Roll of Honour 2006 Download PDF file
Life Insurance Company of the Year
MLC Insurance
In being awarded the Life Insurer of the Year award for the second time in three years, MLC demonstrates that it is a leader in the Australian life insurance industry. MLC also won the award in 2004 and are head of the field through their relentless drive for innovations.
MLC and NAB have introduced a new package combining home lending with insurance. The package helps customers to buy their home and to keep it. In 2005, MLC and NAB conducted an extensive research program with bankers and clients prior to the implementation in October that year of the successful Protected Loan initiative within NAB’s retail banking business.
MLC introduces not only new products but also ensures that existing products remain relevant and sought after by customers, achieved through constant product improvements. The company has introduced 230 product upgrades since 1986, with two more to be launched this year.
As testament to the strength and stability of its products, October 2005 marked the 10th year of its flagship protection offering, Personal Protection Portfolio (PPP) which allows clients to package different types of cover for up to six lives within one policy. Each life insured can have different types of insurance and levels of cover with only one policy fee payable overall. The various covers available include life cover, total and permanent disability, critical illness insurance, income protection and cover for premium waver. As well as new product offerings, MLC also places importance to renewing the way it conducts business.
In 2005 MLC introduced a series of segmentation collateral for its advisers, providing case studies of ’typical’ clients within each segment. With this, it works through the client profile, where the client wants to be and what strategies they can put in place to get there.
In November 2005, MLC revamped its service team structure. The move involved around 1,000 employees and has resulted in having dedicated service teams for specific advisor groups. To ensure that MLC advisors keep up with market developments, the advisors are encouraged to attend a range of knowledge sessions to qualify for continuing education points.
Apart from its focus on customers, MLC is also mindful of staff needs. The company carries out a quarterly survey involving a representative sample of employees. The results are reviewed and used to respond to employees’ needs.
MLC’s leading position is further backed by figures. As at December 2005, MLC led the Australian life insurance industry with over $523m in retail in-force premiums and the largest market share at 15%. In the 12 months to June 2005, MLC had the lowest company lapse rates for both disability and lump-sum business in the industry.
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General Insurance Company of the Year
Vero Insurance New Zealand Limited
Vero Insurance (NZ) has been awarded the General Insurance Company of the Year award, recognising its drive to become a world-class insurer.
Financial figures are but one testament of why Vero NZ sits on the pantheon of winners. The company’s annualised gross written premium growth was a spectacular 17.8% between 1998 and 2005, compared to an industry growth rate of 7.6% per annum over the same period. This performance led its market share in NZ to double from 12% to 23.9% over the last seven years. Gross written premium for the NZ insurance market was estimated at $3 billion at the end of 2005.
Even as market share grows, Vero NZ has not sacrificed profitability. The company, a member of the Promina Group, generated a return on risk based capital of 24.3% in 2005 and an average return of 26.6% for the last three years. Vero NZ’s achievements are supported by more than these figures.
Insurance intermediaries voted Vero NZ as the Insurance Brokers Association of New Zealand ‘‘Insurer of the Year’’ in 2002, 2003 and 2004 and second place in 2005.
Through its vision to become world-best, Vero NZ has made ‘’The Vero Way’’ its approach to all business. The “Vero Way” includes pursuing a specialist-focused business model in direct response to the needs of customers. Its Strategic Business Units (SBUs) operate independently, offering tailored products and services in defined market segments. The SBUs make decisions close to their customers.
Placing a premium on market knowledge, Vero NZ collects and analyses information ranging from the macro to the micro.
At the macro level, it assesses global and local insurance developments, including political, economic, social and environmental factors. At the micro level, it implements practices such as annual audits of its relationships with intermediaries, reviews of customer needs and expectations, as well as analyses of the performance of its competitors.
Recognising that knowledge-sharing is essential to corporate success, Vero NZ has instituted a knowledge management system that includes an extensive 1,500-page Intranet. Market information is collated, analysed and stored on the Vero Intranet and available to all staff. The knowledge is then applied to strategic and day-to-day business operations with a focus on sales, underwriting and claims. Various business units also run regular knowledge-sharing sessions on topics of interest.
