Brokers View

Brokers View A detailed narrative of the AIMS portfolio

Issue 4 – September 2018

For Internal Use Only by AIMS Member Brokers

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Brokers View - Issue 4

Released September 2018, from results pertaining to June 2018 AIMS Member Broker Insurer Survey.

Important Disclaimer

The information in this report is given in good faith and derived from sources believed to be accurate at this date but no warranty or guarantee of accuracy, completeness, timeliness or reliability is given and no responsibility arising in any other way, including by reason of negligence for errors or omission in it is accepted by AIMS, Austbrokers, IBNA or Member Brokers, or their respective officers or employees (all collectively referred to in this clause as “We”, “Us” and “Our”). We also do not warrant or guarantee the performance of services of any persons referred to in the report.

Actual results may vary from any forecasts and any variation may be materially positive or negative. Forecasts, by their very nature, are subject to uncertainty and contingencies, many of which are outside Our control. Past performance is not a reliable indication of future performance.

Subsequent changes in circumstances may occur at any time and may impact on the accuracy of the information.

This report does not take into account any of your particular objectives, financial situation or needs. Before making any decision in relation to this report, you should, amongst other things, independently obtain confirmation of the accuracy and currency of any relevant information on which you may intend to rely. Any information provided should not be considered as a recommendation in relation to continuing to utilise Our services or not.

© Copyright

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AIMS (A&I Member Services Pty Ltd), is a member services provider servicing over 150Member Brokers across Australia. AIMS is a joint venture between Austbrokers andIBNA and works for the collective benefit of the Members Brokers.

AIMS conducts a bi-annual survey of its Member Brokers and has been doing so forthe past seven years.

The survey is completed by Member Brokers across Australia who are “in the field”and hence the survey/this report represents an accurate commentary on the tradingrelationship they have with our Strategic Relationship Insurers. Therefore being the“Brokers View”.

This survey is used extensively as a qualitative analysis of the comparativeperformance of participants in the Insurance Marketplace and their provision ofservices to our Member Brokers and our Clients.

It is a highly regarded benchmarking tool providing periodic analysis of the changesin the Insurance Marketplace and how Insurers respond to the varying needs ofClients in conjunction with the economic performance of the Insurance Marketplace.

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Executive Summary

Recent industry research continues to confirm customers are more likely to return if “the end of the insurance buying or claims experience provides a good outcome”.Simultaneously; companies in Australia are seeking to develop a Digital Advantage(i.e.) Channel their investment where you have a competitive advantage.

So how do the needs of the customer and the needs of commercial enterprises providing Insurance protection co-exist and meet? The commentary in Brokers View will provide some insights.

Why would a customer seek to change their insurance arrangements if the cost remained reasonable. They wouldn’t. So why do customers seek change? Why do Brokers recommend customers change their Insurance arrangements?

When we see a downturn in the results established in our Survey, it can be indicative of dissatisfaction and can surely lead to “reason for change”. Add to this a New Trend identified in our last survey and we conclude we have arrived at “The Tipping Point”. Inertia to change is being overcome by the evolution of the Insurance Marketplace.

In the past the major Australian Insurance companies had the benefit of scale, market share and brand awareness. Today this combined with legacy technology is being challenged by the new, the nimble and those able to take advantage of technology and data. A feature of business today is not having data, but the ability to use this data – create a Digital Advantage.

Customers and Brokers have expanded choice. They have become more accustomed to exercising this choice to obtain the buying experience most in line with their evolving needs. In prior Brokers View reports we highlighted the beginnings of the movement of coverages to Insurers providing some differentiated offerings. This movement is escalating. To this end we have added new products of Management Liability and Cyber to our survey; together with survey commentary on Chubb and Sura who are gaining an enhanced position in our overall portfolio.

Again, the “rubber hits the road” experience of customers is when a claim occurs. All Insurers are investing heavily in providing “best practice” outcomes for the customer. Unfortunately there are always examples where the customer’s

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expectations are not met and our Brokers are at the forefront of managing this. The commentary in this report is driven by these adverse outcomes; simultaneously considering who is doing it better. It should never go unnoticed that in general, Insurers respond very very well to the vast majority of claims that customers have.

Effectively the survey results in this report are:• Display of satisfaction levels with our Strategic Relationship Insurers• Reaching The Tipping Point• Progress with the evolution of the Insurance Marketplace• Response to changing customer needs and meeting their expectations.

Executive Summary cont’d

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The claims experience is the true value proposition to our customers. Many of our customers do not experience a claim, but those that do can become great advocates if they achieve the expected and successful outcome: those that don’t achieve these outcomes, can become harsh critics of the Insurers.

In this issue you will note significant commentary about satisfaction with claims handling. This commentary is from our Brokers who are actively involved in the handling of our customer’s claims with Insurers. This is borne from experience and so are the Industry Awards below. These awards are a true indication of those assisting our customers. In comparison many other awards are established by Insurers making a submission and being judged by a panel of peers.

