insurance business 2.02
DESCRIPTION
The magazine for Australia’s insurance broking and advice community.TRANSCRIPT
INSURANCEBUSINESSONLINE.COM.AU
ISSUE 2.2
Australia’s Top 30 insurance brokers revealed for the first time
PUBLIC ENEMYTHE NEED FOR PUBLIC LIABILITY INSURANCE
GET IN ON THE ACTIONHOW TO BREAK INTO THE RETAIL MARKET
STRATEGIC NETWORKINGYOUR BEST INSURANCE IN A CHANGING WORLD
E liteBrokers
CONTENTS AND EDITORS LETTER / 2.2
INSURANCE INSIDERS32 | Kay JacksonSimplex Insurance’s head honcho on the similarities between builders and dance teachers
50 | StatsHow much insurance business stays onshore?
52 | Social sceneBehind the scenes at the Zurich Zenith launch
54 | Favourite thingsBrad French/Krystie Borg on what gets them up in the morning
56 | The final wordWhy insurance needs to run, not walk
NEWS ROUND-UP4 | The big fiveThe biggest stories in insurance broking
6 | Forum forcesYour views on the big issues
COVER STORY14 | Elite brokersResults of the inaugural Elite Brokers ranking
FEATURES08 | Peter HarmerCGU’s chief executive on the shape of things to come
24 | Why run the risk?Public liability: the insurance every business has to have
34 | Courting retail consumersNavigating the world of retail insurance
BUSINESS STRATEGY38 | Motivating employeesHow to keep your workforce enthused
42 | Strategic networkingWhy networking with a strategy leads to better outcomes
46 | How to deliver exceptional serviceSix ways to supercharge customer service
14 COVER STORY
Elite brokersWho are the top 30 insurance brokers in Australia?
FEATURE
THE BIG INTERVIEWPeter Harmer
3808
1 | MAY 2013
WEEKLY INVESTIGATIONS
NOW ONLINE:
Supermarket giants sharpen pencil on
insurance
Put policies online for greater client
take-up?
Warning given on online branding
insurancebusiness online.com.au
Elite BrokersMotivating employees
2 | MAY 2013
EDITORS LETTER / 2.2
Insurance brokers are many things. Problem solvers, subject experts, trusted advisers, business partners and often the saviours of businesses and clients from ruin. Yet these achievements are often overlooked, albeit not intentionally. The non-stop operation of modern commerce means that we’re usually all working on the next project before we’ve had a chance to absorb the last success.
But we should take the time to celebrate our achievements. That’s why this issue of Insurance Business is acknowledging Australia’s top 30 insurance brokers. We’ve searched high and low across the nation to locate and rate the industry’s elite practitioners and bring you the secrets to their success. Turn to page 14 now to find out who came in at number one.
The really striking thing that we noticed when putting together the inaugural Top 30, however, is the sheer diversity of the brokers ranked within. Every one of these men and women, from industry veterans to up-and-coming rookies, is very different from the next. In our view, that diversity is a sign that the insurance industry is thriving, and will continue to thrive into the future.
Elsewhere in this issue, Insurance Business investigates the state of public liability insurance and how brokers can get a piece of the lucrative retail insurance market, while CGU chief executive Peter Harmer weighs in with his forecasts for the industry.
Add to that the usual roundup of news, views, business building advice and industry figures, and it’s another packed issue for a packed month.
Kevin Eddy, Editor
BEST OF THE BEST
Contact the acting editor:[email protected]
CONNECT
Printed on paper produced from 100% sustainable forestry, grown and managed specifically for the paper pulp industry
COPY & FEATURESEDITOR Kevin EddySENIOR JOURNALISTS Sarah Megginson, Robin ChristieJOURNALIST Chinwe AkomahCONTRIBUTORS Cameron Brown, Tarquin Taylor PRODUCTION EDITORS Carolin Wun, Moira Daniels
ART & PRODUCTIONART DIRECTOR Jonathan Phillips DESIGNER Ginni Leonard
SALES & MARKETINGNATIONAL SALES MANAGER Peter SmithCOMMERCIAL DEVELOPMENT MANAGER Tom NevilleCOMMUNICATIONS MANAGER Lisa NarrowayMARKETING EXECUTIVE Anna FarahTRAFFIC MANAGER Abby Cayanan
CORPORATECHIEF EXECUTIVE OFFICER Mike ShipleyMANAGING DIRECTOR Claire PreenCHIEF OPERATING OFFICER George WalmsleyMANAGING DIRECTOR – BUSINESS MEDIA Justin KennedyCHIEF INFORMATION OFFICER Colin ChanHUMAN RESOURCES MANAGER Julia Bookallil
Editorial enquiriesKevin Eddy tel: +61 2 8437 4700 [email protected]
Advertising enquiriesCommercial Development ManagerTom Neville tel: +61 2 8437 [email protected]
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Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Insurance Business magazine can accept no responsibility for loss
NEWS / ROUND-UP
4 | MAY 2013
FIVETHE BIG
The biggest news stories from insurancebusinessonline.com.au
ASIC BANS SYDNEY BROKER FOR DISHONEST CONDUCTASIC has permanently banned a Sydney insurance broker from providing financial services after an investigation found he engaged in dishonest conduct.
Robert Coshott, the director and sole responsible officer of Bay Pacific Insurance Brokers, was found to have engaged in dishonest conduct between 2010 and 2012 including providing invoices to a client that falsely specified insurance was in place and falsifying insurance certificates stating that Bay Pacific was a Lloyds of London cover holder.
Coshott has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
GOVERNMENT: FOFA REFORMS ARE TO BENEFIT CUSTOMERS, NOT ANTAGONISE MARKETThe Federal Government has stressed its FoFA changes are to benefit the customer – not to disadvantage any particular sector.
When the Industry Super Network suggested earlier in March that insurance commissions fall under FoFA’s conflicting remunerations ban, it was met with uproar from insurance brokers, who criticised the body for paying too much attention to payment and not enough to client need.
A spokesperson for Minister Bill Shorten’s office told Insurance Business that the reforms – which allow accountants to receive referral fees as long as it does not conflict with their advice – aimed to improve customer trust in the finance sector and remove structural impediments to broaden provision of advice by accountants and other finance professionals.
QBE TO OFFSHORE JOBS BUT WORKERS COMP ROLES TO STAY IN OZInsurance giant QBE has been forced to deny job cut rumours following speculation it planned to axe 50 Australian jobs in its workers compensation department.
A QBE spokeswoman assured Insurance Business the 46 workers compensation case manager roles would remain in Australia. She added that QBE planned to increase the number of case managers nationwide by more than 50 in the short term.
Earlier this month, the insurer conceded it would offshore 700 jobs to the Philippines and that this would affect Australia, Europe and North America. It was rumoured that 150 jobs would be axed in Sydney. QBE has denied these claims.
BROKER BAN
CLAIMS
LEGAL
LEGISLATION: A BLESSING IN DISGUISEThe government plans to extend unfair contract terms law to insurance contracts. Law firm Herbert Smith Freehills has warned brokers could be under greater pressure to ensure the policies they recommend do not contain unfair terms.
However some broking experts think it could be a blessing in disguise for intermediaries who are left with the arduous task of explaining vague and complex insurance terms.
MARSH AND AIG TO PAY BIG CLAIMS WITHIN SEVEN DAYSBroking giant Marsh Australia and international insurer AIG have signed an agreement to pay clients with large claims 50% of the agreed sum within seven working days.
The AIG/Marsh major claims promise applies to claims in excess of US$3m. This arrangement aims to provide Marsh clients with greater certainty following a major incident that affects their business.
The pledge covers material damage such as building, machinery, contents and stock; and the immediate increase in costs that are suddenly incurred. Business interruption is not included because it is difficult to measure so soon after an event.
The broking giant and insurer have already invoked the new agreement, paying a flood-hit Bundaberg business 50% of the $8m material damage costs sustained during February’s Queensland floods.
NEWS / ROUND-UP
6 | MAY 2013
“At the end of the day all brokers will advise their clients to take out appropriate Business
Interruption cover, but it remains the client’s decision to spend the money to buy this protection. It would help if the Law, Accountancy and other business advisory networks backed up the advice we give; it might give it more credibility.”Robert Cooper on reducing premiums for commercial clients who take out BI cover
“Change is happening in our industry and we either have to embrace it or be left behind.“
Annemaree on Allianz’s general insurance arrangement with Citibank and mortgage brokers
FORUM FORCES“The very nature of insurance is to protect the consumer; let’s keep our focus in the right place.”
DC on the Industry Super Network’s call for commission bans to also apply to insurance brokers
“Being an online business we do have to compete on price, but we never let price be the
driver of the recommended policy.” Shane on the rise of online insurance
“Price-cutting strategies never work long term. Broking clients pay for service... a completely
different demographic to supermarket shoppers.”Karen on Coles’ car insurance price-beating guarantee
BROKERS CAN BOOST PROFITS BY EDUCATING CLIENTS ON SOCIAL MEDIA RISKSBrokers who encourage their commercial customers to create strategies to deal with social media risks are making their clients more attractive to underwriters and consequently boosting their profits.
But according to law firm Barry Nilsson, few brokers are taking the time to ask clients about their social media activities with just over 10% of brokers surveyed routinely making such enquiries when writing and renewing policies.
Commercial clients have endured a series of loss events in recent years stemming from social media activities that have included defamation cases, harassment, misleading and deceptive conduct, business interruption claims and contempt of court.
The businesses most at risk are in the media, technology, retail and other consumer goods, although other sectors are not immune. But as social media risk is still a relatively new concept, brokers have been slow to recognise the potential risk it presents to clients.
SMES OFFER BOTH CHALLENGE AND OPPORTUNITY FOR BROKERSInsurance brokers face a major challenge in attracting the next generation of small business owners and the growing number of women-led companies, according to research by Suncorp broker-brand Vero.
Research into SME perceptions of insurance brokers found that the younger generation and women in particular were less likely to use a broker, preferring to shop around online.
According to the 2013 Vero SME Insurance index nationwide survey, price was still the biggest reason clients gave for leaving their broker, with 37% suggesting the price rise was too high. Despite this, 72% of respondents had not changed their current broker in the past five years and 61% still used the intermediary channel.
SOCIAL MEDIA SME
THE BIG INTERVIEW / PETER HARMER
8 | MAY 2013
How can insurance brokers remain relevant in the face of growing online distribution channels?
Peter Harmer One of the greatest assets of an effec-tive insurance broker is their ability to assist customers in not only understanding their risks but also providing the right risk management advice and product solutions to meet their individual needs. These insights are drawn from a deep understand-ing of the changing environment their clients oper-ate in. For example, understanding how changes in technology will change a customer’s risk profile. Risk and business complexity are only increasing, and therefore so does the value of these insights.
This depth of personal advice and expertise is of real value and something that customers can’t get from direct providers – this will help keep the role of a broker relevant.