Vero NZ has specifically structured claims teams within SBUs, branches and local offices. They are supported by specialist teams for larger or more complex claims. The company also carries out post-transaction surveys to gauge claims customer satisfaction.
To ensure that the company is on track with achieving its goals, the implementation of its strategic five-year plan is reviewed monthly at executive meetings.
In its rive to achieve excellence, the company stresses that it lives by its name, which is Latin for “Certain”, “Assured” and “Truth”.
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Technological Innovation of the Year
Westpac & Lumley
Lumley General Insurance and Westpac Banking Corporation impressed judges with a system integration project which allows for real time quotes and cover.
Implemented in March this year, the RARE2/Assist Fire and General project enables new business, fulfilment functions and customer data to be exchanged between core systems through a secure VPN connection. Benefits include speeding up the underwriting process, gathering all relevant information up-front, reducing re-work, removing paper-based processing wherever possible and ensuring process consistency between Lumley and Westpac.
Since its implementation, the project has already produced successful results for both companies, including:
- A 20% reduction in customer service calls to Lumley’s call centre and a 30% reduction in call duration
- A 50% decline in re-work for Lumley call centre staff
- An improvement of almost 50% in Westpac staff satisfaction with the sale and quote process
- A reduction in referral processing time from an average of 10 minutes to three minutes.
The end goal of the project is to deliver improved customer service to Westpac’s one million plus customers through streamlining the sales and fulfilment process for fire and general insurance within Westpac’s branch network and call centres.
The project supports Westpac’s “ask once” philosophy and is in line with Lumley’s drive to become more customer-centric and easy to do business with.
Lumley has underwritten personal lines insurance for Westpac for over 10 years. Before the implementation of RARE2/Assist, there were two very different systems for the two independent companies, resulting in issues such as inconsistent information and lack of historical insights.
With the new system, both companies now deal with the same risk and underwriting questions, leading to improvements such as consistent treatment of referrals between Lumley and Westpac, faster handling as the majority of required information is captured at first customer contact, and referral history available for reference.
In the past, manual loading was required for about 25% of schedules. As RARE2/Assist removes this manual process, new business is sent to Lumley electronically as soon as it is issued.
The system also allows implementation of credit card billing on a fortnightly or monthly basis whereas previously, there was no option to do this.
As an indication of the scale of the project, there was a staff launch simultaneously to 2500 Westpac call centre agents, staff in over 200 Westpac branches and 60 staff at Lumley.
RARE 2/Assist is Westpac’s most technically complex development of the last five years.
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Law Firm of the Year
Allens Arthur Robinson
AlIens Arthur Robinson (AAR) has been awarded the Law Firm of the Year for its work in identifying critical issues in the complex insurance regulatory maze and developing solutions to them.The firm stays at the forefront of innovation to help clients market their products.
AAR provides advice on government policy and regulatory and legislative matters relating to the industry, playing a leading role in the development of insurance industry proposals for the reform of civil liability in Australia.
It advises the New South Wales and Victorian governments during the introduction and implementation of new schemes for Home Warranty Insurance including drafting guidelines and consulting with government, insurers and other stakeholders.It also works with the Insurance Council of Australia (ICA) in regards to proposed changes to the Lifetime Care and Support Scheme for motor vehicle accident victims including advising Compulsory Third Party insurers and drafting submissions to bring about a workable scheme for both insurers and claimants.
Keen to help raise professional standards, AAR advised the
ICA and liaised with industry during the drafting and implementation of the new insurance industry Code of Practice. It assists insurers to develop internal training programs for
Trade Practices and Financial Services Reform compliance.
AAR has continued to advise parties affected by the 2001 collapse of HIH, including the Federal Government of Australia, Allianz, General Re and Winterthur. The issues involved in what is Australia’s biggest corporate failure are complex and AAR has guided its clients through these issues at each turn.
The firm undertakes legal and market research and disseminates knowledge through several publications. Its Annual Review of Insurance & Reinsurance Law has become an industry-recognised bible on case law and regulatory developments in Australia.
Individuals within the firm are also at the top of their field globally. Notably, the firm’s practice leader, Oscar Shub, has been listed in the world’s top six insurance and reinsurance lawyers (Euromoney Legal Group Guide) since 2004 and ranked in the top 10 worldwide in Best of the Best 2005.
