INSURANCEBUSINESSONLINE.COM.AU
ISSUE 2.5
CRACKING THE CODE
CYBER INSURANCE – THE NEXT BIG THING?
TROUBLE AT SEA
THE LATEST ON MARINE INSURANCE
INDUSTRY LEADERS INTERVIEWED
ROBERT KELLY AND DALLAS BOOTH SPEAK
Australia’s best-performing brokerages revealed
14 | NOVEMBER 2013
SPECIAL REPORT / TOP 10 BROKERAGES
The Insurance Business
2013PROUDLY SPONSORED BY:
NOVEMBER 2013 | 15
INSURANCEBUSINESSONLINE.COM.AU
For the second year running, Insurance Business has ranked Australia’s brokerages to find the top performer in the country. Who came in at number one?
Welcome to the 2013 Insurance Business Top 10 Brokerages Special Report.
Like our inaugural ranking last year, this year’s research has rated and ranked Australia’s independent brokerages to find the company worthy of the title of Australia’s Top Brokerage.
It’s not just about the biggest gross written premium, though: our unique ‘handicap’ methodology means we can measure brokers large and small on a level playing field to find the nation’s best performer.
As the second edition of the ranking, we expected to receive more entries, but we were overwhelmed with the response from brokers this year. Thanks to all who put themselves forward for consideration.
So, without further ado, which brokerage is the best performer in Australia? Find out overleaf.
– Kevin Eddy, editor, Insurance Business
A WORD FROM OUR PARTNERSAs a company focused on intermediated distribution, Calliden is proud to support the Insurance Business Top 10 Brokerage ranking for 2013. Well done to every brokerage that has participated this year, and special congratulations to this year’s top 10 as ranked by Insurance Business.
Calliden is an ASX-listed insurance group made up of one of Australia’s largest insurance agencies, Calliden Agency Services Limited, and an APRA-licensed insurer, Calliden Insurance Limited. Calliden delivers a choice of commercial, personal and specialist insurance options to intermediaries and third-party agency partners using a range of well-capitalised insurers.
Mike HootonGroup Executive, Agency Services
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SPECIAL REPORT / TOP 10 BROKERAGES
The Insurance Business ranking system is an objective means of ranking the best-performing insurance brokerages in the country.
Each brokerage was required to supply its own details to Insurance Business to be eligible. In total, there were eight criteria, covering: total revenue policies written revenue per broker policies per broker new clients per broker new revenue per broker company growth client retention
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TOP THREE – BY CATEGORY
Each brokerage was ranked in each of these measurements and the sum of all of their rankings was calculated. The brokerages were then placed in order of which had the lowest overall score (think of it as a golf score, where having higher rankings in each section means you have a lower total score).
By ensuring that the majority of measurements rewarded business per broker rather than just critical mass, the very best brokerages were rewarded, rather than just those producing a large amount of business.
POLICIES WRITTEN
BROKERAGE
1 MGA Insurance Brokers
2 NAS Insurance Brokers
3 Westcourt General Insurance Brokers
TOTAL REVENUE
BROKERAGE
1 MGA Insurance Brokers
2 NAS Insurance Brokers
3 Westcourt General Insurance Brokers
NEW REVENUE PER BROKER
BROKERAGE
1 Mega Capital
2 Allinsure (IAA)
3 IAA – Bresland Consultants
NEW CLIENTS PER BROKER
BROKERAGE
1 Mega Capital
2 Bruce Insurance
3 Elliott Australia Group Pty Ltd
REVENUE PER BROKER
BROKERAGE
1 IPS Insurance Brokers Pty Ltd
2 Mega Capital
3 IC Frith WA
COMPANY GROWTH
BROKERAGE
1 Elliott Australia Group Pty Ltd
2 Trade Credit Risk Pty Ltd
3 Mega Capital
POLICIES PER BROKER
BROKERAGE
1 IPS Insurance Brokers Pty Ltd
2 Mega Capital
3 MGA Insurance Brokers
CLIENT RETENTION
BROKERAGE
1 Elliott Australia Group Pty Ltd
2 IC Frith WA
3 MGA Insurance Brokers
THE METHODOLOGY
189,453Total number of policies written by the Top 10 Brokerages
between 1 July 2012 and
30 June 2013
NOVEMBER 2013 | 17
What’s your reaction to being named one of the Insurance Business Top 10 Brokerages?To remain in the top 10 is a great achievement and a rewarding accolade for all staff at Unity.
What’s the most important thing a broker can do to develop their business?Look after your staff, enhance technology where it improves efficiency, and don’t neglect to service your clients’ needs on a personal level.