What political pressures are facing insurers, and what could the upcoming election mean for them?
PH CGU supports well-considered policies and effec-tive regulations that bring benefits to both insurers and consumers. We’ve had a constructive and open dialogue with the current federal government over the past five years or so, during a particularly challeng-ing time for the insurance sector. More recently, we’ve been engaging closely with the federal government on
Peter Harmer, CEO of CGU, speaks to Insurance Business about the state of play of the insurance industry, and what insurance brokers can do to capitalise on current insurance trends
possible ways to make insurance as affordable and accessible as possible. This is, in turn, closely linked to how communities can better prepare for natural peril events. Our work will continue, regardless of the results of the next federal election. We look forward to working with the government of the day to address these important challenges.
What does CGU see as the biggest growth area for insurance?PH At CGU, we are seeing a range of new
social, technical, economic and environmental trends that will all have some impact on insurance in the medium to long term, and provide opportunities for growth. As the world around us changes, the risks our customers face will also evolve and change, as will the profile of our customers.
For example, the large ageing Baby Boomer demographic has created growth in health services and aged care facilities. This is resulting in opportu-nities across a range of insurance products including professional indemnity, liability and property. Other industries where we expect growth opportunities include professional services, communications and media, and infrastructure.
We are also seeing changes in environmental trends, with increasing exposure of natural perils, resulting in a rise of more sophisticated risk models and risk transfer options to address the increasing
KEEPING ON TREND
INSURANCEBUSINESSONLINE.COM.AU
MAY 2013 | 9
“We’ve been engaging closely with the federal government on possible ways to make insurance as affordable and accessible as possible”
THE BIG INTERVIEW / PETER HARMER
10 | MAY 2013
severity and frequency of catastrophic events.While the ongoing evolution of technology will
create new and emerging risks, such as identity theft, it could also lead to opportunities for product development in the insurance industry.
What can brokers do now to capitalise on areas of insurance that may be growing in popularity with consumers?
PH Building specialist knowledge and providing exceptional customer service are two key areas brokers can focus on to ensure they are ready for new opportunities.
Brokers recognise the need to invest in their own development so they can continue learning about emerging opportunities and build their knowledge about key industries. This means keeping informed of political, environmental, social and technological trends. CGU’s business development managers are a great resource for brokers looking to access custom-
er insights and information in order to take advan-tage of growth areas.
With changing customer expectations, we are always looking for opportunities to work with our brokers to think about the ever-increasing customer requirements. The more brokers provide superior customer service, the stronger the relationship and the more information the customer will share. This information puts the broker in a better position to identify opportunities for their customers and ensure they provide the best advice.
With natural disasters becoming more prevalent leading to rising claims, what can insurers do to keep premiums
affordable while still protecting their margins?PH Addressing affordability requires a strategic approach by the insurance industry, government and the broader community. Insurers need to accu-rately price for the events we cover. But to do so, we need adequate risk mapping, planning regulations, building standards and mitigation works that reduce risk and develop a greater community aware-ness of the risks. We also need to work harder at ensuring the community understands the value of insurance.
As you are aware, CGU is into its second year of implementing a new operating model that will improve our customer service and build efficiencies – with obvious spin offs for cost management and our margin. We are seeking to minimise premium increases by implementing new, more efficient systems and processes to reduce the costs of manag-ing policies and claims. We are also working with product suppliers to keep their costs to a minimum.
In what area are Australians/SMEs least adequately insured, and what can brokers do to communicate this
risk to clients?PH Australia is one of the most under-insured countries in the developed world. While affordabil-ity may be a factor, the root cause of the problem is deeper. Last year, CGU surveyed nearly 500 Australian small businesses and found that:One in seven SMEs think that they may be
underinsuredOne in 10 SMEs claim they don’t have any busi-
ness interruption insuranceMore than a quarter of SMEs surveyed believed
their business would not survive if they had to close their doors for three months.
THE BIG INTERVIEW / PETER HARMER
12 | MAY 2013
The research also showed that business owners didn’t understand that the recovery time after an insured event can be lengthy, and without the right cover busi-nesses can incur significant losses and financial costs.
Helping a business owner understand the risks they face needs to remain a key priority for both brokers and insurers. We believe one of the key education messages for business owners is to explain the purpose of Business Interruption (BI) insurance. Many people don’t know that BI will help pay ongoing costs and protect profit margins until the business is up and running again following an insured event and, of course, that BI can also protect customers from loss of income for an insured inci-dent that happens to another business or partner.
What technologies should brokers be embracing to ensure they’re effectively communicating to clients?
PH The challenge for all of us is that customers are utilising more than just one channel to research, communicate and complete a transaction. Increased access to technology means customers are doing more research online before they pick up the phone to talk to a broker; and they are often more informed at the point they talk to a broker.
Completing a sales transaction now involves com-municating with customers online, by phone as well as through personal and professional networks. So, it’s important that brokers find ways to engage with customers through a range of different channels.
Brokers need to be aware of the complete customer experience they provide. This means they need to understand how the various technologies they use operate and work together. This will enable brokers to understand what information the customer requires, as well as when and how it should be delivered to the customer, so they know they are delivering the required customer experience.
It is also critical for brokers to understand the role and purpose of social and digital media such as Facebook, and the role that it plays in business. These communication tools develop and change
quickly, and can do damage if they aren’t used in a way that supports business objectives.
IAG recently stated it is opposed to incorporating unfair contract terms into general insurance, whereas
brokers are more positive. Where do you stand?PH The Insurance Contracts Act has been in effect for many years and has stood the test of time in protect-ing consumer interests. The Act also clearly outlines the duties and rights of both parties and arguably offers better consumer protections than any other industry. The insurance industry has also adopted further consumer protection measures such as the General Insurance Code of Practice which give consumers ready access to information and dispute resolution measures. CGU is a signatory to and a strong supporter of the Insurance Council of Australia’s industry codes.
The insurance contract itself is a relationship of utmost good faith which is a fiduciary duty that CGU takes very seriously. Insurance is based on a relationship of trust and confidence and CGU values that relationship very highly. We believe the current Acts and Codes provide everyone in the industry appropriate guidance and protection.
Some insurers are making job cuts, which has concerned brokers who fear they are going to lose their main point
of contact. Does CGU have any plans to make cuts, or is it hiring? PH Last year, we made changes to improve the way we serviced our brokers and agents, to streamline our processes, remove duplication and become more efficient. These changes, which had an impact on a number of roles, allowed us to free up the time of our business development managers (BDMs) so they could focus on building mutually beneficial partner-ships with our brokers. Our BDMs are now sharing market knowledge and information with our brokers and helping them to identify local opportunities for growth.
Generally, brokers have welcomed the changes and have been supportive through the transition process. We are now receiving feedback that they are experiencing improved and more efficient service.
We are comfortable with our current business development model and are continuing to invest heavily in our people, both in leadership and technical skills so they can strengthen our partnerships.
“Australia is one of the most under-insured countries in the developed world. While affordability may be a factor, the root cause is deeper”
SPECIAL REPORT / TOP 30 ELITE BROKERS
14 | MAY 2013
The nation’s top insurance brokers are front and centre of the inaugural Insurance Business Elite Brokers ranking,
a new initiative that rewards and grades the top 30 leading brokers in the Australian insurance market
Australia’s
Elite BrokersTOP 30
MAY 2013 | 15
IIn a first for Australia, Insurance Business proudly presents the results of the Elite Brokers survey, an exciting new program that has been embraced by the broking community.
Our inaugural Elite Brokers ranking attracted entries from all corners of the country as we sought to evaluate and rank the top 30 individual insurance brokers across the nation. So exactly how was each applicant assessed?
METHODOLOGYThe Insurance Business Elite Broker ranking system is a comprehensive and independent means of ranking the best-performing insurance brokers in the country. Due to the advanced and detailed information needed, each broker was required to supply their own details to Insurance Business to be eligible.
In order to rank performance, however, we were not simply inviting applications from the most advanced and senior executives working at high-profile, well-resourced brokerages. We were also aiming to reward brokers from smaller firms and niche industries who were punching above their weight and achieving big things.
In total, there were eight measurements, covering: premium income revenue per client industry awards and recognition number and value of policies written number of new clients introduced to the business
during the 2012 calendar year
Entries for the inaugural Insurance Business Elite Brokers ranking, which were invited throughout February and March this year, went through an evalua-tion process. The final ranking was based on a number of criteria, including: total revenue new revenue policies written revenue per client number of new clients client retention industry awards and recognition
A place in the Insurance Business Elite Brokers ranking is clear recognition of each broker’s professional standing as one of the leading brokers in the Australian insurance market.
However, in interviews with our inaugural top 30 the consistent message received was that they couldn’t have achieved such successful results without a strong network of support staff and stakeholders.
David Summers of Markey Insurance – who ranked at number 6 – says it best: “Our business has been given the opportunity to grow, thanks to the amazing support that has been provided to us behind the scenes, from our hardworking and dedicated claims and processing teams all the way through to my assistant Ruthanne, who really does make me look good.”
Meanwhile, the Insurance Business magazine and website are committed to meeting the information and business development needs of insurance brokers, and we’re thrilled to introduce you to the nation’s top 30.
What does it take to make an Elite Broker? When interviewing our top 30 brokers, several common strategies for success became clear:
CUSTOMER SERVICE
An unwavering commitment to customer service is essential, from first point of contact with a potential client, through to follow-up after a claim has been processed.
RELATIONSHIPS
With clients, with colleagues, with insurers and with other brokers… If you want longevity and success in your brokerage career, you need to nurture your relationships across the board.
PERSONAL CONNECTIONS
It’s no longer acceptable to sit behind a desk and correspond via email. If you want to be a cut above the rest in today’s market, you need to hit the phones, visit clients in person, and make a genuine connection.
INTERNAL TEAMWORK
Every broker bar none agreed that continued success is not possible without a qualified and supportive team to back you up.