AAR serves its customers through an office network spanning 12 cities and 7 countries throughout the region.
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Service Provider to the Insurance Industry
Finity Consulting Pty Limited
Actuarial and insurance consulting company Finity Consulting has been named Service Provider to the Insurance Industry.
Finity demonstrates its leadership through a number of activities. Currently, the firm is working on a General Insurance Handbook to facilitate the education of insurance company executives within the Asia Pacific region. It also sponsors an annual conference for smaller and regional insurers to share knowledge and industry expertise.
Finity is active in advising the Insurance Council of Australia with a range of policy development issues such as insurance coverage for flood damage and lenders mortgage insurance.
In the insurance industry’s most demanding issues, Finity has shown its mettle. It has accepted some landmark assignments, including Promina’s initial public offer in 2003, tort reform, the HIH Royal Commission and as APRA Inspector.
Among recent initiatives implemented by the privately-owned company are whiplash studies for the CTP markets in New South Wales and Queensland. The studies link individual claim details with actuarial trends so that both insurers and regulators can identify key emerging issues easily.
Finity has also introduced dynamic financial analysis modelling, allowing insurers to quantify risk and develop internal-model approaches to APRA capital management requirements. The modelling provides a framework for quantifying the uncertainty attached to key performance indicators including profit, capitalisation and return on equity, which allows comparison of different business strategies.
The company is developing new techniques to assess the variability of insurance claim liabilities, helping clients to quantify their risk exposure and to make better decisions about risk retention.
The company has also impressed with its research. Among its research projects is a study involving storm costs in which Finity established a method of relating weather claims costs to Bureau of Meteorology wind and rain data. This helps assess how recent weather claims costs are likely to compare to averages over time.
In the business planning and risk management area, Finity has developed a software platform to support compliance with APRA requirements and adherence to sound integrated practices.
In the liability sphere, Finity has established a management model for the New South Wales Treasury and a unique pricing model that takes account of tort reform savings.
In a further contribution to the industry, Finity has managed Insurance Statistics Australia Limited (ISA) since the organisation was formed 17 years ago. ISA is an organisation created by insurers to compile, aggregate and distribute details and statistics to help insurers with the pricing and management of key insurance classes. Through its management of ISA, Finity is now working with ICA to design and expand their industry data collection program.
Finity focuses specifically on the general insurance sector and currently has a staff of 62, of whom 21 are qualified actuaries.
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Risk Practitioner/ Team of the Year
Santos Ltd
Adelaide-based Santos Limited, a major oil and gas exploration and production company, has been voted Risk Manager of the Year for its responses to complex risk financing issues through providing detailed management information and financial incentives.
Santos’s risk financing portfolio utilises traditional and reinsurance markets as well as industry mutual and captive participation. The limits purchased for property damage and business interruption exposures are in excess of $1.5 billion.
The company recognises that information is vital in facilitating risk management. It makes proactive market presentations to local and international markets to sell its risks to gain capacity.
Santos also provides in-depth underwriting information, which includes features such as loss modeling forecasts that can be adjusted for seasonal influences following a loss at the target risk.
Santos gives a boost to risk management by linking financial performance to risk management initiatives in its 2005 placement. The company accomplished this by negotiating financial incentives for the implementation of pre-agreed risk improvement recommendations phased over a three-year period. Independently-audited results at the end of the first year found that 85% of all recommendations were achieved.
In 2005, Santos tackled several specific risk financing issues and embarked on two major offshore developments. These were Mutineer Exeter in offshore Western Australia and Casino Development in Otway Basin where Santos was the operator. The projects required providing joint venture partners an appropriate risk finance solution matched to the risk profile and that dovetails with contractual arrangements together with project financing obligations of certain joint venture partners.
Santos also submitted its final claim for the Moomba loss. The multi-million-dollar claim process required interaction among numerous parties. These included the board of directors, employees, service providers, contractors, joint venture partners, bankers, shareholders, stock exchange and other regulatory authorities, loss adjusters, insurers and legal representatives. The claim was settled, net of deductibles, for some $230 million. The loss had arisen from a 2004 New Year’s Day fire at Santos’s Moomba gas plant in South Australia.
