-based brokerage Insurance House and other intermediary businesses with $438 million in combined annual gross written premium.

Steadfast Chief Executive Robert Kelly says the IBA investment “further strengthens” the business’s leading position in the Australian broking network space. The acquisition is Steadfast’s biggest since it forked out $411.5 million for Coverforce last year.

AUB Group is also charging down the acquisitions trail. In May the business agreed to buy London-based Lloyd’s wholesale broker Tysers for $880 million.
Following the Tysers acquisition, AUB will sell 50% of the Lloyd’s broker’s UK retail business to PSC Insurance Group as part of a joint venture between the two companies.

Tysers places about $3.6 billion in GWP and AUB Group Chief Executive Mike Emmett says the new addition will provide “transformational economic and strategic” benefits to AUB as the business looks to build on its 2021/22 results.
AUB underlying net profit from continuing operations surged 22.2% to $74 million and it is targeting $86-91 million for this current financial year to June 30 2023.

Melbourne-based PSC is also raising its bar, with the business aiming for underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $105-110 million. Its underlying EBITDA rose 30% to $93.5 million in the 2021/22 year.

Past acquisitions, including ones in the UK where PSC has invested heavily in recent years, supported the business. The group’s UK business – which also includes results of its significantly smaller-scale Hong Kong operations – had a successful year with about $1.25 billion in GWP while underlying EBITDA rose to $39.1 million from $28.6 million.

PSC completed 12 deals in the past financial year including regional Victorian brokerage Alan Wilson Insurance Brokers and the broking business of Alliance Insurance Broking Services.

Managing Director Tony Robinson says future acquisitions similar to the Tysers joint investment with AUB may occur if the right opportunities come along.
He tells Insurance News that Tysers is “fairly priced but full of great people, and it’s a retail business [where] we’re looking to increase our presence”. PSC is contributing about $60-70 million to the joint venture.

Times are changing, and HDI Global’s CEO aims to be a reliable partner on future pathways

By Wendy Pugh

Transitioning to a carbon neutral world has become a critical focus for businesses, as they also face rising risk complexity, and HDI Global SE Chief Executive Edgar Puls says the industrial insurer is well placed to assist.

Dr Puls, who is based in Hannover, Germany, tells Insurance News during a visit to Australia that clients around the world are addressing issues related to emissions reduction and considering future pathways. Often changes and processes are not simple.

“Very often we talk about what we do not want to do nowadays, but the question is, where do we want to go, and how do we get there,” Dr Puls says. “What is important to us is that we support the transition.”

HDI Global has expanded internationally and developed a diverse portfolio after emerging from its origins as a mutual organisation for Germany’s iron and steel industry in 1903.

The insurer is part of Talanx Group, which includes the world’s third-biggest reinsurer Hannover Re.

Under its environmental, social and governance (ESG) policy the insurer doesn’t underwrite new coal plants and mines and recently indicated it wouldn’t participate in an African crude oil pipeline.

The group’s position is influenced by its membership of the United Nations’ Principles of Sustainable Insurance initiative.

European insurers in particular have sought to take a lead through their business operations and funds allocations in driving a reduction in emissions in support of the Paris agreement on climate change.

Dr Puls says HDI Global is a large insurer of renewables and was one of the first to underwrite projects such as solar parks and offshore wind farms.

“Also with our investment company, Ampega, we invest in wind farms, solar parks and so on,” he says. “So, from both sides as an insurer, we support the transition to a carbon neutral world.”

Areas such as green steel production, which involves stepping away from coal and toward hydrogen, highlight the challenges for industry.

The explosive gas, which Australia may potentially produce in abundance, requires careful handling through production, transport and storage. HDI engineers are among those analysing the risks and assessing insurance options, Dr Puls says.

More broadly, HDI Global sees good opportunities to expand its commercial business in the Asia-Pacific region. The insurer has moved into a new Australian head office in Sydney’s Martin Place, and has a presence in Melbourne, Brisbane, Adelaide and Perth. The local operations are also represented by the wholly owned subsidiary HDI Global Specialty.

“Australia is a mature market, but we have been growing very fast here,” Dr Puls says. “We use the phrase ‘a one-stop shop’ when we talk to our brokers and clients, because we offer more or less all products to cover their demand.”

Currently, there’s strong growth in casualty, and HDI Global, via its specialty operation, has increased its portfolio for directors’ and officers’ (D&O) risks following rate changes in the last three years.

HDI Global prides itself on being a consistent supporter of clients, and while there might be some “inhaling and exhaling” as the group manages the highs and lows of markets, Dr Puls says it has maintained a presence also through tough times.

“We are not an ‘on-off’ insurer; that’s very important for us. We’re not an insurer stepping into a market, stepping out of the market,” Dr Puls says. “We want to be not only reliable, but also a predictable partner.”

He says the group’s Australian growth reflects the commitment of the local team and a solution-orientated approach in working with clients.

Australia has been costly for insurers from a natural catastrophe perspective, given recent record flooding. Dr Puls says it reflects global patterns. Storms that swept across Germany and Europe last year, and US hurricanes, including Ida last year and the 2017 combination of Harvey, Maria and Irma, have been similarly devastating.

The trend of increasing natural catastrophe losses is continuing, while “value accumulation” is elevating claims severity as a number of other influences have emerged.

Dr Puls gives an example from working in the chemicals industry two decades ago. At that time there would have been two production lines so that if one failed the other could continue. Today there may be one operating at higher capacity, supported by “predictive maintenance” that increases reliability by reducing breakdowns – but with the stakes raised when something goes awry.

“This one line produces triple the output that two lines had maybe 20 years ago,” he says. “So actually, the vulnerability is quite high, if this one single line is destroyed, you don’t produce anything.”

Supply chains with little back-up to protect from disasters or delays increase business interruption costs, while specialisation trends may exacerbate losses when there’s a reliance on parts or materials sourced from one overseas location.

The Suez Canal blockage last year caused by a grounded container vessel, the Ukraine war and covid disruptions have brought home the risks. A client that may not have experienced a loss for a decade or more can be more exposed to devastating impacts from a one-off disruption than was once the case.

“The continuous trend of a decreasing loss frequency and a shift to large losses makes it harder to explain the price and some terms and conditions to a client,” Dr Puls says. “The normal reflex is to say, ‘but I haven’t had a loss for 10 years’, but that’s no argument anymore, unfortunately.”

Dr Puls says talking with brokers and clients about total sums insured, particularly taking into account rising inflation, supply chain issues and potential recovery delays, is vital. In Australia, construction companies have warned that timelines have doubled in some cases, and work that once took 12 months may instead take 24 months.

Given the environment, it’s likely that insurance rates may need to rise, just to maintain stable combined operating ratios, although pricing depends on specific circumstances around a client’s risk, Dr Puls says.

“As an insurer we have to check our limits or exposure; we need best-in-class models and risk assessments, and then we have to adapt the price,” he tells Insurance News. “Not on a general basis – we always do that on an individual exposure basis.”

