Management

Aussie insurance brokers: customer service harder than finding cover for natural disasters or cyber attacks

A STRANGE TWIST in the insurance industry is occurring as insurance brokers struggle to manage an onslaught of customer service demands. Brokers are finding that situation more difficult than dealing with finding adequate cover for natural disasters or cyber attacks.

Brokers’ customer service challenges have been highlighted in new research from insurance technology provider JAVLN. According to the JAVLN report, Brokering Change, Australia’s insurance brokers now believe that providing the right level of customer service is becoming a greater challenge than finding adequate cover for the big headline issues of natural disasters or cyber attacks. 

This is despite the frequency and severity of natural disasters and cyber attacks increasing in Australia. Intensifying customer demand comes second on the list of significant industry challenges, according to 26 percent of brokers in Australia, led only by insurance affordability at 28 percent.

Third and fourth on the list respectively are increasing competition (25%) and providing cyber insurance (24%). Finding adequate cover for natural disasters, measuring an evolving risk landscape and attracting and retaining talent all come out at 23% each.

The news comes off the back of recent research by insurance giant Vero, which found that client satisfaction with brokers is at record highs, suggesting that while brokers are succeeding, they are finding it difficult.

In JAVLN’s research, brokers admit that meeting those demands is tough. Just 28 percent of brokers say their clients would rate their customer service levels at least eight out of 10, while 23 percent say they found 2023 a tough year for customer relationships.

As a result, 24 percent of brokers say they would specifically like to develop their customer service skills in 2024.

Brokering Change report

JAVLN’s research-led report called Brokering Change used global research company, Censuswide, to survey 500 insurance brokers working in small broking firms in Australia in January 2024, uncovering the mindset and challenges facing the industry this year.

Part of the reason brokers see customer service as such a challenge is because of how much they are being pulled in different directions by menial tasks every day, the report revealed. According to the research, 70 percent of brokers spend more than three hours per day on administrative tasks like processing and data entry, while a quarter (24%) said adhering to compliance was becoming harder and more time consuming.

Founder and CEO of JAVLN, Dale Smith said, “The insurance industry in Australia needs brokers more than ever, but if those brokers have to fight battles on multiple fronts every day, they’re naturally going to struggle to deliver the kind of customer service they’d ideally want.

“When you look at the root cause of most productivity issues in Australian brokerages, you quickly realise it’s a tech problem.

“Most brokers are lumbered with old clunky technology to do their jobs, which makes managing client and policy information extremely difficult, and in turn makes customer service difficult,” Mr Smith said.

Tech not fit for purpose?

JAVLN’s research backs up Mr Smith’s claims, with 27 percent of brokers saying the technology they use to manage clients and policy information was too confusing, and 23 percent believed the technology currently serving the insurance broking industry was “not fit for purpose any more”.

Almost a third (30%) of brokers say that having a more modern cloud-based tech setup for managing clients and policies would be a real differentiator for their business.

“Technology is now more important than ever in insurance, not simply just to keep up with other financial industries, but also to help broking firms in Australia take their services to the next level,” Mr Smith said.

He described JAVLN as a “world-class intelligent insurance software company” formed in 2011 to create a SaaS cloud-based platform specifically designed for insurers, agents, underwriters and brokers. Mr Smith said JAVLN provided “full end-to-end policy visibility, delivered securely in real time”.

www.javln.com

 

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Ombudsman helps small businesses to resolve niggling, costly disputes

DISPUTES about being paid, trouble with a digital service provider, contract battles and franchise disagreements are the top four issues for which small businesses have sought the help of the Australian Small Business and Family Enterprise Ombudsman over the past six months.

The Ombudsman, Bruce Billson, said two out of every five requests for help from a small business related to a payment dispute – while almost one-quarter of cases involved digital platform providers.

Among the issues that required active case management, about 15 percent related to contract disputes while 9 percent involved a franchise disagreement, according to the latest snapshot of assistance cases. 

Since being established in 2016, the Ombudsman has helped more than 40,000 small and family businesses with no cost or low-cost solutions to disputes. Court-based remedies are rarely suitable for these kinds of disputes due to the significant costs, delays, risks and difficulties accessing affordable justice.

“It has been a tough year for small and family businesses coping with cost of living pressures not just on themselves but their customers,” Mr Billson said.

“We can’t guarantee that every small business will succeed but it is our mission to provide all the help we can for those who want to start, grow or transform a business, and that no business fails because the owners didn’t know about something that might have helped.

