Taking insurance in toughening times? Be choosy says Gallagher
MOST business leaders agree that the insurance markets are ‘hardening’ – but how to handle this to best business effect is as challenge.
One experienced insurance advisor is suggesting business leaders do what he is doing: take a lead from how insurance brokers are handling the situation themselves.
Gallagher Queensland’s Chris McKeown, a respected corporate advisor with more than 20 years experience in the insurance industry, said in general most types of insurance are likely to be harder to place for brokers, the deals will be less advantageous and cover will cost more.
“That’s where a low claims record, sound risk mitigation strategy and good advice can achieve savings,” Mr McKeown said.
“Everyone is talking about a hardening insurance market but what does that mean for insurance brokers and their clients?”
Mr McKeown said after a year of catastrophic weather events in 2017 global disaster insurance losses were estimated by global reinsurer, Swiss Re, to be in the region of US$306 billion.
“In an environment where reinsurers and insurers alike are very much international players this matters because capacity is reduced,” he said.
“Locally we are seeing a governmental crackdown on financial institutions, corporate governance is being made more accountable, insolvencies are on the rise, flammable cladding has increased risk in construction and Australia is one of the most litigious countries in the world when it comes to liability suits.
“That’s without touching on the cyber-crime wave of attacks on businesses that experts such as digital security specialists McAfee are predicting.”
Mr McKeown – who has advised start-up organisations through to multinational companies – said an insurance broker who understands how a business operates and the conditions it operates under, and who takes the time to run analytics on its risk profile, “can make better informed suggestions about managing these risks and is a key asset in these kinds of market conditions”.
According to Mr McKeown, another major consideration should be achieving integrated cover without gaps or loopholes that can occur when shopping for insurance on a piecemeal, separate policy basis.
“A tailored solution packaged into a single program ensures your business is comprehensively covered and offers its owner greater control with a preferred insurer,” he said.
“Insurance is one area where the cheapest option isn’t necessarily the best deal. Shopping around for a broker with experience in your industry and insight into your professional needs will pay off when you need to claim.”
Gallagher began trading in Australia in 1985 and is wholly owned by Arthur J. Gallagher and Co, a family-owned US brokerage founded in 1927. In Australia and New Zealand, Gallagher employs more than 2500 staff in over 60 locations.
Gallagher is an Industry Expert member of Queensland Leaders.