NIBA Insurer Of Year AwardMore than 800 NIBA Member Brokers rated Insurer’s products and services in a range of categories as part of an annual market survey. CHUBB has been named General Insurer of the Year at the National Insurance Brokers Association (NIBA) Convention. CHUBB was also named Most Trusted Brand and Best Broker Experience, gaining the highest combined score to take out the Top Insurer Honour with all three awards.

Mansfield Awards for Claims In 2016, LMI Group and InsuranceNEWS magazine, sought to celebrate claims excellence and acknowledge those who make the biggest impact on our insuring public. “The Mansfield Awards focus solely on claims; acknowledging and celebrating the importance and wonderful work that those who work in claims departments do day in and day out”. This is measured using data from LMI’s claims comparison website and regular surveys of Brokers, with results weighted to ensure companies are selected across a level playing field.

The 2018 Mansfield Award Winners are:• Personal lines: Chubb Insurance• SME property and casualty: Allianz• Corporate property and casualty: FM Global• Specialty: The joint winners were GT Insurance and National Transport Insurance

(NTI)• The Gold Mansfield Award for overall excellence in claims: Allianz

We are pleased to advise that all bar one of the above awarded Insurers have a Strategic Relationship with the AIMS Network Brokers.

Claims Experience and Satisfaction

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Financial commentary provided by Macquarie Bank.

Current State of Australian Insurance Market

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We have now passed the bottom of the insurance cycle, with premium rates rising across most product lines for the last 12 months. In the coming pages we provide an update on some topical issues in the industry, but first we provide refreshed estimates of channel splits for the Personal and Commercial Insurance markets in Australia, followed by estimated market shares by major Insurance Broker.

Source: APRA, ASIC, Company data, October ‘18

Est. APRA Personal Lines

Est. APRA Commercial Lines


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These charts show the size and scale of the insurance marketplace transacted via intermediaries, and recognises the significant position of AIMS, who have a particular strength in the Commercial and SME Client segments.


Est. Commercial Lines Market Share (APRA Regulated only)

Est. Commercial Lines Market Share SME and Commercial only (APRA Regulated only)


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Incumbent insurers continue to remediate portfolios Consistent with the experience mentioned in previous issues of Brokers View, the large Australian insurers continued to lose market share across most products in the Jun ’18 half.

GWP growth by type (6 months to Jun ‘18 vs. pcp)

Notes: Dotted lines highlight company-specific asset sales or non-recurring portfolio movements. New Zealand data is in constant currency. 85% of IAG’s Personal lines in the Business Division are allocated to Home and 15% to Personal Motor.Source: APRA, Company data, October ‘18

Each of the domestic Insurers (IAG, Suncorp and QBE) experienced continued pullback in Commercial lines through the Jun ‘18 half, with international carriers such as XL Catlin, AIG, Allianz and Chubb participating in a disproportionate amount of new business wins. While portfolio de-risking appears likely to continue for the coming 12 months, we believe the major repositioning has already occurred.

• Expanded Polystyrene risks (EPS) and Commercial Property risks in the Large Corporate segment are two examples which we believe remains on the list for de-risking and / or significant repricing over the next 12 months.

In Property lines (Home and Commercial), the NSW ESL has impacted the perceived growth of the market as a number of major Insurers were unable to capture this levy for the first couple of months in the Dec ’17 half. We understand carriers have recaptured a large amount of this shortfall over the last 12 months, but recognise staggered repricing by carrier result in higher churn over the coming 12 months, particularly for Home.

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Old dogs, new tricksCarriers well known in insurance broker circles continue to expand their risk appetite. AIG have been underwriting mass market Home and Motor products in Australia for the last 12 months, while Blue Zebra (with capacity from Zurich) launched their Home and Motor products in Feb ’18. Further, Chubb commenced underwriting Business Pack insurance in 2018.

While each business is virtually starting from zero in these products, lean technology, small cost bases, and strong brands with existing distribution partners should serve them well to fuel new business growth. At the same time as local insurers remediate portfolios, we believe these businesses could achieve scale quickly.

OutlookCommentators continue to be positive on the outlook of the Australian Commercial Insurance market. They argue insurers cannot continue to sustain losses and will continue to reprice at a rapid pace. We agree with this view, in part.

There remains numerous carriers with appetite for growth in Australian risks. Where one insurer believes prices need to increase 30%, another will see opportunity at 5%. Further, as insurers complete their portfolio remediation programs, at some point they will likely push to grow market share again, perpetuating the cycle.

In an economy which continues to provide weak volume growth, a financial environment not spurring asset growth, and a Royal Commission posturing to challenge selling practices in certain distribution channels, we believe price will be the primary lever for insurers to attain premium growth in the coming 12 months.

