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ICA encourages Government review on Queensland building resilience

Building resilience in Australian homes has been a long discussed topic in the insurance world.

With the recent catastrophic flooding in Queensland and New South Wales earlier this year (February and March 2022), the conversation has only grown even stronger. 

The Insurance Council of Australia (ICA) has welcomed the Queensland government’s independent review of the Queensland Building and Construction Commission (QBCC) to ensure homes in the state remain resilient to extreme weather. 

The independent review, ‘QBCC Governance Review 2022’, discusses developers’ role in the Queensland building and construction industry, and it aims to establish a steering committee to monitor and report on the progress of QBCC’s recommendations. 

The recommendations in the review have matched the ones made by the ICA in ‘Building a more resilient Australia’, a report outlining the need to improve protections for Australians from extreme weather risks. 

ICA CEO Andrew Hall has long been outspoken on the issue, and the need for more action from the Government. 

“As the regulator of the third-largest contributor to the Queensland economy, the Queensland Building and Construction Commission has an integral role to play in improving the resilience of Queensland homes to worsening extreme weather,” said Mr Hall. 

“The ICA and insurers are pleased with the recommendations of the independent review as it drives home the urgent need to improve resilience for homes, which will directly impact on premiums for at-risk communities.” 

The Queensland government made a statement saying it supports and is committed to addressing the independent reviewer’s findings to deliver reforms that reflect outcomes sought by recommendations and review. 

It also recognised that many of the specific actions needed are complex and will need further detailed analysis before deciding how to deliver on the recommendations’ intention. 

“The Queensland government is prioritising actions that strengthen the conflicts of interest framework, improve transparency, impartiality, fairness, and consistency in the QBCC’s decision-making processes,” it said. 

“Other priorities include separating the functions of the mediation, resolution, and review unit from the QBCC licensing and compliance functions, as well as ongoing staff training to deliver a regulator with a clear focus on outcomes and customer service.”

Credit: https://www.insurancebusinessmag.com/au/news/natural-catastrophe/ica-welcomes-review-on-queensland-resilience-411705.aspx

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Nearly $1 billion paid to policyholders after 2022 floods

According to the Insurance Council of Australia (ICA), almost $1 billion has been paid to policyholders after one of the most costly flood events occured in Queensland and NSW earlier this year. 

The ICA has increased the estimated insured losses for the disaster by 28% to $4.3 billion.

The only Australian catastrophes to cost more were the 1999 Sydney hailstorm ($5.57 billion), the 1974 Cyclone Tracy ($5.04 billion), and the 1967 Cyclone Dinah ($4.69 billion) on a normalised loss basis.  

The ICA had previously estimated $3.4 billion, however due to claims progression and an increase in larger commercial claims, the bill estimate has dramatically increased. 

Across NSW and QLD, there have been 216,465 claims, and more than a fifth of them are already closed. 

ICA CEO Andrew Hall says the government will have a role to play in ensuring that Australians can access insurance for future catastrophes. 

“Keeping Australia insurable as extreme weather events worsen requires governments to invest in appropriate physical mitigation and adaptation strategies,” ICA CEO Andrew Hall said.

From February 22 to March 9, intense rainfall struck Maryborough in Queensland down to Grafton in NSW. Many areas received more than half their average annual rainfall in just a week. NSW’s Lismore suffered devastating flooding as the Wilsons River exceeded the former record set in 1954 by over two metres.

As Australia continues to experience extreme weather events all across the country, it’s important to make sure that you are keeping your home and assets protected. 

Contact the team at Business Insurance Consulting to learn more about your home and business insurance today! 

Credit: https://www.insurancenews.com.au/local/almost-1-billion-paid-to-flood-claimants-so-far

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Increased fire danger in NT after record dry levels

Dry conditions in northern parts of Australia will increase bushfire threat in the region in the coming months, reports the Australian Fire and Emergency Services Authorities Council (AFAC).

AFAC’s Season Bushfire Outlook for Winter 2022 reports that NT areas surrounding the Gulf, Victoria River and Katherine regions will face fire risks above expected levels from June to August. 

“Our colleagues in the NT are preparing the landscape and the community for the dry season, with some locations near or at record dry levels over the past three months, which increases their fire risk,” AFAC CEO Rob Webb said. 


The report forecasts a wet winter season, with above average rainfall expected in the ACT and parts of Queensland and NSW, reducing the likelihood of fire threats in those areas. 

“We have seen significant rainfall this year for much of the country, and are expecting above average rain to continue through winter,” Mr Webb said. 

However, he warns that the decreased threat poses an additional risk for traditional fire seasons later in 2022.

“While this reduces fire potential for this season, it will increase grass and fuel as we move into spring and summer. Agencies will continue to monitor local conditions and manage risks accordingly.” 

AFAC warns that deadly fires could still occur in normal fire risk zones, and suggests that all Australians remain vigilant to fire threats. 

With the devastating floods that affected Queelsnad and NSW earlier this year, it’s even more poignant that Australians are taking measures to protect their homes and businesses. 

While the Government needs to be pushed to take action to ensure that there are proper mitigation measures, Australians need to ensure they are insured against extreme weather events. 

If you need help discussing your business or home insurance options, you can talk to the team at Business Insurance Consulting to explore your options today!

Credit: https://www.insurancenews.com.au/local/record-dry-levels-increase-fire-danger-in-nt

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The Benefits of Using Insurance Brokers

A recent podcast series hosted by Insurance News MD Andrew Silcox discussed the benefits of using brokers, rather than buying insurance directly. 

The podcast, Insurance with INsight, is produced by Insurance News in partnership with Vero, and discusses the results of the latest Vero SME Index. 

Each year the Vero SME Index measures the effectiveness of insurance and brokers who work with small to medium-sized businesses. 

The podcast considers statistics from the Index that show broker clients are far more likely to be satisfied with the claims process than those who buy insurance direct. 

This episode features contributions from Vero’s National Manager Commercial Property Claims Kira Pellicano and Gallagher Head of Claims Adam Squire.

The Index reveals that 63% of broker clients are satisfied with the result of their claims, compared to only 42% of direct buyers. 

“99% of the problems that we have in claims are because communication has failed,” Mr Squire says.

“If a client ever rings me and says, ‘I don’t know what’s going on with my claim’, we as an industry have failed. It’s as simple as that.”

Ms Pellicano says SMEs that tap into broker expertise have access to crucial support. 

“The added benefit is then when something does go wrong, you’re not on your own and you actually have support of an insurance professional through that claims process.” 

You can listen to the episode recording here. 

Using an insurance broker can be especially beneficial for businesses, as insurance can be complicated. Having someone who understands the details of a policy can help you better understand what level of cover you may need, and avoid certain errors in claims. 

Need help with your business or home insurance? Get in touch with the team at Business Insurance Consulting today for all your insurance needs. 

Credit: https://www.insurancenews.com.au/daily/sme-claims-podcast-highlights-benefits-of-using-brokers

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Is Australia becoming uninsurable?

Earlier this year Queensland and NSW experienced extreme flooding, leaving many homes with significant damage. 

While extreme weather events are not a new phenomenon in Australia, the increased severity and frequency of them has been cause for major concern. 

A study released by the Climate Council says insurers are raising premiums to cover the increased cost of claims and reinsurance as the threat of extreme weather events grows, with the risk set to worsen unless Canberra starts acting swiftly to phase out burning coal and other fossil fuels. 

According to the report, Australia is now facing the prospect of becoming an “uninsurable nation”, with more than half a million homes (1 in 25 properties) forced to go without insurance cover in 8 years time because of climate change. 

“Climate change is creating an insurability crisis in Australia due to the worsening extreme weather and sky-rocketing insurance premiums,” the report, Uninsurable Nation: Australia’s Most Climate-Vulnerable Places, says. 

The report states that insurance will become increasingly unaffordable in major parts of the country, and there is also a possibility that insurers could decide that offering policies in high-risk areas is not viable. 