4 SUCCESS STRATEGIES REVEALED
SPECIAL REPORT / TOP 30 ELITE BROKERS
16 | MAY 2013
Top 30 winnersRANK NAME COMPANY
1 RON TATARKA SCOTT WINTON INSURANCE BROKERS PTY LTD
2 RUSSELL BRESLAND BRESLAND CONSULTANTS PTY LTD
3 KAREN HARDY ACME INSURANCE BROKERS
4 ANDREW FABER SODALITAS PTY LTD AS AR TO MGA INSURANCE BROKERS
5 KEITH RODERICK RODERICK INSURANCE BROKERS PTY LTD
6 DAVID SUMMERS MARKEY GROUP
7 DAVID CLARKE OAMPS GAULT ARMSTRONG
8 SIMON ALTHAUS SCOTT WINTON INSURANCE BROKERS PTY LTD
9 GEOFFREY YOUNGS MACKAY CANEGROWERS LIMITED
10 GREG PURSLOWE IC FRITH & ASSOCIATES WA
11 WES RODERICK RODERICK INSURANCE BROKERS PTY LTD
12 DAVID VERRYT WESTCOURT GENERAL INSURANCE BROKERS
13 TRENT MOCKFORD BROOKVALE INSURANCE BROKERS
14 SHARON PYNE PARMIA
15 AVI TATARKA SCOTT WINTON INSURANCE BROKERS PTY LTD
16 PRUDENCE CHANG NATIONAL CREDIT INSURANCE (BROKERS) PTY LTD
17 VISHAL KAPOOR MCLARDY MCSHANE INSURANCE & FINANCIAL SERVICES
18 ELYSSA JOHNSON GSA INSURANCE BROKERS PTY LTD
19 BEN SPOKES WHK GENERAL INSURANCES PTY LTD
20 JOHN CRAVEN MGA INSURANCE BROKERS (AS LICENSEE)
21 TIM COOPER ELLIOTT INSURANCE BROKERS
22 ILONA KALIMA YELLOW BRICK ROAD WEALTH MANAGEMENT PTY LTD
23 SHARON FOX-SLATER EBM INSURANCE BROKERS
24 VICTOR DABROWSKI SECURITEX FINANCIAL SERVICES PTY LTD
25 NICK VAN MAASDYK RODERICK INSURANCE BROKERS PTY LTD
26 DAVID COE NORTHWEST INSURANCE
27 KIRSTEN WINEFIELD CAPITAL INSURANCE BROKERS
28 TONY CHRISTIAN SOUTH EAST QLD INSURANCE GROUP
29 FRANCES WOODEN INSURANCE BROKERS OF CENTRAL WAGGA PTY LTD AUTH REP OF SCOTT & BROAD/CLARK PACIFIC
30 ROBERT COOPER COOPER PROFESSIONAL RISKS PTY LTD TRADING AS CPR INSURANCE SERVICES
This year marks something of a unique milestone for Ron Tartarka, the man in the top position of our Insurance Business Elite Brokers ranking: in 2013, he celebrates his 21st year at the helm of Scott Winton Insurance Brokers (SWIB), the brokerage he established in 1992.
“Recently, I looked back and realised that 21 years ago I started this business with little experience and even less capital, and I realised how tremendously the busi-ness has grown,” Tatarka says.
“There were challenges and occasional setbacks along the way, but by using them as opportunities and building meaningful relationships with my clients and my colleagues, I have been able to reach my business goals.”
Being named our inaugural Elite Brokers winner is “an honour and a privilege”, Tatarka adds, “as it affirms Scott Winton’s standing as a leading insurance broker and acknowledges our success in increasing new busi-ness whilst maintaining our exceptional record of client retention. But, my success would not have been possible without the dedication and hard work of the Scott Winton staff and the ongoing support of our insurers and clients.”
His top ranking is certainly well deserved. Over the last two decades, Tatarka has built a successful business from the ground up by establishing long-term, trust-
Ron TatarkaMANAGING DIRECTOR, SCOTT WINTON INSURANCE BROKERS
01
MAY 2013 | 17
based relationships that not only keep his retention rates high, but that also generate new business via referral time and time again.
“Our business structure is designed to put the clients needs’ first, as we’re geared towards providing expertise in all the different types of insurance,” Tatarka explains.
“If specialist expertise is required our clients are referred to our network of independent consultants, surveyors, valuers and risk management experts.”
Now with offices in Melbourne and Sydney, Tatarka says that providing clients with excellent service is both his goal and his passion.
“Meeting and anticipating our clients’ needs is what gives Scott Winton its edge over our competitors,” he says. “In this complex and aggressive market, it is often difficult to negotiate competitive terms, but we excel because our clients understand that price is not everything; they trust us to protect their interests and know that we are available to assist them any time of the day or night.”
SUCCESS DRIVER: CUSTOMER SATISFACTION
“Our focus is on fully protecting our clients and making sure that the cover provided is the widest possible for the premiums charged. One thing I’ve learnt over the years is the importance of making sure all claims made by clients are paid out to their satisfaction, and this can only be done if the policy is correct in the first place. We monitor client satisfaction by the number of referrals we get and the reputation of Scott Winton as a whole; we work to understand the specific needs of our clients and identify cost effective solutions for them, and nearly all of our new business written is from personal referrals as a result.”
Coming in at the number two spot is Russell Bresland, who was “absolutely shocked and amazed” when Insurance Business caught up with him on the phone in Singapore to give him the good news.
“I feel very privileged – I would have been excited just being in the top 30, but to be number two? It’s fantastic,” he says. “It’s not only for myself, but I’m also proud of my staff – I really do work with a wonderful team.”
A supportive and client-oriented workplace is not something that Bresland, who semi-retired from the industry six years ago, takes for granted. When he sold his successful brokerage in 2007 he moved to Singapore, and quickly learned the value of good customer service.
“I’d get phone calls from former clients saying, ‘where are you?’ Can you help me with my policy?’ But I’d signed a three-year restraint of trade when I sold my brokerage, so I couldn’t do anything for them,” he explains.
“When the three years expired in February 2010, I was getting too many phone calls to ignore, so I started again with a brand new brokerage. We’ve rebuilt a busi-ness that is actually bigger than what I sold, and it’s all grown through referral. We go out of our way to try and make sure we give really, really good service. Some of my clients I’ve been dealing with since February 1981.”
02
SUCCESS DRIVER: TEAM WORK
“You don’t achieve something like this by yourself. We all help each other out, and if one of our clients rings and their usual contact is unavailable, we handle each other’s client requests and everyone chips in.”
Russell BreslandOWNER AND PRINCIPAL, BRESLAND CONSULTANTS PTY LTD
“It is important that claims made by clients are paid out to their satisfaction; this can only be done if the policy is correct in the first place”
SPECIAL REPORT / TOP 30 ELITE BROKERS
18 | MAY 2013
When Insurance Business told Karen Hardy she had ranked third, her first words were, “didn’t any-one else enter?!” On the contrary – our initial call-out for entries encouraged a massive response – but it was Hardy’s ability to consistently drum up new policies, new clients and new revenue streams that propelled her towards the top of the list.
“I’m astonished and amazed. I’m very honoured to be awarded this position and I think this is a wonderful opportunity for brokers to gauge their performance against their peers,” she says of the inaugural rankings.
“I am hopeful that all of my counterparts will make the time to apply to be an Elite Broker next year so that this may become a true ‘national competition’ for the legion of committed professionals within our industry.”
Pointing to the industry’s response to Tropical Cyclone Yasi as one her fondest career moments, Hardy says she is “truly proud to be part of such a vital industry and experience the results of its benefits firsthand on such an awesome scale”.
“From the IBNA board and fellow members to our primary insurers Zurich, Vero, QBE, Lumley, CGU and Allianz, all parties rallied to support Acme Insurance Brokers, our clients and our community with speed, integrity, empathy and patience,” she says.
Moving forward, Hardy sees huge opportunities for the industry to educate both themselves and their clients, so that they may make informed and educated decisions about their risk management strategies.
03
SUCCESS DRIVER: EDUCATION
“Insurance industry participants who rely on price-cutting strategies do so at their own peril, as a price-based purchase decision highlights consumers’ lack of understanding. We should all strive to move away from price and focus on educating consumers about the value of the insurance industry, its participants and products.”
SUCCESS DRIVER: AGGRESSIVE GOAL-SETTING
“When we set that target to increase sales revenue by 25%, admittedly it was very much a stretch target whereby the primary goal was a 15% increase on 2011’s results. But with a focus on providing excellent service to our existing clients, we actually exceeded 25% growth through new business for existing clients, and by expanding our referral network via the delivery of a quality experience.”
Karen HardyDIRECTOR, ACME INSURANCE BROKERS
Sales growth of more than 25% in 2012 is just one of Andrew Faber’s most recent work accomplishments, achieved through a “commitment to basic customer ser-vice principles”, as opposed to using brash and bold marketing or adver-tising campaigns.
Such impressive results helped to elevate Andrew up the list of Insurance Business magazine’s top 30 Elite Brokers.
He describes his ranking as “a huge honour” and, like most brokers whom we interviewed, he reinforces that it’s not an achievement he believes he would have earned on his own.
“MGA’s management and AR structure have allowed me to focus on delivering a service to my clients, which has led to this ranking. This fourth-place result is something that I could never have achieved without a fantastic team, and this is recognition of their hard work and dedication, too,” Faber says.
“The insurance industry provides unlimited oppor-tunities to those with the drive and dedication to succeed. Whilst I am elated to have ‘fallen’ into the industry myself, I hope to be able to contribute to changing the profile of our industry so that the next generation of leaders will actively choose to become insurance professionals.”
04Andrew FaberACCOUNT MANAGER, MGA INSURANCE BROKERS
SPECIAL REPORT / TOP 30 ELITE BROKERS
20 | MAY 2013
Keith Roderick MANAGING DIRECTOR, RODERICK INSURANCE BROKERS
As Keith Roderick approaches his 50th year in the insurance industry,
05
SUCCESS DRIVER: CHANGING PERCEPTIONS
“Insurance brokers are problem solvers by nature, and we are experts, trusted advisors and business partners, but we are often perceived as a sales force or misinterpreted as the ‘insurer’. I ensure that every client interaction with me is one that redefines how we are perceived and what we can do so that I continue to build a loyal client group that are the first to experience what I consider to be the future of professional broking.”
SUCCESS DRIVER: STRONG CLIENT FOCUS
“I’m coming up to 50 years in the insurance industry and I still feel passionate about getting my clients the right cover and looking after them when something goes wrong. It’s a great industry to work in; as I tell our young trainees, this industry offers variety and constant challenges and most importantly, we get to make a difference in our clients’ lives.”
Rising starDavid ClarkeACCOUNT MANAGER, OAMPS GAULT ARMSTRONG
he stands at the helm of one of the largest regional brokerages in Victoria, with two offices and 30 staff members. And yet, the industry veteran still maintains his own portfolio, which includes a large and diverse client book.
“I am very proud of my business; I’ve built it up from a two-man show back in 1986, to now be employing 30 staff including my wife and two children,” he explains.
“It is great to be recognised in this way, when the industry has so many excellent brokers, and I think that anything that promotes broking as a career is a step in the right direction for the industry. This is a really good initiative.”
Aged just 24, David Clarke was recently recognised as OAMPS No.1 Young Broker for 2012, having grown his book from approximately $300,000 to more than $600,000 in three years.
He specialises in the marine, offshore and energy sectors, where he provides advice primarily to sub-contractors of major principals.
“I aim to give my clients access to a technical broker that exceeds the level of capability their principals have access to,” he explains.
“Being ranked number seven nationally and being recognised by Insurance Business, an industry- leading publication, means a lot to me from a personal perspective, and adds weight and kudos to my experience and client proposition.”