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21%

8%

8%

14%

2%

7%

39%

AIMS 2014

Business Pack ISR

Liability Commercial Motor

Private Motor Home and Contents

Other

25%

8%

8%

13%

2%

7%

37%

AIMS 2015

Business Pack ISR



Other

24%

8%

8%

15%

1%

7%

37%

AIMS 2016

Business Pack ISR Liability

Commercial Motor Private Motor Home and Contents

Other

24%

7%

8%

13%

3%

6%

38%

AIMS 2017

Business Pack ISR


Private Motor Home & Contents

Other

AIMS Premiums – Last Five Years (2014-2018)

19%

7%

8%

14%

3%

7%

42%

AIMS 2018

Business Pack ISR



Other

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0

AIMS has six tailored products and a number of preferred products which are available to their Member Brokers and their Clients.

The largest of these remains Business Pack, being 19% of our overall portfolio.

Placement of other Insurance lines (i.e. the non-tailored products) increased significantly to 42% and the bulk of these placements are in the “open market” or new lines of business.

This provides significant leverage to our Member Brokers and their Clients by having our existing five Strategic Relationship Insurers (together with our two growing relationships) providing tailored products to a substantial portion of the Australian SME and Commercial Client base.

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Consolidated Strategic Relationship Insurer Overview

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12%

15%

14%

7%4%4%

6%

38%

AIMS 2018

Allianz CGU QBE Vero

Zurich Chubb Sura Other

12%

18%

19%

7%6%

3%

4%

32%

AIMS 2016



12%

17%

17%

7%5%4%

5%

34%

AIMS 2017



AIMS Product/Premium Placements: 2016 - 2018

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AIMS has a significant relationship with our five Strategic Relationship Insurers.

These five Insurers currently participate in 52% of our overall portfolio. This is a significant reduction from the 58% share in the last issue of Brokers View. Add to this our growing relationship with other Insurers and this increases to 62% of our overall portfolio.

This brings significant benefits to our Clients by having one of the most expansive relationships in the Australian Marketplace.

With the New Trend in the marketplace this has led to AIMS expanding its relationship with other key Insurers. This is currently most notable with Chubb and SURA Underwriting.

Our market relationship is larger than any of the International Brokers and demonstrates a commitment by AIMS Member Brokers and our Strategic Relationship Insurers to bringing local relationships and Insurer support in the provision of Insurance to our Clients.

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Allianz has maintained its score over the last 3 waves, and now currently stands just one point shy of the lead.

We have seen some significant changes from the last Survey. Most is the result of a reduction in satisfaction of Claims Responses in certain areas. Certainly claims handling is a major contributor, but not the only factor. Insurers are continuing to streamline their underwriting and processing and those holding the business are remediating their portfolios. This is creating ongoing challenges. Add to this, varying risk appetite in comparison to the past and Brokers are faced with a myriad of challenges on behalf of their Customers.

Each Insurer has changed for varying reasons and we will cover this in more specific detail later in this document.

What does this produce? Greater variety of response as will be noticed throughout the survey results together with customers shifting their business between Insurers.

Overall Satisfaction Average (All Products) - All Insurers

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Throughout this report, comparative data has been used from surveys conducted over the last six years. In addition you will see new data on new Insurers as we have broadened the survey. The graph still shows the five initial Insurers, but other insurers will be added to future Issues as we establish comparative data points.

The Overall Satisfaction average is comparative data of all major Insurers based on our Member Brokers assessment of their satisfaction with the trading relationship and how these Insurers deliver their products and services in support of our Clients.

This is assessed on all products and states throughout Australia.

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CGU and Sura have shown declines against last wave, and are now only marginally higher than Allianz and QBE, despite a large lead last wave. Chubb’s stability has entitled the insurer to lead the Business Pack, with Vero and Zurich experiencing some improvement from last wave.

Business Pack remains our “lead line” of Insurance, despite its reduced percentage ofportfolio. Hence commentary on this product is our most pertinent indicator of therelationship between our Member Brokers and Strategic Relationship Insurers.

Why the change? Is a traditional Business Pack policy still the best solution for thecustomer. As we move from the Industrial Age to the Digital Age, we are finding theneed for more specific and unique coverages for our customers. Hence portions of theBusiness Pack Policy are now starting to be covered under more specific Insurancepolicies.

The above shows the comparison results for the major seven Insurers. This year wehave extended the survey to other Insurers who participate actively in this portfolio.The broader based results are on following pages. The above results are a combinationof factors including Competitiveness, Quote Turnaround and Claims Satisfaction toproduce an Overall Satisfaction score.

Business Pack - All Insurers

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Chubb leads the Business Pack across most aspects, though ties with Sura for Competitiveness. CGU and Allianz were equally highest in Claims.

Business Pack - All Insurers

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Traditional Home Insurance, is transacted with only four of our Strategic Relationship Insurers. Zurich do not provide Home Insurance coverage to our clients. As mentioned Chubb transact a Masterpiece Product.

Major moves in regard to Home Insurance are on the horizon. We will begin to capture the change in our next survey we conduct.

Transition is underway. We are seeing improvements in the product offering, use of technology to underwrite and changes in handling of claims. Whilst most Insurers generally respond well to claims, some difficult claims treatments have been encountered by our Member Brokers. The continued rise for Vero is due to a significantly changed appetite for risk and significant re-engagement with our Brokers and Clients.

