Facts about using Insurance Brokers

Australia’s brokers are valuable to you

The Australian broking industry is growing stronger as more consumers appreciate more their value as advisors, negotiators and time savers.

The popularity of insurance brokers as a medium for distributing and purchasing insurance will increase as they continue to become better qualified and demonstrate their value to businesses.

There are 3,000 registered insurance brokers  with 25,000 people employed in the sector according to industry research firm Ibisworld.

Industry revenue for 2011/12 is approximately $10.8 billion.

One of the key challenges for the industry will be how to deal with climate change and the increasing number of natural disasters. This is expected to bring price rises from insurers which will require new strategies and negotiations with insurers combining loss control in return for discounts. The ability to present a client’s risk in a more cost effective way will achieve greater outcomes for all.

Another aim for brokers is that going forward, there are fewer underinsured individuals. This depends on their ability to advise and influence their clients and start looking to form relationships with external experts such as Risk Managers, Building Inspectors, Workplace Health & Safety Consultants, Human Resource Consultants and IT Consultants, to name a few who can value add to the risks facing a modern business. A referral network of specific experts to assist business coordinated by an Insurance Broker will demonstrate their value.

It is thought that with the ageing of the general population, older persons are more inclined to insure both themselves and their assets and also have the funds to do so. However, there is no doubt that the Insurance Industry’s ability to educate the general public about Risk and Insurance in a more effective manner will also have a greater effect. How we use the media, the internet and our Professional Associations to do this is another new challenge.

  

Latest News

D&O premium pool ‘must treble’ to return to profitability

A new report – called "Show Me The Money!" by insurer XL Catlin and law firm Wotton + Kearney – is the second in a series of three white papers on securities class actions and their impact on the Directors & Officers Liability (D&O) market. The main conclusion is that Directors’ and officers’ (D&O) insurance premiums are under-priced significantly and need to rise strongly to restore profitability. The main risk areas are those exposed to securities class actions, 

It says Directors & Officer's Side A, Side B and Side C cover has been chronically underpriced since at least 2011, while the frequency of class actions is increasing as more plaintiff lawyers and litigation funders enter the space.

The analysis suggests last year’s overall premium pool of about $210 million would need to increase by at least three times to establish a profitable market, if it is assumed all other factors stay unchanged.

“Recent market developments would indicate most D&O insurers are now endeavouring to restore some semblance of profitability to their portfolios after years of market losses,” the report says.

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75% of Cyclone Debbie claims settled

In the 6 months since Cyclone Debbie devastated Queensland and parts of northern New South Wales:

• more than 31,000 homes and business have been repaired or received settlements from their insurance company

• more than 20,000 families have had possessions replaced

• more than 4,500 motor vehicles have been repaired or new vehicles provided

• hundreds of local builders and trades have been working on properties to repair the damage and destruction caused by the cyclone

• over $5 million has been paid EACH DAY to assist local communities, residents and businesses.

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