“We have a number of places in Australia where people are not insuring their homes because of cost,” Climate Council CEO Amanda McKenzie says. 

“So that means that those homes are effectively uninsurable.”

She further elaborates that the recent floods and the Black Summer bushfires are a “massive red flag” for the country. 

“Scientists have been saying for decades Australia is highly vulnerable to climate change risks and now we’re seeing it play out before our eyes,” Ms McKenzie said. 

According to the recent Climate Council report, NSW and Queensland account for seven of the top 10 list of federal electorates that are most vulnerable to climate change-fuelled extreme weather events such as floods and bushfires. 

The report says that about 15% of properties (165,646), or about one in every seven properties in the top 10 list will be uninsurable this decade.

These properties have projected annual damage costs equivalent to 1% or more of the property replacement cost, and are referred to as uninsurable, the report says. 

“Whilst policies might still be available, premiums are expected to become too expensive for people to afford,” it explains.

ICA has responded to the Climate Council report, with a spokesman saying that although there are some locations where there are affordability and availability concerns, there is no area of Australia that is uninsurable at present. 

“Insurance prices risk, and that means that for those in flood-prone or cyclone-prone locations, cover can be costly,” the spokesman said. 

ICA CEO Andrew Hall says that while no area is uninsurable, the question should more so be focussed on what needs to be done in these extremely high risk areas.  

“In some cases we have seen, particularly in these most recent floods, homes that are flooded three times in 10 years and so the question has to be asked ‘when you’ve got homes that are in harm’s way and are often being damaged catastrophically like this, what do we need to do’,” he said. 

Mr Hall says Australia needs to look at adaptation measures and mitigation investments to improve resilience and existing building standards. 

“We do have a problem in this country that we have got to simply address and that is more money has to go upfront to protect homes rather than in the clean-up.” he says. 

Mr Hall says an “extreme outcome” could involve relocating homes, buying the land and turning it into recreational or environmental areas. However, he adds on that people have to be given options if they choose to stay where they are. 

This “uninsurable nation” tagline has raised some debate within the industry. 

Many have said that this is an alarmist interpretation, but the report insists this is a make or break time for Australia’s insurability crisis. 

But one thing that cannot, or should not, be debated is that action must be taken on making this country more resilient to natural disasters.

If you have any questions or concerns about your home or business insurance, you can reach out to the friendly and knowledgeable team at Business Insurance Consulting! 

Source: https://www.insurancenews.com.au/analysis/uninsurable-nation-maybe-maybe-not-but-action-needed-either-way

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High level of underinsurance in flood affected areas

The Queensland and NSW floods have caused losses reaching an estimated $2.3 billion. This devastating extreme weather event has deeply impacted many families and businesses.

A survey conducted by the Insurance Council of Australia (ICA) has highlighted a significant level of underinsurance among the affected communities. 

The ICA reported on March 21st that insurers had received 153,769 claims, which is a 2% increase from the previous week’s figures. 

ICA also released results from a survey of more than 1000 people from three flood-prone areas in southeast Queensland and NSW. The survey found that 37% of respondents say they wouldn’t have enough insurance to rebuild. 

Two-thirds of respondents also stated they don’t believe governments are investing enough to properly protect homes and communities from extreme weather events. More than 90% of those respondents said the spending should at least double. 

From the survey the ICA reports that an astonishing 94% of people said there should be better controls on where homes are built so they are not at risk of flood. 

On affordability and availability constraint drivers, the survey finds 47% say flood cover can be difficult or expensive to obtain due to the risk of flood, one in five says it is driven by insurer profits and 11% cite climate change. 

“The Insurance Council has long called for greater investment in measures that better protect homes and communities from the impact of extreme weather,” ICA CEO Andrew Hall said. 

“This most recent flood has unfortunately brought this issue into sharp relief, and now those directly impacted have added their voices to this call.”

The ICA survey was conducted from March 11th-14th across the Northern Rivers, Western Sydney and Greater Brisbane regions. 

If you wish to discuss your home or business insurance options, you can contact Craig from Business Insurance Consulting. 

Email: [email protected]

Phone: 0412 212 099

Credit: https://www.insurancenews.com.au/local/flood-losses-rising-as-survey-shows-high-levels-of-underinsurance

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Personal hardship assistance extended to more flood-affected areas across South-East Queensland

On March 2nd, the Insurance Council of Australia (ICA) stated that insurers received 48,220 claims related to the flooding in South-East Queensland and the New South Wales coast. 

This was a 53 percent increase from the previous day’s claims count, and further demonstrated the significant impact from this event. 

37,807 of the claims were from Queensland, with the remainder from New South Wales. The New South Wales figures are expected to increase, as more policyholders return to their homes and businesses. 

Eight-four percent of the total claims relate to property, with the rest being motor vehicle claims. Insurers do not currently have an estimate of claims costs. 

The personal hardship assistance has been extended to more flood-affected individuals and families, as flooding continues to affect people across South-East Queensland. 

Grants are available through the jointly funded Commonwealth-State Disaster Recovery Funding Arrangements (DRFA) for eligible flood-affected residents in Ipswich, Lockyer Valley, Moreton Bay and Somerset. The personal hardship grants have also been extended to the entire Local Government Area of Gympie Regional Council, Fraser Coast and Sunshine Coast.

The Federal Minister for Emergency Management and National Recovery and Resilience Senator the Hon Bridget McKenzie said that if eligible, the DRFA assistance would provide grants of up to a maximum of $900 for a family of five or more, or $180 per person. 

“These payments are designed to cover essential items such as food and clothing for people who are doing it tough as a result of the floods, in addition to the reconnection of essential services once it’s safe to return home.” 

“Areas affected by flooding in Brisbane and Logan are currently being assessed for the provision of personal hardship financial assistance and those assessments are being progressed as a matter of priority.” 

“Brokers are contacting their clients in affected areas and are offering their assistance,” said NIBA CEO Philip Kewin. 

“The Australian and Queensland governments continue to work closely to support ongoing recovery efforts and identify where further assistance is required to ensure all flooded communities have the assistance they need to get back on their feet.”

You can find more information on Personal Hardship Assistance and Essential Services Hardship Assistance here, or contact the Community Recovery Hotline 1800 173 349. 

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Insurers step up their commitment to tackling climate change

Allianz Australia has stepped up their climate commitment in 2021 by becoming the first insurer to join Climate League 2030. 

Climate League 2030 is a private sector-focussed 10-year initiative that aims to reduce Australia’s annual greenhouse gas emissions, in line with the targets set by the Paris Agreement in 2015. 

The Investor Group on Climate Change (IGCC) launched the initiative in October 2020, starting with investor participants. 

IGCC is a collaboration of both Australian and New Zealand investors focussed on the financial impact of climate change on investments. 

Supporting Climate 2030 means Allianz must commit to taking at least one new action each year that will make a demonstrable contribution to reducing Australian emissions. 

Allianz Australia MD Richard Feledy says the business is “proud” to be the first insurer to join the initiative.

“Allianz is committed to a net-zero emissions future and we are decarbonising our operations, insurance portfolio and investments to help us achieve that goal,” Mr Feledy said. 

“We believe climate risks are better mitigated when we collaborate with other organisations, industries and markets.”

“By joining initiatives such as Climate League, we hope to enable an orderly transition.” 

IGCC CEO Rebecca Mikula-Wright says hopefully more insurers will follow Allianz and join the initiative. 

“More and more investors, banks and insurers are now recognising that reducing emissions on a Paris-aligned pathway represents responsible action to secure a healthy economy for Australia,” she said.

“The Investor Group on Climate Change continues to support other organisations, including hopefully more insurance firms, to join Climate League to support a stronger 2030 national emissions reduction commitment, which will remain in focus in the lead up to COP27 in Egypt next year.”

Allianz also announced changes to reduce their ties with fossil fuels. They are removing thermal coal from proprietary investment and underwriting portfolios and in 2021 the insurer stopped insuring or investing in infrastructure facilities that derive more than half their revenue from thermal coal. 