Our next survey is likely to produce some major movement in this portfolio.

Chubb maintains its lead in Home insurance, while CGU has experienced a sharp decline since last wave, and are now marginally lower than Vero. Vero, Allianz and QBE remain similar to last wave.

Home Insurance - All Insurers

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Chubb takes the lead for Home insurance for Quote Turnaround, Claims and Overall Satisfaction, while Vero leads in Competitiveness.

Home Insurance - All Insurers

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Again this line of Insurance, Private Motor, is transacted with only four of our Strategic Relationship Insurers. Zurich do not provide Private Motor Insurance coverage to our Clients.

As with Home Insurance, major moves are on the horizon for Private Motor Insurance. We will begin to capture the change in our next survey we conduct.

However, why the variance between Allianz/CGU and QBE/Vero? It appears this is purely a response to appetite and competitive pricing. All Insurers now provide good, quick responses to Clients claims. This is a very customer centric line of business.

Private Motor will be the “lead line” showing how Insurers are adapting to the digital age and the use of technology and data to produce differentiated offerings for customers. There still remains a significant opportunity for Brokers to assist their customers with Private Motor.

Allianz and CGU continue to rival for the lead, although both have declined against last wave. Allianz’s relatively lower decline enabled it to reclaim the leading position, while QBE’s decline resulted in its closest rival Vero taking over the third position.

Private Motor - All Insurers

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While Allianz takes the lead across most aspects of Private Motor, CGU leads in Quote Turnaround, and trails closely behind in Claims Satisfaction.


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CGU and QBE have softened substantially whilst Zurich and Vero have shown significant improvement. However, all remain significantly behind Chubb as you will see across the page. Chubb certainly transact a smaller portfolio but Brokers are finding an enhanced response.

All Insurers are struggling with the current pricing levels on property risks. Most Insurers have risen to the challenge and have seen new opportunities within their risk appetite, evidenced by Zurich and Vero.

The relative changes by Insurers is representative of their changes in underwriting attitude to a class of risk that has come under substantial profitability issues in the last 24 months.

The very selective nature by Insurers to this class of business has a marked impact on the Overall Satisfaction experienced by our Member Brokers and Clients.

Vast improvements in Zurich and Vero’s ISR have enabled the insurers to excel from the bottom last two positions, into equal second highest. Chubb remains highest despite a decline from last wave, and Allianz is now in the lowest position.

ISR - All Insurers

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Chubb dominates across all ISR aspects, though Zurich is almost as high for its Claims Satisfaction. Allianz however is steadily at the bottom of the pack.


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As with our ISR portfolio, the relative changes by Insurers in Liability is a response to changes in their underwriting and claims attitude. This is a major driver for where our Member Brokers and their Clients renew policies or place new business opportunities. A large portion of this portfolio is placed with other Insurers and underwriting agencies and this is demonstrated by these now occupying two of the top four rankings. Liability is one of our most diversely spread portfolios; matching Insurer expertise and attitude to our Client’s risks more extensively than elsewhere.

Liability risks are getting more complex and Brokers will always respond to Insurers with expertise, efficient service and an understanding claims response.

As customer’s risk exposures become more complex, we are seeing some Liability risks exit the Business Pack policies and being placed as a separate risk with different Insurers.

Sura has had a sharp decline since last wave, as has CGU. Chubb and Dual maintain the first and second positions, while CGU only just maintains the third spot. Vero’s decline has resulted in the insurer holding the lowest position, while Allianz and Zurich are the only insurers that have improved.

Liability - All Insurers

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Dual and Chubb equally possess two leading aspects for Liability, while CGU has average to above average scores across most aspects (except Competitiveness).

Liability - All Insurers

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Commercial Motor remains a very competitive portfolio, hotly contested by all our Strategic Relationship Insurers. You will note that the specialist agencies occupy three of the top four rankings.

Change is underwriting attitude, principally driven by the performance of individual Client fleets, this has a marked impact on where placements are made and the Overall Satisfaction with Strategic Relationship Insurers. Given the volume of claims experienced in this line of Insurance, the handling of claims by Insurers is of paramount importance. Any improvement in results is reflective of a better overall outcome being achieved by our Clients.

Again, Commercial Motor is where we are observing a significant shift to the Digital Age. Insurers are employing the latest technology to assist with claims and beginning to use richer sources of data for underwriting.

GT maintains its lead, and while second place was tied last wave, CGU’s sharp decline has resulted in NTI holding a clear second position. Zurich is stable from last wave and maintains its position as lowest amongst insurers.

Commercial Motor - All Insurers

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GT leads across all aspects of Commercial Motor, though Sura follows closely behind for Competitiveness. NTI also performs well, consistently possessing above average scores throughout the board.

Commercial Motor - All Insurers

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Whilst Management Liability has been in existence for some time, this is the second time we have surveyed our Member Brokers regarding their dealings with Insurers; thus we are now able to include data and commentary.

