“I think the most topical thing at the moment is rising premiums,” Glenn Sales, general manager at Steel Pacific Insurance Brokers, told Insurance Business in a wide-ranging discussion on the state of the Queensland insurance market. Sales, who has been with Steel Pacific for 19 years, was frank and forthright as he explained to Insurance Business how and where the brokerage operates, its commitment to going above and beyond for its clients, and how rising premiums in north Queensland threaten to drive businesses and people out of the area.
“I’ve been at Steel Pacific since I was 19,” said Sales, who is based in Mackay. After dropping out of university, Sales saw the opportunity arise to forge a career in insurance and thought, “let’s go for it!”
“I knew nothing about insurance and worked my way up from being a trainee broker,” he said. Nowadays, Sales is the general manager of the brokerage overseeing the operations of Steel Pacific’s broker team. With five Steel Pacific sites across Queensland, Sales is tasked with ensuring the correct day-to-day operations. “I look after all the branches, making sure the brokers are doing things right,” he explained.
Steel Pacific may have its brokers based in Queensland, but it has clients both in rural outposts, as well as in Sydney and Melbourne. Indeed its founding was based across the waters – on the Pacific Islands. Founded in 1993 by John Steel, the first Steel Pacific offices weren’t based in Queensland, but in Vanuatu. Three years later, Steel Pacific had sold its Vanuatu operation and built its first office in Townsville - operating out of the state ever since.
Personability and communication are key pillars of what Steel Pacific tries to do, as it aims to forge lasting partnerships with clients.
“It is a partnership with our clients – to the betterment and success of their business,” Sales said. Frequent communication via telephone and online, but often in person and face-to-face, forms the bedrock of this ethos.
“The way we serve our clients is sometimes difficult for new brokers coming onboard because we like to touch base with our clients multiple times a year,” Sales explained. “We like to be involved with them and we like to actively engage with them.” This includes being kept up to date with any changes within the business, as well as driving hour-after-hour to see clients face-to-face. “Our communication with our clients and our engagement with them is what Steel Pacific does really well,” he said.
With such a close working relationship with clients also comes investment, and a commitment to helping clients through the challenges 2020 and beyond will bring. Rising premiums says Sales, especially in the north of Queensland, is the biggest threat facing the brokerage’s clients.
“Premiums are jumping through the roof – the cost of living and operating in Queensland is huge,” Sales explained to Insurance Business. “I’ve had staff who have left because it’s too expensive to live here.”
Premiums in the region have risen year-by-year, and in an area that is vulnerable to cyclones, the two form the perfect storm to make working in the area difficult. In some cases, some clients can’t afford to insure their properties.
“I know around a dozen businesses that have liability insurance, but they just don’t insure their property,” said Sales.
He recalled the predicament of one client who was faced with a 50% increase in the premiums across four years.
“I’ve got one client – a food distribution centre – that supplies food to restaurants,” he said. “Turnover is astronomical, but their margins are very low.” The property is cyclone-protected, recently refurbished and has some of the best equipment on the market – yet its premium increased by 40% from last year. “It was a $200,000 increase in their premium from last year, but nothing had changed with the risk of the property,” he said.
Sales fears that people will leave the area, if premiums and costs continue to rise.
“It’s a beautiful part of the world, the fishing is great, and I do enjoy not having heavy traffic in the mornings,” he said. “But what happens to Mackay if people continue to leave?”
With an eventual migration away from the mining sector within the community and ever-increasing premiums, Sales fears that people will drain out of the community and leave the region.