From 2023, Allianz plans to no longer provide property & casualty insurance or make proprietary investments in companies that plan new coal mines, generate more than 25% of revenue from thermal coal mining, or produce more than 10 million tons of thermal coal annually. 

This focus on handling climate change is no new thing, and has been a hot topic in the insurance industry. 

After a turbulent year last year in terms of extreme weather events, Suncorp CEO Steve Johnston also made comments on the need to face this issue head on. 

“Call it La Nina, climate change, or just bad luck, it really doesn’t matter – the results and impacts are the same.” he said. 

“At a time when homeowners really need adequate home insurance, allowing tax revenue from insurance to keep growing due to climate change makes little economic sense.

“Pushing people out of the insurance market simply transfers the cost of the extreme weather event, and the one after, to the taxpayer.”

Mr Johnston said “climate change is an intergenerational challenge that must be tackled” by setting ambitious targets and providing support for industries and jobs impacted by the transition.

You can read more about what he had to say here

Australia continues to face extreme weather conditions each year. 

If you want to discuss your personal, home or business insurance, get in touch with us today! 

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https://www.insurancenews.com.au/corporate/allianz-steps-up-climate-commitment
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Questions remain after cyclone reinsurance pool details are released

After announcing that they would be going ahead with the long-debated proposal, the Federal Government has quickly moved to develop a cyclone reinsurance pool. 

The draft legislation was released December 2021. It provided various details, but still left key questions regarding the pool unanswered. 

The two-week public consultation period on the draft bill closed on the 17th of December 2021, and the legislation is due to be introduced into Federal Parliament this year, and the pool is set to commence from July. This is ahead of the election due by late may this year. 

The pool will cover cyclone and related flood damage for claims that arise from the beginning of a cyclone until 48 hours after it ends. The cover includes wind, rain, rainwater, rainwater run-off, storm surge, and riverine flood damage. 

The Australian Reinsurance Pool Corporation (ARPC) will administer the scheme, and based on advice from the Bureau of Meteorology they will declare an event. The initial announcements regarding the proposed pool had referred to a region above the Tropic of Capricorn, however the new material simply refers to “cyclones in Australia”, including offshore territories such as Norfolk Island. 

The eligible policies include, household property, residential and mixed-use strata, small business, charity and not-for-profit property policies, and farm residential policies. 

However there are certain restrictions. 

Business property policies would need to have sums insured of $5 million or less and strata and community title properties will be eligible where at least 80% of the total floor space of units are used mainly for residential purposes. Business marine cover remains a work in progress and is set to be included from the middle of 2023. 

This cyclone pool will be mandatory and insurers are expected to start entering into agreements with the ARPC from July. 

Large insurers have until December 31 next year to join the scheme, and small insurers have an extra 12 months to ensure all eligible risks are reinsured with the scheme. 

The pool will be funded by insurer premiums but the scheme is backed by a $10 billion annual Government guarantee. In the case of rare cyclone activity levels that draw down the available funds, the Government guarantee can be increased after talks involving the Prime Minister, Treasurer and Financial Minister. 

Premiums determined by the ARPC will be subject to actuarial review, and won’t include a profit margin. The pricing formula is set to be finalised before July and will use property-level data such as geography, building characteristics, and mitigation. 

Treasury says key principles for the formula include that it should lower the reinsurance cost for most policies with medium-to-high exposure to cyclone risk and have minimal impact on premiums for lower cyclone-risk properties. 

The treasury says it should also maintain incentives for risk reduction and offer discounts for properties that undertake mitigation. 

From July to June 30, 2025, the cyclone pool should cover the entire cost of eligible cyclone and related flood damage claims above the policyholder excess, “to support insurer transition and maximise the potential premium reductions through the pool”. 

After that time, the pool will operate on a risk sharing arrangement with the insurers, where the pool will continue to cover a significant proportion of eligible claims. 

Insurers will continue to manage any of the claims, while the policyholders will still be able to choose their insurer. 

“The scheme is expected to improve insurance access and affordability in cyclone-prone areas, build the financial capability of affected households and small businesses to recover from natural disasters, and support the economic resilience and development of cyclone-prone areas,” the Treasury paper says.

“The scheme is also expected to increase competition by encouraging greater insurer participation in cyclone-prone areas and support higher levels of insurance coverage by property owners.” 

Pricing and the pass-through of savings from the scheme will be monitored by the Australian Competition and Consumer Commision. The first review is scheduled for three years after it commences, and every five years thereafter. 

While the scheme is expected to commence in July this year, critical issues around the setting of premium pricing are still to be determined. Debate continues about the breadth of this cover, and the expected level of savings for policyholders remains unknown. 


You can read the draft legislation, along with further details here. 

Credit: https://www.insurancenews.com.au/analysis/cyclone-pool-details-revealed-but-questions-remain

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AFCA says there is no excuse for not disclosing your claims history

A couple has lost their claims dispute after failing to remember their previous claims history when purchasing an Auto & General motor policy. 

The Australian Financial Complaints Authority (AFCA) has ruled that the oversight was a breach of the disclosure obligations and the insurer was entitled to decline the latest claim for damage to the couple’s vehicle. 

When purchasing their policy, the couple was asked how many claims they had made in the last five years. They indicated they were unsure whether it was one or two, and the insurer’s representative suggested that they disclose two claims. 

The couple should have disclosed four claims. If they had disclosed the full extent of their claims history, the insurer’s underwriting criteria would have ruled them out. 

“The complainants say they forgot about one of the non-recoverable claims,” the AFCA’s ombudsman said. 

“While this may have been the case, it does not change the outcome.”

“It is reasonable to expect a person to know their claims history. I do not accept forgetting means the claims history was not known to the complainants for the purpose of section 21A(5)(i) of the [Insurance Contracts] Act.”

The AFCA said that an innocent non-disclosure is still a non-disclosure, and therefore a breach of the complainant’s duty. 

“I am satisfied that, by failing to disclose two of the four claims the complainants had in the five years prior to policy inception, the complainants failed to comply with their duty of disclosure.”

“I am satisfied if the complainants disclosed their full claims history, the insurer would not have agreed to offer the policy and would not have insured the complainants.”

“Therefore, under section 28 of the Act, the insurer is entitled to reduce its liability to nil and refuse to pay the claim.” 

You can read the full ruling here.

Interested in a dedicated broker for your home or business? Contact us for your own specialised quote. 

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Worldwide losses from natural disasters on the rise

In 2021, natural disasters caused substantially higher losses worldwide when compared to the previous 2 years, according to the Munich Re 2021 Nat Cat report. 

From the data, Munich Re discovered that storms, floods, wildfires and earthquakes, and other extreme weather events destroyed assets totalling US$280 billion. This was a massive increase from US$210 billion in 2020, and US$166 billion in 2019. 

Only US$120 billion of the 2021 losses were insured, but this was up from US$82 billion in 2020 and US$57 billion in 2019. 

The United States accounts for a large share of these natural disaster losses in 2021, costing around US$135 billion. Tornadoes, tropical storms and deep freeze were the extreme weather events responsible for major losses in the USA in 2021. 

Torrential rainfall triggered severe flooding in Europe that resulted in devastating losses to local areas, especially in western Germany. Within the affected regions of Europe, this rainfall was the highest in over a hundred years. 

In the River Ahr in Rhineland-Palatinate, the flash flooding swept away countless buildings and severely damaged infrastructure, including railway lines, roads and bridges. The death toll was over 220 people. 

This natural disaster caused losses of US$%54 billion. 

In the Asia-Pacific, the losses from natural disasters remained modest in comparison. The overall economic loss was US$50 billion, with only US$9 billion being insured. 

This region accounted for 18% of overall losses, with the costliest from natural catastrophes being a severe flood in Henan Province in central China. 

Many rivers, including the Yellow River, burst their banks and hundreds of thousands of homes were flooded. 

Overall losses in the Asia-Pacific region totalled to US$16.5 billion, and only 10% of these were insured losses. 