This is a complex product and there are substantial coverage differences between the various Insurers. AIMS provides their Member Brokers with substantial comparison information to enable them to match the right Insurer to customer needs.

In addition, competitiveness and quote turnaround are very important when placing coverage for our customers.

Claims frequency from Management Liability is growing. These claims are multifaceted and complex. The low satisfaction with claims is not so much a reflection of poor performance, but more a statistical anomaly of the low claims numbers experienced by our Brokers.

Dual pips Chubb for the lead in Management Liability, with both stable or improving against last wave, along with CGU and Zurich. QBE, Vero and Sura have declined since last wave, with the latter in the lowest position.

Management Liability - All Insurers

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Dual lead across most aspects of Management Liability, with the exception of Claims where Chubb took lead. Chubb and CGU performed average or above average across all aspects of Management Liability.

Management Liability - All Insurers

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Cyber Liability is a new emerging risk and this is the second time we have surveyed our Member Brokers regarding their dealings with Insurers; thus we are now able to include data and commentary.

This is a complex product and there are substantial coverage differences between the various Insurers. AIMS provides their Member Brokers with substantial comparison information to enable them to match the right Insurer to customer needs.

In addition, competitiveness and quote turnaround are very important when placing coverage for our customers.

Claims frequency from Cyber is escalating rapidly. These claims are multifaceted and complex and in the main, the real key is the “first 24 hours response”. The low satisfaction with claims is not so much a reflection of poor performance, but more a statistical anomaly of the low claims numbers experienced by our Brokers.

It needs to be noted that major insurers had a small base for their Cyber insurance. Dual leads in Cyber insurance, followed by Chubb.

Cyber Insurance - All Insurers

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Cyber insurance was lead by Dual across all aspects except Claims, where Chubb had the leading score. It continues to need note that as a new product, few have been able to utilise the Claims service, resulting in lower response rates for the aspect.

Cyber Insurance – All Insurers

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Our Member Brokers have enjoyed significant relationships with our major Strategic Relationship Insurers over many years. All our Insurers have strived to build personal relationships with our Member Brokers and Clients and take significant interest in providing best services.

This enables the best possible transaction and placement on behalf of our Clients. Insurers deliver their services to our Member Brokers on a face to face basis (through BDMs) or via Central Service Centres (Underwriting Call Centres). Dependent upon scale of services required and the complexities of the placement; various Strategic Relationship Insurers select to provide their services via the two service models.

The Overall Satisfaction average scores are representative of how our Member Brokers judge the provision of these services either via BDMs or their Underwriting Call Centres. As this is the “front line” of our interaction with Insurers, this is a very important commentary on the relationship with our Strategic Relationship Insurers.

As Insurers strive to streamline and simplify their distribution process; they look to transact further business via Underwriting Call Centre’s. Our Brokers and their Clients note the service differential and the scoring represents their sentiment.

As mentioned in the Executive Summary; we have reached “The Tipping Point” and we are seeing our customer needs also satisfied by further Strategic Relationship Insurers. Dependent on the line of Insurance transacted, this can be via BDM’s or Electronic means. Commentary on this is also beginning to appear in this Issue.

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How our Brokers transact with Insurers is of paramount importance due to the volume of placements in any one year. Everyone seeks simplicity, speed and pinpoint response.

However, there is no denying this is still a “people driven business” where relationships enable our Brokers to recognise and understand the most efficient route to obtain the most suitable outcome for their customers. Technology assists this process.

Some of our newer Strategic Relationship Insurers have completely new engagement models, heavily reliant on technology supporting the personal interface.

In future surveys we intend to expand our assessment of these interactions and use these to assist our Brokers and Clients accessing the most suitable way to address the changes driven by the Digital Age.

QBE maintains the lead in BDMs, with Allianz remaining a similar distance in second place. All insurers maintain their positions since last wave. Across underwriting centres, CGU’s decline against QBE’s improvement since last wave has resulted in a rival for the lead, with CGU marginally maintaining its lead. Vero, Zurich and Allianz remains 1-2 points apart.

BDM and Call Centre's – Traditional Insurers

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Many of these Insurers transact specialised lines of Insurance and as such the matching of specific portions of customers needs to Insurer capabilities is streamlined. Much of this can be done via enhanced technology solutions. Hence, the closer and more “straight lined” results.

However, the availability of skilled and responsive people when required is what leads to a successful outcome for the customer.

This produces a slightly different profile of transaction to the traditional Insurers who provide their products, services and personnel across a broader array of customer needs.

As mentioned prior, in future surveys we look to expand our assessment of these varied interactions.

Sura takes the lead for Face to Face interactions, followed by Chubb. GT takes the lead amongst phone contacts, also followed by Chubb.

BDM and Call Centre's – Specialised Insurers

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Allianz Overview

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Allianz In The Market

Allianz is the fourth largest Insurer in the Australian Commercial Insurance market, with ~10% market share of GWP as at June ‘18.