“When a small business finds itself in a dispute or having trouble it has tried to but can’t resolve, we are often able to help navigate a pathway to a solution.”

Power imbalances, late payments bedevil SMEs

Mr Billson said being paid on time was critical to the viability of most small businesses.

“Cash flow is the oxygen of enterprise but difficult conditions mean when one party is late in paying, it can cascade through the supply chain,” he said. “Sadly, too often that first party that is slow to pay its suppliers is a big business or a government department.

“Power imbalances make it difficult for a small business to pursue timely payment for their services. In one case a government department was three months late in paying their bills, despite multiple reminders from the small business. In another case, a sub-contractor in the construction industry came to us after he had not been paid for many months and became homeless.

“For small and family business owners, their identities are interwoven into their business and the stakes are so much higher than just a job,” Mr Billson said. “Many have invested a lifetime – and put their life’s savings and family home on the line to build up their business. Nearly half of outstanding small business debts are secured by residential property.

“When a small business is not paid, it puts extreme pressure on all aspects of their lives. These pressures are amplified with higher interest rates and businesses facing challenges are drawing on their cash buffers to keep their business afloat. And let’s never forget that the business owner will pay themselves last after paying their bills and staff, so slow payment can needlessly amplify the risks of business ownership.

“Research by my office shows 43 percent of small businesses do not make a profit while 75 percent of self-employed small business owners working full time earn less than average full-time adult weekly earnings.”

Mr Billson said contract disputes ranged from cases where a small business was unaware of auto-renewals for goods and services to terminating agreements.

“In one case a family-owned cinema in a coastal town came to us about a long-running dispute they had with a beverage supplier that had escalated to the point where they had broken fridges and could not meet the terms of their contract to sell a set quantity of drinks, which in turn was causing financial hardship,” Mr Billson said.

“Our case manager directly contacted the head office of the beverage company and helped not only to resolve the contract dispute but assisted both parties to improve their processes. The cinema has decided to keep that beverage supplier for a new contract supported by better mutual understanding.

“This is a great result. Most small businesses in a contract dispute do not want to end the business relationship. They want to keep doing business but they often struggle to fix problems when they arise.

“We can give small businesses the skills – and sometimes case management – to resolve the dispute without ending the business relationship.”

Digital platforms troublesome?

Mr Billson said there had also been a sharp rise in the number of disputes involving digital platform providers.

“Digital platforms have fundamentally changed the way in which small and micro businesses connect and sell to their customers yet when there is a problem – such as having your account shut down after being hacked – solving it can be a nightmare,” he said.

“Often there is no real person you can speak to, and the automated systems prevent you being able to escalate the issue. One of the absurdities is after being locked out of your account, you need to access your account to make a complaint. It’s the ultimate run around.

“Some people have built their entire businesses on social media and digital platforms and having someone else access and control their account is devastating for their business and their reputation. They watch the financial and emotional damage occur in real time with no ability to stop it.

“Hundreds of small business have sought our help in dealing with their digital provider to unlock their accounts so they can get back to doing business.”

Tricky franchise issues

In the franchise sector, cases have involved managing disputes about the sale of a business, fees and charges associated with the franchise, helping parties to amicably terminate agreements and organising Alternative Dispute Resolution when other efforts had failed.

Mr Billson said many other disputes involving small business such as those about insurance, telecommunications, banking and finance, cyber security and workplace issues such as health and safety, were referred to other relevant dispute resolution agencies because the Ombudsman’s legislation prevents the office from duplicating the functions of other Commonwealth, State or Territory agencies.

“We happily provide a type of triage service to receive the dispute and then assess whether we are best equipped to help or whether the small business will be best served by sending their case, with their permission, to the most appropriate federal or state agency,” Mr Billson said.

Small businesses who are in a dispute or need assistance can contact the Ombudsman at www.asbfeo.gov.au

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Small business owners 'age up'

AUSTRALIA's small business owners are rapidly getting older as the proportion of younger entrepreneurs shrinks, according to research from the Australian Small Business and Family Enterprise Ombudsman.

Ombudsman Bruce Billson said the most common age of small business owners across Australia is 50 years, compared with 45 years in 2006.

“In the 1980s there were actually twice as many small business owners aged between 30 and 49 as there were aged over 50,” Mr Billson said.

“The Intergenerational Report being released by the (Federal) Treasurer (Jim chalmers) this week highlights the ageing of the population and the quest to make our economy larger to meet the challenges and opportunities of the future. 

