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Milne Alexander Newsletter December 2011 |
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Welcome to the Summer edition of the Milne Alexander Newsletter. For those of you who have read the winter newsletter back in June this year, you will remember I mentioned the Floods, Cyclone Yasi, Earthquakes and Tsunami’s which would have a dramatic effect on our industry in the months following these disasters. I can now say that within the last 6 months, the market has what we term ‘Hardened’, especially the Property Insurance. A hardened market means insurers require greater premiums to cover their claims along with reduced insurer capacity. This ultimately results in greater premiums. North Queensland commercial risks have seen rating increases of up to 1000% dependent upon the construction, age, and general area of where such a risk is located. In the Sydney market generally most insurers are reducing their capacity on the higher hazard types of risks. Rating increases of anywhere between 15% and 50% is not uncommon. For the normal non hazardous occupations, rating increases appear to be limited to 10%-20%. So why are insurers increasing rates in Non Flood/Earthquake and Cyclone areas? I can hear most insurance buyers asking, why are insurers raising premiums when their specific areas have been relatively unaffected by the recent weather events? Reinsurance premiums for Catastrophic Events have risen between 50% and 100% and insurers need to maximize where they wish to participate. These reduced capacities ultimately push up the price of insurance due to not many insurers wanting particular risks. Flood Insurance Update - There has been quite a bit of activity in relation to the topic of Flood Cover. A number of Insurers have taken the step to include Flood cover, under their domestic policies (for an additional premium). This is partly driven by the large number of policyholders being uninsured against the risks of Flood in the Brisbane and Ipswich areas. Following a review by the National Disaster Insurance Review, ordered by The Hon Bill Shorten “the industry is striving for a standard flood definition”. One option being considered is that Flood insurance must be offered to all policyholders. No clear details on how this will actually work have been released. There have also been discussions for the Government to form a separate 'Flood Disaster Pool' to ensure the level of affordability to those policyholders in Flood risk areas. The Flood issue is a long way off being resolved, so we'll watch with interest as things progress and keep you updated. Weather Update - As we are in the cycle of La Nina, the weather bureau expects the East Coast to have its wettest summer in decades which will mean many storms, some of which expected to be ferocious and up to 8 named cyclones in the North Queensland region. This does not necessarily mean that this number of cyclones will cross the coast, but Insurers are ready for bad cyclone season. La Niña periods are usually, but not always, associated with above normal rainfall during the second half of the year across large parts of Australia, particularly the eastern and northern regions. Daytime temperatures are typically cooler than average and tropical cyclone risk for northern Australia increases during the cyclone season (November to April). During La Niña years, the first tropical cyclone to cross the Australian coast typically occurs in the first half of December. Widespread above average rainfall over Australia during the last few months is consistent with the current La Niña event. For detailed rainfall and temperature outlooks, please see: www.bom.gov.au/climate/ahead. 2011 Survey - I wish to personally thank all of those clients that completed our satisfaction survey. I take these extremely seriously as it is our clients whom we either meet their expectations or not. In short, 88% of those customers surveyed rated us an 8, 9 or 10 with meeting their expectations. I have provided some detailed information on the results below. Christmas Hours - Our Sydney office will have a skeleton staffing between Christmas and New Year, and our Port Lincoln office will be closed from 23 December to the 9 January 2012. We are still contactable 24 hours on our email at sydney@milnealexander.com.au should you require urgent assistance during Public Holiday period. Best regards Darren Milne |
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Milne Alexander Christmas Party Eastern Creek Go-Carts |
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From all the staff at Milne Alexander and West Coast Insurance Brokers we thank all our clients for their continued support and take this opportunity to wish everyone a Happy and Safe Christmas and a Prosperous 2012. Back Row - George, Quinton, Ronan, James, Kathy, Anna, Andrew and Darren |
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Survey Results |
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The 2010 Survey highlighted some areas for improvement, I'm proud to say that we have seen a 32% improvement in these two categories. Further improvement this year relates to the question 'Would you recommend Milne Alexander to your friends and colleagues', see results. I would like to think that the overall improvement is a true reflection of the high quality of service we strive to provide. |
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Fighting fraud and cyber crime |
