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One Billion dollars worth of Summer catastrophes


According to the latest figures from the Insurance Council of Australia, Insured losses from this summer’s catastrophes currently stand at $942.1 million,  .

There have so far been 91,132 claims made, with insurers paying out an average of $5.22 million per working day.

The Queensland storms and flooding have caused $742 million in insured losses and 70,693 claims, with insurers paying $2.24 million each working day. This is a rise on figures released last month that put the cost at $661.3 million, with 59,010 claims.

Thalidomide Victim wins settlement from distributor

A Victorian lady has won a multi-million-dollar legal  payment from a company responsible for distributing the controversial Thalidomide drug in Australia.

Lynette Rowe, aged 50,sued the German drug company Grunenthal as wells as the Distillers company and UK company Diageo, which were responsible for marketing Thalidomide in Australia.

She was born with no limbs after her mother took Thalidomide to treat morning sickness.

The decision means Ms Rowe will receive compensation and provided with care for the rest of her life.

Suncorp get tough on Flood prone areas

After Suncorp scored a Public Relations coup with their fanatastic response last year on providing automatic Flood cover in their policyholder's House and Contents insurance, including featuring real life testamonials in their advertising, reality has hit home.

They have now announced that new Home and Contents policies will not be offered in Emerald and Roma. These have been two of the towns worst affected by recent years of flooding 

 Their existing policyholders face hikes of up to 10-fold. 

Lloyd’s Posts AUD$850 Million Overall Loss for 2011

Lloyd’s of London proved just how severe the second costliest year for catastrophes on record for the insurance industry actually was. They announced a loss of £516 million ($822 million) for 2011. To be perfectly honest, while this appears large, it is a lot less than I would have expected when considering the number and scale of claims.

Lloyd’s reported that it had incurred total net claims of £12.9 billion (AUD$22 billion) during 2011, including £4.6 billion (AUD$8 billion) of catastrophe claims, this made it the ”largest catastrophe claims year on record for the 324-year-old insurance market.”

The claims from the world’s global catastrophes included flooding here in Australia in January 2011, the second earthquake in New Zealand in February, the Japanese earthquake and tsunami in March and the floods in Thailand beginning in July. 

2012 Starts With Bad Weather Signs for Insurers

Reuters report that damaging hailstorms in Australia. Unprecedented tornadoes in the southeastern United States. Constant windstorms in northern Europe and so on are very familiar to last year.

This year is starting a lot like last year in terms of unexpectedly severe weather, to the consternation of the insurance industry, which paid out more than $100 billion in 2011 on natural disasters.

That could put more pressure on the shares of property and casualty insurers, who did relatively better than other insurers last year but who have turned in a mixed performance so far in 2012, despite being a favorite of some analysts.

To be fair, more than half of the 2011 losses came from earthquakes in Japan and New Zealand, and earthquakes are impossible to precisely predict. Even so, some of the worst events of 2011 (like the U.S. tornadoes in April and May) took many by surprise, and there is yet to be much relief. 

Melbourne Storms declared Catastrophe

Violent storms struck Melbourne on Christmas Day, causing wide spread damage to buildings and infrastructure. Insurer QBE said the country’s insurers have already received more than 15,000 claims as a result of the storm.

The Insurance Council of Australia (ICA) has formally declared a catastrophe for the damage to homes, businesses and vehicles caused by the storms. It noted that this is the “eighth catastrophe declared by the general insurance industry in 2011, with insurable losses through catastrophes likely to exceed A$4.5 billion [US$4.53 billion] compared with A$2.144 billion [$2.153 billion] in 2010.” 

Reinsurer not happy with Climate Conference Results

Reinsurers take the main catastophe risk from Primary Insurers and they will undoubtly be looking at mitigating their risks. One of them is  Munich Reinsurance and from their perspective, the recently concluded climate summit in Durban “yielded disappointing results that fail to reflect the world climate’s dramatic situation.”

Prof. Peter Höppe, Head of Geo Risks Research at Munich Re, stated: “Durban has had the effect of postponing efficient climate protection even further. Another nine years will pass before binding reduction targets might come into force, and even then it is still very unclear how the reduction targets will finally turn out.”

Munich Re also pointed out that the meager results came “in spite of resolute negotiating efforts on the part of Germany and the European Union – efforts without which the summit would probably have yielded no results at all.” 

Reinsurers set to cause rate rises

With many insurers currently negotiating their reinsurance contracts that are due 31 December this year, we all all bracing ourselves for large rate hikes as Australians are expected to pay for some of the consequences of our natural disasters and the subsequent claims.

Fortunately there is still alot of competition for business, but what effect will this have.

Read more from here about this

Swiss Re Estimates 2011 Loess at $350 Billion

The Victorian CFA Contamination – will a Liability Policy respond?