Clarke is also committed to the WA rock lobster
“This industry offers variety and constant challenges and most importantly, we get to make a difference in our clients’ lives”
industry as an insurance provider, with his branch of OAMPS representing nearly 80% of the entire industry, from boats, processors and wholesalers to traders and repairers.
“I’m proud of the fact that I’ve been able to develop my oil and gas industry expertise to the extent that I am well regarded amongst the ROV [remotely operated vehicle] community, and other subsea and offshore subcontractors, as a leading expert in the space,” Clarke says.
His business, Roderick Insurance Brokers, which received the Geelong Business Excellence Award last year for Best Family Business, was rated number three in the top 10 brokerages for 2012.
SPECIAL REPORT / TOP 30 ELITE BROKERS
22 | MAY 2013
Elyssa Johnson manages the workers compensation team of five people within GSA, and personally oversees an impressive 322 different workers compensation programs.
Having exceeded her budget for the past 36 months, Johnson has led an already well-performing division of the business to achieve even bigger goals, which was recognised in 2012 when she and her team were awarded ‘GSA Division of the Year’.
Johnson was also promoted to divisional manager last year, which “felt
A continual high-achiever, Prudence Chang almost has more awards on her CV than you can count, and now add her newest accolade as an Insurance Business Elite Bro-ker to the list.
Over the last three years, Chang has written over $918,000 worth of brokerage, which
equates to $8.5m worth of trade credit insurance premiums. “I’ve written approximately 200 policies in seven years, and I’ve retained 90% of my client base,” she says.
An NCI Sales Person of the Year six out of seven years and four-time NCI Executive Team Sales Achiever of the Year, Chang is clearly a top performer and consistently exceeds her budget.
But it’s not just her impressive sales figures that saw Chang rocket up the Elite Broker ranking. Some-thing of a sales superstar, Chang says she is driven by more than figures and budgets when writing new business and working with existing clients.
“I’m passionate about the fact that I’m able to protect the livelihood of people, through protection of their business,” she says simply.
“I can walk into someone’s business and create an insurance policy from the prospective that their debtors could fall insolvent. We are able to protect their livelihood, and that’s enormous for me.”
Top performerPrudence Chang SENIOR BUSINESS DEVELOPMENT MANAGER (VICTORIA), NATIONAL CREDIT INSURANCE (BROKERS)
Elyssa Johnson MANAGER, WORKERS COMPENSATION, GENERAL SECURITY AUSTRALIA INSURANCE BROKERS
SUCCESS DRIVER: RELATIONSHIPS
“I’m extremely proud of this achievement, as it reflects my relationships not only with our customers but also with insurers and other brokers. It’s very important to me as I’m passionate about the people in the industry as much as the industry itself. I think it’s important for all businesses to have acquisition and sustainability strategies in place to create opportunities for new sales executives, and to keep them constantly engaged.”
SUCCESS DRIVER: PUTTING PEOPLE FIRST
“The industry is full of great people, and I enjoy relating with them on a day-to-day basis. Yes, insurance can at times be about processes and procedures, but, more importantly, it is all about relationships with the people you work with and for. As insurance professionals, we should be exciting, surprising and always adding value to the client.”
SUCCESS DRIVER: FOLLOW-UP
“My number one priority is to make every customer feel special. That involves getting to know my client personally and professionally, understanding their priorities and their business needs, and providing them with the right product. More than that, it’s about letting them know I am always available to answer any query, follow through any claim and address any concerns.”
that Tatarka is just 28 years old and relatively new to the industry.
Being awarded the 15th position in the inaugural Insurance Business Elite Brokers ranking “means a great deal to me, as I have only been work-ing in the insurance field for three years,” Tatarka says. “And on a per-sonal note, it gives me great pride to be ranked in the same group as my father Ron, who has been awarded first position. He has been a mentor to me and continues to provide me with unstinting support.”
like a real reward for my efforts,” she says. And now taking out the number 18 position on the Elite Brokers ranking, Johnson adds another accolade to her list.
“It’s an exciting achievement! I’m honoured to have been ranked in the top 30 so early on in my career. It gives my colleagues and I confidence and a platform that we can build on,” she says. “The insur-ance industry is tough and com-petitive but after eight years, I still love what I do and know that I’m adding real value to our clients.”
Management fast track Avi Tatarka ACCOUNT MANAGER, SCOTT WINTON INSURANCE BROKERS
Looking after approximately $2.5m worth of business, Avi Tatarka has exceeded his budget by more than 30% for two years running – impressive when you consider
MAY 2013 | 23
clients,” Elliott explains. “He provides his clients with a level of service which is extremely rare, given their size. It’s not just about the brokers handling those accounts worth $50,000 or more, it’s also a testament to an outstanding and profes-sional broker to maintain both outstanding service for clients, and profitability for his employer. Tim is one of the best I have seen in terms of juggling these two accomplishments with ease.”
Industry leaderSharon Fox-Slater GENERAL MANAGER, EBM INSURANCE BROKERS
Managing an office of 45 people, Sharon Fox-Slater opened EBM Insurance Broker’s first east coast office in 1997 and has been with the company for 20 years. Dur-ing that time she has become the first female to complete
the Advanced Diploma of Finan-cial Services with National Insur-ance Brokers Association (NIBA) and the first female fellow, two achievements that Fox-Slater doesn’t take lightly.
“Some of my proudest moments have been breaking new ground for women in what is still a male-dominated industry,” she says.
And now, placing in the 23rd position of Insurance Business magazine’s Elite Brokers ranking is another attainment for Fox-Slater to be proud of.
“There are thousands of exceptional brokers around Australia – both colleagues and
SUCCESS DRIVER: BROKER EXPERTISE
“Landlord policies are not all alike and don’t cover all the same things, and as brokers we have an opportunity to educate. There are some sub-standard products on the market, and it’s actually not just the coverage that counts – it’s also the service you get if you need to make a claim. We regularly receive testimonials and compliments from our clients about our exceptional service.”
SUCCESS DRIVER: CLIENT REFERRALS
“I still remember the first time a client referred my services to another in their industry. Receiving that phone call and hearing the unknown party tell me that they’d been told to call me because of the good work I’d done for their colleague was a great feeling.”
Focus on service Tim Cooper SENIOR ACCOUNT EXECUTIVE, ELLIOTT INSURANCE BROKERS
Nominated by his boss, John Elliott, for the Insurance Business Elite Broker ranking, Tim Cooper was both surprised and pleased to be advised of his placing at the 21st spot.
“Being ranked anywhere in the top 30 brokers is a great individual honour, considering the field and the quality of my colleagues recognised in Insurance Business’ ranking. It’s a huge compliment and recognises our hard work,” Cooper says.
Working primarily within the SME market, which en-tails high volume and a knowledge of a wide variety of industries, Cooper has demonstrated the ability to “adapt his knowledge and service clients in many weird and wonderful industries,” Elliott says.
“Tim’s dedication to his existing clients goes above and beyond, which is reflected in growth in his book not just from new clientele, but also with his existing
competitors – so making the Elite Brokers list in any position is an honour,” she says.
It’s a well-deserved recognition for Fox-Slater, who oversees a low premium, high volume portfolio – landlord insurance – that presents plenty of unique challenges as a broker.
“Property investors really need to take the time to fully compare what various policies offer, which is where brokers can play a big role. A lot of people spend more time choosing a flat screen TV than researching their options with insurance,” she says.
Landlord insurance is the largest division of EBM, with 110,000 clients and a network of around 4,500 real estate agents nationally, and Fox-Slater only sees oppor-tunities for further growth ahead. “It has consistently grown over the past 20 years and this is a direct result of the outstanding service and the skills and expertise that myself and my staff possess,” Fox-Slater says.
Public liability insurance covers a wide range of risks and circumstances – and
there is increasing collaboration and innovation among brokers, insurers and
underwriters in this industry sector
24 | MAY 2013
FEATURE / PUBLIC LIABILITY
PUBLIC LIABILITY INSURANCE:
WHY RUN THE RISK?
EMAY 2013 | 25
INSURANCEBUSINESSONLINE.COM.AU
PUBLIC LIABILITY INSURANCE:
WHY RUN THE RISK?
Every business owner in Australia faces the risk that in some way, shape or form they may be found liable for damages, economic loss or injuries to another person or property.
Enter public liability insurance, which protects business owners against the financial risk of being sued by a third party for a range of outcomes, includ-ing death, injury, loss of or damage to property, or pure economic loss resulting from a business owner’s negligence.
In simple terms, it should be an intrinsic part of any business’ risk management plan as it is the mechanism that steps in if, despite best efforts, a business’ risk management plan fails.
Due to its very nature – broad, diverse and end-lessly evolving in response to regulatory, environ-mental and industry changes – public liability insurance is complex and difficult to manage. This is why insurance brokers play such an important role in marketing, sales and distribution networks, explains Alan Whittle, managing director of High Street Underwriting Agency.
His agency’s varied portfolio includes general liability, contract works, professional indemnity,
FEATURE / PUBLIC LIABILITY
26 | MAY 2013
contractors’ plant and equipment, and commercial property product lines, with insurance solutions for small to medium-sized businesses and individual sole traders.
“Being an underwriting agency, we can focus on the niche occupations and trades that the traditional insurers steer away from,” Whittle explains.
“But insurance brokers are an integral part of our marketing process. They are aware of the changing markets and the appeal that different underwriters have for diverse risks and exposures. Furthermore, the clients need to be alerted to the conditions and exclusions of the contract into which they are entering, and this is one of the broker’s roles.”
In many cases, Whittle adds, clients are signifi-cantly better off when utilising the services of an
insurance broker. They receive impartial advice and expertise that matches them with the most suitable product on the market, resulting in a happy client and a more robust industry overall.
“And by buying directly,” Whittle says, “many clients – especially the smaller businesses – would not be necessarily cognisant of the terms and conditions of the contract they are securing.”
INNOVATION: A TWO-WAY STREETWhittle maintains that public liability premiums are “hardening”, as insurance companies and their underwriters look more closely at public liability risks to determine coverage terms, sub-limits and specific exposures.
In saying that, “claims patterns have improved,” he says, “and the established underwriters seem to have remained focused on their core business and are prepared to reduce their pricing if threatened. This is not anything new, but the pattern seems to be consistent.”
And herein lies the opportunity to innovate. Rado Polic, underwriting manager, commercial, with Brooklyn Underwriting, says the relationships that develop between brokers, insurers and under-writers are becoming increasingly important, particularly as stand-alone public liability insurance is almost exclusively distributed through brokers and agents.
“Distribution is really important for us – it’s really about getting out there and meeting brokers face-to-face, doing what people used to do pre-mobile, pre-email and pre-internet. There’s nothing more powerful,” Polic says.
But it’s not simply a matter of brokers pushing the products they are familiar with. The relation-ship that insurers and underwriters develop with brokers becomes a two-way street, he contends, and can create opportunities to respond to the market in ways that neither party could achieve on their own.