Ernst Rauch, chief climate and geoscientist at Munich Re and head of the climate solutions unit, said the latest disaster statistics are striking as these extreme weather events are likely to only become more frequent or severe due to climate change. 

“Among these are severe storms in the USA, including in the winter half-year, or heavy rain followed by floods in Europe. For hurricanes, scientists anticipate that the proportion of severe storms and storms with extreme rainfall will increase because of climate change,” Rauch said.

“Even though events cannot automatically be attributed to climate change, analysis of the changes over decades provides plausible indications of a connection with the warming of the atmosphere and the oceans. Adapting to increasing risks due to climate change will be a challenge.”

Natural disasters in 2021 were devastating to many, and many scientists believe this will only get worse in 2022 and later as climate change continues to be a risk factor. 

Many of these catastrophic losses weren’t insured, and will leave families and businesses with long term impacts. 

If you want to discuss insurance for you or your business, get in touch

Credit: https://www.insurancebusinessmag.com/au/news/natural-catastrophe/munich-re-natural-disasters-losses-soar-in-2021-321577.aspx

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What You Need to Know About Cyber Threats

As the internet has become an even more integral part of our lives and businesses, cyber threats have become a more prevalent danger. 

Each and every day, cyber security incidents impact small businesses, large companies and individuals. 

These cyber threats can cause devastating results for many small businesses. 

Not every owner has the time or resources to effectively manage their cyber security, so this list includes a few tips to help protect your business from cyber attacks. 

Common Cyber Threats

In order to better protect yourself against a cyber security incident, it’s important to understand what the most common cyber threats are.

Malicious Software (Malware) 

Malware is software that is created to cause disruption or damage. It can include viruses, spyware, trojans and worms. 

Criminals can use malware to access confidential information, such as bank or credit card numbers, passwords, and other personal information.

Some types of malware can gain access and take control of a user’s computer, using this information to commit fraud or identity theft. This security risk can disrupt business, and risk the security of sensitive data and intellectual property. 

Malware creators can be located anywhere, as long as they have a computer and the technical skills, criminals can easily access cheap tools to use malware against you. 

Email Scams (Phishing)

Phishing emails are a type of scam where a criminal impersonates a legitimate organisation, such as a business, via email, text message or advertisement, in order to steal sensitive information. 

Often these criminals will pretend to be an individual or organisation you think you know and trust, in order to trick recipients out of their money and data. They may use official branding and logos to mimic businesses such as banks, and make themselves seem legitimate. 

The emails or calls will most often attempt to trick businesses and individuals into performing specific actions, including: 

  • Paying fraudulent invoices, or changing payment details on legitimate invoices
  • Reveal confidential information such as bank account details, passwords and credit card numbers
  • Give remote access to your computer, device or server, through opening an attachment that contains malware
  • Purchase gift cards and send them to the scammer

Phishing attacks are becoming more common, increasingly sophisticated and even more difficult to spot. 

Always be cautious regarding urgent requests for money, changes to bank accounts, unexpected attachments and requests to confirm login details. 

If you believe a message or call might truly be from an organisation you trust, you should find a reliable contact method to confirm. 

You can search for the official website or call their advertised phone number. Do not use the links or contact details supplied in the message you have been sent or given over the phone, as these could be fraudulent. 

You can also report suspicious emails and suspected scams to Scamwatch.

Ransomware

Ransomware is a type of malware that locks your computer or files down until a ransom is paid. This malicious software works by locking up or encrypting files so that you can no longer use and access them. This can sometimes result in your computer crashing. 

Ransomware can be picked up in the same ways as other malware, such as:

  • Visiting unsafe and suspicious sites
  • Opening links, emails or files from unidentified sources
  • Having poor security on your network, mobile devices and servers

It’s important that you never pay a ransom. Paying for the ransom does not guarantee that the files will be restored, and it won’t prevent the stolen data from being published or sold. 

Paying the ransom can actually increase the likelihood of being targeted again. 

If you experience a ransomware incident and need support, you can call the Australian Cyber Security Centre hotline on 1300 292 371, or report the incident via ReportCyber.

Ways To Protect Yourself

In order to protect yourself and your business it’s important that you are implementing some sort of strategy to manage your software, data and online accounts. 

This can protect your computer networks from attacks, and save you the trouble of dealing with online criminals. 

Here are just a few of the things you can do within your business to improve your cyber security. 

Automatic Updates

Keeping up to date with software updates is one of the best ways to protect yourself and your business from a cyber security incident. 

An update provides you with an improved version of software, whether it’s a program, app or your operating system. 

By setting your servers, computers and mobile devices up for an automatic update, you will get software improvements as soon as they are available, helping you prevent data breaches, and improving your information security. 

Updating to the newest version of a software can help reduce the chance of a cyber criminal using a known weakness to run malware or hack your device. 

Automatic updates can also just help make your life easier, saving you time. If automatic updates aren’t available, you should regularly check for new updates. You can also set a more convenient time for your updates to occur so that you reduce disruption to your business.

If you have antivirus or security software, you should always make sure these are set to update automatically. 

Automatic Backups

A backup is a copy of your most important information, such as customer details and financial records. You can save this either on an external storage device or to the cloud. 

Setting up automatic backup creates a ‘set and forget’ system that will backup your important information without the need for human intervention. 

You should disconnect and remove your backup storage device after each back to ensure it remains secure in the event of a cyber incident. 

Backing up is a precautionary measure to keep your data accessible if it is ever lost, stolen or damaged. It gives you the room to recover in the event of a cyber incident, and helps you get back on your feet faster. 

You should test your backups regularly, and keep at least one backup disconnected from your device. 

Multi-Factor Authentication

Multi-factor authentication is a security measure that requires two or more proofs of identity to grant you access to a device or account. 

This usually requires a combination of things:

  • Password, PIN, or security questions
  • Authenticator app, smart card, or physical token
  • A fingerprint or other biometric method

This can be one of the most effective ways to prevent unauthorised access to valuable information and accounts. 

These layers make it much more difficult for a criminal to attack your business. They might be able to steal your password, but obtaining the right combination of proofs of identity is much harder to accomplish. 

As a business you should implement MFA on all possible accounts, especially financial and email accounts. 

Access Control

Access control can help you limit access to your computer system. It can protect your business by restricting access to critical infrastructure such as; 

  • Files and folders
  • Apps
  • Databases
  • Inboxes
  • Online accounts
  • Networks

Most of your staff will not need to have full access to all data, accounts and systems to perform their job. You should restrict access to sensitive information where possible, so employees and external providers do not accidentally or purposefully endanger your business.

Having an access control system in place will allow you to;

  • Decide who needs access to files, databases and emails 
  • Control access permitted to external providers such as accountants, website hosting providers
  • Restrict access to social media and website accounts
  • Reduce damage if information becomes compromised
  • Revoke access if an employee changes roles or leaves the business

As a small business, typically the safest way is to give employees the bare minimum access and permissions they need to perform their job.

Passphrases 

A passphrase is a more secure version of a password, and can be useful in situations where you can’t use multi-factor authentication. 

Passphrases consist of four or more random words that make up your password. For example, ‘milk bridge toenail soup’.

Passphrases are intended to be hard for cybercriminals to crack, but easy for you and your employees to remember. 

Your passphrase should be:

  • Long: the longer the better, but as a guide it should be a minimum of 14 characters
  • Unpredictable: use a mix of unrelated words, don’t use famous phrases, quotes or lyrics
  • Unique: don’t reuse your passphrase on more than one account

Employee Training

Employee training is a must when it comes to keeping your business safe from cyber attacks. You should teach yourself and your staff how to prevent, recognise and report a cybercrime. 

Your staff should know the basics, such as how to update their devices, secure their accounts and identify scam emails. 

You may also want to implement a cyber security incident response plan so your employees have a guide in the event of a cyber incident.

This will help you understand what your critical devices are, and what processes need to be in place. 

Employees can be the first line of defence against a cyber threat, so training will help change habits and behaviour to ensure cyber security is everyone’s responsibility. 