When it comes to Public Liability risks, there are events that can arise years later that you may need to go right back to policy that was in force years ago. However, would it still respond?

Then there are the Directors and Officers Liability exposures (which in this case would be Association Liability) and if they would respond.

Take the current Victorian CFA contamination scare which now involves 13 deaths and more than a dozen people suffering serious illnesses. Authorities are beginning to investigate claims the CFA knew of dangerous chemical exposures.   

Wilder weather the new norm

In a report from, Insurance Australia Group CEO Mike Wilkins said Insurers must offer targeted and affordable cover to help prepare consumers for increasing and intense bouts of wild weather.

Modelling from IAG’s natural perils team indicates that in the next 40 years there is likely to be a 15% increase in the number of the most destructive category 4 and 5 tropical cyclones and an increased frequency of cyclones tracking south into northern NSW.

Mr Wilkins also expects the number of serious hailstorms – with stones up to 10cm – to double over that period. 

The "Know Risk" Web Site is worth looking at

Know Risk is an online network of tools and information to help the public better understand risk and appreciate insurance in their lives.

The Australian & New Zealand Institute of Insurance & Finance began to develop Know Risk in the aftermath of recent natural disasters. Much of the pain and devastation of loss that resulted could have been reduced and mitigated had there been better community understanding of risk management and the security of appropriate insurance coverage. 


Natural Disaster Review Recommendations Released

Government release their recommendations

 Assistant Treasurer Bill Shorten this afternoon released the recommendations of the Natural Disasters Insurance Review, which encompass flood risk management, insurers’ claims-handling and dispute resolution processes, and the provision of flood insurance.

Under the review’s proposals, every Australian seeking to purchase or renew home and contents insurance will be offered flood cover, but will have the option to “opt out”.

The recommendations of the review, which was commissioned to examine insurance for flood and other natural disasters after last summer’s floods, “are a good place to start in mitigating the risk of disasters and making sure everyone has the appropriate insurance arrangements to set them on the path towards recovery after disaster strikes”, Mr Shorten said. Read more here

Could Fracking cause Earthquakes?

A company in the U.K.released a report that said it was "highly probable" that two minor earthquakes and 48 weaker seismic events resulted from pumping drilling fluids in hydraulic fracturing. At the same time, the report said the events were the result of a "rare combination of geological factors."

The U.K. has become the latest place to see shale gas spur major debate because of controversy surrounding "fracking," which has been heavily criticized by environmental groups. 






Young Start Ups appreciate Brokers

Dealing with a younger demographic.

Generation Y seem to appreciate the services of Insurance Brokers more than other generations according to a new report from Zurich. Click here if interested in reading more. 

Time to get rid of Taxes on Insurance

“What you need to know about taxes on insurance" is a discussion paper which examines the background and effects of insurance taxes, how they work and the much fairer funding alternatives.

While in Queensland we have relatively low taxes, Victoria and NSW are the highest taxed states in Australia. Victoria is actually the highest taxed place in the world when it comes to insurance.

 As a policyholder, you are paying a number of taxes including GST (10%), stamp duty (7.5-11%) and – in NSW, Victoria and Tasmania – a fire services levy (up to 72%). Then don’t forget the Terrorism Levy and possibly in the future, a Flood Levy. 

No panic as Lloyds posts a big loss

Lloyd’s has posted a £697,000,000 pre-tax loss for the first six months of 2011, its worst ever first half year loss due to an unprecedented £6.7billion of claims from natural catastrophes.
This compares to an overall profit of £628,000,000 (AUD$1 Billion) for the first six months of 2010. Lloyd's have also indicated that 2011 looks likely to be the second most expensive year ever for insurers. They also had a combined ratio of 113.3% compared to 98.7% in the previous period (compared to 117% for the Bermudian (re)insurance market and 116% in the US reinsurance sector. However their investment return of £548m (£597 million in the previous period) was not too bad even though there continues to be volatility in financial markets. They also now have record central assets of £2.472 billion

La Nina effect back for Summer

There are two main types of weather event, with La Nina being the one that brings the wet weather to Queensland along with the associated storms and cyclones. The other is El Nino.

Read here a report about what that means for us. ABC News

Insurers being sued for climate change

Insurers have been warning the world about the impact of climate change for as long as I have been in the industry (over 30 years) and the increase in extreme weather events.

Already one energy company has sought to use their Public Liability policy to pay for global warming events and has sued their insurer for recovery. Read about it on this link.

Insurer not liable for climate change events

Could we have another Summer of natural disasters?

According to news reports, we will have another tough summer on the weather front. After watching Hurricane Irene tear through the USA with Billions of dollars worth of damage, no doubt adding further to the insurers need to increase premiums, it will soon be our turn again.

Could this summer/wet season be as bad as last year? Click on this link to the news article discussing this very issue.