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Fraud is a growing problem in Australia with numerous industry surveys pointing to a rise in fraud since the global financial crisis (GFC). Research from KPMG, has found that 53 % of organisations have experienced at least one incidence of fraud. This figure increases to nearly three out of four for organisation with more than 500 employees. The Association of Certified Fraud Examiners estimates that the typical organisation loses five per cent of its annual revenue to fraud. Yet the corporate response to fraud risk is ad hoc and inconsistent. The rise of cyber crime - There has also been a significant increase in cyber crime. Research from Australia's Computer Emergency Response Team found that Australian businesses have lost more than 250,000 pieces of stolen information, including passwords and account details, in the first half of this year. Insurer Zurich reports that there was 100 % increase in notifications from pre2008 to post 2008. The feel is that people are uncertain about their job security and bonuses. Their yearly take-home pay was going down and these stresses led them to behave in a way they would not normally do. Experts go further to say that many companies are also not spending enough money to prevent fraud, to prevent fraud you have to employ more staff in order to segregate duties but a lot of companies are cutting back on staff to save money. For more information on Management Liability including Fidelity Guarantee (employee fraud), Employment Practices Liability and Directors & Officers please contact your Account Manager. |
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Watchdog spots rise in insolvent trading |
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A report recently released from the Australian Securities and Investments Commission (ASIC) which provides a snapshot of corporate insolvencies, reveals poor management, inadequate cash flow and trading losses as the three main reasons businesses folded in 2010-11. The purpose of the report was to provide insolvency professionals, academics and creditors with a "basis for further inquiry". Administrators referred 47 cases to police for investigation. Most reports related to companies registered in NSW (47.7 %), followed by Victoria (21.3 %) and Queensland (18.2 %). The estimated dividend delivered to secured creditors was less than 11¢ in the dollar for 97 % of cases. Insolvent companies with estimated assets of $100,000 or less made up 84 % of all reports. The number of corporate insolvencies has skyrocketed to its highest level in more than a decade - 2961 companies slipped into administration in the September quarter, an 18.3 % increase on the previous year. The number of reports lodged with ASIC has also increased, climbing from 8494 in 2009-10 to 8616 last financial year. If you would like more information on Credit Insurance contact your Account Manager. |
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Domestic Property Valuations |
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Owners of high value homes are consistently shocked when taking an inventory and realizing the total value of the contents and possessions they have accumulated. Underinsured - A recent survey revealed that over 80% of us are underinsured. Why? Because in some cases we fear that the higher the sum insured, the higher the premium. The Under-Insurance Challenge - Select one room at home, master bedroom, kitchen, lounge, take a sheet of paper and an hour of your time and make an inventory of EVERY item in the room. Not just furniture, carpet, curtains, paintings, but in every cupboard/wardrobe and every drawer. List EVERYTHING you see! New research from leading insurers has shown that Older homeowners are underinsuring their properties by an average $131,000. The average cost to completely replace a home is $424,000, but many people over 50 are only insuring their homes for $293,000. Research shows there are many reasons why older Australians are underinsured by such a large amount, including serious pressures on the household budget and a failure to review the value of the home regularly, in most cases it is older Australians that can least afford a huge financial setback, such as having to pay out large lump sums to rebuild their property, or replace their contents. It should not take the start of the fire and storm season to prompt all homeowners to review their sums insured, they should be reviewing their polices at a minimum annually, to ensure you have adequate cover call our Personal Lines Account Broker, Laura Phongsavath on 02 8297 4909 |
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Model Work Health and Safety Regulations |
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Summary and Key changes for NSW - The 'Model' refer to safe Work Australia's model WHS framework, which includes an act, regulations and codes of practice to be adopted by each Jurisdiction. Each state and territory will enact their own laws to mirrors these model laws. For further information click here. Under the new work health and safety (WHS) laws, effective from 1 January 2012 the term 'employers' will be replaced by 'person conducting a business or undertaking (PCBU) and 'employees' will be replaced by workers. For NSW Government and WorkCover NSW information Frequently Asked Questions - Work Health and Safety Legislation Fact Sheet - PCBU's Workers and Officers Model work health and safety regulations - Summary and key changes for NSW |
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Workers Compensation Training Calendars 2012 |
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Insurers offer Workers Compensation, Injury Management and WHS training for you and your staff, training schedules below. Or contact your Account Manager for further information. |
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Staff in Profile |