Talanx is now the six-largest insurance group in Europe and remains on a growth trajectory. Having Hannover Re as a partner within the group is also advantageous, he says, providing opportunities for HDI to offer combined solutions that aren’t available elsewhere in the market.

The insurer is set to celebrate its 120th anniversary next year. Dr Puls says the company’s foundations are based on stepping-up to support industry and businesses.

“That is part of our genes and our roots.”

Reinsurers are cautious about the risks they are taking on even as primary underwriters seek higher levels of cover

By Wendy Pugh

Combine climate change, the Ukraine war, covid, economic volatility and inflation and it’s a recipe for tough upcoming reinsurance renewal talks and expectations the cost of cover will head higher.

Primary underwriters are looking to reduce exposures through ceding more of their potential costs while reinsurers want adequate pricing for business they are shouldering in a period of greater uncertainty.

“If I go back in my career that is now 25 years-plus in the industry, I cannot remember a time like this ever before – a time where several crises hit us at the same time and posed manifold challenges to us as an industry as a whole,” Swiss Re Group Chief Underwriting Officer Thierry Leger said at a media briefing at the industry’s gathering in Monte-Carlo in September.

January is one of two critical times for reinsurance renewals, along with the mid-year period, and the current volatile environment has sparked a wave of reports and briefings, many coinciding with the in-person return of the annual Rendezvous de Septembre in Monaco.

Aon’s Ultimate Guide to the Reinsurance Renewal says a unique confluence of uncertainties is set to play out in the upcoming negotiations.

“Macroeconomic and geopolitical volatility has coincided with an increased frequency of extreme weather events in recent years, causing investors and reinsurers to reassess their view of risk and appetite for natural catastrophe exposures,” Aon Reinsurance Solutions Global Growth Leader Joe Monaghan says.

At this point, he sees the mismatch in supply and demand continuing through the January renewals.

Aon calculates global reinsurer capital declined 11% to $US600 billion in the first half, mainly driven by substantial unrealised losses on investment portfolios, while alternative capital was broadly flat at $US95 billion. Total capital last dropped year-on-year in 2018.

Reinsurers have moved on from the prolonged soft market and achieved pricing gains. Last January was a challenging time involving some tense and protracted negotiations, and catastrophe-hit Australian insurers experienced tough conditions at the mid-year.

Gallagher Re’s six-monthly global market report says a group of reinsurers it tracks achieved premium growth of 14%, supported by favourable pricing. The weighted average combined operating ratio continued to improve, but financial market conditions hit return on equity and capital levels.

“Investment losses have hurt what was otherwise a more positive first half for reinsurers, and the steep headline decline in capital overstates the impact on economic capital positions,” Global CEO James Kent says.

“But the figures nonetheless show the need for continued vigilance given today’s macroeconomic and geopolitical uncertainties and the continuing debate over natural catastrophe exposures.”

AM Best says that for the past two years reinsurers have been shifting covers to higher layers of protection, raising deductibles, lowering limits, adding explicit exclusions, avoiding aggregate covers, restricting specific perils and geographies, and generally becoming more selective.

Upcoming outcomes will depend on clients’ specific circumstances, regional factors and lines of business, but the general sentiment is that pricing, particularly in property, is still on the rise given reinsurer requirements.

S&P Global Ratings’ view of the sector remains negative. The ratings agency says reinsurers will continue to struggle to sustainably earn in excess of their cost of capital due to potential heightened natural catastrophe losses, capital market impacts and inflation.

Natural catastrophe risk strategies have diverged, with half the top 21 reinsurers rated by S&P growing their net exposure and the remainder taking a more cautious and defensive stance.

Even before Hurricane Ian devastated Florida in late September, reinsurers had revealed a particularly wary attitude toward the state’s difficult natural catastrophe market.

“While reinsurance capacity is still available, the rising uncertainties have resulted in an increased demand for reinsurance from cedants,” S&P says. “We believe this trend will persist and support rate increases into 2023.”

Aon estimates more than $US5 billion in additional reinsurance limits was sought by insurers at the June and July renewals, buoyed by higher inflationary expectations.

Inflation, reflected in multi-decade high consumer price index readings, is driving up sums insured and potential losses, with impacts varying for different lines.

Supply chain fragilities, evident before covid and exacerbated by the pandemic and the Ukraine war, are boosting business interruption costs, as material or equipment to restore operations is delayed.

Food and energy supply disruptions and inflation also increase potential exposures for losses caused by strikes, riots and civil commotion.

At the same time, property reinsurers see no end to rising losses caused by secondary perils, such as hail, flooding and bushfires. Modelling is less developed for those risks, and loss trends are rising with urbanisation and development in exposed locations.

Some reinsurers view casualty and specialty classes as attractive opportunities to diversify away from natural catastrophes, although those areas are not without pitfalls and challenges.

Swiss Re says social inflation trends have picked up following a covid dip, as shown in payments awarded in US court decisions. The issue is not confined to the US, with global litigation funder activity having international impacts.

In specialty, the Ukraine conflict has raised uncertainty over exposures, including in areas such as aviation and marine.

The demand for cyber cover is outpacing capacity as reinsurers tread carefully, given a relatively short claims history, modelling shortcomings, accumulation risk, rising ransomware activity and evolving threat scenarios.

AM Best points out that from an economic and catastrophe environment standpoint, volatility and uncertainty perceptions have been magnified for reinsurers on both the asset and liability side of the balance sheet.

“Theoretically, at least, there should be a price high enough to compensate for that level of uncertainty, but few reinsurers feel that rate increases have reached that point yet,” the ratings firm says.

Marsh McLennan reinsurance broker Guy Carpenter says insurers and reinsurers are both being strategic about business they are taking on, and are carefully evaluating risks. Demand for reinsurance is expected to remain strong given the “desire for downside protection is pervasive across the industry”.

“Overall, this is one of the most challenging and complex markets seen in years and January 1 will likely follow the wide range of renewal outcomes achieved at mid-year,” Chairman David Priebe says.

Reinsurers have clearly delivered a message that market hardening is set to continue, while client experiences will differ.

“We are remaining disciplined, but seize opportunities as they arise. In doing so, we take great care to factor in inflation with due caution,” Munich Re Member of the Board of Management Torsten Jeworrek says.

“Given appropriate conditions, we continue to support our clients with our financial strength and capacity. Where risks have heightened, such as in cyber or as a result of climate change, we need sufficient margins in our underwriting.”

Uncertainty about future risks will continue to be a problem for anyone dealing with reinsurance. While the present is challenging enough, the always-circumspect reinsurance sector must also deal with the “unknowns” that cloud their forecasts.

Back home to see for himself, Crawford’s Andrew Bart explains the challenges loss adjusters have faced after massive floods

By John Deex

Andrew Bart came back to Australia recently from his base in London to praise his former workmates for working through what has been a nightmare year for loss adjusters.

The Chief Executive International Operations for global claims management provider Crawford & Company was in the country to gain a first-hand impression of the workload faced by his employees, who are dealing with an unprecedented set of natural disaster claims.