Vero still cleaning up the natural disaster claims

Not all claims have been settled by Vero but when you see how many they have had, it is not surprisingi. They are still one of the best insurers in Australia to be insured with and to have a claim with.

Read about it on this Link. Vero claims

Huge Storms lashing New York

It seems big storms are certainly a global event and nowhere in the world is immune. New York was battered yesterday but at least the Hurricane (Irene) was downgraded. But it is still enough to cause major damage and loss of life.

For further details click on this link to ABC News

Brokers and insurers agree – the hard market is coming

Despite a relatively uneventful June 30 renewals period, major brokers and insurers remain convinced the market will harden. 

When we refer to a market hardening it means Prices go up, and broadness of cover goes down. This due usually to less competition or a crisis or catastrophe which has hit insurers hard. It is also has been due to falls in the stock market as insurers make additional money by investing their reserves before needing that money to pay claims. If the stock market falls they make no extra money.

More on this - click here

Insurance tax removal on the agenda

by Terry McMullan 

The Federal Government has put insurance taxes back on the national tax reform agenda, saying it’s an inefficient way to collect revenue.

The decision to include the state-imposed taxes in the discussion paper for its October tax forum examining Australia’s taxation system has been hailed as a positive step towards making insurance more affordable.

The Government says the states have taxes on almost all general and life insurance polices, and “in comparison to other countries, Australia has high taxes on insurance”.

“Insurance taxes have been a growing source of revenue for the states, raising about $4.6 billion in 2009/10.” 

Interim Flood Enquiry Report released

The interim flood enquiry has released its interim report which is a 266 page document seeking to improve the way we manage Floods in the future in Queensland. Click on this link to read more and even download the report if interested. ABC Flood Report 1 August 2011

ICA to push market-based flood cover solution

The Insurance Council of Australia (ICA) will propose a premium rebate scheme exclusively for properties at high risk of flood when it submits its response to the Natural Disaster Insurance Review (NDIR) later this week.

Under ICA’s plan, the rebate for the 135,000 homes at high or extreme risk of riverine flooding would be funded out of the $4.6 billion that is currently collected each year by state governments from their taxes on insurance policies. 

The blame game begins

Insurers are bracing for fallout from the Queensland floods on at least two fronts – resisting the compulsory flood cover option of the Federal Government’s Natural Disaster Insurance Review and preparing for an onslaught of criticism from the Queensland Government’s independent commission of inquiry. 

Latest News

High Court dismisses Business Interruption Test Case

Today the High Court dismissed appeal by Insurers on the Business Interruption test case. Even the big insurers make silly mistakes! But you the policy holder may benefit if you were one of the 40% of Business Pack policy holders that added Business Interruption cover to their Business Pack. While it was never the intent of insurers to cover policyholders for the loss of income from a pandemic, the fact that insurers never factored in a risk premium for it, and the fact there is supposed to be a material or physical loss to trigger the Business Interruption section, none of that matters according to the highest Court in the land. So what was the mistake? Simply that when insurers defined what they considered to be the definition of an infectious disease, they referred to the Quarantine Act of 1908 which since was superseded by the Biodiversity Act of 2015. Because the Quarantine Act of 1908 no longer exists, apparently you cannot draw on this for a definition of an infectious disease? Not one of the insurers picked up on this! Shows how much interest we take on the business of Governments, except what is reported in the media.

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Three Years running - Insurance Brokerage of the Year 1 to 5 staff

Mandy and Robert Cooper were extremely honoured and astounded to once again win, Insurance Brokerage of the Year for 2020 from Insurance Business Australia magazine. This is the third year running.

While this year has not been the easiest of years for the business with Covid 19, the Recession, the hard market and issues at Lloyds of London, we are literally all in this together as an Insurance Industry.

CPR Insurance Services continues to make our clients the number one focus of our business while managing our relationships with Insurers, who we need more than ever in this market climate.

CPR Insurance Services are a highly ethical Brokerage with a reputation as a trusted advisor who always acts in the Client's best interests. Their experience, knowledge and expertise is amongst the highest in the industry.

CPR Insurance Services is now ten years old as a business and is proud of being an Authorised Representative of Ausure and their partnership with Steadfast, giving CPR the strength and backing to match it with any Broking firm in the Insurance Industry, but remain focussed on supporting the Small to Medium business segment.

Memberships of the National Insurance Brokers Association, Australia and New Zealand Institute of Insurance and Finance, Australian Insurance Law Association, Australian Professional Indemnity Group and the Australian Institute of Company Directors, ensures CPR Insurance Services maintains the high standard of knowledge and expertise required to be one of the best Brokerages in Australia.

CPR Insurance Services also plays a strong role in their local community supporting other Sporting Clubs and Community organisations. They also support and promote local businesses with their operation of the Kedron Brook Business Group who meet regularly and has 174 members.

We are truly honoured to receive this National award once again for the third year as a recognition of CPR Insurance Services contribution.

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