In its overall strategy, Santos’s risk management department provides advice to the Chief Financial Officer on risk financing strategies, options and markets.
Highlights are made of deviations from core placement objectives of market capacity, cover, insurer security and cost. This is to ensure that alternative strategies are considered before such a change can affect the program. There is constant review of all alternatives to achieve the most efficient risk transfer mechanism to support business objectives.
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Broker of the Year
AON
Aon has been recognised as Broker of the Year for the second consecutive year, with judges impressed by its commitment to client services and research.
The company prides itself on responding to issues before they arise, such as the ageing population trend in Australia, for which Aon has created an aged care practice group.
Aon places emphasis on industry knowledge and undertake the only study of its kind in Australia with its Aon Australia Risk Management and Total Cost of Insurable Risk Survey. The study identifies the key risk concerns of Australian corporations.
Clients use the survey results to benchmark their risk management and risk financing performance and to compare their total cost of insurable risk with industry peers.
In another initiative, Aon hosted an inaugural advanced risk finance seminar in October 2005, bringing together regulators and experts to discuss alternative ways for Australian companies to finance their risk.
Aon works with ABN Amro on the Commercial Insurance Broker, which is a quarterly report on market issues and trends. Readers use the report to adjust their short-term planning each quarter and to assess the market.
Innovation is also key to Aon’s success. They were instrumental in assisting one of Australia’s largest privately-owned companies to become the first-ever private corporation in the country to win a licence to self-insure its workers compensation program, helping the client to achieve considerable cost savings.
Another facet in which Aon impresses is its industry-focused practice groups. To ensure that its experts are well versed in its clients’ wide variety of industries, they employ from within them. Furthermore, every Aon broker undergoes client literacy training, a course designed to reinforce understanding the financial, risk and insurance needs of any client.
Aon’s approach to service has been rewarded by its dramatically increased presence in recent years in BRW’s Top 100 Australian companies. Aon’s market share in the insurance market has soared from 15% in 2003 to 35% this year.
The company’s expertise has also been recognised in the political arena with the appointment of Aon’s George Walker to the Prime Minister’s working party on tsunamis.
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Reinsurance Company of the Year
Swiss Re
Swiss Re has been awarded the 2006 Reinsurance Company of the Year award, the second time in three years that they have been awarded this honour.
Over the past 50 years, Swiss Re has developed a partnership approach to doing business, working closely with clients. The company conducts a bi-annual global in-depth client survey to highlight client expectations and drivers and to benchmark Swiss Re’s performance against them. It uses the surveys to identify areas of improvement and incorporate initiatives to address them in its strategic planning process.
On the product side, Swiss Re’s constant emphasis on product innovation has helped to grow its clients’ business.
Swiss Re has launched Australis, an Insurance-linked Security (ILS) and the first catastrophe bond covering Australian natural catastrophe perils such as earthquakes and tropical cyclones. These instruments transfer insurance risk into the capital markets by packaging up a particular type of risk – such as earthquakes or hurricane risks or a human disease pandemic – into an investment vehicle bought by institutional investors.
In late 2005, Swiss Re launched Lifeguard, a secure client portal for life and health clients in Australia and New Zealand. Lifeguard is home to: Life Guide, a resource tool dedicated to supporting the day-to-day underwriting assessment and decision-making process; Group Insurance Manual, a comprehensive guide to group insurance risks; Disability Claims Guidelines, the first on-line life and health disability income claims guide.
Swiss Re has also joined forces with six of Australia’s largest companies to encourage early action on climate change through the Business Roundtable on Climate Change. The roundtable generated debate across the industry with its report highlighting the significant impact climate change will have on Australia. The report is the first of its kind in Australia to link economic indicators to climate change.
To share knowledge, Swiss Re held its first Product & Knowledge Fair in 2005 in Australia for clients. The event promoted open dialogue on issues affecting the industry and provided an opportunity for Swiss Re to share its expertise.
Through its dedicated Top Topic Program, Swiss Re is committed globally to engendering knowledge transfer on the issues of sustainability, mortality trends, terrorism, liability regimes, natural catastrophes and insurance-linked securities. In Australia, Swiss Re focuses on the ‘’sustainability’’ Top Topic program.