“Insurance brokers are an integral part of our marketing process. They are aware of the changing markets and the appeal that different underwriters have for diverse risks and exposures”
FACT
Of the $10.6bn in insurance policies estimated to have been sold in Australia during 2011/12, about half were written through brokers and agents.Source: IBISWorld Insurance Brokerage in Australia: Market Research Report
Polic says Brooklyn Underwriting, which tradi-tionally operates in
FEATURE / PUBLIC LIABILITY
28 | MAY 2013
EDUCATING PRICE-DRIVEN CONSUMERSWages, taxes, stock, rent – business owners deal with an ongoing roster of expenses in managing their day-to-day operations, and risk-based insur-ance policies are just one of them.
It’s no surprise then that in a survey of Australian businesses conducted by accounting giant Ernst & Young, SMEs nominated pricing pressure and cost-cutting as their biggest business risks in 2013. Translation for the insurance industry: “Can we get that premium any lower?”
While Ernst & Young Asia-Pacific risk leader Rob Perry says businesses “have got to ensure their risk management practices are sharply focused on mitigating the risks which truly matter’’, the reality is that most businesses are more focused on their
FACT
The insurance industry currently employs approximately 60,000 people in Australia and, on average, pays out $95m per working day in claims. Source: Insurance Council of Australia
01Defective drill sees employee pocket $700,000An employee of a contractor was performing work as a fitter in a manufacturing
company when he was requested to drill into concrete and was provided with a drill in order to do so. While drilling into the concrete, the man sustained severe injuries to his shoulders, upper arms, neck and arms as a result of the defective drill becoming jammed in the concrete (and the consequent twisting of the loose handle of the drill). His lawyers, Leon Martin Barristers & Solicitors, launched a public liability claim against the manufacturing company, seeking damages for the injuries and loss of income sustained. The fitter was awarded damages in excess of $700,000.
02Supermarket slip awarded compensation for pain and suffering
Slater & Gordon Solicitors represented a client who was shopping at her regular supermarket and slipped on a puddle of water in an aisle, fracturing her hip. She underwent surgery. Her solicitor argued that the supermarket
was required to have a regular system of cleaning and inspection in place, and in failing to follow such a procedure they failed to fulfil the duty of care owed to the client. The woman was awarded compensation for pain and suffering, and past and future medical expenses.
03Drunk patron attacks, but hotel pays upWhile a man was enjoying himself with friends at a pub, he was
continually hassled by an intoxicated patron. Although he complained numerous times to the hotel staff, no action was taken. When the inebriated patron later assaulted the man, he sustained a brain injury – and even though it was the drunk patron at fault, ultimately it was the hotel that Slater & Gordon Solicitors pursued a case against. The matter was settled out of court and the client obtained substantial compensation for pain and suffering, past and future medical expenses (including home modification), and loss of earnings – which, most importantly, took into account his permanent severe limitations.
Source: Slater & Gordon Solicitors
PUBLIC LIABILITY CASE STUDIES
financial lines and general liability, perceive themselves “as a bit of a niche player”, and, as such, they have the opportunity to offer clients flexibility and innovation.
As a case in point, when they were approached by an insurance broker about a product line they didn’t actually offer, they decided to investigate the potential market.
“We ended up getting a small arrangement off the ground in an area that we didn’t have any involvement with, because a broker in Melbourne asked if we had an appetite for it,” Polic says.
“Now we’ve launched something that works with a completely new client base, which we never would have branched into without the broker’s suggestion. If you don’t ask, you won’t know.”
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MAY 2013 | 29
As a ‘long tail’ class of insurance, public liability is is particularly exposed to the impact of declining investment returns and increasing claims costs, which may ultimately put pressure on premiums. “The recent significant decline in Australian Government bond yields has implications for liability insurance,” confirms Darren O’Connell from Suncorp Commercial Insurance. “Brokers play an important role in explaining these broader market dynamics to their clients, and how they impact insurance premiums.”
RATE CUTS COULD FORCE PUBLIC LIABILITY PREMIUMS HIGHER
bottom line than they are on protecting themselves against ‘what if’ scenarios.
This is partially why Brad French, managing director of SLE Worldwide Australia Pty Ltd, Pacific Underwriting Corporation and Mobius Underwriting Australasia, firmly believes in the role of the insurance broker.
With his group offering diverse public liability insurance products under all three company brands – from sports, leisure and entertainment industry strands, to industrial and large commercial clients – he’s only too aware of the “complex nature and issues posed by public liability”.
“The public liability insurance products that used to protect organisations from claims arising require professional intermediaries to source and negotiate the best product for their clients,” he says.
“In this sector, we face some tough challenges with the increasing deterioration of the legal climate – and also, the exponential increase in medical costs across all of society. Of course, we in the insurance industry don’t help ourselves by pric-ing and structuring the policies incorrectly, all in the name of ‘market share’.”
Although the insurance brokerage industry is already a vital player in the insurance market, French feels that more needs to be done to educate consumers, and says this needs to be a key priority
moving forward.“If we use our resources to educate the public of
the need for properly structured insurance prod-ucts, then we will be able to take our customers from being purely price-driven buyers to ones that
“We face tough challenges with the increasing deterioration of the legal climate – and the exponential increase in medical costs”
FEATURE / PUBLIC LIABILITY
30 | MAY 2013
environment, a significant claim can cost millions of dollars, he adds.
Factor in the reality that supply chains are becoming increasingly globalised, leaving business owners exposed to additional risks associated with both imported and exported products, and it’s clear that brokers play an important role in ensuring a business is adequately covered for the risks it faces.
“Within this changing environment, brokers play an important role in ensuring their clients are covered appropriately for such risks,” O’Connell says. “Vero relies on the expertise of brokers to provide a clear description of their client’s busi-nesses, as well as ensuring the right policy limits are obtained and breadth of cover is tailored to their clients’ needs, so there is the opportunity for brokers to provide real value for clients by provid-ing advice on how and where to obtain the right cover for their business.”
realise the importance of buying their programs, so that it takes them away from the vagaries of the insurance cycle,” French adds.
ESSENTIAL, YET OPTIONALAlthough public liability insurance is optional in most cases, it is strongly recommended for busi-nesses in all industries, as the potential to be sued for negligence is both unpredictable and costly.
Regardless of size and turnover, any business can be found liable to a third party for a range of risks, which makes liability coverage “essential for busi-nesses and organisations”, says Darren O’Connell, executive general manager – commercial portfolio and underwriting management, with Suncorp Commercial Insurance.
Public and product liability claims can be finan-cially crippling (see case studies on p28), which is one of the primary challenges facing those in the industry today.
“The public liability market is directly impact-ed by developments in the area of litigation,” explains O’Connell.
“There continues to be high awareness in the community of the opportunity to pursue litigation in the event of injury or loss, which occurs as a result of the negligence of a business owner. One area that appears to be gaining momentum is that of class actions, which has the potential to impact any insured who manufactures products or whose busi-ness deals with the public.”
Given the impact of the challenging legal
“There’s awareness of the opportunity to pursue litigation in the event of injury or loss which occurs due to negligence of a business owner”
GETTING THE BROKER ADVANTAGE
“If every other broker can offer the same product, at the same price, with the same terms, how are you going to differentiate yourself?” asks Peter Marshall, manager – business development, Prorisk. “A broker who knows and assesses the market well is able to differentiate their expertise, as they can provide offerings that have resulted by working with the underwriter to understand their client’s business. This presentation of broker expertise and product delivery is a compelling client retention and new business strategy.”
To get the advantage as an insurance broker, it’s all about:
understanding niche markets and which underwriters specialise in each area
understanding how to measure general liability risk exposure – whether it’s low, moderate, high and/or hard to place
understanding which is the underwriter’s preferred market space: SME, corporate, individual or international
understanding which underwriters specialise at which level of risk
knowing where to go in the market and who to speak to, which results from building relationships with underwriters
Q&A / SIMPLEX INSURANCE
32 | MAY 2013
SERVICE WITH A SMILE
When Kay Jackson launched Simplex Insurance in 2005, she didn’t have a single client on the books. “Our first port of call was family and friends,” she recalls, “and then we hit the phones.” Today, with a diverse yet niche-targeted brokerage that employs nine staff, she believes brokers have more opportunities than ever to grow their customer base – provided they’re willing to offer A-list service
Why did you decide to launch Simplex Insurance when you did?Kay Jackson I began my career in the
industry in 1986 and I was very lucky that I was able to work in different positions, from mail clerk to claims, underwriting and then business develop-ment management. After I had my first child I decided, if I’m going to do this, I’m going to do this for me, so I launched my business in 2005. We didn’t have any clients whatsoever, so whether it was a mum or dad client or a big business, we weren’t very fussy to start with.
Simplex Insurance offers a diverse range of unique insurance products. How did you end up working in these
specific, niche industries? KJ We started out by virtually doing anything and everything! After 12 months I wrote a business plan of the areas that I wanted to get involved in, and at the time it was the building industry. We went down the track of being educational, rather than selling ourselves, and it was very successful, but I was concerned about being too niche and having all
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MAY 2013 | 33
our eggs in one basket. So we decided to move into an industry that is about as opposite as possible to builders, and began working with dance teachers.
Dance teachers is an unusual area to target. What prompted your interest in this industry?
KJ At the time, we had a staff member who was a dance teacher, and it got us thinking about the fact that, while they’re good at what they do, they don’t know much about the insurance side of things. They hire equipment and stage concerts without thinking about the consequence if, for instance, equipment gets damaged or stolen, as they often don’t realise what they’re liable for. We worked through different issues with our staff member and came up with a good policy, and again, got in touch with teachers of dance and offered our services on an educational front. These days, we often go to conferences and hold workshops to educate clients about what they need to look out for. Just recently, we began exploring opportunities in the hair and beauty industry.
As well as targeting niche industries, you also offer various retail insurance products. How much business do you
do in this space? KJ We do about 18–20% in retail. I know there’s a lot of talk about the direct marketers in home and contents insurance, but I do believe there’s a place for broking in that space. It’s not simply a matter of getting the cheapest price, and this is where brokers can help educate consumers about what they’re actually paying for. We have had clients go off and get their own direct quotes, and come back to us and say, “you’re ripping us off!” But when we do a policy comparison we can show them, “this is the cover you have now, and this is what your new policy won’t cover you for”.
How do you think brokers can leverage more business in the retail space?
KJ If a consumer comes to a broker, the onus is on us to make sure they get the best price and the best coverage possible, and there’s a real opportunity for brokers to make headway in this regard. The aver-age consumer with no insurance at all generally thinks that if they pay their home and contents premium each year, everything is covered – and
that’s where we fall down. It comes down to educating the client and explaining that if you want the Rolls Royce of insurance, you can get a policy with coverage away from home for high-value items and accidental damage, but if it’s your first home, and you don’t mind living with a bit of spilt red wine on the carpet and you only need a low jewellery limit, then a basic policy would be fine. It comes down to the level of service and expertise that brokers can offer. We survey every client that has a claim, and during the last calendar year our results showed 100% satisfaction after a claim, while 97% ranked us as excellent. It makes us feel really proud because there’s such a bad perception of insurance claims in the market. People automati-cally think, “here comes the muck around… Am I going to get paid or what…?” They are ready for a fight before they’ve even lodged their claim. They expect to be ripped off; they expect not to be paid. And afterwards, they’re so relieved when the service is not what they expected.
