CBN Market Update - January 2021 - Community Broker ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
CBN Market Update – January 2021
Welcome to the first edition of the Monthly Market Report for 2021. We hope you
had a good break over Christmas and New Year after the volatile year 2020 was.
CBN BI Broker Resources – Additional Resources
As communicated in the November edition of the Monthly Market Report, we have created
a landing page in the CBN Hub for you to access resources and information with respect to
the BI Case in Australia.
Since this page was published, we have added the
following two resources to the page.
• 05/01/2021 – An update on the current legal
position – what to consider for BI related
COVID losses, and steps your clients can
consider to support their claims.
• Steadfast COVID-19 Business Interruption
Coverage Schematic.
Click here to visit the landing page.
ACCC Report into Insurance Affordability in North
Australia
Over the holiday period, the Australian Competition and Consumer Commission (ACCC)
released their third and final report of the Northern Australia Insurance Inquiry. The report
is the product of more than three years of investigations into the availability and
affordability of home, contents, and strata insurance across the northern areas of
Australia. In order to complete this inquiry, the ACCC used statutory powers to gather
extensive information from insurance companies operating in the regions.
To read the full summary from the National Insurance Broking Association (NIBA), click
here.
January Economy Report – National Credit Insurance
The number of insolvencies within Australia for the September quarter is trending much
lower than previous years. This is largely due to government, banking, and landlord
support measures. Supply chains have been disrupted throughout the globe due to forced
lockdowns and reduced distribution channels because of the pandemic. Euler Hermes has
predicted that business insolvencies globally will rise by 35% in 2021.
Key factors which will lead to a rise in insolvencies in 2021:
• The moratorium on issuing statutory demands has ended
• The limited ‘safe harbour' on directors insolvent trading has ended
• Banks are now renegotiating deferred loan obligations
• There is no moratorium operating on the director penalty notices regime
• Courts are on vacation for Christmas until the end of January and operate with a
vacation judge with limited workload capacity
• Business shutdown over Christmas has a flow on effect into the new year
To read the full report, click on the article links below.
NCI Economy Update January 2021
Business failures on rise as ASIC data shows COVID insolvency drought breaking.
Work Health Options (WHO) becomes a referral
partner
CBN is entering into a referral partnership with Work Health Options (WHO). Work Health
Options provide professional broking, claims and risk management to assist employers in
the dynamic Workers Compensation environment.
Workers Compensation Insurance is a fundamental to any business employing staff, the
thresholds, and requirements around this vary from state to state making it a complex
class of insurance. Furthermore, each state government regulates the workers
compensation scheme in that state. The various schemes are administered in different
ways and insurers may have different roles within the schemes.
WHO will be our specialist partner and
placements broker for Workers
Compensation solutions for your clients.
Initially, we are looking for pilot brokers
across all states to work with WHO to bring
their offering to your clients. Please talk to
your Regional Business Partner if you would
like to be involved. The pilot will involve
some training around workers compensation and looking through your client list to
determine which clients you would like to support with the procurement of this insurance
as we lead into June when a lot of these programs are due. This is a great opportunity in a
highly competitive market to provide additional value to your existing client base.
2Leisure Business – Where to Place?
Two of the largest markets for Leisure business was Coversure and Hostsure who have
both lost their binders due to poor performing portfolios. This shift has made is
significantly harder to place leisure business into the market.
Pen Underwriting are one of the only remaining markets open to writing these risks.
However, they are quite selective on which risks they will consider.
If you have a leisure risk, consider the following information:
• Turnover – is it over $100-$150k? Underwriters are more inclined to consider risks
above this threshold as it typically represents a business who is focused on the
leisure rather than it be a side hustle.
• Underwriting Information – Ensure the information is comprehensive and well
presented.
• Operations Manual – Ask your client or prospective client to provide their
operations manual. This is a pre-requisite for Pen to consider writing the risk.
• Time – be timely if you have any leisure renewals on your book.
• Minimum Premiums: $5K for $10M GWP.
Why is this business so hard to place?
To understand the concern that underwriters have with this style business, you don’t need
to look much further than google. Examples of some large claim’s scenarios include:
• Inflatable World Toowoomba – 3-year-old boy dies following a fall from the
inflatable onto the hard floor ($2.7m lawsuit).
• Australian kids are increasingly being left with serious injuries including spinal cord
damage, fractures, and sprains, because of playing at indoor trampoline centres.
• Dreamworld fatalities due to malfunctioning water ride.
Is Rent Default making a comeback?
With the rent relief measures introduced in 2020, several insurers removed rent default
cover for new business. Despite the Government support packages coming to an end, and
there is a perceived confidence back in the market, many have been asking when insurers
are looking to reintroduce rent default cover.
CBN reached out to the SCTP underwriters IAL and Hollard Personal to understand what
their position was and when we could see this back. Here are their responses below:
Hollard Personal Insurance At this stage, Hollard Personal are not
looking to reintroduce rent default cover to
their landlord’s product anytime soon.
When this is known, they will advise the
market. Hollard Personal will be renewing
existing Hollard Policies with Rent Default if
the cover was taken out at New Business
before they pulled the cover.
IAL IAL are hoping to have rent default back
from 1 April. They are just working through
3some PDS changes required for Unfair
Contract Terms and as part of this change,
they are looking to introduce a pandemic
exclusion. If they can get this in then they
will remove the embargo from rent default
at the same time.
CBN have scheduled in a follow up for early March with both insurers to check in on their
progress so that we can communicate these with the network.
Despite the above, it is important to note that Blue Zebra and Vero have already re-
introduced their rent default back into their products. For full details, click on the links
below:
Changes to Vero Secure Landlord Insurance Policy
Blue Zebra – Rent Default is Back!
