PRESIDENT’S DESK: JUNE 2021 NEWS
AILA National President: Cameron Roberts
Turmoil rocks insurance industry
Turmoil is synonymous with the insurance industry these days.
Perhaps that is the nature of the product – coverage is there for the hard times, and it seems we have plenty of those.
In mid-April, the Insurance Council of Australia declared
an insurance catastrophe for parts of Western Australia impacted by Tropical Cyclone Seroja. The cyclone made landfall late on Sunday April 11, with the coastal town of Kalbarri bearing the brunt.
It was Australia’s third insurance catastrophe declaration for 2021. The first was the north-east Perth Hills bushfires in early February, with estimated losses at more than $85 million in mid-April, followed by the NSW and south-east Queensland floods in late March with estimated losses of $600 million at mid-April.
As an industry, we need to ensure those who see insurance as a grudge purchase are aware of the massive payouts the industry makes when disasters occur, which will be increasingly more frequent as we grapple with the effects of climate change.
Captive insurance thrives
A Swiss Re Institute report
shows more companies are turning to captive insurance to self-insure their risks as hardening rates and Covid-19 related disruptions affect the commercial insurance market. New business models for captives are opening options for mid-sized companies.
Swiss Re Institute notes that captives can make complex risks more insurable, especially in times of high uncertainty. It says the use of captives is spreading from advanced markets to Asia and Latin America.
It is an interesting and not unexpected outcome of the hardening market.
UK insurers’ BI payments
In a related Covid-19 issue, the UK’s Financial Conduct Authority (FCA) has assembled data from insurers on payments made because of the test case decisions on business interruption (BI) policies and the pandemic.
At 14 April 2021, UK insurers had paid £352 million in final settlements and another £278 million in interim payments. That is a staggering amount and I expect Australian insurers are managing their reserves carefully given the outcome of test cases here.
Changes at the top
There are changes at the top for two Australian insurance industry bodies.
NIBA CEO Dallas Booth has announced plans to retire this year.
Dallas has been in the role for more than a decade and has done a sterling job of leading the brokers’ representative body.
Dallas has worked closely with AILA during that time and, on behalf of the AILA membership, I wish him all the best in his future endeavours. I hope he is not lost to the industry, and certainly not to AILA.
Dallas will continue working with the new CEO, once appointed, to assist with a seamless transition.
The Risk Management Institute of Australasia (RMIA) has welcomed a new CEO, Simon Levy.
Simon has previously been an RMIA Victoria committee member, Victorian chapter president and an RMIA board director, so has a deep understanding of the organisation he now leads.
On behalf of AILA members, congratulations Simon, and we look forward to working with you in the future.
Ron Shorter applications close
Entries have now closed for AILA’s 2021 annual Ron Shorter Award, a public speaking competition for young professionals in insurance.
The award has been revised this year to meet the increasing demand for online presentation skills. AILA has teamed up with the Australian Institute of Management to provide training to selected applicants.
Mark your diaries for the Ron Shorter Award final on 3 August 2021 at 4.30pm AEST. You will hear short-listed finalists speak for 10 minutes on their selected topics. Recordings of the three finalists’ presentations will be shown during the 2021 National Conference.
2021 National Conference
The conference committee is still finalising the program, but highlights include:
- The official conference opening by AILA patron Chief Justice Allsop AO
- Global trends in risk and regulation: The value of dynamic risk assessment, presented by Dr Andries Terblanche, KPMG Sydney
- Climate change: Key issues for insurers, presented by Prof Andy Pitman, UNSW, and Heather Bone, Munich Re
- A panel session on class actions in Australia
- Two presentations from US insurance litigation attorney Bernie Heinze, President and CEO of the Heinze Group
- A panel session on managing cyber claims
- Geoffrey Watson SC, from New Chambers, speaking about business interruption claims from Covid-19.
And that’s just the start – more presentations are being finalised. A highlight of the event will be the conference dinner at Luna Park, including a ferry trip from Doltone House across Sydney Harbour to reach the venue.
At the closing lunch at Doltone House, we’ll hear from lawyer turned winemaker James Agnew on the theme, Never let a crisis go to waste. He will tell us how bushfires, floods and Covid-19 impacted on Agnew Wines.
It promises to be an excellent conference, so register now because early bird registration closes on 1 September.
I look forward to welcoming many AILA and NZILA delegates to Sydney.