Regular awareness training is going to help keep your business safe. Scams and cyber attacks are only getting more sophisticated, and evolving as things change. Keeping your staff up to date on the latest cyber security threats could be the difference between a criminal gaining access to your vital data. 

Keep Your Business Safe

These steps should help you understand more about what cyber threats are, and some of the strategies you can use to protect yourself. 

Unfortunately, this does not mean that you will always be able to protect yourself or your business from the increasingly clever cyber threats. 

If you’re considering Cyber cover for your home, or business, contact us today for a specialised quote.

Email: [email protected]

Credit: https://www.cyber.gov.au/acsc/view-all-content/publications/small-business-cyber-security-guide

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Action on home resilience needed to minimise impact from cyclones

$23 billion in claims costs have been generated by cyclones since 1967. 

The Insurance Council of Australia (ICA) says homes are not resilient enough, and the risks are expected to rise with climate change. The impacts from these extreme weather events are set to worsen unless action is taken. 

According to a report prepared by the James Cook University Cyclone Testing Station in association with Risk Frontiers, changes need to be made to the design methods and criteria for new homes to avoid an increase in the already high impacts and losses.

The report recommends that the National Construction Code should consider resilience in new property construction as well as life safety. It suggests that federal and state governments should support the development and expansion of schemes for existing homes, like the North Queensland Household Resilience Program. 

ICA CEO Andrew Hall says the National Construction Code needs to consider resilience for all new property construction if all of Australia is to remain insurable. 

“Australia’s modern houses are not resilient to the tropical cyclone hazard of today,” 

“Implementation of stronger building codes and retrofitting programs, improved land-use planning, and permanent physical mitigation measures, where necessary, will be key to ensuring an insurable Australia.” 

Australia’s most costly natural disaster was Cyclone Tracy, which hit Darwin in 1974. The cycle generated a $5.5 billion insurance bill, normalised to 2017 values. 

Recent cyclones in North Queensland, such as Yasi, Marcia and Debbie have cost $3.83 billion in insurance costs. 

The National Construction Code is updated every three years, and the next revision is due late 2022. Decisions on any updates are administered first through the Australian Building Codes Board (ABCB). The ABCB is made up of state and territory government representatives, the Australian Local Government Association and seven industry reps. 

“The ABCB are considering resilience initiatives and programs,” an ICA spokeswoman said. “It’s expected that consideration will take an extended period.”

If any National Construction Code amendments are made, it will still be up to each state and territory to decide whether they adopt the changes. 

The cyclone report also includes recommendations for building codes to be updated to address water ingress issues, as well as a public awareness campaign to promote regular maintenance on vital home features. 

The ICA report also suggests that it is time to invest in more fixed and mobile weather stations, and an Australian Historical Tropical Cyclone Footprint database should be developed to represent land wind speeds.

“A nationally consistent asset register could assist in improving data quality regarding housing construction type, wall construction, roof type, year of construction, renovations and retrofitting works,” the cyclone report says.  

“This information is essential for the owner of the home or future buyers as well as emergency services, insurers and banks.”

This cyclone report is the second in ICA’s Climate Change Impact Series. It follows a study released last month on the impact of actions of the sea, and there are plans for a final report on floods to be released. 

RACQ Group Executive Insurance Tracy Green says the report is a vital resource for explaining the growing risk of cyclones. 

“Australia needs insurance to be sustainable and affordable and this report complements the growing amount of evidence that investment in resilience and future-proofing our assets is long overdue,” she said. 

You can find the report here.

Credit: https://www.insurancenews.com.au/daily/cyclone-impacts-set-to-worsen-without-action-on-home-resilience-ica?utm_medium=email&utm_campaign=Daily%20insuranceNEWScomau&utm_content=Daily%20insuranceNEWScomau+CID_104083c4a61267ca59686b5cfcf16410&utm_source=EmailCampaign&utm_term=Cyclone%20impacts%20set%20to%20worsen%20without%20action%20on%20home%20resilience%20ICA

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Floods predicted for Australia this spring and summer

The Bureau of Meteorology warns that above-average rainfall and flash flooding could occur in Australia this spring and summer. 

Atmospheric and oceanic observations have yet to consistently reach La Nina levels, but there’s still a 70% chance of a La Nina system developing. 

“Regardless of whether La Nina thresholds are met, a La Nina-like pattern in the Pacific may still increase the chances of above-average rainfall for northern and eastern Australia at times during spring and summer,” the bureau said in its latest update. 

Various other weather systems are combining to point to wetter than average conditions across much of Australia. 

The negative Indian Ocean Dipole (IOD) has weakened, but cloud patterns in the eastern Indian Ocean suggest the atmosphere is still responding to warmer than average sea surface temperatures in the region.

A negative IOD increases the chances of above-average spring rainfall for much of southern and eastern Australia.

Meanwhile, a Madden–Julian Oscillation (MJO) is forecast by some climate models to strengthen and move eastwards into the western Pacific over the coming fortnight. If the MJO strengthens this would increase the chances of heavy rain across northeast Australia, the bureau says.

The Southern Annular Mode (SAM) has been positive for the past three weeks and is forecast to remain at positive levels to the end of the year.

A positive SAM during summer typically brings wetter weather to eastern parts of Australia, but drier than average conditions for western Tasmania.

It’s more important than ever for Australians to prepare for the oncoming storm season. 

The QLD Get Ready campaign, supported by Suncorp and featuring representatives from Queensland Fire and Emergency Services and Lifeline urges Queenslanders to prepare for the risk of flooding, torrential rain and other severe weather events. 

Get Ready recommends three steps: prepare an emergency plan, pack an emergency kit and make sure insurance is up to date. 

Suncorp CEO Steve Johnston says the insurer is committed to helping encourage Queensland households and businesses to be weather-ready as “waiting until a storm is bearing down is just too late”.

“Each summer, we see homes and communities destroyed by natural disasters, with much of this damage avoidable,” he said. “Even small-scale events can have a big impact, financially, emotionally and even physically, so it is critical Queenslanders undertake home preparation and maintenance now.”

Queensland has been hit by almost 90 significant natural disasters and weather events in the past decade, leaving a recovery and reconstruction bill of more than $16.8 billion. Last season, it was hit by 11 natural disaster events across 50 local government areas including hailstorms, bushfires, floods and cyclones.

Credit: 

https://www.insurancenews.com.au/regulatory-government/queensland-launches-suncorp-backed-get-ready-storm-campaign
https://www.insurancenews.com.au/daily/la-nina-holds-off-for-now-but-floods-still-feared
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IAG and Suncorp raise peril costs expectations after storms

Storms in South Australia and Victoria have been declared a catastrophe by the Insurance Council of Australia (ICA). These extreme weather events have elevated claims within the insurance industry, and Suncorp and Insurance Australia Group (IAG) have raised their outlooks for financial-year natural peril costs. 

IAG increased its full-year natural perils forecast by 36.6% to $1.045 billion and lowered its reported insurance margin guidance range to 10-12% from 13.5-15.5% previously.

IAG says its net cost for the storm’s catastrophe is anticipated to be $169 million, the maximum retention for the first loss under its catastrophe program.

The full-year figure includes $535 million for the first four months. In addition to the recent storms, that comprises $204 million for the September quarter, $142 million for other weather events across eastern Australia in October and $20 million for attritional events last month.

Suncorp expects natural hazard costs of $1.105-$1.130 billion for the fiscal year. That’s $125-150 million above the previously announced $980 million allowances, divided equally between the first and second halves. 

There have been six declared weather events in October. Suncorp says costs for the half have also been inflated by the 2021 Victorian earthquake and other storms in both Australia and New Zealand. 

Suncorp expects the total cost from the recent storm events could reach $225-250 million, which led to a revised year-to-date estimate for natural hazard costs of $597-702 million. 

Earlier in the year Suncorp had begun issuing grants for remote, rural and regional Australia in the hopes to rebuild resiliently in preparation for any future disasters.  