Est. Commercial Insurance Market Share at June ‘18

Source: APRA, ASIC, Company data, October ’18

Despite the fourth-place ranking, Allianz does not dominate many segments or products like its peers in the top five. Consistent with its positioning in Personal lines, Allianz Australia is well diversified across products and customer segments, with a skew towards risks on the east coast.

Allianz’s relationship with insurance brokers in the small to medium segments of Commercial lines is much stronger than with international brokers, as evidenced by the share of wallet with AIMS members.

Looking forward: Challenges in the motor dealer channel, iCare restructuring, and NSW and QLD CTP scheme reforms are well understood by the industry, and could put pressure on Allianz’s Australian arm in 2018 and 2019. A disproportionate amount of growth may be required from Commercial lines to balance lost profits from other segments.

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Allianz holds the highest usage in Private Motor across insurers, while Business Pack was 2nd. Home, ISR and Liability Insurance rated third, with Commercial Motor seeing comparatively lowest usage ranking fourth.

Product Summary Usage

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The graphs opposite represent the degree of usage of Allianz in addressing the needs of our Clients in regard to each class of Insurance.

Example: 64% of our Member Brokers use Allianz for the placement of Personal Motor Insurance policies. This ranks them as No. 1 out of the four Strategic Relationship Insurers in regard to the degree of usage.

The Overall Usage and Satisfaction has a very high correlation to the amount of business they transact for our Clients and their ability to address and satisfy the Insurance needs of our Clients.

This usage is very reflective of who our Brokers approach “first” when seeking Insurer support for their Client portfolios.

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The following three graphs show the Year on Year change in Overall Satisfaction, Competitiveness and Claims Satisfaction. The individual product lines showing a green differential represent an improvement and the individual product lines showing a red differential represent deterioration.

This provides a more granular view of the change in Overall Performance of Allianz.

Year on year Allianz’s aggregate score for Overall Satisfaction has softened, driven by the later part of last year. Business Pack eased the most substantially, 8 points year on year.

Overall Satisfaction Year on Year

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Downward shifts are only marginal, especially in the current wave. Liability demonstrated an upshift in both waves in the last year, though all others have weakened overall.

Competitiveness Year on Year

Claims Satisfaction Year on Year

Much of the progress made in the November 2017 wave was lost in the current wave, though Allianz’s Claims Satisfaction is still up year on year. Most products improved at an aggregate level, with the exception being Private Motor.

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CGU Overview

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CGU In The Market

IAG (and its related Commercial Insurance brands including CGU and WFI) is the largest Insurer of Australian Commercial Insurance risks, with ~21% market share as at June ’18 (including Strata).



Macquarie estimates IAG’s Commercial Lines business contracted -1.3% in 2H18 vs. Australian Commercial Insurance market growth at +14.3% (excluding Workers Compensation and Personal Lines within IAG’s Business Division).

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CGU In The Market

IAG GWP Growth (6 months to Jun ’18 vs. pcp)

Notes: New Zealand data is in constant currency. 85% of IAG’s Personal lines in the Business Division are allocated to Home and 15% to Personal Motor.

Source: Company data, October ’18

The decline in Commercial risks in 2H18 was due to many factors, but primarily stemmed from continuation of the broad based portfolio remediation. Despite the shrinking Commercial book, IAG Group remains extremely strong, with high margins in Personal lines underpinning Group earnings.

Looking forward: We expect IAG to continue to remediate its Commercial portfolio in FY19. Further, we believe the long-term strategy of 50% GWP from direct channels and 50% for intermediated channels in the SME portfolio will categorise movements in this division for the next couple of years.

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The Business Pack was CGU’s most used product (75%), followed by Home Insurance (63%). CGU products generally had high relative usage, with half of products the highest used across all insurers. Commercial Motor however is now 3rd highest used, compared to being the highest in Nov-17.


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The graphs opposite represent the degree of usage of CGU in addressing the needs of our Clients in regard to each class of Insurance.

Example: 75% of our Member Brokers use CGU for the placement of Business Pack Insurance policies. This ranks them as No. 1 out of the seven Strategic Relationship Insurers in regard to the degree of usage.



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This provides a more granular view of the change in Overall Performance of CGU.

It needs to be noted that the ratings in Cyber insurance may have a drastic effect on the total score, due to volatility from its small base. With the exception of Mgmt. Liability, all products have declined in their Overall Satisfaction against last wave.


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Competitiveness has also experienced a decline across all products since last wave, and while this was highest in Cyber insurance, the small base must be noted.



ISR and Cyber have held in their Claims Satisfaction against last wave, but all other products have experienced some decline, particularly the Business Pack and Commercial Motor.

QBE Overview

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QBE In The Market

QBE is the second largest Insurer of Australian Commercial Insurance risks with ~18% market share as at June ’18 (including Strata).



QBE dominates all segments of the Australian Commercial Insurance market. Whilst IAG has a preference for small to medium sized insureds, QBE truly spans from small clients, as evidenced with their share with AIMS members, all the way through to global accounts, which they support through their global network.