What does the next 12 months hold for Simplex Insurance?KJ We’re purchasing another business,
which will virtually double us in size. I’m sure it will be a very positive experience, but it’s really uncharted waters. It’s a brand new concept for us and we want to be sure that we can look after every-one equally, so that will be a challenge. At the end of the day we love what we do – it’s a nice feeling to be able to really help someone get back on their feet when something tragic has happened.
“It comes down to the level of service and expertise that brokers can offer… People are ready for a fight before they’ve even lodged their claim. They expect to be ripped off; they expect not to be paid. And afterwards, they’re so relieved when the service is not what they expected”
FEATURE / RETAIL INSURANCE
Personal lines insurance has taken a battering in terms of public perception in recent years, with newspapers and current affairs programs only too happy to call attention to hard-luck stories of personal wreck and ruin.
From homeowners who were left destitute after their properties were demolished by natural disas-ters, to drivers left without vehicles when their cars were swept away in the floods, there are plenty of people willing to go on record about the evils of the insurance industry.
What we don’t see as often, however, are stories that showcase insurers coming through with the goods. Such was the case with Gold Coast landlord Ross Pizarro, whose waterfront investment property was recently razored by fierce storms that eroded the backyard and threatened to destabilise the home’s foundation.
“The quote to fix our home is $18,500,” he told local reporters, “but we’re lucky because our insurance is going to cover it. The two houses next to us have to pay $25,000 each and they are just
34 | MAY 2013
Although retail insurance policies are broad products designed for the masses, brokers can still get in on the action. And with recent natural events highlighting just how important it is to have the right insurance policy in place, there’s never been a better time for brokers to court consumers
RETAIL CONSUMERS
Courting
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going to have to come up with that kind of money.” It highlights the issues that industry is currently facing in regards to everyday consumers, and their education and awareness of personal risks and insurance – which is leading to associated prob-lems to do with underinsurance, inappropriate or ill-advised coverage and, worst of all, a lack of any insurance at all.
These are issues that Kay Jackson, director of Simplex Insurance Solutions, confronts on a daily basis.
“During the floods, out of the thousands and thousands of claims that were lodged, there were only around 100 claims from brokers. Why aren’t we sticking our hands up saying to consumers, ‘you need to know what policies you are buying! You need to use a broker!’ Why aren’t we, as a broking industry, doing more about this?” she asks.
“I have met with clients before who live in beautiful big properties, which
they have spent all of their lives working towards owning, but
for the sake of saving a couple of hundred dollars
a year, they’ll scrimp on a bare-bones insur-
ance policy. They’ll easily spend that
much money on a night out,
and they’ll go on expen-
sive over-seas trips w h e r e
they’re buying great memories, but people are just so reluctant to spend money on good insurance.”
Jackson believes that as well as the industry making a bigger effort to educate consumers, the government has a large role to play in helping change perceptions about insurance.
“I think the government has to step in, because they’re the ones at the end of the day that have to dip their hands in their pocket – it falls back on the community when insurance fails. It’s just not a product that should be sold on price.”
A QUESTION OF PRICEA huge part of the problem for insurers, underwrit-ers and brokers, according to Jackson, is the public perception of the insurance industry as a whole. Greedy, evil, deceitful, stingy… these are just some of the adjectives routinely thrown about to describe those mean-spirited insurers who use every possible loophole to get out of paying a claim.
“During the floods, out of the thousands and thousands of claims that were lodged, there were only around 100 claims from brokers. Why aren’t we sticking our hands up saying to consumers, ‘you need to know what policies you are buying!”
RETAIL CONSUMERS
THE STATS
The percentage of Australian residential property
owners who don’t have home and contents insurance
The percentage of an average home and content insurance premium in
Australia that is comprised of levies, duties and taxes.
Source: Natural Disaster Insurance Review (NDIR); Australian Strategic Policy Institute (ASPI): EBM Insurance Brokers
6.2 BILLIONThe number of homes in Australia
1 in 5The number of Australian investors who use a professional property manager, but fail to have landlord insurance
50,000The number of Australian homes subject to high flood risk; it equates to less than 1% of all homes
25% 50%
36 | MAY 2013
“I have real issues with the way that ASIC and our government allows for advertising of direct insurance. There’s a new TV commercial that asks, ‘Are you being fleeced by your insurance company? Let us find you a better deal!’ That type of advertis-ing only teaches people that insurance is just about price,” Jackson says.
“If the policy is cheap, there’s usually a reason for it, and all that these types of messages do is perpetuate this non-trust of insurance. All it does is give the industry a bad name and I think it’s deceptive and misleading.”
It also leads to an increase in under-insurance, as consumers are being trained to make policy decisions based on the lowest possible price, rather than adequate and appropriate risk management.
Sharon Fox-Slater is general manager of EBM Insurance Brokers, which manages insurance policies for more than 100,000 landlords Australia-wide. She says that half of the nation’s DIY land-lords don’t have any type of landlord insurance at all, while a further 20% of investors who use a professional property manager are also uninsured.
“The extent of under-insurance and non-insur-ance for Australian landlords really gets me going,” Fox-Slater says.
“So many of these ‘mum and dad’ investors are taking huge risks that they can ill afford to take by not having landlord insurance. The fact is, even if you have great tenants, clients often fail to account for the fact that bad things can and do happen.”
The solution partly lies in educating individual consumers about the potential risks that relate to their situation, so that insurers can provide a policy that adequately addresses those concerns.
“Landlord insurance, for instance, is an inexpen-sive, tax-deductible policy that offers peace of mind
for property investors – who, if they are sued, could lose the lot,” Fox-Slater adds.
“We’ve helped a client who had a learner driver come crashing through her own front door, while others have had to cope with damage from burgla-ries, and smoke damage from fires outside the property, to give just a few examples. Some claims run to hundreds of thousands of dollars.”
HOW CAN BROKERS GAIN RETAIL MARKET SHARE?Part of the challenge for brokers who are angling for more retail market share is being able to match the automated ability of the direct market to reach consumers 24 hours a day, seven days a week.
“The way in which insurance products are distributed, and the expectations of our customers, is rapidly changing,” says Matthew Boon, director, business development of MECON Winsure Insurance Group, which provides personal accident and illness insurance products to people in over 300 occupations throughout Australia.
“As a new generation of insurance buyers is steadily coming through, the expectation on service levels and access to information 24/7 is far greater than it has been in the past.”
Using electronic platforms to meet the expecta-tions of this new generation is “significantly impor-tant”, Boon adds, particularly as it allows brokers to deliver a superior experience – that is expertise, personal advice and speed – that direct insurers simply can’t match.
“Brokers need to be able to meet the expecta-tions of these customers in an environment where quick turnaround times are expected,” he says.
Furthermore, the value proposition that brokers can offer consumers is significant when compared to that which consumers can access through direct market call centres. The ability to exploit this professional service and expertise will be the key to gaining more market share in the retail sector, says NIBA CEO, Dallas Booth.
“Many people don’t realise that the role of insur-ance brokers… is to represent the customer, not the insurer. Their role is to get the best deal for the policyholder,” he says. “Insurance company call centre operators provide information about the products their company sells, but they are not licensed to give personal advice to policyholders on what is the best cover for them. On the other hand, insurance brokers are fully licensed financial advis-ers who are trained and qualified to give profession-al advice to consumers on insurance matters.”
FEATURE / RETAIL INSURANCE
Women are more likely than men to spend time doing their own research – primarily online – to obtain their own insurance policy directly rather than using a broker, according to the 2013 Vero SME Insurance Index. “Women and younger business owners and decision makers represent a market gap for brokers,” confirms Andrew Mair, executive general manager, distribution, with Vero Insurance. “However, attracting this part of the market should be seen as a significant opportunity for brokers. The key question for brokers is how to convey their value proposition and remain relevant.”
WOMEN MORE LIKELY TO BUY DIRECT
FEATURE / BUSINESS STRATEGY
38 | MAY 2013
Mark Oliver explains why businesses need to understand
the basics of human motivation in order to increase
employee satisfaction and productivity in the workplace
WHY YOU NEED
MOTIVATED AND CAPABLE
EMPLOYEES
MMotivation combined with capability tends to lead to effective behaviours, and behaviour underpins performance. To get the right answer to the ques-tion above it helps to ask the right question and the question in this case would be: how do we get our employees to perform better? If someone has the capability but not the motivation to do some-thing required to perform, then the necessary behaviour is very unlikely to arise and they will not perform; similarly, if someone has the motiva-
INSURANCEBUSINESSONLINE.COM.AU
MAY 2013 | 39
tion but not the capability. You need both motiva-tion and capability for performance.
WHY MOTIVATION IS KEYThe second question that follows on from this is: which is most important with regard to performance – motivation or capability? At first sight it would seem that the more important of the two is capability, and there is often a great emphasis on training in the workplace to enhance that. The appropriate training is important and, after all, motivation is not trainable, so one might wonder what is the use in focusing on human motivation? But look more deeply and you will realise that motivation is much more important than capability in the wider context of both professional and personal life. In short this is because of two facts:
1. Motivation determines what you do; in many ways it determines the path you take at work (and in life).
2. If you do not have the motivation then your capability becomes largely irrelevant. Not surpris-ingly then, motivation precedes capability and often leads to capability.
Given all this, the third question becomes very important: what can we do to increase motivation? To answer this you can split the factors affecting motivation into two parts: internal and external to the individual.
Internal factors: The internal factors include a person’s personality (values, beliefs, etc.). An important time to look at this is when recruiting individuals and it is wise to use good psychometric instruments to help increase the accuracy of your decisions, such as The Universal Hierarchy of Motivation Professional Report (see accuratesurveys.com), especially as they are so cost effective.
External factors: Key external factors are the systems and structure of the organisation. But it is often difficult to predict how these affect human motivation. Consider the real-life example of a day-care centre that encountered tardy parents at closing time each day. This situation led to
anxious children and frustrated carers. A solution put in place by several day-care centres in Haifa, Israel, was to fine parents three dollars if they were more than 10 minutes late. Rather surprisingly, this solution had the opposite effect and the number of late parents more than doubled after the fine was introduced. It turned out that the guilt the parents felt in being late was motivating them to be on time, but now the payment of a small fine assuaged these feelings and they were less motivated to be punctual.