Credit

https://www.insurancenews.com.au/corporate/iag-suncorp-raise-peril-costs-expectations-after-storms
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Over Four Decades Natural Disasters Are Projected To Cost Australia $1.2 Trillion

Natural disasters costs are set to almost double over the next forty year period. $1.2 trillion is the projected cost to the Australian economy according to the Deloitte Access Economics estimate. They have estimated that natural disasters will drain the Australian economy of at least $73 billion per year by 2060.

The three main cost drivers are climate change, rising property values and population growth. Two thirds of these costs will be incurred in Queensland and New South Wales due to the rising temperature of oceans. Creating tropical cyclones and floods further south. 

This figure projection was presented in Deloitte’s “Update to the economic costs of natural disasters in Australia” report, which was commissioned by the Australian Business Roundtable for Disaster Resilience & Safer Communities. 

As the population grows major flooding from extreme weather events are forecast, increasing costs and social impact further. According to the report “coastal population centres in South East Queensland and North East NSW will experience some of the highest increases in costs as they become more exposed to tropical cyclones and floods.”

It also warned that a high emissions scenario introduces an additional $125 billion in costs over the same timeframe. It expressed that a low emissions future is imperative to offset climate change impact on natural disaster risks. 

“Delaying action will ultimately mean paying more later as the costs from natural disasters increase.” the special report update mentioned. 

The roundtable has released five independent research reports that include the financial and social costs of disasters. Each report recommends investment in disaster resilience and mitigation activities in response to natural hazards. 

IAG MD and CEO Nick Hawkins says the action to limit climate change must be used in conjunction with interventions and creating resilient communities. Mr Hawkins said “the Roundtable members are seeing firsthand the impacts of more extreme, more frequent weather events on Australians, and this latest report provides further evidence that we must all continue to invest in increasing resilience to protect communities and ultimately, save lives.”

The report takes into consideration the smaller natural disaster events that aren’t always recorded by insured-loss data. These are utilised to consider how costs vary under various future temperatures scenarios. 

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Buy Now, Pay Later Option For Insurance Introduced By Coverpay

From next month “buy now, pay later” company Coverpay will offer a general insurance product. This will be aimed at consumers and SME’s after raising $2.5 million in launch funding to establish the platform. 

Managing Director Steve Gilbert shared that the company has taken inspiration from “buy now, pay later” in the retail sector when developing this product. A product that is aimed at insurance that will offer customers another policy payment option.

The platform is embedded into a merchants existing transaction process and can be used at the checkout for online policy sales. It can also be used in conjunction with payment portals, on invoices or utilising embedded links. The bill can be split over 12 fortnightly payments for the customer and Coverpay pays the merchant in full. 

A management fee of $7 is applied to each instalment. Customers are also given three days to make up a missed payment. After this time a default fee of $40 is added to any outstanding payment. 

The fees that they charge are fixed, which according to Mr Gilbert, “aligns with our guiding principles of fairness and transparency.”

“Underinsurance continues to be a significant issue in Australia and we know that affordability is a key aspect of coverage choice,” he said. “We believe Coverpay can play a part in addressing underinsurance by directing more funds into a customer’s insurance budget.”

Coverpay will initially provide payment plans for up to $2500. Mr Gilbert has over 20 years in the insurance and finance industries. Rosalie Lau, Lisa Woodley, Vibul Imatarnasan and Kiersten Lethbridge also make up the core team at Coverpay.

awards

Insurance Awards Finalists Named By ANZIIF

The finalists for the Australian Industry Awards have been announced by the Australian and New Zealand Institute of Insurance and Finance (ANZIIF). 

ANZIIF will reveal the winners on October 26 via a free “online movie” production due to the current COVID-19 situation. The event was originally intended to be held at the Star Event Centre in Sydney. 

The CEO Prue Willsford said, “whilst it would have been lovely to frock up and celebrate it is just not possible, so this year a professionally produced online movie will celebrate the incredible achievements from individuals and companies, and their contribution to raising the standard of professionalism for the insurance and financial services industry”. 

The ANZIIF awards celebrate the accomplishments of individuals and companies within the insurance industry. The annual affair to highlight the accomplishments of those in the general insurance industry was cancelled last year due to the pandemic.

The following are the insurance provider finalists:

Small General Insurance – Adica Insurance, Guild Insurance, Lawcover Insurance, RACT Insurance

Large General Insurance Company – Allianz, CGU, Hollard Insurance, QBE Australia Pacific, Zurich General Insurance (Australia & New Zealand)

Excellence in workplace diversity and inclusion – Allianz Australia, CHU Underwriting Agencies, Hollard Insurance, Marsh, MetLife Australia, QBE Insurance Australia Pacific

Both the Insurance Leader and ANZIIF Lifetime Achievement Award winners will be announced on October 26.

Credit 

Free Image – Canva.com

ANZIIF Names Insurance Awards Finalists – insurancenews.com.au

prof

Profitability Improves For Global Industry As Rates Increase

According to a report on the results of global firms, insurer and reinsurer combined operating ratios improved in the first half, as rate increases outweighed claims. Double-digit rate increases were reported by six of the 18 tracked. QBE led with a 26% increase due to rising commodity prices in its North American crop business. 

Pricing in commercial lines increased premiums, whilst rate growth for reinsurance also supported the momentum. Favourable pricing is expected to continue this year according to Willis Re. Some management teams have mentioned that further rate increases are likely to be less significant and portfolios have started to ease. 

The increased profitability was supported by lower than expected personal lines loss frequency and some reserve releases were achieved despite higher natural catastrophe losses. The average combined ratio for the half was 93.7% with every company below 100%. Experiencing higher profit performance compared to the same period the previous year, which included substantial COVID losses. 

Willis Re discussed the long term outlook of rating the environment and the current cyclical upswing as well as if profit margins are set to continually increase. Inflation impacts many areas in the short term as well as longer-term. Potentially including loss ratio deterioration, due to lags in pricing response, loss development increases above-booked levels and reductions in the market shares according to the report. 

The report states that “In the current pricing cycle, companies appear to be proactively taking pricing action, but it remains to be seen whether it is sufficient”. 

There are a number of companies included in the report such as QBE, Chubb, AIG, Aviva, Liberty Mutual, MS&AD, Allianz, Axa, Zurich, Travelers, Mapfre, Hannover Re, Swiss Re, Munich Re, Generali, Sompo. Tokio Marine and Scor. 

Credit

Insurance News – https://www.insurancenews.com.au/international

building

Suncorp Offering Grants To Rebuild After Natural Disasters

Suncorp pledged 1 million in grants to assist with the rebuilding in remote, rural and regional areas within Australia. In the hopes to rebuild resiliently in preparation for any future disasters. The first round of grants is now open and currently available to communities within NSW and South East Queensland impacted by severe flooding in March.

NSW experienced record rainfall within a 7 day period since data began being collected in 1900. The rainfall in the area of the state that drains into the Tasman Sea averaged 252.9 millimetres in the seven days leading up to March 24, breaking previous records. 

Suncorp has partnered with Foundation for Rural & Regional Renewal (FRRR) to conduct the Suncorp Rebuilding Futures program. Individual grants of up to $15,000 are being offered to local community groups and not-for-profit organisations to support the long term recovery and resilience building of vulnerable communities. The first round is open until September 15 with successful applicants being named in November.

10,000 insurance claims were received by Suncorp following the flooding in rural and regional communities. More than 60% of the total claims have now been finalised, assisting the community to recover from natural disasters. 

CEO Steve Johnston said “I’ve seen firsthand the devastation and emotional toll of natural disasters, which is why we are supporting communities to not just build back but to make themselves more resilient than before. We are working closely with our building partners to progress repairs as fast as possible”. 

Suncorp’s Rebuilding Futures grants aim to empower locals to collaborate and design local solutions. They understand that recovery is a marathon but communities are best placed to steer their own future. 

