“…insurance broking was both a divided industry and a lawless one,” says an excerpt from a book provided by the National Insurance Brokers Association (NIBA). The Right Direction - A history of the National Insurance Brokers Association recounts the founding of Australia’s leading broker representative body more than four decades ago.
On Oct. 26, 1982, the two leading broker organisations met in Melbourne to formally come together. “Not everything went right,” the book said. The publication describes a delayed start, missing overhead displays and the underlying concern that some local brokers might not show up.
However, in the end, the Confederation of Insurance Brokers of Australia (CIBAust) and the Insurance Brokers Association (IBA) merged to form a single representative body “to champion their industry.”
Robert Kelly (pictured above), CEO of the brokerage network Steadfast, was one of NIBA’s founding directors.
“We were all influential in bringing together the two incumbent organizations and it was a classic case of Sense and Sensibility taking over from ego, because there were two insurance broking organizations,” he said. “The fact that all of us, the whole industry, decided to vote that, yes, we should be one organization, made the National Insurance Brokers Association of Australia and gave it credibility.”
The NIBA publication explains these two organisations. CIBAust was itself a combination of two groups. One of those, Lloyd’s Insurance Brokers Representative Association (LIBRA), formed in Sydney, represented intermediaries selling insurance in Australia on behalf of the London market. The other, the Corporation of Insurance Brokers Australia (CIBA), “aimed to represent the interests of large, international brokers,” the excerpt said.
The other trade association, IBA, “drew its membership from those brokerages that had been excluded from CIBA and LIBRA “and typically represented smaller, Australian-owned businesses,” the book said.
The prospect of government regulation may have encouraged these organisations to overcome what the NIBA publication called “A deep-seeded mistrust between CIBAust and IBA.”
According to the excerpt, in 1976, a new government agency, the Australian Law Reform Commission (ALRC), began looking at introducing laws to regulate the activities of insurance agents and brokers.
Despite the prospect of regulation, “IBA and CIBAust continued to trade barbs at each other,” the NIBA publication said. However, a meeting a few months before the official founding of NIBA in October 1982 seems to have overcome the main divisions.
“The negotiations were intense, but after two days a basic structure for a single representative body for Australia’s insurance brokers had been agreed to,” the publication said.
Stuart Leslie, the CIBAust president, was elected as the first NIBA president.
“Under the guidance of Stuart Leslie, it was bound to be a success,” said IBA Registrar Ian Abell, who is quoted in the book and noted Leslie’s ability to find and work with the common ground between the two organisations.
“I think it's a salutary lesson for any industry that runs more than one national association for the people who participate in that if you can make a singularly strong association, then people listen to you, government listen to you, and that's why NIBA’s strong and that's why NIBA’s been successful,” Kelly told Insurance Business.
Another founding director, Robin Nisbet, agreed. “Establishing NIBA was very important because it enabled us to speak as one in representations to government and the ICA [Insurance Council of Australia] and to promote standards, values, ethics and a code of conduct for Australian brokers,” said Nisbet, who is director of Sydney-based Armstrong Nisbet.
He said NIBA’s formation marked a turning point for Australia’s insurance industry. He said it was also about recognising the value of insurance broker contributions to clients and acknowledgement of that by the community and government.
“The NIBA board played a very important role in the Insurance Brokers Act 1984, which reflected a high level of recognition and responsibility accepted by the broking fraternity,” he said. “NIBA represented all Australian brokers and we were able to achieve complete agreement on a range of difficult issues such as security of premiums for customers and insurers through trust accounts, a code of conduct and client commitment - all of which are the norm today.”
Insurance Business would like to thank NIBA for providing an excerpt from The Right Direction - A history of the National Insurance Brokers Association. The book was compiled for NIBA by Paul Howell, Terry McMullan and Naomi Conway and published in 2009.
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