What’s the biggest challenge facing the industry today?Direct market competition.
How would you change the industry to help brokerages flourish?The introduction of insurance [education] in high schools and university, which will lead to people entering the industry with qualifications and an understanding of the insurance industry as a viable career option.
What sets your firm apart from your rivals?With the size of our brokerage, we proudly maintain a culture that involves a hands-on relationship approach with our clients. This culture is willingly adopted by all staff at Unity and has served us successfully for 35 years.
What’s next?We are constantly looking to improve how we interact with clients, adopt a methodology of better using available technology, and enhance our reputation in the community.
What’s your reaction to being named one of the Insurance Business Top 10 Brokerages?Second year in a row – we must be doing something right! But the support we receive from IAA has helped us to achieve this status.
What’s unique about working in insurance?It is a most rewarding career. We learn a lot about all types of businesses. What other career gives such a wide experience?
What’s been the biggest challenge of the last year? Maintaining the current level of growth.
What’s been the biggest highlight of the last year? Being in the top 10 of these awards and also being for the second year a finalist in the IAA AR of the Year award.
What’s the most important thing a broker can do to develop their business? Provide honest and genuine service to their clients.
What’s the biggest challenge facing the industry today? Direct market deluding the public into thinking they are getting the same cover but at a cheap price. If it is cheap, there is only one way that is possible – reduce cover. The direct market does not generally provide advice to cover a client’s whole program. They only sell their own products, in some cases leaving the client glaringly uninsured but taking no responsibility.
How would you change the industry to help brokerages flourish? Make direct insurers responsible for their clients to ensure they have the correct cover and have the same responsibilities as a broker. If they wish to play in this field, then make it an even field.
What sets your firm apart from your rivals? Belonging to the IAA network, and the service level we provide to our clients.
Unity Insurance Brokers Last year’s ranking: 4GRAHAM D’ARCY, CHIEF FINANCIAL OFFICER
IAA – Bresland ConsultantsLast year’s ranking: 5(as Insurance Advisernet)
RUSSELL BRESLAND, PRINCIPAL
Russell Bresland
“Don’t neglect to service your clients’ needs on a personal level”Russell Bresland
6 Brokerages are based in Western Australia
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SPECIAL REPORT / TOP 10 BROKERAGES
What’s your reaction to being named one of the Insurance Business Top 10 Brokerages?It reaffirms that the hard work and dedication exhibited by every member of the team at Scott Winton results in client satisfaction, strong performance and long-term company stability.
What’s unique about working in insurance?It is a service that everyone needs. We must guide customers in identifying the best way to protect their assets, allowing them to concentrate on their core business.
What’s been the biggest challenge of the last year?With customers and revenues increasing, one of the biggest challenges over the last 12 months has been managing company growth while at the same time ensuring that clients continue to receive excellent service and insurance packages that are specifically tailored to their needs.
What’s the most important thing a broker can do to develop their business?Differentiate themselves from the competition, and give clients a reason to choose them and stay with them. Strong relationships lead to loyalty, and Scott Winton has a strong focus on building long- term relationships with its clients based on trust, confidence and open communication.
What’s the biggest challenge facing the industry today?The biggest challenge is competition from companies who have not traditionally operated in the mainstream insurance industry and the ever-increasing market for online insurance products.
How would you change the industry to help brokerages flourish?Insurance brokers need to take steps to deepen their expertise and promote their value to customers. The ability to explore new opportunities and provide sound advice and strategic solutions for clients is key to a thriving sector.
What’s unique about working in insurance? I think insurance gets in your blood. It’s great working with and getting respect from your clients. I have clients that have been with me for years and that trust is great.
What’s been the biggest challenge of the last year? We spent a lot of time working on the business: getting our systems better and our staff to be more effective in what they do each day.
What’s been the biggest highlight of the last year? We increased the number of ARs who joined our network – some great people with excellent knowledge who share with others within our group. That’s always great.
What’s the most important thing a broker can do to develop their business? The basics: do the hard yards; always be available; be professional; and constantly learn and mix with others in our industry.
What’s the biggest challenge facing the industry today? I think as Australians we are underestimating the future effect of the direct/online insurer. We need to offer existing and new clients more service. As brokers, we also need to be looking at what we can offer online.
How would you change the industry to help brokerages flourish?I think we need to reduce the number of brokers within Australia. Brokers need to spend more time training and bringing people into the industry.
What’s next? We intend to continue to grow our network to double our size over the next few years. Next year we will hold our own offshore conference and we would like to have an involvement in an underwriting agency. For us, it’s all about growth and getting our name out there.