The CEO of FRRR, Natalie Egleton mentioned that “This program, with a focus on the medium to long-term needs and building back better, will mean that when there are significant disasters support will be available to local groups’”. 

The first round of funding consists of $200,000 in grants and applications are open until September 15 to help support the long term recovery of flood-impacted communities. 

Credit

Insurance News – https://www.insurancenews.com.au/daily/suncorp-offers-1-million-in-grants-to-rebuild-after-floods

Insurance News – https://www.insurancenews.com.au/local/suncorp-flood-rebuilding-grants-open-until-mid-september

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Insurance Companies Join COVID Vaccination Push

Some of Australia’s largest insurance companies are urging eligible staff members to receive a COVID-19 vaccination. With the possibility of offering an employer-assisted vaccine roll-out. The government is currently assessing a policy that could allow vaccinated employees to return to work. 

Suncorp CEO Steve Johnston stated the insurer is “strongly advocating” for vaccines as “our ticket to a more ‘normal’ existence”. Mr Johnston has himself been fully vaccinated after receiving two doses of AstraZeneca. He encouraged “doing everything possible to support and encourage our employees to play their part and get vaccinated”. 

They are currently working with chief medical officers to answer any queries employees may have and to continue the vaccination program. Members of staff have access to paid leave to attend vaccination appointments during work hours and Suncorp is actively considering playing a role in employer-assisted vaccine roll-out. 

Allianz mentioned that it is “actively encouraging” all of its employees to receive the vaccine and is offering flexible work options to attend their appointment during work hours. A spokesman said that they have “also registered their interest with Australian Vaccine Services to participate in a corporate vaccination program”.

Allianz has recently introduced a pandemic leave policy giving their employees access to paid leave if they have exhausted all of their normal leave and are unable to work due to COVID related restrictions. 

IAG introduced measures, in June, to support their employees, including leave to attend COVID-19 vaccination appointments. A spokesman mentioned that “employees can take a half day paid leave for each of their vaccination appointments”. 

Many companies are jumping on the bandwagon including Broker Marsh who says it is encouraging all eligible staff to get vaccinated, while Willis Towers Watson believes vaccination protects “family, friends and colleagues”. 

The Head of Australasia and Head of Corporate Risk and Broking Simon Weaver says “WTW is strongly encouraging all colleagues to get vaccinated once eligible”. Recognising the importance of slowing COVID-19 cases. Understanding the difficulty to secure appointments they are offering flexibility for employees to attend appointments. 

Credit

Insurance News – https://www.insurancenews.com.au/daily/get-jabbed-insurers-join-covid-vaccination-push

ED Insu

Estimated ASIC Funding Levy Tops $24.7 Million

The estimated levy recovered by The Australian Securities and Investment Commission (ASIC) totals $24.7 million. These funds will be recovered from the general and life insurance industries to cover the cost of regulating the sectors in the last financial year. $16.1 million is projected to come from the cost recoveries levy whilst the remaining $8.5 will be obtained from statutory levies.

It is projected that overall funding levies of $359.6 million will be collected from the financial services sector to support ASIC’s 2020/21 regulatory costs. ASIC released these estimates last week as part of their draft Cost Recovery Implementation Statement, seeking feedback on how these funds will be recovered as industry levies under the industry funding model. 

The corporate regulator expects to publish the final levies in December and invoices to be issued in January. ASIC has created a draft cost recovery statement annually since the government introduced the industry funding model for the corporate regulator in 2016.

The insurance focus areas for the 2020/21 financial year include claim handling, mis-selling, hardship assistance, small business insurance cover, Hayne royal commission reforms and unfair contract terms review. 

In the draft statement, which can be found here, the ASIC says “we continue to consult and develop information for industry on our expectations of fair and transparent behaviour. We will review specific market sectors and products, we will take regulatory action…where necessary”.

August 13th is the closing date for submissions.

Credit: 

ASIC Australian Securities & Investments Commission – https://asic.gov.au/

Insurance News – https://www.insurancenews.com.au/

Training

Increased Training On Premium Funding Suggested By Broker Code Committee

The Insurance Brokers Code Compliance Committee, which assists insurance brokers to deliver high quality service standards to consumers, has recently suggested training should be increased for premium funding. Including ways to assist clients in financial difficulties as a result of the events experienced within the past year. 

Regular training provides brokers with up to date information regarding premium funding arrangements, according to an Own Motion Inquiry. Allowing clients to spread out instalments and consolidate their premiums, from numerous policies, into one payment. 

More in depth training can also lead to early identification of financial difficulty triggers. Policies and procedures can then be put in place to ensure appropriate response and aqedate assistance. 

The inquiry report mentioned “we have seen businesses of all sizes suffer financially due to the pandemic and, in some cases, extreme weather events such as bushfires and flooding”. 

With that said it is projected that financial difficulty will be an ongoing issue for Australian businesses and the insurance industry needs to respond. Brokers should establish that clients are entering a third-party arrangement with a premium funder. As well as ensuring the client understands the risks associated if insurance premiums are missed. 

The inquiry report states “ensure the client understands their mutual obligations to the premium funder and should financial difficulties arise work together to find solutions so that all parties are appropriately informed”. 

The Insurance Broker Code Committee continues to monitor compliance and provides guidance to stakeholders to enhance professionalism and high standards of practice within the insurance broking industry. 

Credit:

Insurance Brokers Code Compliance Committee – https://insurancebrokerscode.com.au/

Insurance News – https://www.insurancenews.com.au/

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$600 Million Dollar Mitigation Program Announced In Budget

The Federal Government Budget included a $600 million mitigation program that will support resilience projects. Prime Minister Scott Morrison identified that the Preparing Australia Program will provide assistance for locally identified risk as well as assist with risks outside community control. 

“The introduction of this new program will allow the Commonwealth to fund projects that reduce risk and minimise the impact of natural disasters including; bushfires, floods and cyclones” Mr Morrison mentioned to the Townsville Chamber of Commerce recently. 

The program will be separated into two parts including Preparing Australian Communities and Preparing Australian Homes. The Home Program will be conducted by the Government working closely with the insurance sector to identify projects of paramount importance. This will support beneficial reductions in insurance premiums. 

An Australian Climate Service will also be established to collate information from Government bodies including the Bureau of Meteorology, CSIRO, Geoscience and the Bureau of Statistics.

Led by Shane Stone, The National Recovery and Resilience Agency will work closely with Emergency Management Australia and the climate service. Supporting emergency response in regards to decision making after a crisis. This will also help to target where the relief funds are spent under the Preparing Australia Program. 

This program is on top of the five year $130 million Disaster Risk Reduction Funding Package and the $50 million in additional funding from the Emergency Response Fund. Funding that is specifically for long term risk reduction, preparedness and resilience.

Derived from the Former National Drought, Flood Response and Bushfire Recovery Agency, the new agency will also support communities affected by recent floods in NSW and Queensland as well as cyclones in WA. 

The insurance industry has been calling for a large scale investment in this area for quite some time according to the Insurance Council of Australia CEO Andrew Hall. “It is pleasing to see that the Morrison Government has heard these calls with this action,” Mr Hall said. 

The Government also announced their support for local governments to provide disaster recovery scenario training to assist regional communities to prepare for unforeseen events. These announcements are a step in the right direction to ensure a national response to disaster management. 

Steve Johnston, Suncorp CEO, mentioned that the new agency is a vital part of delivering the recommended reforms from last year’s Natural Disaster Royal Commission. He welcomes a national approach to ensure Australia is adequately prepared in the case of disasters. 

Australia has a high risk of extreme weather events and levels of financial and physical resilience and therefore requires extended funding for natural disaster mitigation projects. 

Credit:

Insurance News – https://www.insurancenews.com.au/

Climate Change

Climate Change Guidance Draft Released

The Australian Prudential Regulation Authority is also known as the APRA has recently released a draft of their climate change guidance. 

This guidance is directed towards the banking, insurance and superannuation industries for managing the risks of climate change. This release came in response to industry requests for clarification on expectations. 