London Market Update by Carroll Hollman
Still early in the month to tell how the year is going to be but 01/01 see’s the “reset” of
Lloyds Insurers capacity, the review of Underwriting guidelines, territories, rating structure
and minimum premiums.
For those syndicates that have survived the year, the turn of 01/01 usually ignites the
open market again and kickstarts the Underwriters appetite but with most, if not all
syndicates awaiting the final Court ruling from Australia on the COVID/BI impact, we are
still seeing a cautious approach on AUS business.
What is clear now more than ever, Underwriters are insisting on detailed presentations
across all classes before considering any risk and without the “face to face” broking the we
so dearly crave. Therefore, it is vital we (The Broker) are afforded as much information
from you (the producers) on the front line.
With the recent (October 2020) release of our tailored Unoccupied scheme (soon to be
released as an online portal), we are keen to build on niche property and liability schemes
required across Australia. We have the strong backing from certain syndicates who upon
01/01 have reviewed their appetite and are moving away from the larger industrial risks to
focus their capacity on high volume classes.
EVENT: 2021 Regulatory Landscape Explained for
Young Professionals (NIBA)
Date: Thursday, 11 February 2021
Time: 2.30 – 3.30pm
Location: Live Webinar
Cost: Special Discount for Young Professionals! All pricing below is inclusive of GST.
4NIBA Member Young Professional: $5.00
Non-member Young Professional: $10.00
NIBA Member over 35 y/o: $15.00
Non-member over 35 y/o: $20.00
Dallas Booth, CEO, NIBA and Mark Radford, Principal Lawyer, Radford Lawyers will provide
a high level, easy to understand, overview of the Royal Commission for the benefit of Young
Professionals.
They will break down, what it was all about, what the commissioner found, key outcomes,
and some of the recommendations relevant for brokers and why it matters to you.
Notable Market Updates
Allianz
• Some brokers reported that the Personal Lines Uplift Scheme ID was missing from
sunrise last week. We raised this with Allianz, and they advised there were some
technical issues which have now been rectified.
• Key regulatory initiatives in 2021 include Unfair Contract Terms and Product Design
& Distribution Obligations that require us to review and amend our PDSs and policy
wordings to ensure that they remain compliant.
The UCT requirements commence on 5 April 2021. Existing PDSs and policy
wordings will be reviewed and updated prior to this date and you will receive a
detailed communication about these changes in February 2021.
You can read more about the regulatory initiatives and other related changes and
how they will change Allianz products in this bulletin.
High Street Underwriting Agency
• HSUA found new security following the DTW syndicate shut down. New syndicate
supporting their Property and Liability book is Carbon. HSUA will be running down
the DTW book over the next 6 months. There might be some slight changes to
appetite but are hoping for little to no impact overall.
They have had some staff changes with Ben Allen departing, he has now gone to
Ansvar. They have two new ladies joining the UW team over the next couple of
months as well as a new IT Developer.
5ATL Insurance Group
• WEF 1st of Feb - Transport Package is being updated. There are enhancements to
the cover around automatic trailer in control cover. There is one derogation in cover
which is in the BI section for Fire - with the intent to eliminate cover for arson
related crimes.
ATL will be sending out a notice to all CBN RBPs and Brokers prior to changes.
Included with this will be the employment tool and distance calculator.
QBE
Changes to Builders Warranty Distribution – ACT, SA & WA
Given the high government oversight on these policies and specialist nature of this
product, QBE instructed CBN that we required to consolidate all accounts.
This means that moving forward, all QBE Builders Warranty correspondence for both
Certificates of Insurance and Eligibility matters (new applications and reviews) is to come
through the central CBN HUB.
For your reference, we have below outlined the preferred process for our brokers to action
the Certificates of Insurance and Eligibility matters as this will ensure duplication of
workload is minimised and time efficiency for all is maximised.
Certificates of Insurance
The preferred process will mean that you will now be able to prepare the invoice and
obtain payment once the application & contract are received by your office. By then
supplying the HUB with the application, contract and payment confirmation, the COC can
be produced in one touch on the insurer’s system. In order to do this on your end, we have
now attached the rates chart as provided by QBE, depending on the category of your
builder – please note this includes the HUB fee of $60 + GST to be incorporated with your
broker fee on the invoice for each COC.
For reference, the builders are assigned a premium category rate with their latest Eligibility
approval which will show on the Brokers Copy of the COE – should you not have this,
please call the HUB and we will be able to provide the category to correctly rate the COC
premium.
The two most important elements of this process are:
a) Ensuring the application form and contract are completed correctly and accurately
without any incorrect or missing information.
b) Knowing your builders’ profile and open jobs to ensure the builder has the available
limits to register the job.
With any changes to these premium rates, we will be communicating those to you in
advance of the changes taking effect.
Alternatively, if you receive a Builders Warranty enquiry and you do not know what to do
with it. We can liaise with you builder directly on your behalf which will incur a higher Hub
6Fee of $100+GST. Please feel free to call the team to discuss when these opportunities arise. Eligibility – New and Reviews The checklist of Mandatory Requirements is kept on the HUB and continually updated throughout the year depending on the timing and the requirement for updated financials. Please ensure you review this prior to submitting any Eligibility application (new or review) – any application that is submitted without all the required items or comments on those that cant supplied, will be returned for re-submission. It is imperative these applications are full and complete when submitted to QBE to keep our high approval within QBE. We have attached the link to the HUB for the updated information: Central HUB contact details: 1300 905 577 – (Option 3) Homewarranty@cbnet.com.au Tell us what you would like to see more of The market update is a new initiative for us so we can keep you more informed with what we are working on. Given this is a new focus for us, we would appreciate your feedback on what you would like to see more of in these reports. Click here to submit feedback. 7
You can also read