The sheer volume of claims being dealt with is enormous – the east coast flood event from February and March resulted in 234,000 claims alone. It’s the second-most costly Australian natural catastrophe on record, with insured losses of $5.45 billion.

Mr Bart is a familiar figure on the Australian insurance landscape. He’s been managing loss adjusters in Australia since 1992, when he set up an office in Sydney for Robertson & Company, which was acquired in 2002 by Crawford.

He became Chief Executive of Crawford Australia in 2004, and in 2015 was appointed Chief Executive Asia Pacific. Mr Bart relocated to London in 2019 as Global President of Global Technical Services, overseeing large and complex claims, and last year he was named President Loss Adjusting. He took up his present post in January, leading all Crawford’s business operations outside North America.

It’s a tough time for loss adjusting companies everywhere, with covid preventing the movement of overseas adjusters into countries where they’re needed, a shortage of tradespeople, and supply chain issues exacerbated by the Ukraine war which have led to a shortage of materials.

Mr Bart tells Insurance News he’s proud of how the company’s Australian workforce has responded to the challenges they’ve faced.

“One of the reasons I particularly wanted to travel back to Australia at this time was to really thank our team for the phenomenal response that we provided in dealing with the floods this year,” he says.

“It’s obviously been an extraordinary event. It’s one of the biggest natural catastrophe events in Australian insurance history, and the way it’s trending it may wind up being the biggest.”

Mr Bart says the industry was still dealing with the legacy of claims from events like the 2019/20 bushfires when the floods struck, “so capacity has been tested”.

“I’m very proud of the work that we’ve done. One of the things I’m really happy about is that Crawford kept its doors open. It would have been very easy at an early stage for us to limit intake or stop taking claims in.

“But we made a commitment that we would support the industry and the broader community. I’m particularly proud of that, and our commitment to restore lives, businesses and communities.

“The building supply chain, and employee availability within insurance and within loss adjusters, has been tested and will continue to be tested. But it’s a challenge that’s not unique to Crawford and I think we’ve made very good progress in closing claims.

“We’re starting to see some really positive trends in our rate of closure and we think that will continue to improve over the next few months.”

When covid limited the movement of adjusters, technology came to the fore, Mr Bart says. Digital remote assessment played a crucial role during this period, and in general he sees technology continuing to have a significant impact on the claims services industry.

“Insurance has been a slow adopter [of technology], but we’re certainly seeing a change and we’re making substantial investments,” he tells Insurance News.

“The pandemic has accelerated the rate at which we’ve adopted the use of technology – remote assessments, image-based solutions, the use of artificial intelligence, and so on.

“We’re utilising technology at the moment that allows us to take photographs of a building, and from those render a 3D drawing with a great deal of detail accurate to within half a centimetre.”

While the future is technological, Mr Bart still sees people as the most important component of loss adjusting.

“People remain at the heart of our solution. Having skilled claims professionals on top of what technology does allows people to spend time on what matters most. So it’s a combination of people and technology.”

While Crawford often works for an insurer to assess and manage a claim, Mr Bart says he sees claims as “a collaborative situation” – adjusters working with all stakeholders to resolve the matter in the best and the most efficient way.

“What we’re about is making sure we produce the best possible claims outcome, the right customer experience, the right settlement, and resolving matters as quickly as possible,” he tells Insurance News.

“We also welcome the opportunity to work with brokers. Different insureds want different levels of involvement from the broker. But, for me, where the broker is working in concert with us I find we get very good outcomes.”

While Atlanta, Georgia-based Crawford & Company is best known as a loss adjuster, it has expanded to become “a one-stop-shop for outsourced claims solutions”. It also supplies third-party administration capabilities, claim management services for insurers and corporates, and “contractor connection” – a managed repair solution with a network of builders.

“Certainly we think there is merit in providing a one-stop solution,” Mr Bart says. “I think the benefit that it brings to the end user – the policyholder – makes for a seamless claims experience.

“It helps with the management of expectations, it helps with the management of that claim, and we believe it produces high-grade outcomes – cost-effective outcomes that deliver a great customer solution.”

He says some clients are very keen adopters of a multi-faceted solution. “We see it as an engine for growth.”

One of the key challenges for Crawford, and the industry as a whole, is recruitment. Even before covid the industry was struggling to find skilled adjusters to replace a generation of experienced talent that is now rapidly heading into retirement.

With the war for talent in full flow, it’s not getting any easier. And the movement of skilled workers into Australia from overseas still hasn’t recovered since covid.
“It is absolutely a challenge,” Mr Bart says. “Historically, a considerable number of adjusters in the Australian market came from other markets, in particular the UK.

“And now that I work in the UK and occupy a global and international role, I can see why the UK is an environment where talent is fostered, because you have 60 million or so people in a very small landmass, and a large-scale market, and historically they’ve been heavily invested in training.

“I think the issue all over the world is that there’s been under-investment in training for a number of years.

“Many people who work elsewhere have worked previously for Crawford. And I see that as a credit to our commitment to training; but I think we have to double down on our investment.

“There’s only so much talent that can be recycled throughout the market, and it’s a diminishing pool.”

In Australia, changes to visa rules have made it harder for loss adjusters to be recruited from overseas, and Mr Bart believes it’s an issue that needs revisiting.

Historically, Crawford was able to bring people from offshore under 457 visas because loss adjusting was designated as a profession where there was a shortage of people.

“That changed several years ago where we could only get people in on two-year visas, possibly with a two-year extension. I think it’s a great shame. That’s been something that I believe the Federal Government got wrong, and I think it’s something that should be revisited.

“In terms of the short-term response following catastrophes, there needs to be some forward planning about how we get people into the country.

“Exceptionally large-scale events seem to be almost the norm rather than exception and we need to plan ahead.”

Silicosis carries a hefty cost and grave consequences, with growing case numbers catching insurers’ attention

By Harris Pozderovic

In the late 1980s and ‘90s the insurance industry was rocked – and Lloyd’s brought close to ruin – by massive payouts to thousands of workers who had developed cancer and other diseases related to asbestos exposure.

In previous decades insurers and reinsurers simply had not seen what was coming, and the industry went through one of its darkest periods, with Lloyd’s devastated by the volume of claims.

The word “asbestos” continues to have a haunting effect on the industry. Insurers are mindful not to make the same mistakes that caught them in a financial trap, and these days maintain a close watch on emerging and future risks.

In its investor report for the 2022 financial year, IAG announced a $168 million strengthening of its commercial liability reserve.

The insurer referenced a late increase in medium to large claims, notably worker injury claims, in the past five years. It says the strengthening of the reserve reflects its “recent adverse experience from the 2017 and 2018 accident years [that] has been assumed to continue into later accident years”.

Just over a quarter ($45 million) of IAG’s boosted funds has been put towards silicosis. The stealthy, incurable disease caused by persistent inhalation of silica dust concerns IAG, which says the average size of silicosis-related claims has doubled during the past year. Some are calling it “the new asbestos”.

The insurer says it has taken “significant steps to refine its pricing and underwriting decisions to mitigate future impacts for a range of topics, including silicosis”.

