“For a challenging risk you can spend a lot of time knocking on doors and waiting for an answer,” said Peter Greenham (pictured above), director of AllCover Insurance Brokers.
Many brokers, like Greenham, say it’s getting harder to find insurance coverage for customers with harder to place risks. These customers could be in major industries but with a highly specialised business that some insurers find too challenging.
Brisbane-based Greenham faced a challenge recently with an engineering client. The client supplied engine components like valves and valve seats for cars and other engines, including many end users in the power generation industry.
However, after being approached to supply a very specific valve that needed to be sourced from India, his client was concerned about their insurance and risk management situation.
“The client was initially extremely confused by the situation as it was a new scenario for them,” said Greenham. “The issues related to product warranty/contractual liability and potential consequential losses for the end user, for example if the product failed to perform at the level required.”
Greenham prompted the client to obtain legal advice on the structure of the contract, he said, and also placed a more suitable liability policy to close off potential exposures. He said the experience compelled him to find out more about this niche industry.
“The client was able to help me understand his industry niche in a much clearer way,” said Greenham, “which in turn helped me provide clear risk advice to him and provide an elegant and cost-effective insurance solution.”
The AllCover director founded his brokering firm more than 30 years ago. He suggested that one of the ironies of being a broker today compared to when he started is that, despite the sheer number of providers and online portals compared to 1990, hard risks are still very hard to place.
Greenham recalled a time when there was only a handful of underwriting agencies and he was in contact with most of them every week.
He said his biggest lesson from the experience with the engine parts manufacturer was the need to treat each client situation as unique.
“We have to continue to tease out as much useful information as possible in order to add the best possible value for our client,” he said. “We get to educate our clients but always manage to learn something ourselves.”
For Greenham, this is one of the most rewarding characteristics of his profession. He described the sheer variety of risks that need coverages as “one of the biggest challenges - but at the same time most rewarding aspects of being a broker.”
“I’m endlessly curious about almost anything and relish the opportunity to absorb information from my clients, who are experts in what they do,” said Greenham.
He said his brokering career has involved working with complex government corporations, including port authorities and ferry operators, and also large franchise programs and national sporting bodies. Greenham has also found insurance for microbusiness and tradie clients.
Melbourne-based Di Fiore pointed to property coverages as an example. He said any property in a bushfire zone with dense bush has become very challenging to insure since the 2019 bushfires, including ski resorts, camping areas and caravan parks.
“We’ve even seen some regional clients, like the owners of old pubs in small country towns that are built mainly from timber – that’s now a huge fire risk – some of them have become uninsurable,” said Di Fiore.
Will Laundy, director of Pillar Brokerage, was recently engaged by a client who services the mining sector. The client had received a non-rewal notice from their longstanding insurer.
“Importantly, we repositioned the account given the client’s services related to products and technology more than traditional engineering,” said Adelaide based Laundy. “After further negotiation, we secured favourable terms which bridged the coverage gap and satisfied the client’s contractual requirements.”
Laundy said placing non-vanilla risks like this, is “more challenging than ever.”
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