A good model on human motivation is helpful because it helps you to predict better what the actual outcomes will be. The Universal Hierarchy of Motivation (UHM) provides the basis for a complete understanding of human motivation so that you can accurately predict what behaviours will result from system or structural changes. For instance, many people still believe that bonuses make employees work harder and more effectively. Alfie Kohn, a teacher-turned-writer found that the more you reward a person with grades or incen-tives, then the lower the person’s productivity. In this context, individuals become less intrinsically motivated. Bonuses (extrinsic motivators) actually reduce people’s performance on complex tasks because they limit individuals’ capacity to fulfil the task by changing their focus to how to get the best bonus.
INTRINSIC MOTIVATION American psychologist Edward Deci observed that tangible rewards inevitably reduce the intrinsic motivation of individuals. He stated, “the facts are absolutely clear, there is no question that in virtually all circumstances in which people are
If you do not have the motivation then your capability becomes largely irrelevant. Not surprisingly then, motivation precedes capability and often leads to capability
40 | MAY 2013
FEATURE / BUSINESS STRATEGY
doing things in order to get rewards, external tangible rewards undermine intrinsic motiva-tion”.1 (There is one exception to this observation. This involves jobs where there is little intrinsic motivation, such as simple repetitive manual tasks, and in that case, rewards do tend to increase output or productivity.)
The UHM helps you to understand human motivation comprehensively and so makes the most accurate predictions on what people’s motivation (and hence resulting behaviour) will be, given a set of system or structural changes. The higher UHM level we are at then the more impact we have on our own and others’ lives. The UHM levels are shown in the table below correlated with the relevant intrinsic motivator and extrinsic behaviour.
How much an employee is ‘engaged’ (feels an emotional bond) to the organisation has been shown in many studies across industries to have a direct correlation with productivity. International studies have found that employees who were fully engaged in their work were almost 50% more
productive in terms of revenue generation and 300% better at delivering value than their disengaged (disaffected) colleagues. The ‘extrinsic behaviours’ in the table correspond to increasing levels of positive engagement, going up the table and starting with the lowest one: satisfaction at work.
The UHM theory explains the observations that paid bonuses at work are poor motivators because they only move employees’ motivation to the level of pleasure, which renders them less able to deal with greater and more complex challenges which are best dealt with at a higher level.
CONCLUSION So to get the best performance (or combination of people’s motivation and capability) from those employees you currently have in the organisation, it is critical that you provide the structures and systems (including pay systems) that will help to motivate them at the higher levels. To be able to understand and predict what this is you have to have a very good model or framework describing human motivation.
Once you have set up the environment in your organisation that achieves this, only then is it worth investing time and money in training your employees. If you do it the other way around, the risk is that not only will the employees not use the new skills they acquire in their training but also they are more likely to leave the organisation, which means someone else is likely to get all the investment you have made in them!
Mark Oliver is managing director and CEO of MarkTwo Consulting, and author of ‘The Seven Motivators of Life’. Visit marktwoconsulting.com or lulu.com
UHM LEVEL
MOTIVATIONAL DRIVE
INTRINSIC MOTIVATOR
EXTRINSIC BEHAVIOUR
7 MEANING OPTIMISM GRACE (COURTEOUS GOOD WILL)
6 WISDOM UNDERSTANDING (LISTENING)
FEEDBACK (NOT CRITICISM)
5 COURAGE EMPATHY ACCOUNTABILITY
4 COMPASSION SYMPATHY COOPERATION
3 POWER PRAISE (GENUINE) COMMITMENT
2 PLEASURE HUMOUR INVOLVEMENT
1 SURVIVAL BELIEF SATISFACTION
Note:1. Psychological Bulletin, Vol. 125, pg 627
How much an employee is ‘engaged’ to the organisation has been shown in many studies to have a direct correlation with productivity
FEATURE / BUSINESS STRATEGY
42 | MAY 2013
Strategic networks are built on relationships, but what type of networker are you? Julia Palmer explains how strategic networking can be your best insurance in a changing world
DOES YOUR NETWORK NEED INSURING?
INSURANCEBUSINESSONLINE.COM.AU
MAY 2013 | 43
Nearly every job title I have trained to network over the years has shared the sentiment that they dislike networking.
There is no escaping the fact that the word ‘networking’ has a dirty connotation in business. In my opinion, this is because most people have been taught the wrong way to network or not been taught at all! It is an expectation of each role in some capac-ity or another, but unfortunately most people fear, dread, or simply avoid it. Worse still are those who feel forced to network and put on a different persona to help them cope, making them quite awkward and sometimes even fake versions of themselves – never nice to meet!
The financial services industry is one of the most networked, but the last few years have seen the gaps widen and the pressure increase. Having worked closely with some of the market’s biggest banks, insurers, mortgage brokers and financial planners, I know only too well how vital relationships are to
success. The good news is: by taking a look at how you network and by making changes to be more strategic, you can increase your influence and operate in stronger networks.
There is no doubt that the GFC permanently altered the business environment that we work in, and the rate of change in organisations is only going to increase in the next 18 months. With this in mind, I hope to help shine some positive light on network-ing and the consequent networks we produce, with a view to helping individuals and organisations get better returns from both.
Apply your networking strategy to all your rela-tionships – organisational, industry, suppliers, stake-holders, clients, community and, of course, personal.
(MODERN-DAY) NETWORKING DEFINEDNetworking has a somewhat negative connotation in Australia, mostly due to how it has been undertaken. But this view is changing as people realise the power that lies in having strategic connections that align with their business and personal goals.
Let’s define strategic networking by outlining what it’s NOT: It’s not just having 500+ friends on a social
networking site It’s not getting as many business cards as you can
at a social or business gathering It’s not about knowing lots of people and wanting
to have coffee with all of them It’s not simply wining and dining clients or
prospects through expensive hospitality
It IS about: Planning and establishing key connections Knowing the right people – and knowing
them well Building a set of quality two-way relationships –
and not simply collecting a large quantity of connections
Becoming a trusted ally of your connections and becoming a hub – the ‘go to’ person in a network
ARE YOU AND YOUR ORGANISATION RELATIONSHIP-FOCUSED?The highest-performing companies worldwide are differentiated by their ability to attract, leverage and retain relationships. Networks are more than just
NBy taking a look at how you network and by making changes to be more strategic, you can increase your influence and operate in stronger networks
FEATURE / BUSINESS STRATEGY
44 | MAY 2013
your customers; attention must also be given to shareholders, partners, industry, the community, and employees. However, according to research conducted by the Business Networking Academy, 75% of business people admit that their existing networks do not support the results they need, and 99% state they would like specific training on networking and network management.
The questions to consider are: Is there a gap between your intention and how
you are perceived in your relationships? How conscious or deliberate are you at creating a
network that is aligned to your role? How conscious or deliberate are you at managing
a network so that it benefits you and those in it?
Networks are powerful and relationships are impor-tant. Combine these two things with thought to the future and you have strategic networks – a strong set of relationships which can deliver mutual value to those involved. Built and maintained with care, strategic networks can then go to the next level, allowing you to potentially leverage the power of other people’s networks.
WHAT TYPE OF NETWORKER ARE YOU?Given that we all network in some capacity, it pays to look at how you do this and if it is working. Unfortu-nately, many people have been taught the wrong skills and may spend a considerable amount of time and effort with no return. On the flip side, we all know someone who is a ‘born’ networker as well.
Start by identifying where you fit and then look at the steps you can take to improve (see Diagram 1).
BENEFITS OF A STRATEGIC NETWORKThere is a growing body of research that correlates the importance of relationships with business outcomes. Let’s face it, every time you interact with someone (potentially new or existing to your network) you can either build or lose credibility. The approach you take directly impacts the quality of the networks at your disposal. A strategic network will give you access to people
with knowledge and authority. As you build relationships with these people, you will build your own knowledge and also gain authority by association.
A strategic network will deliver you introductions, referrals and endorsements which will lift you above the commodity debate. But you’ll need to deliver real value.
A strategic network will help build your personal brand and allow you to be introduced as an authority, someone who delivers on commit-ments, as someone worthy of doing business with.
In today’s ever-changing world, this is the best insur-ance against the winds of change any individual can invest in. Your very livelihood depends not only on what you know – but who you know, who knows you, and even more importantly, who is promoting you.
Julia Palmer is a respected networking strategist and chief executive of the Business Networking Academy, providing training to create and manage networks that work. To learn more, visit juliapalmer.com and businessnetworkingacademy.com.au
STRATEGICThis group is the rare few who have invested in two-way reciprocal relationships. Influence, visibility and communication are strong.
INVOLVEDThis group is active and often has quite big networks. They can lack focus, which impacts the quality and outcomes from their network.
ACCIDENTALThis group doesn’t really think too much about networking but may be in the right place at the right time, so get occasional rewards from it.
MISGUIDEDThis group exhibits incorrect skills, and often they are detrimental to relationship building eg, pronounced card collectors
?DIAGRAM 1: WHAT TYPE OF NETWORKER ARE YOU?
??
FEATURE / BUSINESS STRATEGY
O46 | MAY 2013
It’s the little things you do that create a create customer
experience, explains Nikki Heald, managing director of Corptraining
EXCEPTIONAL SERVICE
Often we’re so intent on making the sale that we have a transactional view of our clients, rather than taking time to build relationships or demonstrate service excellence. We use them (to increase our profits), abuse them (by giving them inferior service), and then treat them like a one-night stand – attentive today, neglectful tomorrow!
Sounds silly? Well, complaints such as “you never call”, “you’re always too busy”, and “why were you late?” are legitimate gripes made by disgruntled clients. In today’s competitive market,
SERVICE
How to deliver
EXCEPTIONAL SERVICE
INSURANCEBUSINESSONLINE.COM.AU
MAY 2013 | 47
client service expectations have increased. Clients are savvy, realise they have a multitude of choices, and expect to be treated exceptionally by their insurance brokers.
So what is exceptional service? Exceptional client service is about going beyond what is realis-tically expected of you. It’s about surprising and often delighting clients, turning them into enthu-siastic referral sources who will stick with you not only because you do great work but also because of the value you bring. Imagine if you could get existing clients to tell others about how wonderful you are. It would certainly save on all of those marketing and networking costs.
Great service is not about just doing your job, it’s also about establishing connections on an emo-tional level. It’s about value-adding and finding ways to be unique. Interestingly, research suggests that emotion influences purchasing decisions six times as often as rationale. Think about it: when something makes us feel good, we are more inclined to buy.
Unfortunately, many businesses believe that delivering stand-out service will cost them too much in staff time, in training and developing service standards and procedures. These in-focused organisations are only concerned with company profit and cutting costs, and little thought is given to how to make clients happy. Additionally, staff recognition and retention are low, which can also impact significantly on growth and profit.
When you think about it realistically, bad service is actually more costly to your brokerage than great service. Bad service creates more than just a negative customer experience – it reduces revenue and drives up costs. It damages public
perception, credibility and market reputation. As we all know, a dissatisfied client is more likely to spread the word about a poor service experience than a positive one.