“Our claims experience is reflected in our pricing for future business, and our reserving position includes potential claims from past exposure,” an IAG spokesperson told Insurance News.

Insurers will always be wary of high-risk activity, and with silicosis claims the risk carries substantial costs. Personal injury law specialist vbr Lawyers says individual statutory claims with WorkCover for employment-based silica exposure in Queensland could run as high as $700,000 to $800,000. The combined risks of a high prevalence of silica exposure and potentially expensive liability claims has caused insurers to react.

“We have ceased underwriting specific high exposure accounts. We have also imposed exclusionary wording on directly impacted industries and trades with potential exposure to silicosis,” IAG says.

“We assess the industry, occupation and product (or materials) when determining when to apply the exclusion.”

The insurer says these steps are “prudent” to address an “increasingly inflationary environment” currently facing the commercial liability market.

Increased costs are sufficient reason for insurers to introduce exclusions; the onus is now on employers to make the changes to fit regulator and insurer requirements.

Irreversible and incurable outcomes from silica exposure don’t occur overnight. The body can exhale some of the dust it breathes in, but prolonged and routine exposure to it, which people like stonemasons and construction labourers face, is the primary cause of a silicosis diagnosis. In most cases, silicosis symptoms won’t show up until decades after extended exposure. But it will attack aggressively, as do other lung-related diseases caused by asbestos or coal-dust inhalation.

A report published in May this year by Curtin University with the Australian Council of Trade Unions predicts up to 100,000 workers of the 584,050 exposed to respirable silica dust will contract silicosis in their lifetimes.

The report builds on numbers from the previous decade that found 6.6% of Australia’s workforce (329,000) were subject to respirable silica, saying a dramatic increase in infrastructure investment has exposed a broader range of workplaces.

“Silicosis has become a bigger work safety concern than asbestosis.”

Senior Research Fellow at Curtin School of Population Health Renee Carey, who co-authored the analysis, tells Insurance News the projections were developed by observing lung cancer risks associated with silica exposure. She says part of the problem with silicosis is a lack of clarity on diagnoses.

“There is very little information available on how common silicosis is in Australia,” Dr Carey says. “We also don’t have a clear understanding of how many people are exposed to silica dust at work, and what the risk of developing silicosis is for those people.”

The National Dust Disease Taskforce final report, published last year, points to data that “suggests there are currently at least 477 Australians living with silicosis,” but warns that undetected cases likely mean that the number is higher.

Dr Carey attributes the re-emergence of silicosis to the prevalent usage of engineered stone, which carries up to 95% of silica dust. She says it is causing the onset of “earlier and faster” cases, even after dust exposure stops.

The taskforce’s final report reveals that 25% of workers tested after exposure to respirable crystalline silica from engineered stone before 2018 have been diagnosed with silicosis or other silica-related diseases. It says there has been a “systemic failure to recognise and control the risk associated with producing benchtops from engineered stone”.

Dr Carey says workplaces have introduced measures to protect employees from silica exposures, but these can only be effective with “100% compliance” and proper investment in adequate respiratory protective equipment. She says a ban on engineered stone would effectively reduce future case numbers.

An outright ban is viable, given that alternative materials which present lower risks are available. “Natural stone products have been available for many years.

While these still contain silica, the amount of silica dust is much less. There are new products on the market which use recycled glass and don’t contain any silica at all, so there is no risk of silica exposure.”

Regulators have yet to impose a ban on engineered stone but have been looking to make headway in addressing the issue. The taskforce report provides several recommendations to reduce the onset of silicosis cases, including strengthening workplace health and safety measures because “it is clear that existing WHS laws have failed to protect workers from developing silicosis”.

The report calls for a ban on silica products by July 2024 if industries and governments cannot “urgently demonstrate that engineered stone can, in fact, be used safely”.

State governments have also made additional efforts to tackle the problem. The Victorian Government made amendments to its workers’ compensation laws that increase coverage and benefits for workers diagnosed with silicosis. The Queensland Government says it will provide $3 million in research grants to help prevent and treat occupational lung diseases.

States have changed their workplace health and safety regulations by clamping down on dry-cutting of engineered stone and requiring workplaces to limit silica exposure to 0.05 milligrams per square metre over eight hours. But Dr Carey says the limits don’t go far enough and should be changed to a health standard of 0.025 milligrams per square metre.

In recent years governments, regulators and the insurance industry have all given attention to, and taken action on, silicosis. As to whether their responses have gone far enough to stop a potential explosion of cases, only time will tell.

What is silicosis?

“Silicosis has become a bigger work safety concern than asbestosis,” major broker Gallagher says.

Silica materials can be found wherever you look. Dust particles of the chemical compound, known as crystalline silica, are found in stones, concrete, gravel, sand, and clay products.

It’s part of what forms many kitchen benchtops where meals are prepared, the newly minted tiles in your bathroom, or even the bricks of your home. But as stonemasons, engineers and miners know, it can be also found in your lungs.

When silica products are cut, drilled into or broken, respirable compound particles 100 times smaller than grains of sand are released into the air. They are small enough to be inhaled. There the particles can get stuck in the lungs, causing scarring.

Enough exposure to silica dust leads to incurable diseases such as lung cancer or silicosis – the permanent scarring of the lungs – as well as a host of other breathing-related issues.

Our second Insurance News Wellness Survey finds employees’ mental health is still an issue, and remote working isn’t a positive change for everyone

By Miranda Maxwell

The covid experience seems to have changed us in ways we didn’t expect. The latest Insurance News Wellness Survey has revealed a mismatch between the impact of remote working on employees who mostly embrace it as positive, and on industry standards.

Of more than 750 Insurance News readers who responded to our survey this year, just 21% were solely office-based.

Some survey respondents say this sweeping shift to almost 80% remote or hybrid “Working From Home” across the insurance industry has led to a dive in service standards and poor response times. They also fear WFH has wiped out mentoring of the next generation of professionals.

“While a lot of individuals have enjoyed working from home, the service levels within insurance have dropped,” one reply says, reflecting the views of many.

While 84% say remote working has been positive or neutral for their own lives, only 40% feel the industry has benefitted. And just over 25% of respondents say it has been outright negative.

Around a third of our respondents are brokers, with 18% working in underwriting and 10% in claims. More than 75% are over the age of 40, and just 5% are under 30.

Many say they have enjoyed a dramatic lifestyle improvement from remote working, with the added benefit of clawing back transport fares and commuting hours that can be spent with family and running households.

“Me and my dog spend more quality time together,” says one reply.

“Best years of my career,” says a man aged between 30-40 who works from home. “Productivity is up and there’s more opportunity for collaboration internationally and across sites. The last six months has been a big backward step to siloed offices again.”

Families are seen as a beneficiary of the move to WFH, with women particularly enthusiastic. “I can put on washing in my lunch break and I am here when my daughters get off the bus,” says one mother.

For others the change is not so great. Some say they feel isolated and worry their social skills are deteriorating, or that they’ve put on weight. A few reveal loneliness, with poorer interaction with colleagues frequently cited.

