the year in review niba 2007 year in review. market - background 133 licensed insurers - 112 were...
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The Year In Review
NIBA 2007
Year in Review
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Market - Background
133 licensed insurers - 112 were general insurers and 21 reinsurers.
Market consolidation continues. Insurers buying insurers – brokers
buying brokers and even insurers taking strategic stakes in brokerages
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The most notable movements:
The $7.9 billion ($US6.11 billion) acquisition by No 2 insurer Suncorp for No 3 insurer Promina.
The acquisition of OAMPS by Perth-based industrial conglomerate Wesfarmers, which already owned middle-range insurer Lumley.
Wesfarmers has continued to buy brokerages, including NZ’s largest locally owned brokerage, Crombie Lockwood.
Austbrokers and IBNA have entered an open-ended alliance to work together distributing insurance products (“AIM”)
Steadfast announced no changes to its current structure at this stage.
RIBA expanding - taking on brokers outside Victoria
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Distribution
Brokers continue to dominate distribution in the commercial insurance market.
Up about 12% in the past five years (to 75%)
Brokers are regaining market share in personal lines. Up 6% (to 39%)
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Insurers
LIMBO market --- how low can it go? Record result for insurers despite intense competition, lower
investment returns and impact of June floods (insured losses approx $1.5B )
Insurers reported gross premium revenue of $30.5B, while underwriting profit up 30% to $2.84B.
Domestic motor vehicle and household insurance made up the largest portion of gross premium revenue at 21.7% and 14.9%.
NSW/ACT insurers accounted for 42.8% of Australia’s total gross premium revenue. The region dominated all classes of insurance except employers liability, for which WA accounts for 54.9%.
In total premium revenue from PI insurance fell 5.6% on the previous financial year to $1.3 billion. Public and product liability gross premium revenue also fell to $1.9 billion.
Overall, industry has gross value of $15B = 2% of economy + employs 96,000.
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NIBA’s Mission Statement
“To constantly identify, meet and represent member needs and expectations with excellence and enthusiasm.”
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NIBA Organisational Chart as at August 2007
NIBA BOARD
CEO
Divisional and Specialist
Committees
YP’s
Manager Finance& Operations
Professional Development
Executive
ConsultantsRegulatory/ LegislationTechnical ServicesPublications/ PR MarketingConventionPI FacilityHREducation/Courses
Registrar/ Member Services
Co-Ordinator
NIBA College National Education
Co-Ordinator
CPD/Seminars
QualificationsTraineeships
Student liaison
Divisional Secretaries(Part Time)
Receptionist
Admin Assistant(Accounts)
Admin AssistantsAdmin
Assistant(Part Time)
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NIBA Board - role
To be visionary & guide the future for NIBA and its members
To assess, plan and govern the affairs and policies of NIBA
To maintain ongoing dialogue and collaboration with key stakeholders through the sharing of knowledge and information
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NIBA Board – role (cont.)
To ensure effective & viable operationEnhance the “profession”Best position NIBA and its members for
future
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Divisional Committees
Regular meetings and local input on issues
Organise at least 2 social, networking functions which reflect a good image for NIBA and members
Produce annual activity plan Business/UWA expos in most states
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Young Professional Sub Committees
Mission Statement:
“Advance aims and objectives of NIBA by providing and promoting an active business, educational and social network for YP insurance brokers”
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YP committees - role
To report thru respective State Divisional committees
Provide input on issues relating to YP’sDevelop relevant training and education
in liaison with NIBA CollegeImplement activities to promote broking
as a career of choice
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NIBA Key Result Areas
Government affairs/lobbying Broker training and education (NIBA College) Technical services, website, advice (FinServ) Member Services (advice, PI Facility, HR) Marketing promotion and publications
(McMullan Conway) Convention Administration/Finance/Membership
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Government Affairs - objectives
Promote brokers interests to key stakeholders including ASIC, Treasury and government at all levels
Enhance NIBA’s profile as peak body representing risk intermediaries
To best position members
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Government Affairs –2007 hot spots
Code of Practice – launched March 07 (no problems so far) EDR schemes looking to merge FSRA – ongoing refinements/fine tuning Simple regulatory system - NIBA support ASIC occupied by property finance industry (Westpoint, Fincorp,
Bridgepoint and mortgage industry - but brokers gaoled!) DOFI’s/DMF’s – support in principle but working thru concerns PI – transitional arrangements, concerns Taxation – greater traction on argument FSL/deductible (Vic) (on business with over $50m insured valued) – strong
NIBA lobbying - Govt. backs down. Also effective admin. arrangements for handling net rating Workers Comp – active committee NSW, other discussions in
ACT and Tasmania
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NIBA Finance
Finance Committee reports to BoardAim to operate viably under sound
financial criteria and proceduresMaintain a reserve = 6 months operating
costs (around $3m currently)To target a min. 15% margin on activities
and functions$2.6M back to members in past 5 years
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Membership
17%
Convention
26%
IRP
14%
Interest
7%
Education
14%
Professional Assessment
3%
Gazette
4%
Divisional
11%
Other Income
4%
Broker Survey
0%
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NIBA College - objectives
Provide … relevant, reliable, innovative educational products and services to the broking sector … and quality educational advice to licensees and their staff
Represent … the broking sector in government and industry educational forums
Ensure that members have access to a compliant RTO to meet their qualifications requirements
Promote … the benefits of broking careers by providing and supporting traineeship programs
Promote … College as a quality educational provider in competitive market
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Communication
Ongoing media relations (AFR, BRW etc) NIBA hotline - over 40,000 seek referrals to
NIBA brokers (Needabroker) IC liaison – taxation, flood, under-insurance,
liability, workers’ comp etc. Around 100 speeches, presentations,
briefings (CEO, President, staff) Sundowners around Australia
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Communications (cont)
“Insurance & Risk Professional” Gazette - popularMarketing kit completed – 12 chaptersWebsite development ongoingNew Warren Tickle Memorial AwardNewshots, surveys, questionnaires
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Membership
Despite rationalisations & mergers – principal members remain steady
QPIB or equivalent = 2491 (June 01 1837 )
Principals = 440 (462 in 01)Branches = 720
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New Associate membership
Allows entrants that meet the ASIC min Tier 1 requirement and have less than 4 years exp. to join NIBA.
Then encouraged to do additional modules to complete Dip Fin Services (Insurance Broking) and upgrade to QPIB
Then ultimately to FNIBA with Adv. Dip.
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Member PI Facility
Manager - Gallagher Broking ServicesAim – “ensure relevant, economical and
reliable facility for all members”Competitive marketPremium pool over $2m, 89 membersLow claims, no deterioration on earlier
years
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Life Brokers & Advisers Sub Committee
Assisted ongoing lobbyingRepresentation on industry groups
representing life/investment sectorWorking with divisional committees Gwen Fletcher - awarded Member of
the Order of Australia (AM) in Queen’s Birthday Honours list
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NIBA - industry liaison ongoing
IC, FPA, UAC, clusters, government, consumer and related groups
Strong links with international broking community as CIIBA secretariat
CIIBA a member of WFFICEO on World Council Executive
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2007 Highlights - year of consolidation
Launching Code & Promotional campaign Generational change - new Warren Tickle
Award and State YP winners Modernisation of QPIB Victoria dumps FSL (on business with over $50m insured valued)
DOFI Exemptions – they listened! Industry advertising – nailing AAMI!
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Finally …
“Achieving consensus may not always be possible … but a function of any representative body is to shape, guide and empathise with its membership as to sharing its aims and objectives.”