Providing exceptional service is not overly difficult, and it’s important to recognise that even little things count with clients. So what are some simple things you can do to ensure your service is exceptional?
1RESPOND AS SOON AS YOU CANSpeed is everything, so try to reply to your clients
as soon as you can and keep them in the loop as to your progress. Procrastination doesn’t help anyone, and you’re going to have to respond sooner or later. May as well do it now!
2LISTEN TO YOUR CLIENTSAvoid speaking, and really listen to what they’re
saying. It’s important you understand what your clients are communicating to you. That way, you will be able to meet their needs successfully and provide the correct product or cover.
3KEEP PROMISESOne of the biggest gripes in business today is
that people simply don’t do what they say they’re
Exceptional client service is about going beyond what is realistically expected of you. It’s about surprising and delighting clients, turning them into enthusiastic referral sources
EXCEPTIONAL SERVICE
of customers indicated that quality customer service was vital to maintaining brand loyalty
It’s not safe to work on the premise of “no news is good news”. Chances are, if your client is not happy, they’ll walk and
won’t even forewarn you of their departure
93%
DID YOU KNOW?
It’s 6–7 times more expensive to
gain a new client than it is to retain an
existing one
EXCEPTIONAL SERVICE
48 | MAY 2013
FEATURE / BUSINESS STRATEGY
By Nikki Heald, managing director of Corptraining. Visit corptraining.com.au
going to do. If you say you’re going to do something, then make sure you do it. It enhances your profes-sionalism and personal brand, and demonstrates that you value your client.
4KNOW YOUR STUFFThe perception of your client is that you are
the paid expert. That’s why they have come to you. So it is imperative that you keep yourself up to date and top of the game within your profession. Be ready to answer client questions – unfortunately, if you convey a lack of knowledge, then you risk ruining your credibility.
5GIVE A LITTLE If a client asks you to do something that
really won’t cost you a lot in time or money, then treat it as an opportunity to go the extra mile. By doing so, you will not only have a contented and indebted client, but someone who is more than happy to refer others to you.
6USE YOUR KNOWLEDGEOnce you’ve built an emotional connec-
tion with your client, you will have figured out how they prefer to communicate. Some clients are not detail driven and won’t require excessive information. On the other hand, some prefer to know every step of the process. Learn to gauge your client’s prefer-ences and use this knowledge appropriately in the service experience.
Finally, within the insurance and financial services profession, brokers really should view their book of clients as their most valuable asset and take good care of them. More than that, they should take the time to develop long-lasting relationships by keeping in touch regularly, both in good times and bad. It’s not sufficient to wait until renewal time to contact your client; instead, the communication should be ongoing.
Remember, you’re not just selling a product but providing expert advice that can significantly impact on people’s livelihood. So, if you haven’t given much thought to your service levels, then perhaps it’s time to conduct a self-audit. Remember, if you don’t make the client feel valued, respected and important, your competitors will!
If you say you’re going to do something, then make sure you do it. It enhances your professionalism and personal brand, and demonstrates that you value your client
SERVICE EVALUATION:
What systems do you have in place to determine whether your clients are happy? Try to gather feedback - but remember, feedback is only useful when acted upon
DELIVERING EXCEPTIONAL SERVICE: Lower cost to manage and service
client base - higher profits
Increased customer loyalty - raises revenue, lowers marketing fees
Increased staff loyalty - better service culture
STAT
SIN
SUR
AN
CEBR
OK
ING
IND
UST
RY
SIZE OF THE INDUSTRY
WHERE ARE INTERMEDIARIES PLACING BUSINESS
(1 JULY–31 DEC 2012)?
OF 1,549 GENERAL INSURANCE INTERMEDIARIES
TOTAL NUMBER OF GENERAL INSURANCE INTERMEDIARIES
817 (53%) placed business with APRA-authorised general insurers
668 (43%) did not place any general insurance business in this period
69 (5%) placed business with Unauthorised Foreign Insurers (UFIs)
215 (14%) placed business with Lloyd’s underwriters
30 (2%) placed business directly through other Australian intermediaries
1,535DEC 2012
JUN 2012 1,536
DEC 2011 1,541
JUN 2011 1,550
DEC 2010 1,549
TOTAL PREMIUM INVOICED IN THE PERIOD ($m)
9,272DEC 2012
JUN 2012 7,985
DEC 2011 8,919
JUN 2011 7,458
DEC 2010 8,041
INSURANCEBUSINESSONLINE.COM.AU
MAY 2013 | 51
BUSINESS PLACED WITH FOREIGN DOMICILED INSURERS
Source: Australian Prudential Regulation Authority (APRA). Intermediated General Insurance Statistics December 2012. Data collected
for period of 1 July – 31 December 2012
GROWTH AREAS
TOTAL NUMBER OF NEW AND
RENEWED POLICIES
TOTAL BUSINESS PLACED IN
THE PERIOD
AVERAGE PREMIUM OF NEW/RENEWED POLICY
TOP REGIONS
$
$
SINGAPORE AND UNITED KINGDOM
$554m IN PREMIUM
(73% OF TOTAL)
SINGAPORE
UNITED KINGDOM
$434 MILLION
OF PREMIUM PLACED IN FIRE AND ISR CLASS
BUSI
NES
S PL
ACE
D
IN T
HE
UK
PRO
FESS
ION
AL
IND
EMN
ITY
PUBL
IC A
ND
PR
OD
UCT
LI
ABI
LITY
CUST
OM
EX
EMPT
ION
PO
LICY
HO
LDER
S
DECEMBER 2011
DECEMBER 2011
DECEMBER 2011
DECEMBER 2012
DECEMBER 2012
DECEMBER 2012
3,221208,900
233,700
$685m3,175
$754m
SOCI
AL
LIFE
Zurich Zenith LaunchThe 2013 Zenith Program was kicked off in February with launch events held across Perth, Adelaide, Melbourne, Sydney and Brisbane. Guests enjoyed an afternoon of culinary delights with regional chefs and food specialties in a variety of different locations across Australia.
MAY 2013 | 53
ZURIC ZENITH LAUNCH 2013 / SOCIAL
FAVOURITE THINGS / BRAD FRENCH & KRYSTLE BORG
54 | MAY 2013
Favourite things...
Book: How the Mind Works by Stephen Pinker
Food: Anything that used to have a face!
Place to be: Niseko, Japan – some of the best snow in the world, combined with the Japanese culture
Sport: When I get a chance, I like to surf and ski, and these days watch rugby
Celebrity: Kevin Bacon (only because he replied to my LinkedIn request)
Music: Radio Birdman/Sunnyboys
Vacation spot: I have a place in Niseko, Japan – it’s a great place to visit all year round
Working in insurance: I enjoy dealing with and helping people
Movie: The Big Lebowski
Drink: After a day of skiing, I like nothing
more than a couple of cold Yebisu beers
Brad French, MD, SLE/Pacific UW/Mobius UW Australasia
INSURANCEBUSINESSONLINE.COM.AU
MAY 2013 | 55
Book: I’m a huge Jodi Picoult fan
Drink: Champagne (Pol Roger)
Food: Although I’m a self-confessed McDonald’s junkie, who can say no to
nice, fresh seafood?
Place to be: Champs-Élysées (at night)
Sport: Shopping is a sport, isn’t it?
Movie: Love Actually – the Hugh Grant dancing scene makes me laugh every time
Music: Anything I can sing along to (which also means making up my own lyrics)
Vacation spot: Anywhere there is sun and good local food
Working in insurance: Proving to the market that not all of Gen Y deserve to be labelled selfish, apathetic and lazy
Celebrity: Katherine Heigl
Krystle Borg, Contingency & entertainment underwriter, SLE
GUEST COLUMN / IVAN MICALLEF
56 | MAY 2013
AAs we all know, the insurance sector is becoming extremely competitive. The industry’s pace of change has never been greater, and firms that are stuck in ‘legacy’ ways of thinking and aren’t in tune with new developments will be left behind. Period.
Innovation will continue to be imperative to an insurer’s ability to maintain market share, as the traditional driver of customer loyalty is running thin. The solution clearly lies in our relationship with our customers – in how we are engaging with them and how we are perceived by them. Insurance companies need to understand that the customer will spend very little time thinking about insurance, and it’s your job to make it accessible and simple for customers to do business with you.
Also, there has been a shift in power, in favour of the customer. These days, customers are approach-ing us loaded with all the information they need to make informed decisions. They have been to iSelect and Choosi, put their information into various online calculators, and have a decent understanding of which products are ideal for them and at what price. I believe that convenience and accessibility are the definitive factors in attracting consumers.
Rethinking how we sell insurance is particularly important: selling targeted products to individuals at certain stages of their lives will ensure they see the contact as relevant and this will set up the foundations for future positive engagement.
In addition to convenience and accessibility, simplicity is of major importance to insurers and the relationships they forge with their customers. It’s fair to say that most customers don’t understand the technical jargon the industry uses in its documenta-tion, much the same as the terms of business documents used in the recruitment industry. I believe it would be a great move in the right direction if insurers were to rethink the language used and try to simplify some of its more difficult
terminology while moving towards educating their customers about what they are actually covered for.
Mobile will undoubtedly become the main driver of customer engagement. Mobile usage within Australia is growing at a phenomenal rate and will continue to do so for many years to come. The indi-vidual we will be selling life insurance products to in 50 years’ time is the three-year-old iPad/iPhone-savvy toddler who has grown up in a world where the web is our main source of information, and that information is instantly available at the click of a button [or a touch of the fingertip]. Insurers will need to adopt some of the advancements in mobile technology and social interaction from the telecom-munication and banking industries without reinventing the wheel. Let’s just look at what works and what doesn’t and adopt some of those strategies and techniques so that the customer can engage with us on how they like and when they like.
Obviously, regulatory change and legal challenges may affect our ability to ‘innovate’ in this fashion, but the truth is that we are slowly moving towards a model of transparency, and a solution to this will have to be drafted so that insurers can progress along with our consumers. The future of financial advice and flood cover changes are really driving engage-ment within wealth products, and sometimes it can be a challenge for an organisation to move forward on a particular strategic path when the path is always shifting as new legislation and legal hurdles arise.
Insurance will have its challenges in years to come, but organisations that invest in understanding their customers intrinsically will ultimately enjoy increased market share. The customers of tomorrow will want to engage with a company in a simple, straightforward manner while dictating how and when they engage. The challenge is to provide multiple channels of communication while maintaining a consistent brand message throughout these channels.
IVAN MICALLEF is a recruitment
consultant to the insurance industry. If you
have any requirements you need assistance with
or want advice on your career, contact Ivan at
[email protected] or visit linkedin.com/
pub/ivan-micallef/44/378/977
HAND IN HAND WITH ITS CUSTOMERS, TO KEEP UP WITH THE PACK
INSURANCE NEEDS TO RUN NOT WALK