“Lack of camaraderie, less happiness, less support – but more home jobs getting done,” is one take.

A good number have shared concern over a lack of mentoring and oversight, and a plunge in availability when trying to contact insurer staff.

“No one answers the phone!” is a common comment, mainly from brokers.

“We are a relationship business and this has taken a huge step back due to remote working,” says an underwriter in Victoria. Another whose role means they don’t leave the office much describes “communication delays from insurers with seemingly less oversight from managers”.

“There is no reason to work from home,” is one firm response. “Make everyone go back to work to get us operating at full speed again. The client and us as brokers are sick of the constant excuses. We need to service our industry, which can’t happen sitting at home.”

Criticisms centred on a drop in accountability, phone calls being ignored, longer insurer response times, more emails back and forth which delay claims that could easily be resolved with a quick call, and underwriting and claims services that one broker summarises as having “dipped appallingly”. Some other typical comments:

“Insurer claims services have turned to custard.”

“Everyone uses covid as an excuse not to keep working. Delays are past significant.”

“The ‘due to illness turnaround times are longer’ response is wearing thin.”
There is also worry about upskilling new starters to the industry who would usually learn and have support from the more experienced people around them.

“They won’t see the bigger picture and benefits of a career in insurance, as their networking is far more limited.”

The 2022 Insurance News Wellness Survey finds 95% of employers are seen as flexible in their approach to individual working needs, with only a small fraction holding on to a 100% office-based work model.

This minority nevertheless comes under harsh criticism from many respondents who like working from home and attack “dinosaur” attitudes, with one chastising an “old Victorian mentality of bosses wanting us chained to desks”. Some other comments:

“Feels like we’re working in ancient times. Very old school mentality – if your bum isn’t on the seat you can’t possibly be working.”

“Old ways of thinking flood an industry that is still in the most part living in the 1980s.”

As for covid, which was wreaking havoc in the industry when last year’s inaugural Wellness Survey was conducted, 45% of respondents say they did not catch the virus, while 3% had it multiple times and 15% had symptoms that lasted longer than a month.

More than a third had required sick leave due to covid and almost half said their workload has increased as a result of covid-related absences.

“Covid/flu absenteeism is putting huge pressures on delivering customer service and business as usual, with no relief to projects and deliverables,” one industry professional says.

“Exposure is a concern because the next thing you know, you are in isolation.
This throws all your plans out the window. It’s tiring,” says another.

But covid awareness is still very strong, with 43% admitting to being anxious about catching the virus. There is still hesitation about travelling for work, and for attending industry functions. Many respondents say they caught the coronavirus from an industry function. Some comments:

“Every single industry function has resulted in attendees getting covid.”

“Certainly don’t want the inconvenience of being locked up for a week, having plans ruined, or risk infecting vulnerable people.”

“I am anxious but still do [attend functions] as it is expected.”

“You have to doubt the wisdom of reverting to packed forums sitting close to each other, shaking hands, etc. It feels like with all we know we should be distancing and practising good hygiene, but these functions don’t really support that.”

“We’ve done without functions for two years – I honestly don’t miss them.”
There is concern over a lack of supervision and suggestions staff are taking advantage of remote working, and that “people who are slack have the ability to do this without anyone watching over them”.

“I’m suspicious that many don’t hold the same work ethic at home despite what all the experts spruik,” said a broker in Victoria who mainly works from the office.

Some others:

“Some of my colleagues are abusing it which will eventually affect everyone as hybrid will be removed as a work option.”

“It doesn’t help when we touch base with an underwriter and they are either picking up the kids from school or going for a walk at 3pm.”

A contrasting reply says clients and brokers are less patient and “expect you to be available all the time”.

There is also feedback that a loss of culture in the teams leaves people feeling less engaged with each other and less interested or challenged by their work.

“Instead just exhausted from it all,” says a young male underwriter in NSW.
“Work productivity has dropped off a cliff!” adds a broker from South Australia.

More encouragingly, a female underwriter in NSW says remote working allows her to recruit more qualified staff from other states which “has drastically improved the talent pool,” and another says flexibility has allowed staff to keep working when isolating which eased some of the burden.

Concern over a loss of mentoring is mentioned a number of times, with “difficult for new staff who rely on osmosis learning” an example.

As one professional warns: “The less experienced are going to have a lasting effect not being in the office learning from their peers and managers.”

What is your current working model?

Has your company found it hard to recruit new talent since the pandemic?

Has remote working had a positive or negative effect on your industry?

Are you nervous about travelling for work and attending industry functions?

Over the past 12 months have you suffered from mental health issues?

How flexible has your company been to individual working needs?

MENTAL HEALTH: The malady lingers

Last year’s Insurance News Wellness Survey shocked many with the revelation that 28% of respondents were seeking or had considered seeking mental health advice from a medical professional. That survey was conducted at a time of considerable uncertainty when lockdowns of varying length were imposed in much of the country.

While we could have expected this year’s survey to show mental health issues gradually receding in line with the virus and a gradual return to some sort of normality, that isn’t the case.

Some 43% of respondents say they have experienced mental health issues in the past year and 29% say they have sought professional help.

So the end of the covid crisis hasn’t been matched by a reduction in the profile of mental health in the industry – a finding backed up by participants in a survey conducted by last month’s Dive In Festival.

As insuranceNEWS.com.au reported on October 3, 79% of the Australian Dive In participants nominated mental health as the most pressing cultural issue that needs to be addressed within the industry, followed by gender equity.

And it’s not just an issue for Australia’s insurance industry. Dive In’s global survey of more than 20,500 insurance professionals found 68% nominated mental health as the most pertinent issue the insurance industry needs to focus on.

Some comments on the issue of mental health from participants in our 2022 Wellness Survey:

“My personality has changed. I have moved to being an introvert.”

“I want to go back into the office but have become very anxious.”

“The gap is the lack of human interaction. I have felt isolated at times.”

More than three-quarters of respondents to the Wellness Survey say their employer has offered assistance with mental health, though comments range from effusive praise to disappointment.

“All employees trained in mental health first aid,” says a male executive in Queensland.

“Nothing formal but very understanding of individual situations,” says a male at a small organisation employing less than five.

Then there’s this:

“They give you the name of a counselling crowd – that ticks a box but doesn’t help the problem when the problem is the job and the pressure that comes with it.”

“They promote it from a distance as part of common rhetoric, but they don’t know when it comes to the crunch,” said another.

Others revealed the support available did not meet their needs “so I bury it”; they have not requested support as “I don’t want to look weak”; not having time to pursue help due to high workloads; some “I’m ok so you should be too” attitudes, and accusations of “lip service”, “passive assistance” and “high level of denial”.

More encouragingly, others reported managers that were “very forthright and upfront re mental health,” regularly checking on team members’ wellbeing.

MORE WITH LESS: Covid still hurts

The wider consequences of covid have also been raised by respondents to the 2022 Insurance News Wellness Survey, with many tales of drawn-out time taken to recruit or train staff.