In our view, the added exposure to large corporate accounts could spur pricing growth of QBE’s Australian Commercial portfolio for the next 12 months, with repricing in this segment higher than the SME segment at present.

QBE moved in a different direction after ANZ management changed in mid-2016, walking away from risks, tightening claims and underwriting teams, and pulling back on growth for Workers Compensation products in WA. Most importantly, QBE clearly communicated with insurance brokers that prices needed to rise. These efforts are now rolling through their second renewal season.

Looking forward: We watch with interest as QBE’s new Australia and New Zealand division CEO builds his strategy for the region, be it growth for market share, or policy contraction with a focus on underlying profitability. We believe the performance of the local business will be paramount as the broader group undergoes review.

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The Business Pack was QBE’s most used product, utilised by 7 in 10 members. Commercial Motor was next highest, followed by Home insurance. Cyber insurance was lowest used both within QBE, as well as in relation to other insurers.


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The graphs opposite represent the degree of usage of QBE in addressing the needs of our Clients in regard to each class of Insurance.

Example: 40% of our Member Brokers use QBE for the placement of Liability Insurance policies. This ranks them as No. 2 out of the eight Strategic Relationship Insurers in regard to the degree of usage.



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This provides a more granular view of the change in Overall Performance of QBE.

It needs to be noted that the ratings in Cyber insurance may have a drastic effect on the total score, due to volatility from its small base. There has been a general decline in overall satisfaction, with only Business Pack and Home insurance stable against last wave.


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Many products have remained reasonably stable for Competitiveness, fluctuating up to 3 points for Business, Home, ISR, Liability and Cyber. Private Motor and Management Liability have shown the largest declines since last wave.



Similar to Overall Satisfaction, Business and Home insurance remain in the positive against last wave, while other products have shown decline.

Vero Overview

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Vero In The Market

Suncorp (and its commercial insurance brands including Vero and GIO) is the third largest Insurer of Australian Commercial Insurance risks with ~11% market share as at June ’18.



Macquarie estimate that SUN’s commercial division grew +1.6% in 2H18 vs. Australian Commercial Insurance market growth of +14.3% (excluding CTP and Workers Compensation).

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Vero In The Market

SUN GWP Growth (6 months to Jun ‘18 vs. pcp)

Source: Company data, October ’18

In the last 12 months Suncorp management have been slowed by group issues such as the sale of the Australian Life insurance business, execution of the Marketplace strategy, and preparation for hearings at the Royal Commission. With most of these issues now behind them we would expect to see stronger results into FY19.

Looking forward: We believe Suncorp’s Commercial insurance portfolio will continue to shed market share for the coming 12 months, led by volume losses on a short-tail Commercial portfolio.

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Although over a third of brokers dealt with Vero’s Business Pack, they only ranked in fourth place, as did Private Motor, ISR and Liability Insurance. Vero’s Home Insurance was second highest in terms of usage, while Management Liability and Commercial Motor ranked fifth and seventh respectively.


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The graphs opposite represent the degree of usage of Vero in addressing the needs of our Clients in regard to each class of Insurance.

Example: 60% of our Member Brokers use Vero for the placement of Home Insurance policies. This ranks them as No. 2 out of the five Strategic Relationship Insurers in regard to the degree of usage.



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This provides a more granular view of the change in Overall Performance of Vero.

Vero’s Overall Satisfaction has remained relatively stable year on year, easing slightly at an aggregate level due to Management Liability. However it should be noted that larger fluctuations are unsurprising when bases are small.


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Competitiveness has softened slightly, with only ISR and Commercial Motor improving from last wave.



The aggregate score across products for Vero’s Claims Satisfaction has seen a downward shift, with ISR being the only product to obtain an increase in score.

Zurich Overview

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Zurich In The Market

Zurich is the fifth-largest Insurer of Australian Commercial Insurance risks with ~6% market share as at June ‘18.



Zurich has been through much publicised change in recent years. Zurich has contracted from underwriting ~$1.6b of premiums in Australia in 2013 to ~$0.9b in 2016. This decline was accelerated by the decision to cease underwriting for NSW CTP and Strata in 2016 as well as consumer credit insurance in 2015.

Zurich purchased travel insurance specialist “Covermore” in 2017 and announced their relationship with “BZ Insurance” for Home and Personal Motor insurance in early 2018.

Looking forward: We will continue to look at the AIMS survey for markers as to whether brokers perceive Zurich are improving their underlying Commercial offering in the Australian market.

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The Business Pack continues to be Zurich’s most used product (62%), followed by their Commercial Motor insurance. In comparison with other insurers, all products are 4th to 6th highest used.


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The graphs opposite represent the degree of usage of Zurich in addressing the needs of our Clients in regard to each class of Insurance.

Example: 62% of our Member Brokers use Zurich for the placement of Business Pack Insurance policies. This ranks them as No. 5 out of the seven Strategic Relationship Insurers in regard to the degree of usage.



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This provides a more granular view of the change in Overall Performance of Zurich.

