Smooth sailing

NM Insurance is celebrating 20 years of operation, and is looking forward to many more

By John Deex

When Nautilus Marine Insurance launched as a pleasure craft specialist in 2005, it plotted a course focused on quality products and service, delivered by skilled, motivated staff.

Two decades later – despite significant growth – those founding principles still hold true.

Nautilus Marine was born of a belief that the market needed an alternative option. Initially backed by underwriter Hollard and former broker Ian Frith, the agency struck an immediate chord with partners and clients.

Chief executive Lyndon Turner, who has been at the helm since 2007, tells Insurance News that when the business launched, the recreational pleasure craft market was dominated by just a handful of players.

“I think the market, and our broker and distribution partners that are still with us today, were saying there was a need for change.”

Nautilus Marine aimed to capitalise on this appetite for another option, but it was determined not to prioritise price above strength of coverage.

Boat owners are a discerning lot, and Mr Turner points to the care often taken over fuel as evidence of that.

“When they look at where they’re refuelling, and putting thousands of litres of diesel in that boat, they’re not chasing the cheapest price they can find.

“They will see through something that’s substantially cheaper than everything else. That’s their mentality.”

He says the “internal mantra” at the agency – which evolved to become the NM Insurance group – is to be at a mid to premium level in both product and service.

“We are always competitive in what we do, but we are not always the cheapest, because we believe that the breadth of the product, including the service if something goes wrong, should oversee a pricing strategy.

“That was from day one, and it still applies today. It’s served us well.”

From small beginnings, the agency has grown fast. In 2010 it expanded into New Zealand; in 2014 Steadfast Group acquired a majority shareholding in NM Insurance.

In 2015 it diversified from boat cover to provide consumer and commercial insurance solutions for the marine, motorcycling, caravanning and cargo markets.

Now, a range of sub-brands sit under the NM Insurance umbrella: Nautilus Marine Insurance (pleasure craft), Proteus Marine Insurance (commercial), Australian Caravan Insurance, and National Motorcycle Insurance.

Zurich provides capacity for all NM Insurance products, and the business has more than 100 staff at offices across mainland Australia and New Zealand.

NM Insurance recently extended its agreement with Zurich, securing a new five-year term.

The agency manages a portfolio worth $90 million. About 70% of business still goes through brokers, but NM Insurance also sells direct and through agreements with authorised dealer distributors.

Mr Turner says success is dependent on a broad distribution strategy and catering to brokers’ needs.

The launch of Proteus Marine Insurance came in response to requests for a “one-stop marine shop”.

“Brokers would come to us with a pleasure craft risk on a Monday, and by the Wednesday we’d receive a cargo slip as well.

“[The launch of Proteus] was about supporting those partners, and it’s been successful.”

On the consumer side, Mr Turner says the covid pandemic prompted a period of rapid growth as international travel was restricted and the values of boats, caravans and motorcycles soared.

“We saw really strong growth through that period, and the retention has been strong.”

Cost-of-living pressures have affected clients in more recent years, and discretionary spending has tightened, so growth has settled back to pre-covid levels. But Mr Turner believes interest rate relief could counter this.

“I don’t have a crystal ball, but we’re ready for when sales take off again.”

While not facing the affordability issues found in sectors such as home insurance, the pleasure craft market has been affected by insurers increasing premiums and enforcing more strict risk acceptance, Mr Turner says.

“In the past five years, there’s been a tightening, especially when it comes to vessels that are kept in the water. Yachts, cruisers, house boats – the market’s tightened up by looking at quality of the risk, and that includes surveys or risk inspection forms.

“Let’s face it, boats are sitting in saltwater environments that are corrosive by their very nature. They need regular maintenance, and owners need to have proof of that when it comes to an underwriter’s comfort in laying down capacity for those risks.”

Commercial hull has experienced strong rate growth based on historical results, but Mr Turner says the business NM Insurance writes can also be affected by discretionary spending changes, as much of the charter industry is linked to tourism.

NM Insurance operates in north Queensland, and Mr Turner says different risk selection criteria apply there due to the historical frequency of losses.

He sits on the board of the Marina Industries Association, working collaboratively to understand issues for asset owners in the region.

“We strongly support really good risk management practices for those regions that have traditionally suffered adverse catastrophe effects. And realistically, we’ll see more weather events occur in those regions.”

Some industry commentators have suggested the federal government’s cyclone reinsurance pool should be expanded to include marine.

“It’s important to understand that in that region, in addition to recreation or pleasure craft, there are a substantial number of businesses that service and support the marine industry more broadly, including marinas, charter operators, tourism,” Mr Turner says.

“They are susceptible to weather events in the region and would like political support regarding the cyclone pool, for it to extend to those regions. And we are not against that. If it can be shaped correctly, I think it would be a good outcome for the region.”

NM’s largest claims event was Cyclone Debbie, which made landfall near Airlie Beach in 2017.

“Unfortunately, Debbie occurred where there was a high concentration of reasonably large pleasure craft, which included some salvage challenges due to the unique nature of where those losses occurred. It was certainly the largest cat event we’ve had to manage when it comes to both numbers of claims and the quantum.

“In saying that, we paid the claims, we moved on and kept our position in the market. We’re very proud of our claims outcomes and testimonials. That’s what we’re here for.”

Successful claims are mostly about communication, Mr Turner says.

“We’ve got an internal cat team that we bring together closely and that can swing into action when we have advanced warning of an issue, or one that’s been reported to us.”

Customers are alerted of incoming events, and some of the money spent protecting assets can be covered under policies.

“Whether they’re a high net worth client with a multimillion-dollar craft or someone of a different demographic, the same process should occur, and communication is key.

“If we can keep that up, between our offices and our customers, including our broker partners, the majority of the battle is won there, and we find good outcomes.”

One aspect of the business Mr Turner takes great pride in is the way staff have been selected and looked after over the past 20 years.

He says a “significant shift” took place as the business grew, to ensure staff were retained and remained engaged. “A lot of investment and time went into that, including training. You look after your staff, they’ll look after your customers.

Once you have the right behaviours and cultures in place, it makes my life easier to develop and grow the business.

“We’ve got tens of thousands of customers, and we’ve paid hundreds of millions of dollars of claims.

“It comes from the spirit of the staff, and that’s the thing I’m proudest of.”

As for the future, Mr Turner says NM Insurance isn’t done growing yet – but for the time being, it is focused on its core offerings and regions.

“We’re not in a consolidation position and we’re aiming to take market share. But while growth is important, the growth has to be sustainable, and we need to make sure the portfolio performs. We won’t move away from being a specialist agency. If we lose our focus, I think we devalue why a broker or a client would deal with us.

“We wouldn’t ignore an opportunity if it came across a desk, but it would have to be strategic, to justify the investment outside of what is a successful model.

“Twenty years is a great milestone, and we’ve had a lot of successes to enjoy, but there’s plenty more growth and development to come.”

The journey so far

• April 2005 Nautilus Marine Insurance Agency is launched, focusing on Australia’s recreational boat market
• September 2010 Nautilus Marine begins trading in New Zealand
• July 2013 The company expands and changes its name in Australia to NM Insurance
• April 2014 Majority shareholding is acquired by Steadfast
• October 2014 NM Insurance enters the recreational motorcycle market
• February 2015 Proteus Marine Insurance is launched, catering for the commercial marine sector
• April 2017 NM Insurance enters the recreational caravan market
• April 2020 Proteus Marine Insurance expands to New Zealand
• April 2025 NM Insurance celebrates its 20th anniversary