With its belief in training, the company sponsored a competition in 2005 run by the New South Wales committee of the Australian Professional Indemnity Group (APIG) to further the education and professional development of the financial lines industry in Australia.
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Loss Adjuster of the Year
Freemans Australia Pty Ltd
Freemans Australia is on its way to attaining its goal of becoming the pre-eminent claims firm in Australia by being awarded the Loss Adjuster of the Year award.
Responsive to clients’ needs, Freemans has opened 12 new offices in the country over the last two years to boast the broadest geographic spread of all the loss adjusting firms. A wide office network allows Freemans to get to jobs faster, reduce travel time and costs, as well as having better local knowledge.
Freemans, the only Australian-owned major loss adjusting company, has also ventured into new services claims management and claims validation. In claims management, Freemans teams up with leading communications company Hogan to offer claims handling as well as call centre and
data capability capabilities. In claims validation, Freemans forms a joint venture with a claims consultancy specialising
in claim audits.
In July 2005, Freemans introduced a national marine surveying service to help underwriters look for national capability, structured fees and strong IT and systems.
The company also adopts other new service approaches. Freemans has appointed local client focus champions in
each region in Australia. These personnel are trained in communications, dispute handling, coaching, negotiation
and project management. The appointments were made in response to the results of an annual client focus research study in 2004 and 2005 in which Freemans engaged a specialist company to interview 12 major customers. The study covered industry expectations in claims and loss adjusting.
With its commitment to sound governance and management, Freemans provides 24/7 online access to its jobs by underwriters, and as allowed by them, brokers. This allows easy monitoring of its claims carriage. The company undertakes regular compliance monitoring as well to allow scrutiny of its adjusters’ compliance at the personal, office and regional level as well as by claim type and client.
Freemans’ willingness to go the extra mile is reflected by its expanding client base. The company has 10 customers spending more than $1m with it this year, compared to four only in 2003. Overall, the company’s turnover has soared impressively. Revenue is expected to be close to $30 million this year, an increase of about a third compared to $21.4m three years ago.
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Premium Funder of the Year
Macquarie Premium Funding
Macquarie Premium Funding (MPF)’s ‘’Forward Thinking’’ philosophy has been recognised with the Premium Funder of the Year award. The ‘’Forward Thinking’’ approach is manifest in the company’s launch of a purpose-built web-based quoting system, Encore, that boasts several firsts in the industry.
These firsts include ‘’evergreen’’ loan contracts that simplify the funding process for brokers and their clients and minimise paperwork on contract renewal. Other advantages include a two-way feed that helps improve brokers’ debtor management; a streamlined endorsement process which allows brokers to add policies to existing loans without re-documentation and the ability to prepare quotes and contracts on-line up to $500,000. The system allows flexibility in structuring settlement dates to suit varying policies.
MPF has also introduced an end-to-end payments and reconciliation system, Macquarie Premium Payments, on which MPF has spent $500,000, and is being integrated with Encore. Macquarie Premium Payments streamlines client invoicing, provides an automatic reconciliation process of trust accounts, and widens brokers’ payment options including credit cards, Australia Post and BPAY. MPF offers a financing arrangement to brokers to make it easier for their clients to buy insurance, renew policies on time, and balance their cash flow.
Apart from working with brokers, MPF also provides credit lines to other premium funders. It assists and trains funders planning to establish their own business.
MPF’s commitment to high service levels is reflected not only in these innovations but also in performance standards. As a measure of these standards, MPF approves 90% of loans on the same day. MPF also offers financial modelling and analysis of key performance indicators for funders and brokers.
MPF’s responsiveness to meeting industry needs is demonstrated by client surveys and focus groups, which are conducted to keep pace with changing market needs.
Turnover is said to have increased by 40% in the 2004-2005 financial year and by 90% in 2006-2006, with growth being organic instead of through acquisitions. MPF, which is planning new offices in Australia and abroad, expects that it will achieve 100% revenue growth this year. Prudent financial management has meant that in three years, MPF has written off just $20,000 in bad debts.