The guide includes APRA’s best practices in areas such as governance, risk management, scenario analysis and disclosure. It does not however implement additional requirements or obligations. 

APRA has developed their draft CPG 229 in response to industry requests including clarity of regulatory expectations and their view of sound practice. 

Since Australia became a party to the Paris Agreement, Chairman Wayne Byres has been consistently raising awareness around the topic of climate-related risks to the financial sector. 

Whilst the guide draft from the Prudential Regulation Authority, APRA, doesn’t create any new requirements in regards to financial risks CPG 229.

According to Byres “The guide is aimed at ensuring decisions are well-informed and appropriately consider both the risks and opportunities that the transition to a low carbon economy creates.”

Recommendations from the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, TCDF, influenced the CPG 229. With both domestic and international peer regulators assisting with the process. 

The APRA is actively seeking feedback for the CPG 229, Climate Change Financial Risks, draft and plans to release their final version prior to the end of the year.

The intended outcome of the CPG 229 is providing greater clarity of regulatory industry practice in regards to climate change financial risks. 

This clarity has the potential to lead to an increased size customer base and business strategy enhancements for relevant industries such as insurance, banking and superannuation.

Credit

APRA – https://www.apra.gov.au/news-and-publications/apra-releases-guidance-on-managing-financial-risks-of-climate-change

Insurance News – https://www.insurancenews.com.au/regulatory-government/apra-releases-draft-climate-change-guidance

Flood Damage

Flood Damage Extends To $438 Million With Clean Up Well Underway

The insurance costs from the Queensland and New South Wales flooding have extended to an estimated $438 million, as the focus shifts to the clean up and future impact of this natural disaster. Tens of thousands of people have already made claims to insurance companies customer support teams.

According to the Insurance Council of Australia, an estimated 29,213 claims had been made, in regards to the floods, as of the end of March. More damage locations are being assessed as the conditions continue to ease and people return to their homes.

With the Bureau of Meteorology stating that no further flooding is projected, assessors have been visiting affected regions as soon as it is safe to do so. Although there has been cause for concern, in regards to flood insurance transparency in the terms and conditions and whether it has in fact been selected by those who are affected by the flooding. Including the sum insured for and the ability to cover the cost of damage and any business interruption.

The Federal Emergency Management Minister, David Littleproud has asked insurers to “show a little bit of humanity and have a social conscience to [the people affected by the floods]” when appearing on Sky News Sunday Agenda last week. 

Also making a point to mention that “people entered into these contracts in good faith, and we would expect insurance companies to act in good faith”. Littleproud also sees this as a great opportunity for the insurance industry to improve their reputation amongst consumers. 

Support teams have been deployed in flood affected areas and are assisting with the arrangement of emergency repairs as well as organising temporary accommodation for customers, according to Suncorp CEO Steve Johnson. Mr Johnson also commended the Federal Government’s swift response in urging state governments to insurance workers and tradespeople as essential workers. 

Giving insurance workers as well as tradespeople the confidence to cross borders with the intention to support flood affected communities. They have also committed to getting customers back on their feet as soon as possible. Therefore it is incredibly important that assessors and repairers have access to these areas. 

There has been additional support from NSW Land Registry Services who are making title searches, replacement Certificates of Title and plan images free for property owners affected by the flooding. These documents not only provide peace of mind to owners but also help landholders with insurance claims and development applications to council.

Disasters such as flooding are a good reminder to check your insurance cover in order to protect your business or home against adverse events. Craig at Business Insurance Consulting may be able to assist in finding the optimum cover when it comes to business or home and contents insurance cover.

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Insurance Business Magazine
Image – NSW SES through 7 NEWS

Insurance

Positive Opportunity For Insurers To Embrace Change

EY Global released their 2021 Global Insurance Outlook report where they suggested there is an opportunity for general insurers to change their business models as we approach a post-COVID world. 

The pandemic encouraged numerous changes that were slowly being implemented prior to the outbreak we experienced last year. We saw a substantial investment in digital methods including IT innovation, to stay in touch with consumers. There is a clear preference to communicate through mobile devices such as phones, tablets and laptops. 

“The global insurance industry is facing a truly unique moment in its long history,” the report stated.

The disruption faced over the past year has provided a positive opportunity for insurers to embrace digital transformation. The industry has the potential to improve itself to align with modern times and market needs.

Although it is the responsibility of individual insurance companies to reposition or even reinvent themselves, EY believes the insurance industry has notable advantages and the ability to achieve growth and opportunity. 

EY Sector Leader Grant Peters wants Australian insurers to connect more with their customer base and explore digital opportunities available to them.

The digital trend is becoming increasingly popular amongst consumers and is likely to continue. Mr Peters mentioned that “some of these trends existed pre-COVID but have been accelerated.”

A trend that is already prevalent and will continue is more flexibility in product terms and offerings that insurers have for consumers. Tailoring products for different consumers need to improve the overall customer experience. It is projected that we will see more innovation and competition in the area of insurance. 

The EY report also mentions there will be a greater need for individual and commercial insurance solutions with the current economic recovery. 

With the introduction of stricter regulations and reporting requirements, insurers will need to review the way in which they manage performance and share their strategies with capital markets. 

Insurers have demonstrated their ability to adapt efficiently to a digitalised world. They now have a unique opportunity to embrace change and enhance their reputations in a customer-centric approach. 

Credit:

Insurance News – https://insurancenews.com.au/local/pandemic-gifts-industry-opportunity-to-remake-for-future

2021 Global Insurance Outlook Report – https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/insurance/insurance-pdfs/ey-2021-global-insurance-outlook.pdf

Construction industry insurance

How The Construction Industry Will Be Impacted By The Capacity Crunch?

The Australian construction sector is facing increasing pricing, higher excess levels and restricted insurance cover due to natural disasters and project failures. There is a looming potential for insurers to shift away from long term construction risks, instead replacing them with annually renewable risk exposures. 

At the beginning of the year treaty renewals experienced an increase in reinsurance costs. This lowered profitability and led to multiple insurers completely withdrawing their cover from the construction industry, decreasing the supply chain.

The construction market recap report from the past few years outlined “the construction industry is not immune to major events”.

This has created implications for long term contract periods, with capital reducing long term risk and alternatively opting for short term risk exposures. 

A sequence of high profile construction project failures globally, in combination with an array of natural disasters as well as COVID-19 has impacted the construction industry greatly. So much so that insurers are considering insurance coverage restrictions for the construction industry. 

A number of insurance companies have placed their construction books into run-off and in the last 12 months or so, 15 global leading markets withdrew from underwriting construction risks. This resulted in a $1.27 Billion loss in market capacity. 

These losses have led multiple insurers to review their long term participation in the construction industry. Insurance premiums increased by 30-35% last year, with construction liability insurance and excesses also rising significantly. 

The report suggests that insurers will become more selective with the terms and conditions that they offer for construction risk. Other areas of insurance including property and casualty are also on the increase, as major markets avoid risks that don’t adhere to strict underwriting guidelines. 

Head offices are adopting an underwriting approach that focuses on practicality and profitability. Many underwriters are waiting for lead terms to be finalised before considering their participation in the industry, as they are restricted to the original approved terms. 

An example of a key area for concern is water damage. Insurance companies have experienced high volumes of claims for residential and building projects relating to water damage. This has led to increased premiums and cover being limited or excluded completely.

Businesses within the construction industry weighing up their insurance cover options may achieve a more positive outcome by investing in an insurance broker. Demonstrating lower risk and associated capital spend will optimally position businesses to obtain the best cover available. 

Despite the challenging entrance into 2021, insurers have the ability to position themselves to improve outcomes and navigate the market optimally in order to limit cost increases. 

Craig from Business Insurance Consulting is a highly experienced insurance broker that can assist with finding optimal cover for businesses, within the construction industry, that have been impacted by the capacity crunch. Get in touch with Craig for more information in regards to adequate cover for your business.

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Insurance News – https://www.insurancenews.com.au/local/capacity-crunch-hits-construction-sector