Some 61% of our industry respondents report an increased workload due to talent shortages. Yet 39% say they have not received a pay rise in the past year.

Many of those surveyed talk of their workload, with one typical response saying: “I’m feeling like there’s three times more to do.” Some other comments:

“Workloads have exploded – very frustrating and very concerning.”

“Stress is obvious and workload at the coalface has increased dramatically. Does not affect the C-suite.”

“We have been one staff member down almost continuously for the past two years.”

“Can no longer keep up, can’t accept any new clients or grow my business.”

“Covid is an annoyance and disruption that seems to keep on giving. It has led to unpaid overtime for those left manning the fort.”

Respondents say staff turnover has been very high due to unreasonable workloads, good staff being headhunted, the industry struggling to compete for talent “unlike ever before”, and businesses being stuck in a constant recruitment cycle to fill “lots of gaps from the Great Resignation.”

The difficulty being experienced in recruiting and retaining talent has drawn many responses, with people relaying stories of poor staff retention, vacant positions taking months to fill and job postings not getting the response they used to. Some responses:

“Increased time between hires has meant more drag on each staff member for longer.”

“Due to resignation of a staff member and inability to find trained staff, my workload has increased substantially.”

“Just expected to absorb workloads or not go on leave.”

“We are all trying to access the same talent.”

“Normally we would receive 20-30 applications for new roles, but last time we only received five after seven weeks of advertising.”

“The last two years has been very hard on claims people. We have a very hard job to do and don’t get paid enough to put up with the abuse we cop day in day out. Many are opting out.”

“Companies have restructured to the point of no return. Not willing or have capacity to train people new to the industry.”

“We need to get better at attracting talent to the industry.”

“Up to 25 hours unpaid overtime per week up from five due to the nature of the claims space at the moment.”

“It’s been a tough two years.”

We found almost 300 of our 750+ respondents had not received a pay rise in the past year, while 61% received rises ranging from 1% to 30%. The larger rises tended to be the result of a move to a new position, with 16% taking up this option by changing jobs in the past year. The comments of some who’ve received little or nothing at all by way of a pay rise in the previous year are cynical, with an employee at a large NSW brokerage leading them off: “No one ever gets a pay increase”.

“Everything has increased – except salary.”

“I did [get a pay increase] if $20 a week can be called an increase.”

Other respondents say their answers were well below inflation, the first in five years, or even “stuff all of nothing”. Other key words to describe their pay rises included “miniscule”, “minor”, “a disgrace”.

“I had to put forward my case and negotiate why I was worth the increase.”
One had a 15% increase in remuneration but added they are “now doing two different roles, though”.

Thanks to those who responded to this year’s Insurance News Wellness Survey. Our topics ranged from the advantages of Working From Home and the impact on people’s work, mental health issues, recruitment and training worries, what employees see as important, salaries and uneven workloads.

The entire 2022 Insurance News Wellness Survey will be uploaded to insuranceNEWS.com.au shortly.

E-scooter share programs could be a useful addition to the urban transport mix, but insurance issues have some observers worried

If you’ve visited any of Australia’s biggest cities lately, chances are you’ve noted the latest addition to the CBD street scene: electric scooters.

To advocates they are an environmentally friendly way of moving people around urban areas, easing pollution, traffic jams and the strain on public transport; to critics, they are a mid-speed menace to users and pedestrians.

The use of privately owned – and often quite high-powered – e-scooters is limited by the road rules; the states differ, but it is generally illegal to use these vehicles on roads.

However, a host of local authorities, following the example of cities worldwide, have introduced or are trialling low-powered share scooters that can be hired and dropped off at hubs around a city or town using a simple payment app.

Elliot Fishman, director of the Institute for Sensible Transport based in Melbourne, says it is all part of the push to make our cities greener, cleaner and more easily navigable.

“This is something that is happening all around the world…partly because of the technological advances that have allowed it to happen, but also because cities are looking for ways to move people that take up less space and use less resources,” he tells Insurance News.

Dr Fishman says Australian cities are not as well suited – in terms of dedicated lanes and car-free roads – to cycling and scooter riding as those in countries such as Denmark and the Netherlands, but take-up of the e-scooter schemes has nevertheless been good.

“What we’re finding is that each e-scooter is used about five or six times a day, which is a pretty high level of use, comparable with other cities internationally.

“So even though Australia as a whole is not especially well set up for [it], we’ve seen that people are really willing to choose a scooter for a proportion of their trips … they’re clearly meeting a transport demand that wasn’t being met previously.”

Of course, where there is traffic, there will be accidents, and adding a new kind of vehicle – available for any adult to use – is unlikely to go off without a hitch.

There has been a spate of media reports recently about the risks to riders and pedestrians, particularly on paths shared between bikes, scooters and people on foot. And one particular case – that of Adelaide woman Julia Miller – raises a potential issue around third-party protection.

Dr Fishman says the scooter schemes come with mitigation measures, including a geofencing tool that pinpoints where a scooter is and limits its speed accordingly or stops it if the vehicle moves into an illegal area.

“So, for instance, if you’re on a shared path … with people on foot, usually you’re limited to 10kph, so it’s not up to the rider to determine the speed, the vehicle knows where it is and will govern its speed. They go up to about 20kph on the road, and typically in Australia you can’t go on a road where the speed limit is [above] 50kph. You can go on a road where the speed limit is up to 50kph, or where there is a protected bike lane.”

He says many e-scooters – whose motors have “about a quarter of the power of a toaster” – also come with training modules in their apps that users are required to complete, and even reaction-time games that can block people who have been drinking.

And they can be disabled at high-risk times. Brisbane recently began a safety trial that locks share scooters overnight on weekends in central parts of the city.
Dr Fishman notes that in the longer run, introducing such vehicles could make our cities safer.

“What cities have found is that when they introduce a bike share scheme…the level of hospitalisations caused by crashes involving cyclists reduces. There’s a number of theories that help explain that, and part of it is that when cities introduce these schemes, they also have an impetus to speed up the rollout of bike infrastructure.

“They have an investment in the shared scheme and want to make sure it succeeds, so they put in the bike infrastructure that makes it safer for people to use it, but also for other road users as well.

“It injects a large number of small, two-wheeled vehicles, either e-bikes or e-scooters, into the system, and that raises people’s awareness – including motorists’ – of riders, and that helps to enhance safety as well.”

However, in the meantime, there are certainly issues to address.

Adelaide academic Ms Miller was struck by an e-scooter while in Melbourne earlier this year. She suffered injuries including a broken shoulder and elbow, and says she has been left with medical bills running to thousands of dollars.

Her lawyer, Alice Robinson from law firm Polaris, tells Insurance News she is in the early stages of pursuing compensation. At time of writing she had contacted the scooter operator involved, Lime, but had yet to receive a response.

She says that while Lime has third-party insurance for its riders, the policy will not respond when a user breaches rules of operation, and in Ms Miller’s accident, the young rider was not wearing a helmet, as required.

