Seemingly a microcosm of the wider state of affairs we’re all currently in, the local insurance market in New Zealand has been dealing with its own set of changes – with brokers having to shift their ways in recent months, in response. Here Steadfast New Zealand chief executive Bruce Oughton (pictured) shines a spotlight on how his peers have been coping, as well as on the challenges that the broking sector won’t be spared from.
“Legislation has forced many brokers to change the way they keep record of their activity,” noted Oughton, the industry stalwart who has been at the helm of Steadfast in NZ since day one.
“Our brokers are professional and always put the client first, so have always done the things required by legislators, but documenting those actions has been a big change. This has required a new mindset and discipline, which I’m happy to say our brokers have adapted to well.”
Within the Steadfast network in New Zealand are over 50 general insurance brokerages with access to more than 160 products and services.
For Oughton, what spells the difference when it comes to developing and maintaining client relationships will still be tailored personal service.
He told Insurance Business: “With the hard market and capacity issues, our brokers are continuing to dedicate time to understanding client risks and researching the market to ensure cover meets the clients’ needs and budget. And with Steadfast’s broad services and strong technology offerings they are well placed to do this.
“We are fortunate and astute to own our own technology companies and therefore technology is built by the brokers for the brokers. Over 80% of our network is now on our broker platform INSIGHT, which is an intuitive cloud-based system with local NZ-based support.”
The chief executive also cited the group’s Steadfast Client Trading Platform (SCTP), which provides what he described as a “seamless interface” between a broker system and insurers to provide full policy lifecycle from quote all the way to renewal.
“Three broker systems including INSIGHT interface directly with SCTP, which means a broker can enter information once into their broker system and obtain multiple quotes from insurers,” added Oughton, who said the goal is to enable brokers to spend more time on looking after their clients.
“We already have four insurers on the platform for our business package, with another due to pilot later this year. Development will be completed on domestic products this year as well, with insurers keen to be involved following the success of the business package.”
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As for the difficulties, the CEO acknowledged that the new year would continue to have its fair share.
Oughton asserted: “We are in an ever-evolving world and market, and 2022 will also have its challenges. We have lived with COVID for two years now, but each variant has a different response from governments which we then must adapt to.
“Our brokers can and do adapt, but what is concerning is the mental fatigue that is occurring with most of us, our brokers and their customers. This goes beyond their financial capability, and we all need to consider everyone’s well-being.”
He also pointed to the Financial Markets Authority’s new financial advice regime.
“This year we are faced with obtaining full licenses and meeting the compliance requirements that come with full licenses,” highlighted the Steadfast NZ chief. “Our brokers are in a good position with compliance, thanks to the guidelines and education Steadfast has provided and continues to do.”
“We also have to work with insurers as they prepare and implement their responses to the new Conduct of Financial Institutions (CoFI) Bill,” he continued. “Further, we will work with insurers and our network on affordability and capacity.
“Domestic premiums are rising, and the shortage of supplies is not helping costs. Even with the lift in the EQC (Earthquake Commission) cap, we will still see a tightening of earthquake capacity. Concerns are being expressed as to availability and affordability for cyber insurance as the ‘hackers’ become more sophisticated and targeted.”
Outlook-wise, there are a couple of things that Oughton is looking forward to, including getting back in front of brokers during professional development days, office visits, and regional forums.
He told Insurance Business: “Our industry is a people’s business, and face-to-face interaction with our brokers is a powerful activity, so, COVID-permitting, we hope we can continue to do this again this year.
“From a wider market perspective, I would like to see IBANZ (Insurance Brokers Association of New Zealand) and ICNZ (Insurance Council of New Zealand) work together to lay the groundwork on CoFI implications and broker agreements and have more robust discussion around some of the industry ‘standards’. Are these still fit for purpose; do they meet acting in the client’s best interest?”
Additionally, Oughton is of the view that climate change is going to have a huge impact on the industry.
“While this is a global problem,” he said, “we are already seeing the impact locally, particularly around insurance availability on coastal properties and flood-prone areas. I believe the insurers do and will act responsibly, but government and councils need to be more proactive and effective at addressing our industry issues.”
