YS Up Podcast - Business Insurance Renewal Challenges | Maria Newman & AnnMarie Rodgers, Marsh

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Business Insurance Renewal Challenges | Maria Newman & AnnMarie Rodgers, Marsh


50:58 by Ainslie Cunningham
Business Insurance Renewal Challenges | Maria Newman & AnnMarie Rodgers, Marsh

Episode 26 - Shownotes

In this episode of YS Up Governance and Boards Podcast, 3YS Owls Governance Consultants, Ainslie Cunningham and Deb Anderson interview Maria Newman and AnnMarie Rodgers from Marsh and McLennan Group of Companies. We explore with Maria and AnnMarie current challenges in the insurance market, including 14 consecutive quarters of pricing increases in the Pacific with one of the largest being Q2 2020 and based on Marsh’s benchmarking data for ASX 100 clients, renewal in the first two quarters of this year, Directors and Officer’s (D&O) premium spend is up 170% on average and in some extreme cases they are up 600% with retentions soaring also up to 300%.

I think also, Ainslie, just to your point around what can organisations do in terms of attracting the right type of director or talented directors. I think if you're on a board, if you're the director of an organisation is making sure that you understand I suppose the impact on your D&O cover, that those business activities are going to have, and take a really keen interest in what's happening with that insurance renewal as well.

I suppose our approach is where we can in terms of D&Os to ask our clients to actually sort of be involved in that presentation to the market. One, nobody knows your business obviously better than you do. And if you can sort of talk through what your risks are, what your risk profile is with an underwriter, that's really important. But equally important as well is giving for us perhaps going into boards and actually giving those boards presentations about what the drivers are and what an insurer is perhaps looking at and what's going to be the driver in that next renewal. Because if you sit in a number of boards, it might be different for each different organisation as you'd know. So just getting an idea of what that means for you and being involved in and making sure that you've got, as Maria says, you've got the broadest coverage come renewal.

AnnMarie Rodgers

So, the challenge really is finding that right mix, level or right balance between the mounting cost of insurance and the right mix or level of protection for directors. So, companies and directors potentially facing a decision to reduce coverage or eliminate coverage in certain areas. So, it's really important that you have an understanding of what you have and then the insurance market also has an understanding of your business.

In terms of anything more creative on the larger scale, some larger companies, and it doesn't need to be a very large company, they're turning more into captives. So, from January to July this year, Marsh created 76 new captives. So that's about, if you look at year on year growth, that's about a 200% year on year growth. So where they can do it, where it's appropriate to a company, they're turning more into captives so that they can remove themselves from the volatility of that market and have more control around how they're transferring that risk.

Maria Newman

Summary of episode
  • Natural Catastrophe Insurance
  • Challenges in the Directors and Officers (D&O) Market
  • Captives as an alternative risk transfer mechanism
  • The importance of modelling to enable better decision making
  • Increases in shareholder and securities class actions
  • The importance of renewing early so that you have time to review your policy renewal terms adequately
  • Cyber Insurance policies
  • Claims arising from COVID-19, additional COVID questionnaires and exclusions
  • The potential impacts of the Royal Commission into Aged Care Quality and Safety
  • Changes to Lloyd’s of London syndicates
  • Consolidation of Insurer’s driving down capacity
  • Marsh’s Benchmarking tool IDEAL which is designed to provide decision-making support when evaluating publicly traded D&O liability insurance limits
  • UK High Court Financial Conduct Authority’s (FCA)’s business interruption insurance test case
About Maria Newman

Maria is the Managing Principal and Vice President – Risk Management at Marsh, a corporate insurance broker and risk advisor with over 20 years’ experience in the design, placement and management of complex insurance programs.

Maria is an accountant by trade having completed a Bachelor of Business with a major in Accounting and a Master of Business Administration with a Finance major through QUT’s Brisbane Graduate School of Business.

In her current role, Maria works with a diverse range of clients from ASX 200 and multinational companies to government-owned corporations across several industry sectors including Real Estate, Retail and Consumer Goods, Infrastructure, Manufacturing and Aged Care.

Maria has expertise in Property and Casualty lines with special interests in managing multinational programs, insurance due diligence, and contractual insurance and indemnity reviews.

About AnnMarie Rodgers

AnnMarie is a Senior Vice President and leads the Queensland Corporate Segment for Marsh - world leader in delivering risk and insurance services and solutions and part of the Marsh & McLennan group of companies.

A Fellow of the Australian & New Zealand Institute of Insurance and Finance, AnnMarie started her career in Glasgow and has 30 years insurance industry experience in the UK and Australia.

In her current role, AnnMarie oversees client service delivery and insurance solutions for clients and is also responsible for business development in Queensland. Previous roles include client account management, new business and insurance program placement in local and international insurance markets. Her client servicing experience spans a wide range of industries including real estate, retail, manufacturing, food & beverage, utilities, aviation and government entities.

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About Us - 3YS Owls - Governance Consultants

3YS Owls are a corporate governance firm and incorporated legal practice who specialise in providing a variety of services and solutions across corporate governance, company secretary, board advisory, strategy, risk and business consulting. Contact the team today to see how we can assist you with your corporate governance framework or risk management framework.

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