“This creates the intolerable situation where … if you’re struck by an e-scooter, you face a very difficult path to insurance, compensation and accountability,” Ms Robinson says.

Insurance News contacted share scooter companies Lime, Neuron and Beam – which run schemes across the country – for comment on their third-party coverage.

Only Neuron responded by deadline. It says it was the first e-scooter operator in Australia and New Zealand to introduce third-party insurance, provided by Agile Underwriting.

“The extended cover complements Neuron’s significant public liability insurance, along with the company’s personal accident insurance,” a spokesperson said.

“If you’re going to introduce that mode of transportation, what comes with that is the responsibility of making sure the insurance is comprehensive so when people do inevitably run into others, they’re not left like my client – with a $20,000 bill for healthcare.”

“This goes well beyond what is required by law and beyond what riders of private e-scooters or bikes typically have.

“Third-party insurance provides protection for accidental injuries or property damage to a third party (like a pedestrian or car owner) that a rider might cause during their ride. Like other insurance products, people must be riding within the law to be covered by it.

“Insurance outcomes are always dependent on the specific incident. We have a low incident rate across Australia and the number of e-scooter incidents involving third parties is extremely small.”

Lime’s website shows it has third-party coverage, also provided by Agile. Its certificate states cover is dependent on wearing a helmet and following local rules and the rental terms of service.

Beam’s website shows it has third-party coverage from Marsh Advantage, and its certificate shows it will not cover unauthorised use of the vehicle.

Dr Fishman says that, as with any mode of transport, “there will always be some reckless users. Our argument is that the risk posed [by] a well-managed e-scooter share program is much less than what would happen if there wasn’t the program”.

His solution is for the Transport Accident Commission (TAC) in Victoria and its compulsory third party counterparts in other states to widen their coverage beyond accidents caused by cars, trucks and motorbikes, and to provide protection for people injured by cycles and e-scooters too.

“The TAC has contributions from motor vehicle owners. It should cover all road users regardless of their mode, because the fact is that most adult bike riders also own cars. They’ve already paid through their [car] registration. They’ve just chosen to leave their car at home and use another mode of transport, and that is something that should be encouraged.

“We’re not against motor ownership here at the institute, but we are against policies that act as a disincentive to use walking, cycling and public transport. The TAC should be a multimodal system.”

Ms Robinson has called for a “TAC-style” program to be introduced by scooter operators and local councils that “properly covers riders and walkers for the medical bills, income loss, and pain and suffering … in the case of a collision causing an injury”.

Dr Fishman also wants restrictions on the sale of privately owned e-scooters that can be “10 times as powerful as a share scooter. There are many e-scooters on our roads that are high-powered and go very fast.

“Our advice to government has always been, you’re much better off going with e-scooter share schemes and legalising [road use for private] e-scooters that have the same safety functions as the share schemes.

“It may be the case that riskier riders are attracted to the riskier vehicles, so you’ve got this terrible match-up. I think there’s some policy reform that’s needed to remove those risks and promote the use of safe e-scooters, and make it very difficult if not impossible to purchase the more dangerous, high-powered, high-speed e-scooters.”

Ms Robinson agrees safety and protection are key to the success of e-scooter schemes.

“If you look at why e-scooters are being trialled in the first place, one of the things councils and e-scooter companies say is, we’re trying to promote an environmentally friendly transport option to…get cars out of the CBD. That’s a great idea. Make it safe.

“If you’re going to introduce that mode of transportation, what comes with that is the responsibility of making sure the insurance is comprehensive so when people do inevitably run into others, they’re not left like my client – with a $20,000 bill for healthcare.”

HDI Global hosts lively office opening

HDI Global has celebrated the opening of a new office in the heart of Sydney’s central business district, with around 120 brokers welcomed to the festivities.
The event included live music from Soulganic, competitive ping pong and pool matches and plenty of refreshments.

The office at 20 Martin Place offers stunning views and natural light and is now home to both HDI Global and Specialty with a combined staff of more than 100. The layout includes productive work areas and a number of meeting spaces for collaboration and welcoming of guests.

Global Chief Executive Edgar Puls attended the opening, and the company says the contemporary space will support the continuous growth of the organisation.

360 celebrates success at inaugural awards

360 Underwriting Solutions has held its first Awards Night to celebrate five years of operation and the key role its people have played.

“At 360, our people are our single most important asset, as they underpin our ambition to deliver solutions our broking partners want, with service they expect from people they know,” the business said.

The event took place on September 22 at the Hayden Orpheum Palace Theatre in Cremorne.

“We are immensely proud of 360’s journey to date and equally, the people who make 360 what it is today. Every individual’s contributions are crucial in helping the wider company meet our strategic goal of being a $1 billion, broker-centric underwriting agency that delivers the best in market service by 2030.”

Here are the award winners: Service You Expect – Lisa Davies, 360 Commercial; Solutions You Want – James Rosen-Evans, 360 Group Services; Rising Star – Lucas Benson, 360 Construction & Engineering; Employee of the Year – Ross Butler, 360 Farm & Regional; Business of the Year – 360 Farm & Regional; Founders Award – Craig Davie, 360 Aviation.

PSC Network connects with partners at Singapore conference

PSC Network Partners held its annual conference this year in Singapore, hosting about 250 delegates comprising of authorised representatives (ARs) and business partners at the Swissotel, a popular hotel with convention facilities in the heart of the city-state.

Chief Executive Tony Walker says the PSC Network Insurance Partners National Conference enables the business to “give thanks to our growing AR Network and celebrate their success despite the challenges faced over the past few years.”

The theme for the August 21-23 conference was “The Future is Now”, the business says. A two-minute video for the conference says the business now has 220 ARs and partners across Australia and New Zealand with $455 million in gross written premium.

Singapore was the venue to host the 2020 conference and also to celebrate its 10th anniversary but those plans were put on hold because of the pandemic.

PSC Network Partners was created in September 2020, combining PSC Connect and PSC Reliance Partners, which had been operating independently as well established AR network groups for more than 10 years.

SUA marks three-decade milestone

Specialist Underwriting Agencies celebrated 30 years in business at Brisbane’s Queensland Cricketers’ Club – dubbed SUA’s “second office”.

Director John Iles addressed the jovial gathering, reflecting that SUA’s 25th anniversary had “set the bar tab record to beat” at the same venue.

“Any chance we have to commemorate a milestone is done with gusto. We feel privileged that so many of you want to participate in our celebration,” he said. “We have been blessed with incredibly loyal and dedicated staff.”

Mr Iles has been at SUA more than two decades after it was founded by the late Frank Page in 1992.

“Thank you to everyone that attended the event and that has been a part of the SUA business since 1992,” the agency said.

“The support from the market allowed us to reach this milestone, and our independence has allowed us to adapt to changes in the market along the way. We’re looking forward to seeing what the next 30 years brings.”

APIG conference returns in style

The Australasian Professional Indemnity Group (APIG) annual conference returned in September with a full-day program followed by a sold-out Gala Dinner.

The evening featured performances from the Taikoz Drummers and popular cover band Jellybean Jam, while Darren Isenberg was master of ceremonies for the event.