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Romeo Rimando, Account Broker joined Milne Alexander through the acquisition of CBD Insurance Brokers in 2008, having been in the industry since 2002. For several years Milne Alexander has been specialising in providing a range of tailored products to Courier and Transport Operators, Romeo has been instrumental in securing new markets and products for this industry. He manages the monthly declarations for Personal Accident, Marine Carriers and Public Liability and supports George Peros, Director on our large corporate accounts. Romeo attained his ASIC Tier 1 (Insurance Broking) Qualification through the National Insurance Brokers Association and has partially completed the Diploma of Financial Services (Insurance Broking). He had to put this on hold during 2011, whilst fulfilling the 'Great Australian Dream' building his own home, and planning his wedding. Romeo works out at the gym regularly, is a strong believer in a healthy life style with a very strict diet and claims to bench press 120kg. |
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Social Media - Identifying an approach to social media |
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Social media is here to stay and, as we have seen, there is an array of positive uses to which it can be, and is increasingly being, put in the workplace. For most organisations, ignoring social media and blocking or banning its use by employees will not be a workable or desirable solution. Failing to engage with social media will not only deprive a business of the evident benefits it can offer but is also likely to lead to a lack of understanding which will make the associated risks more difficult to manage. If you are embracing the use of social media in your business some things to consider:
DLA Piper recently released a research study 'Shifting Landscapes' The online challenge to traditional business models, Social Media. For the full article click here |
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Specialist Prestige Motor Insurer notices an alarming trend |
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Although the number of car thefts have been decreasing over the years, in 2011 three out of four car theft claims have involved keys being stolen directly from the owner's home. Just imagine walking in the middle of the night to the sound of thieves stealing their luxury $200,000 Mercedes from the garage or waking up in the morning only to discover that the garage door is wide open and your pride and joy has disappeared... Car thefts shouldn't happen to anyone and Dawes Motor Insurance believe that with some handy tips these types of thefts could easily be avoided.Please click here to find out more. |
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Travel Alerts |
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Corporate Travel - Insurer offers up-to-the-minute security information on over 185 countries and more than 135 cities, gain access to Daily News - Email Reports and SMS and Email Travel Alerts. Chubb Corporate Travel - PeopleSure - Chubb A&H in partnership with their emergency assistance experts Customer Care, have developed a web based portal for a comprehensive range of emergency medical & travel assistance services, access to online security travel intelligence, including country guides providing information on over 185 countries. The Chubb RESPONSE 24/7 is a product enhancement offering Chubb clients with up-to-the-minute security information on over 185 countries. Already the Chubb RESPONSE 24/7 is aimed at CFO’s, HR Directors, MD’s and frequent travellers within a business. The 3 main components of Chubb RESPONSE 24/7 and the websites are: Travel Security Website - The travel security website offers up-to-the-minute security information on over 185 countries and more than 135 cities. Chubb's country and city guides include information on security risks, kidnap for ransom, political conditions, travel logistics and cultural pointers. Daily News – Email Reports - Subscribe to email reports sent each weekday, covering political stability, civil unrest, disease outbreaks, crime patterns and terrorism news from around the world. SMS and Email Travel Alerts - Free mobile phone text and/or email alerts notifying you of high-risk events (including terrorism, civil unrest and severe weather risk) happening in or near your location. How do I access Chubb RESPONSE 24/7? - To access the website cut/paste into you internet browser. www.customercare.com.au/chubb Passwords are the first 4 digits of your policy number followed by Chubb. Example:-
Or contact your Account Manager should you have any questions or for assistance. |
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GST - Commercial Motor |
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Insurers approach settlement under a Commercial Motor Policies differently in relation to GST in the event of a claim. The difference is that some insurers settle their claims inclusive of GST and others settle their claims exclusive of GST. Where we nominate a Sum Insured or Agreed Value for a vehicle under a policy we need to consider if the insurer will settle the claim inclusive or exclusive of GST and the nominated figure should reflect the way the insurer settles their claims. For example Allianz, Global Transport and Vero do not include GST in their Agreed Value or Sum Insured Polices. CGU and QBE do include GST in their Agreed Value or Sum Insured policies. For more detailed information please contact your Account Manager. It is important to provide both the value of the vehicle and the GST as two separate sums to ensure we are able to arrange appropriate cover. Other factors you should take into consideration when insuring your vehicle and advise us are as follows:
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Helpful Tips and Reminders |
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Home Maintenance - You can help prevent damage to your premises and some of these preventative maintenance ideas listed below may help reduce the risk and hence prevent claims.
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