Scott Winton Insurance BrokersLast year’s ranking: 8RON TATARKA, MANAGING DIRECTOR
Westcourt General Insurance BrokersLast year’s ranking: New entryJEFF HOLLANDS, MANAGING DIRECTOR
Ron Tatarka
8 7
8,887Average number
of clients per brokerage
NOVEMBER 2013 | 19
Elliott Australia GroupLast year’s ranking: New entryJOHN ELLIOTT, CEO
6What’s your reaction to being named one of the Insurance Business Top 10 Brokerages?It was fantastic to see that for all the hard work our team has put in that we have been able to be in the top 10 brokerages in Australia in regard to growth.
What’s been the biggest challenge of the last year?We have had a new range of clients from the rural sector, which presented a range of challenges that we had not experienced before, including developing our internal systems in order to deliver the same high level of services our metro clients currently receive.
Together with the head of our rural department, David Powell, we have been able to improve the
service offering to these clients to a level they have never experienced before.
What’s the most important thing a broker can do to develop their business?Develop your team. By focusing on the staff and ensuring they are happy, well trained, well rewarded and are a good mix with each other, your business will naturally develop.
What’s the biggest challenge facing the industry today?Price-focused clients, resulting in underinsurance. Getting the message across to our clients and future potential clients has a great deal of challenges, and it’s only when we have a large event such as the Queensland floods that the issue is highlighted.
Clients understand that there is a great deal of difference between a Hyundai and a BMW. They would never expect to purchase a BMW for the price of a Hyundai. Unfortunately, in our industry we have clients expecting this every day. The challenge is how we educate our clients and potential clients without sounding like an ‘insurance salesman’.
$79.8mTotal revenue of Top 10 between 1 July 2012 and
30 June 2013
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SPECIAL REPORT / TOP 10 BROKERAGES
What’s your reaction to being named one of the Insurance Business Top 10 Brokerages?I am humbled by the honour. It really is a credit to our team. This is not just something that has happened by chance but was made possible by a number of people challenging the way we do things and ensuring we deliver for our customers.
What’s been the biggest challenge of the last year?Controlling costs of doing business, especially with the recent uncertain economic times and the regulations that govern the way we do business: it forces up costs for the end consumer. This has meant that now, more than ever, our customer service standards have really needed to show and reflect real value and advice to our valued clients.
What’s the most important thing a broker can do to develop their business?Do as you say and do it when you say you will. Customers today are becoming more and more impatient, and delivering timely, accurate informa-tion – good old-fashioned customer service – is more important today in building and retaining clients who then become advocates for your business. What sets your firm apart from your rivals?Staying at the forefront of our market by consistent disciplined marketing and relationships with our suppliers. We have developed a mobile-savvy website for ease of use, and have communications including newsletters, surveys, updates, etc., going out frequently to our clients.
What’s next?Looking towards the future, our expansion goals may not be obtained through organic growth alone. We are looking at growth through acquisitions that complement and leverage our services and enable us to become more efficient in what we do. This will allow our staff a wider range of career opportunities, help reduce our cost base, and benefit our customer base.
What’s been the biggest highlight of the last year?Seeing my team develop new strategic ideas and having really good success upon implementing them. We have set a really good platform for growth, and the future is exciting.
What’s the biggest challenge facing the industry today?Overcoming the poor public perception our industry has. It is frustrating how often highly educated people make negative comments about our industry which I believe is a result of their lack of under-standing of how important the insurance industry is and the great work people in it do every day.
How would you change the industry to help brokerages flourish?Ban insurers from advertising based on the cheapest price. It reflects on the whole industry and teaches consumers that the only thing they should consider is price.
What sets your firm apart from your rivals?We have a really motivated and talented group of young professionals that have been together for a long period now. They have set themselves and our business up for success.
What’s next for your firm?Consolidating some of the things we have been doing over the past 12 months to hopefully take us to the number one position next year!
IC Frith WALast year’s ranking: New entryRICK PURSLOWE, MANAGING DIRECTOR
Bruce InsuranceLast year’s ranking: New entryMURRAY BRUCE, MANAGING DIRECTOR
5 4
18,945Average number
of policies written by a Top
10 Brokerage between 1 July
2012 and 30 June 2013
NOVEMBER 2013 | 21
What’s unique about working in insurance?Providing professional advice and protection in the event of an unforeseen loss. Building long-term relationships and friendships between clients and staff.
What’s been the biggest challenge of the last year?Political instability. Competitive rates in a tight market, causing the business market to slow. Finding good-quality staff that fit in with the IPS family.
What’s been the biggest highlight of the last year?Being part of the Steadfast listing. We also had very good growth for the 2012/2013 year despite the competitive marketplace.