Around 530 people attended the dinner, held at the Hyatt Regency in Sydney, as delegates appreciated the opportunity to meet again after a hiatus during the pandemic.

Earlier in the day the conference program covered topics such as headwinds in the global economy, the market post covid, insurer profitability, reputational risks in the digital age, and issues around ransomware and resolving funded class actions.

Speakers also included Julius Sumner Miller Fellow at the University of Sydney Karl Kruszelnicki, better known as science communicator Dr Karl, who spoke on great moments in finding truth through numbers.

Resilium celebrates in Cairns

Resilium conference delegates enjoyed a packed program of activities in northern Queensland, with the three-day event this year held in Cairns.

MKS Insurance Services was presented with the Resilium Practice of the Year award at a gala dinner, as the achievements of authorised representatives over the past 12 months were celebrated.

Speakers during the day delivered thoughtful and inspiring presentations and Resilium provided training and insights in areas such as compliance and marketing.

Conference attendees also participated in activities including white water rafting and sailing as many enjoyed an escape from cold, wintery weather in southern states.

The event wrapped up with a finale night at Hemingway’s Brewery, with guests invited to come dressed as musical superstars. Spotted on the night were members of bands Kiss, ABBA and the Village People.

‘Helluva ride’: McLardy McShane conference back with a blast

More than 300 attended the McLardy McShane conference on the Gold Coast after a two-year hiatus due to covid.

Themed “One Helluva Ride”, the welcome event took place at Movie World and attendees had the chance to climb aboard some of the park’s famous rollercoasters.

The following day speakers at the The Star Events Centre included Richard Harris, who played a key role in rescuing 12 trapped young soccer players and their coach from a Thai cave system in 2019, tsunami survivor and Head of AFL Queensland Trisha Squires, and four-time Olympian Steven Bradbury.

That night a 1970s-themed gala dinner was held and awards were announced.
More than $150,000 was raised for charity at the event, with funds supporting The Reach Foundation, epidermolysis bullosa sufferers, and the GoFundMe page of Megan Affinita, an Elantis Premium Funding employee battling stage 4 cancer.

Mansfield Awards recognise claims professionals

The Mansfield Awards for claims excellence returned to the Establishment Ballroom in Sydney with about 150 people attending the celebrations.

Vero won the top Gold Mansfield for the third consecutive year after also taking out the honours in the SME Property and Casualty category.

QBE was the winner in Personal Lines, Zurich took out the Corporate Property and Casualty award and top honours in Specialty were shared by EBM Rent Cover and GT Insurance.

The evening also marked the presentation of the first Purple Mansfield, which went to Natasha Blanch, a commercial assessor with Vero, in recognition of her work in supporting a large commercial customer during the southeast Queensland flooding disaster after her own home was inundated.

The event, now in its sixth year, has introduced the Purple Mansfield to recognise a company or individual that has gone above and beyond and provided a service that has made a real difference to a client or a community.

Adroit keeps believing at conference

Adroit hosted its Annual Conference at the RACV Torquay on September 1 and September 2.

The event featured panels of industry experts, roundtable speed training and speeches from former AFL star Nick Dal Santo and inspirational speaker Sean Purcell amongst others.

The event’s theme was “Don’t Stop Believing” and Adroit applauded the efforts of its team to navigate through the past two years. The conference capped off with an ‘80s celebration to thank all those who attended.

UAC Norwest Sydney expo scores a full house

The Underwriting Agencies Council (UAC) Norwest Sydney expo enjoyed a “full house” with participation from more than 70 members at the one-day event on August 10.

About 250 brokers attended the expo at the Commbank Stadium, hearing first-hand from the 72 underwriters who were exhibiting their insurance products on that day.

Cynthia Al Assaad from ii-A and Aon’s Michael Pham were the lucky brokers on that day, going home with $500 and $100 gift cards in the Sedgwick-sponsored prize draw.

UAC will hold expos in Hobart and Perth in October and November, the last two stops on the expo calendar.

‘Grow and shift’: CBN lays out vision at Gold Coast conference

Community Broker Network (CBN) held its annual conference in the Gold Coast, its first such in-person gathering with business partners since the pandemic.
More than 300 delegates attended the SHIFT conference over three days in September, where they heard first-hand from insurance figures on key trends shaping the industry.

Chief Executive Richard Crawford in his opening address touched on lessons learned from covid and how CBN plans to take the business forward.

“It is extraordinary that our network are all here together again in 2022,” Mr Crawford said. “One key thing the pandemic taught us all, is the true value of the human connection, whether at home, professionally or in our social relationships.”

He says succeeding into the future will require continued adaption and embracing change, describing it as “a shift…we can’t change the world so that it fits into our thinking, but what we can do in response, is to grow our thinking, to change the way we look at the world, shift our perspectives”.

The Steadfast-owned authorised broker network also announced its award winners and raised more than $56,000 for the Gold Coast Project for Homeless during the gala dinner at Sea World.

At the gala dinner, CBN named the award winners in recognition of their outstanding performance.

William Murdoch of ARMA Insurance Brokers Hunter Valley took home Non-Authorised Staff Member of the Year prize, Petara Tanuvasa of Silverback Insurance was Network Rising Star and Amanda Morris of ARMA Insurance Brokers Hunter Valley won for Innovation Product/Service.

Aimee Henderson of Grace Insurance won Individual Authorised Representative honours, John James of Kerrie Woodards Insurance was Corporate Authorised Brokerage, Matt Ennis of Hollard Insurance was Industry Partner Professional, QBE Insurance was Industry Partner of the Year and Anthony Barbara from AJB Insurance Solutions was awarded for Recognition of Service to the Community.

Hundreds gather for ANZIIF awards night

Suncorp was crowned 2022 Large General Insurance Company in front of more than 750 industry professionals at The Star in Sydney in August.

Australian and New Zealand Institute of Insurance and Finance (ANZIIF) Chief Executive Prue Willsford said she was delighted to see a full house and celebrate in person.

“Every finalist embodied the true meaning of professionalism and has contributed to building trust and confidence in our community. You all deserve to be celebrated,” she said.

Now in their 18th year, the ANZIIF awards celebrate pursuit of excellence, exceptional dedication and accomplishments across the Australian insurance industry.

Marsh was again named Large Broking Company of the Year, while the Lifetime Achievement Award went to Jacki Johnson, who was an executive at IAG for two decades, and Finity Climate & ESG Risk Actuary Sharanjit Paddam took out Insurance Leader of the Year.

Suncorp Chief Executive of Insurance Product and Portfolio Lisa Harrison told Insurance News it had been great to “come together to reconnect with colleagues and celebrate professionalism across our industry” after a challenging year for both customers and the insurance sector.

Insurance Advisernet, CHU, Royal Automobile Club of Tasmania (RACT), the CGU Strategic Broker Claims Teams, AIA Australia, Mitti, Hollard, QBE, ProRisk Claims Team Leader Bianca Parussolo and more were recognised with wins in other categories at the glittering awards night.