“Small business, which accounts for 97 percent of all businesses and provides jobs for over 5.1 million people and employs 42 percent of all apprentices and trainees, stands at the epicentre of this mission and energising enterprise will help deliver the growth to meet future needs," Mr Billson said.

“But the small business sector faces its own demographic challenges with only 8 percent of small business owners aged under 30. It is half the peak for this age group of 17 percent achieved in the mid-1970s.”

Mr Billson said in some sectors it was even lower, such as retail where only 6 percent of small business owners are today aged under 30.

“We need to replenish and nurture the next generation of entrepreneurs, value self-employment and encourage and enable smaller enterprises and the livelihoods they make possible,” Mr Billson said.

“We need to understand why it is not as appealing as it perhaps should be for younger Australians to own a small business?”

More than one in five small business owners (22 percent) are aged 60 and over.

In agriculture, forestry and fishing two-thirds of small businesses are owned by people over the age of 50.

Other sectors where more than 50 percent of small business owners are aged 50 or over include manufacturing, retail, finance and insurance, real estate, wholesale trade, utilities and waste services.

www.asbfeo.gov.au

 

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How savvy business leaders can best utilise freelancers and avoid miscalculations

By Jonathan Perumal >>

ECONOMIC PRESSURES and fears of global financial instability are leading many Australian businesses to implement hiring freezes or lay off significant numbers of staff. This trend is particularly visible among technology companies and start-ups as they scale back previous growth forecasts.

In this uncertain environment, companies need to remain agile and effectively utilise all the resources available to them to remain competitive. One way to do this is by bringing in freelance workers, also referred to as independent contractors, rather than hiring new full-time staff. 

There are 1.1 million independent contractors in Australia, comprising more than eight percent of the employed population, according to recent ABS data on working arrangements.

Companies can tap into this local talent pool, or bring in international freelancers, to supplement skills gaps, for extra support during certain phases of the business cycle, and to execute specific projects.

But in doing so, it is important for businesses to understand the risks of misclassification, which can result in substantial penalties.

Freelancers bring independence, flexibility, cost savings to a business

Freelancers can provide benefits that businesses may not get with existing employees. They are typically highly skilled individuals with deep expertise in their respective fields. Working with a variety of clients can also give them a greater breadth of experience than employees who work for a single company.

Freelancers typically use their own tools to complete work, meaning there is less reliance on company resources. They also retain a degree of control and independence in doing so, meaning that businesses that hire them can focus on the deliverables, not the steps taken to get there or the time they allocate to the task.

As freelancers usually don’t require, or expect, much oversight in their work from clients when completing projects, management and administration teams can spend less time managing a freelancer’s workload. These teams can direct their energy to other tasks, like developing company strategy and longer-term goals.

Businesses can bring in and let go of freelancers as their needs change, without the obligation to provide the overhead associated with a full-time employee. Companies are also not required to make employer tax liability payments because freelancers are self-employed.

For these reasons, it can be more cost-effective to work with a freelancer as opposed to an employee – under the right circumstances.

Freelance workers can be an asset to businesses that are looking to supplement their internal resources or complete certain projects during times of economic strain. However, without a solid understanding of regulations governing the use of independent contractors, coupled with robust plans outlining the work they are tasked to do, the risk of misclassification and ensuing penalties is significant.

Understanding misclassification risks and remaining compliant

In 2018, Foodora Australia admitted to owing their thousands of food delivery drivers over $7.5 million in wages and superannuation, an underpayment that resulted from misclassifying them as independent contractors instead of employees.

The penalties involved with contractor misclassification are costly, with Australian companies liable to a $63,000 fine per violation, as outlined by the Independent Contractors Act 2006 in conjunction with the Fair Work Act 2009.

Since freelancers are responsible for their own employment taxes, social and health benefits, government regulations are in place to protect them in an employment relationship. For example, in certain circumstances, which are outlined by the Australian Taxation Office, businesses must pay superannuation for contractors who are considered employees for superannuation purposes.