What’s the most important thing a broker can do to develop their business?Education and development of staff; maintaining strong and long-term relationships with clients.
What’s the biggest challenge facing the industry today?Expectations of service from underwriters. We feel there is extra pressure on brokers to perform more of the underwriting role, brought on by technology. A more traditional broking/underwriter relationship would allow brokers to focus on client relationships rather than underwriting.
What sets your firm apart from your rivals? The IPS Group offers a variety of services. We have three divisions: general insurance, financial services (life and income protection) and finance brokers. This way our staff have a responsibility to provide outstanding service to clients across all three divisions.
What’s next?The IPS Group is going through a growth phase of expansion and always looking to evolve our business in the current market, all whilst providing and maintaining an excellent level of customer service.
What’s been the biggest highlight of the last year?The highlight of our year would have to be our chairman, John George, being recognised for a number of awards. This including the Rex McKeown award, presented at NIBA in 2012. He was also awarded an Order of Australia on the Queen’s Birthday in June 2013 for his charity work with the Australia Cambodia Foundation after receiving a humanitarian award from the prime minister of Cambodia, Hun Sen. Quite a year for our chairman and all well deserved.
What’s been the biggest challenge of the last year?In general terms, retail, home, contents and private motor have become challenging. Despite the fact that this is not a preferred line for most brokers, we are the experts in these areas and will always have a requirement to do this line of business.
What’s the most important thing a broker can do to develop their business?I would say a good strategy – targeting areas that you have expertise in, in a vibrant and growing industry; good relationships with both the client group and the insurer who will write the business. Provided all these things line up, with some hard work, it should lead to success. I believe that we also need to be wary of technology and to make sure that it is actually helping us. Sometimes it can complicate things. As we move into times where there are going to be more and more options, I think we will need to say no more than yes when it comes to new systems and technology.
What’s next?Our group currently has 27 offices around Australia. We would like to continue our growth and we have strong plans for further acquisitions. We would like to achieve 30 offices by the end of June 2015. We are also rolling out our new pay-by-the-month initiative which will allow our offices to offer free monthly instalments on retail and SME business up to a certain premium.
IPS GroupLast year’s ranking: New entryFRANK CUSMANO, MANAGING DIRECTOR
MGALast year’s ranking: 1PAUL GEORGE, GENERAL MANAGER
Frank Cusmano
Paul George
3 2
And Australia’s top brokerage is...
$7.9mAverage revenue of a Top 10 Brokerage
between 1 July 2012 and 30 June 2013
22 | NOVEMBER 2013
SPECIAL REPORT / TOP 10 BROKERAGES
What’s your reaction to being named the number one brokerage in Australia? I am delighted that our brokerage has placed first this year after just missing out last year when we came second. The award affirms our innovative business model and the quality of the personnel at Mega Capital and our corporate AR BizCover.
What’s been the biggest highlight of the last year? We have recently brought on Steadfast as a share-holder, which gives us tremendous opportunity to
Mega CapitalLast year’s ranking: 2MICHAEL GOTTLIEB, MANAGING DIRECTOR1 position ourselves as the professional lines specialist
to the 280 brokerages in the Steadfast group. We see this as a key strategy to continue our growth ambitions.
What’s the most important thing a broker can do to develop their business? In my view, brokers need to ensure they continue to add value to the supply chain by providing high-value advice or innovating around delivery. If broking becomes an information and transactional service with limited or no advice, there is no value in this service and it is likely over the medium term these business models will be under threat from direct distribution.
What’s the biggest challenge facing the insurance industry today?Distribution of insurance products will change considerably over the next 10 years and brokers need to adapt their business models to ensure they continue to provide value to the supply chain. In my opinion, brokers need to become knowledge leaders, by specialising along industry or product verticals, or innovate around delivery of product by leveraging technology. Brokers who continue to act as general practitioners without adapting their delivery capa-bility will become commoditised and face significant competition from an online delivery channel.
How would you change the industry to help brokerages flourish? The most valuable service a broker provides to clients is advocacy. However, brokers too often do not act as strong advocates for their clients when procuring insurance and during claim time. We could change the perception of insurance brokers if we could: improve the level of professionalism improve our level of specialisation unequivocally look after the clients’ best interests
What sets your firm apart from your rivals? We have created a business model which caters to both high-value clients – who require a tailored solution, advice around complex issues, and high levels of advocacy – and small businesses, who have less ability to tailor their policy but require choice, transparency and ease of purchase. Our staff are all extremely knowledgeable, client focused and provide a terrific client experience.
What’s next for Mega Capital? To win the Insurance Business Top Brokerage award again in 2014!
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