MPF recognises that people are its assets, particularly in the service sector. Its employees are predominantly tertiary qualified. There is emphasis on training, with access for staff to in-house training courses that range from self-development and credit management to leadership.
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Services to the Community Award
Suncorp
Impressed by Suncorp’s the active role in supporting a wide array of programs and charity, judges have named the company the recipient of the 2006 Services to the Community Award.
Just as Suncorp fosters innovation in its business services, the company also comes up with novel ideas in providing community services. So committed is Suncorp to volunteer services that it gives each employee one day of paid leave a year, known as Staff Volunteer Day, to help out in the community.
One of the team’s initiatives is volunteering at Zoe’s Place, an organisation that provides away-from-home accommodation and counselling to dying children and their families.
Suncorp has a dedicated team to support and service Not-For-Profit Organisations (NFPOs) in Australia. The company is the leading provider of insurance to NFPOs and was one of the first insurers to provide liability to community groups. They have also hosted risk management conferences for NFPOs and community organisations in Brisbane and Melbourne.
The Suncorp NFPO team undertook a number of activities in 2005, including organising the Heart Kids NSW Comedy Ball at which it raised $80,000 for the Australian Children’s Heart Research Centre.
Suncorp and its staff also donated time and money in various programs. These included the Suncorp Ride 4 Research eight-day bike ride which raised $310,000 for the Queensland Institute of Medical Research. A series of free public seminars about sun safety were also held. The Ride 4 Research was so successful that Suncorp plans to stage it again in September this year.
Another $300,000 was raised at two functions, the Butterfly Appeal and Queensland Business Leaders Dinner, for the Hear & Say Centre. Suncorp has also implemented a charity donation scheme which allows customers to contribute money through internet banking transactions. Customers are able to round up their bills to the nearest dollar when paying online through BPAY, with the difference is credited to the Hear and Say Centre.
Also worthy of high praise is the company’s “Sun Safe’’ skin cancer community awareness and education program, which is driven by the high incidence of skin cancer in Australia. The awareness campaign, costing $1.4 million, comprises promotions at beaches and pools, extensive community advertising and merchandise sales.
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Insurance Personality of the Year
Michael Hawker,
CEO - Insurance Australia Group
Michael Hawker, Chief Executive Officer of Insurance Australia Group (IAG) has been named Personality of the Year for being at the fore of the insurance industry. Mr Hawker is deeply involved in debate on industry issues such as climate change, flood cover, financial literacy and underinsurance.
With him at the helm, IAG has received accolades such as being voted Best General Insurance Company 2005 by the Australian Banking and Finance Magazine. The company was added to the Global 100 Sustainable Companies list in 2006 by Corporate Knights and Innovest Strategic Value Advisors, and clinched the National Ethical Investor Awards for best company in corporate governance.
In his own right, he has been named Leader of the Year and CEO of the Year in the 2006 Human Capital Leadership Awards. He was included on AFR Boss Magazine’s True Leaders list in 2004 and 2005.
Mr Hawker, who has an extensive career spanning insurance, and consumer and investment banking, is generous with his time and energy for the insurance and financial services industry, as is reflected by the various public positions he holds.
Most notably, he is President of the Insurance Council of Australia (ICA) and a member of the Financial Sector Advisory Council, the Business Roundtable for sustainable development, the Business Council of Australia and the Federal Treasury’s Consumer and Financial Literacy Advisory Council.
Within IAG, he oversees the “Reputation Committee’’ that reports to the board and is an integral part of IAG’s corporate governance framework. He also supports the Community Help program which grants help to community groups that undertake risk management initiatives in the areas of crime and injury prevention, emergency services and the environment. Mr Hawker fosters innovation in the company with several initiatives such as including innovation as a key element of IAG’s staff reward and recognition program.
Examples of the innovative culture encouraged at IAG include the company working with car park developers to design safer car parks, the annual release of a car visibility index and publishing the top 101 crash sites.
Mr Hawker believes that teamwork is critical to achieving the best outcome. ‘’It is impossible for one person to do, make, manage and deliver a product”, he said.
On being a leader, Mr Hawker says, ‘’True leadership is painting a picture of a future that is better with a product or service you can provide. If you do this well, you can bring people with you to follow a vision, gaining their trust.”
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