To ensure your business is fully compliant with local laws when hiring a freelancer, keep these five ideas in mind:

  1. Prepare in advance for an audit - Conduct regular audits to determine how freelancers are being used within a company. Ensure there is a standardised process for managing contractors and their agreements, including comprehensive recordkeeping and payment transaction logging, which are beneficial to have on-hand and ready-to-go in the case of an audit.
  1. Understand international employment laws - Companies that take a global approach to their search for talented freelancers who may not be found as easily in the local region should understand what international employment laws determine the criteria for engaging freelancers, as they are often complex and can differ greatly country-to-country.
  1. Align the legal requirements with what you’re engaging the freelancer to do - Remember that for most independent contractors, they are not beholden to meetings, time ‘on the clock’ or other behaviour that a full-time or part-time employee engages in. Most often, the work requirements are aligned with project-based work versus continuing contribution to the company goals.
  1. Do not roll your freelancer into your day-to-day operations - Whether this is attempting to determine work hours or location or adding them to any platform or system that is used to manage employees.
  1. Ensure you have protection agreements in place - IP agreements, NDAs, and data protection agreements will protect your organisation, clients and the worker from any conflicts or confusion about the work relationship down the road.

Freelancers can be a great resource for businesses to fill skills gaps or complete projects, but it is vital to be aware of and actively manage the risks associated with misclassification when utilising the gig economy.

 

ABOUT THE AUTHOR:

Jonathan Perumal is the Australia-New Zealand (ANZ) region country manager at Safeguard Global, helping ANZ companies hire talent anywhere in the world, fast and compliantly. Mr Perumal has worked for a several fast-growth tech companies including Salesforce, Success Factors, OneLogin, Workday, and Q-CTRL over the past two decades and joined Safeguard Global last year following its expansion into ANZ. He has a proven track record of driving revenue and building strong team, client, and business partner relationships and has worked with cross functional units to drive business improvement through system optimisation and sales process improvement.

www.safeguardglobal.com

 

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Power business 101: Lower electricity costs with fewer emissions

By Leon Gettler, Talking Business >>

IMAGINE getting a cheaper electricity bill in a plan that reduces environmental pollution, giving off fewer greenhouse gas emissions.

That’s the promise of EnergyIQ, an energy switching site for those looking for renewable energy options.

It’s an attractive proposition, with some customers shocked after being told that they'll be hit with a massive hike to their electricity rates next month – some facing increases of up to 83 percent.

Energy IQ operates on the eastern seaboard from South Australia up to Queensland. Western Australia, Tasmania and Northern Territory aren’t competitive as they have only one power supplier. 

Ross Sharman, the founder and CEO of EnergyIQ in Australia, said it made sense for consumers and households now battling rising energy prices to switch.

Power change made easy

Mr Sharman said Energy IQ allowed households and energy users to upload bills and switch to a cheaper provider – and they can do it digitally in a few seconds without having to go through a call centre

“We provide that service to banks and governments. We have our own consumer facing service that is basically a market place for more renewable focused energy retailers to help consumers switch to more renewable energy,” Mr Sharman told Talking Business.

He said energy costs would keep going up.

“It’s going to get more expensive, so being on a cheaper plan – but ideally on a plan that pollutes the environment less – is a good choice for consumers to make,” Mr Sharman said.

He said the energy sector was one of the biggest polluters in Australia at the moment, “mainly through coal”.

“Those coal power stations have life cycles of 10 to 15 years left and there’s a transition away from coal that’s going to happen, because solar and wind are now cheaper than the dark stuff,” he said.

“We’re just trying to help to expedite that shift away.”

Businesses must consider emissions now

Mr Sharman said Australian corporates were now addressing greenhouse gas issues.

“Big corporates now have a social responsibility and that goes all the way up to banks,” he said.

“They literally have to report on their activities to reduce their climate impact.

“Big businesses are doing this now, so home owner or consumers care more than they did in the past. Small businesses really have a duty to try and do the right thing as well. They’ve got a choice. It’s not going to cost them extra, which it shouldn’t do, then shifting to renewable resources is a good thing.”

Mr Sharman said households that changed their energy provider to one that uses renewable energy were, in effect, making that choice away from coal.

He said Australians had become more aware of climate change and greenhouse gases because of storms and bushfires.

Mr Sharman said gas will be an important “part of the mix” as Australians move to renewables, but its importance will decrease over time.

“It’s really going to be the next five years or 10 years that it will play a role,” he said. “After that it will become negligible.”

As an example, he cited South Australia which was running almost 100 percent renewables. There is no coal and it uses some gas.

“It uses gas but it’s realty about balancing the assets and using gas to fill that void,” Mr Sharman said.

www.leongettler.com 

 

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness.

https://play.acast.com/s/talkingbusiness/talking-business21-interview-with-ross-sharman-from-energyi

 

   

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