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31 Oct 2018

The Australian reinsurance market remains very much in buyers’ favour despite the string of natural disasters that hit the Asia-Pacific region in the last few months, reinsurance broker Guy Carpenter says.

Unless a “really big” Australian catastrophe hits, it’s unlikely the upcoming January renewal season will produce a price breakthrough for reinsurers.

In Australia it has been a relatively benign catastrophe season so far. The last major natural disaster to hit was Cyclone Debbie last year, leaving insurers with a bill of nearly $1.78 billion and making it the second most costly storm in the country’s history after Tracy in 1974.

“It’s a pretty stable m...

30 Oct 2018

Insurance brokers should not be “tarred with the same brush” as financial services sectors exposed at the Hayne royal commission, the National Insurance Brokers Association (NIBA) says.

In its submission to the policy questions document following last month’s insurance hearings, NIBA draws attention to the small number of complaints about brokers, and the lack of regulator concern about their conduct.

Figures from the Financial Ombudsman Service (FOS) show that out of 8603 general insurance complaints last financial year, only 181 related to brokers.

“FOS has not indicated to NIBA that it has any significant concerns with insurance broker conduct or compl...

29 Oct 2018

General insurance should remain exempt from the ban on conflicted remuneration, the National Insurance Brokers Association (NIBA) has told the Hayne royal commission.

Whether monetary and non-monetary benefits given in relation to general insurance should remain exempt is among issues raised in the commission’s policy questions document following last month’s hearings on insurance.

“NIBA’s response is yes,” the association says in a submission. “NIBA is strongly of the view there has been nothing identified in the hearings or otherwise regarding insurance broker conduct that would reasonably support a recommended change from the exemption as it applies t...

25 Oct 2018

Insurers today rejected suggestions the industry has focussed on maintenance issues and wear and tear to avoid paying claims for homes damaged in Cyclone Debbie in March last year.

The criticism, made on Channel Nine’s A Current Affair program last night, was “absurd”, ICA spokesman Campbell Fuller says.

“Of more than 75,000 Cyclone Debbie claims, about 99% are closed,” he told insuranceNEWS.com.au today. “Fewer than 0.6% ended up with the independent Financial Ombudsman Service.”

Total losses from the cyclone, which swept across the Queensland coastline, have reached $1.78 billion.

David Keane, who runs a claims advocacy called Solve My Claim, told the pr...

24 Oct 2018

While companies are responsible for keeping clients’ data secure, class actions around data breaches would face significant hurdles in Australian law.

A paper from allied law firms Allens and Linklaters says plaintiffs’ biggest obstacle is establishing how they have suffered economic loss.

Data breaches have become common locally and overseas, but no class actions have been successfully brought in Australia.

The law firm says class actions require a suitable cause of action, and Australia lacks an actionable right to privacy.

Shareholder class actions against companies whose stock is affected by data breaches are a possible route to claims, because that co...

23 Oct 2018

While insurance companies are focused on alerting clients to the dangers of cyber breaches, their own internal security systems have failed to detect about 47% of cyber breach attempts.

Accenture’s annual cyber security study shows 50% of respondents require more than a week to detect a breach. About 22% of breaches were successful this year, down from 30% last year.

The number of “cyber capabilities” insurers have mastered has jumped to 20 from 12, out of 33 capabilities identified by Accenture.

However, 40% of respondents’ business is not protected by cyber security, while 40% of study participants do not apply the same security standards to partners as...

23 Oct 2018

Australia has an insurance penetration rate of 3.5%, the sixth-highest in a Lloyd’s underinsurance study of 43 economies.

The country placed 10th in the last survey, in 2012, when penetration – based on total premium as a percentage of GDP – was 3%.

The Netherlands tops the new list at 7.7%, followed by South Korea (5%), the US (4.3%), New Zealand (4.2%) and Canada (4.1%).

Lloyd’s says underinsurance remains a huge problem in the Asia-Pacific, despite the region’s exposure to natural disasters.

Asia-Pacific accounts for $US134 billion ($188 billion) of the world’s $US162.5 billion ($229 billion) overall insurance gap.

Half of the 18 economies with insurance...

22 Oct 2018

A Victorian scheme to remove dangerous fire-prone cladding that covers hundreds of apartment buildings won’t have an immediate impact on strata premiums, according to a strata insurance expert.

But that situation may change after the cladding is replaced, Strata Community Insurance MD Paul Keating says.

Commenting on the Victorian Government’s tripartite loan scheme to help strata owners pay for removal of the cladding, he says owners’ hopes for an immediate reduction in premiums are unlikely to be met “until the risk has been mitigated, reduced or lowered”.

“Until the rectification actually has taken place the risk is still not reduced.”

The Cladding Rect...

18 Oct 2018

Steadfast raised its earnings guidance range today after its broker network and underwriting agencies made a strong start to the financial year.

“We are seeing better than expected first-quarter organic growth supported by mid-single-digit price rises by insurers,” MD and CEO Robert Kelly told the annual general meeting in Sydney this morning.

The group has also completed several acquisitions that will make a contribution this year and Mr Kelly says there is still a strong acquisition pipeline.

Steadfast expects underlying earnings before interest, tax and amortisation (EBITA) of $190-200 million and underlying net profit of $85-90 million for the year en...

17 Oct 2018

The areas of Australia most likely to suffer a serious earthquake were laid bare today in the first update to the National Seismic Hazard Assessment (NSHA) for six years.

Geoscience Australia says WA’s Wheatbelt region and Gippsland in Victoria are prone to the heaviest quakes in the country.

Its latest report provides information to government agencies and regulators, “so buildings and infrastructure design standards can be updated to mitigate the impact of strong earthquake ground shaking”.

“Although we cannot predict the exact day, time and place of a large, damaging earthquake, we can apply best practice and evidence-based science to make sure communi...

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