Overall Satisfaction has increased across most products, though the largest contributor to the increased aggregate score was Cyber insurance, which should only be taken indicatively due to a small base.


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The aggregate score for Competitiveness has also improved, though again noting Cyber as the largest contributor. Mgmt. Liability was the only product showing decline against last wave.



Claims Satisfaction has improved in ISR, with marginal fluctuations across most other products.

SPECIALISED INSURERS

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Financial Commentary

We are unable to provide financial commentary in regard to the following operations in Australia; as they are not publicly listed companies in Australia whose data can be accessed.

CHUBB Overview

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Management Liability and Cyber Insurance rated second highest in terms of usage, with Liability being the only other product not to rate lowest or second lowest.


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Home Insurance and ISR perform slightly above the rest, with all other products rating similarly. Business Pack possessed the lowest share in the top 3 box, although Cyber Insurance obtained a slightly lower mean score.

Product Satisfaction Summary

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This is the second time that Chubb have been included in the survey on a Comprehensive basis.

Hence we do not have historic survey results and as such are unable to produce the degree of comparative data that is available on the five Traditional Insurers.

As further surveys are conducted and we begin to build historic survey results for Chubb; the depth of analysis on the Chubb portfolio and their participation with AIMS will expand.

DUAL Overview

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Management Liability continues to be DUAL’s most used product, and highest used amongst other insurers, along with Cyber insurance. Liability is least used both within DUAL and against other insurers.


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DUAL’s products performed consistently, receiving top 3 box scores from over 1 in 2 users, and a mean score of 7.7 - 7.8 out of 10.


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This is the second time that Dual have been included in the survey on a Comprehensive basis.


As further surveys are conducted and we begin to build historic survey results for Dual; the depth of analysis on the Dual portfolio and their participation with AIMS will expand.

GT Overview

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Almost 2 in 3 (63%) members had dealt with GT’s Commercial Motor, making it the most used Commercial Motor across all insurers.


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GT are a specialist Insurer focused on providing Commercial Motor and Heavy Fleet Insurance coverage.

This is the second time that GT have been included in the survey on a Comprehensive basis.


As further surveys are conducted and we begin to build historic survey results for GT; the depth of analysis on the GT portfolio and their participation with AIMS will expand.

NTI Overview

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Commercial Motor is the only NTI product captured by AIMS, and is used by 59% of AIMS respondents, making it the second highest used out of the 8 insurers that offer Commercial Motor.


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NTI are a specialist Insurer focused on providing Commercial Motor and Heavy Fleet Insurance coverage.

This is the second time that NTI have been included in the survey on a Comprehensive basis.


As further surveys are conducted and we begin to build historic survey results for NTI; the depth of analysis on the NTI portfolio and their participation with AIMS will expand.

SURA Overview

91

Sura ranked lowest or second from lowest across all products, though more than half used the Business Pack.


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Commercial Motor scores highest in both mean and top 3 box, although Business and Liability follow closely for top 3 box. Management Liability performs lowest on both measures though still obtains a reasonable mean score.


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SURA are a specialist Underwriting Agency focused on specific lines of Insurance risk.

This is the second time that SURA have been included in the survey on a Comprehensive basis.


As further surveys are conducted and we begin to build historic survey results for SURA; the depth of analysis on the SURA portfolio and their participation with AIMS will expand.

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Macquarie. The Insurance Brokers Bank

With over 30 years’ experience working in the insurance broking industry, wehave developed a unique understanding of what really matters to our clients –and what will help them grow. We have developed strong working relationshipswith AIMS members to support them achieve their business goals - whetheryou’re focused on organic growth, premium funding, acquisition or successionplanning.

We can unlock new opportunities for your business, with our proven trackrecord of creating tailored banking solutions with tangible benefits. And thatstarts with analysing your current cash management and payment processes tofind a more efficient solution.

Our technical expertise in the Insurance broking industry stems from years ofexperience, investment in staff, technology and processes. We have honed ouroffering through close working relationships with our clients, centred on thecommon goal of simplifying and enhancing the broker and client experience.Today, we are the most recognised and called upon bank in the Australianinsurance broking market.

We offer market leading payments technology and customised bankingsolutions to help make life simpler for you, your team and your clients.

Contact a relationship managerTo find out how we could help your business grow, please contact Eoghan Trehy,National Head of Insurance Broking on 0437 367 908 or [email protected]

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Top 3 box scoring refers to the top 3 boxes in a survey result i.e. ratings 8, 9 and 10. See below diagram for further clarification. These scores then get aggregated for further analysis usage.

10 Excellent

9

8 Good

7

6

5 Neutral

4

3 Poor

2

1 Very Poor

Top 3 box scoring

Bottom 3 box scoring

Top 3 Box Scoring

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Powering a new generation of Insurance through

strategy, action and innovation.

AIMS (A&I Member Services), is the member services provider to Austbrokers and IBNA. AIMS is a joint venture between the two, and works for the collective benefit of the member brokers.

www.aims.insure

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