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I guess you could say that I was destined to be in insurance.  Like a few, I was born into the industry courtesy of my father who spent close to 40 years in underwriting.

My first role was as an Assistant Account Executive based in Melbourne working with mid-market corporate and multinational clients.  After two years, I moved on to supporting the service team on larger ASX50 clients.  In 2006, I was seconded to London where I spent time broking into the market across property and casualty lines of insurance.  During this time, I established relationships with a range of insurers that I’m fortunate to have to this day.

I held several senior placement roles before being welcomed into the Honan family in 2018. In 2021, I became Honan’s Head of Placement.  It’s a real privilege for me to share my experience and work collaboratively with both my colleagues and clients.

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Placement is a specialist division that acts as the conduit between the client and insurers for larger, more complex types of risks.  These can vary from hard-to-place occupations to insurance programs that need more than a single insurer, or where capacity from international markets is needed.

Placement spans insurance program design, market negotiations, insurer relationship management, and staying up to date with the latest market movements.  

Program design involves understanding a client’s business and unique risk exposures and then developing a program that addresses these vulnerabilities.  It’s sometimes misunderstood that exposure management simply involves buying an insurance policy or transferring risk to an insurer.  Where placement truly adds value, is in uncovering insurance options both locally and in international markets.  Market negotiation is about representing a client’s business through negotiating their policy terms and conditions with insurers.    

Carrier Management is the way we interact with insurers and how we ensure our trading relationship remains strong for the benefit of our clients. 

I was drawn to Placement for the opportunity to trade with the local and overseas insurance markets. Placement exposed me to a wide range of clients and industries, all of which have varying levels of risk and complexity.  I saw the importance and value that Placement brought and how clients responded to the solutions it created, especially where they had large and challenging risks that needed coverage, or where there was a difficult claim to be negotiated.        

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Over the past 10 years, the transacting of insurance has moved to online trading platforms and portals.  As we have seen for those looking to buy insurance for home and contents, motor vehicles, travel, and even life insurance, commercial insurance has gone the same way.   This has enhanced trading efficiency, expedited claims settlements, added more clarity about cover for clients, and it has potentially reduced errors and omissions.

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Ultimately, this enables customers to have a tailored insurance program that is delivered in a faster and more cost-effective manner.

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Access to commercially available catastrophe cover - namely floods and bushfires continues to be challenging.  The environmental and economic impacts from this year’s floods have been well documented and with that, we’ve seen a significant pivot in the willingness of insurers and reinsurers to offer cover for these perils – especially for clients located in high-risk zones.

Insurers are focused on reducing the amount of cover offered as a way of limiting their own exposures and this finite amount of capital is driving up pricing for clients.  Many customers will no longer be offered flood cover and for those that are, it may prove cost prohibitive.  To provide clients with optionality, we are designing non-traditional policies such as Parametric Insurance (insurance that provides automatic cover when a set of parameters are met i.e., the amount of rainfall over a set period or wind exceeding a certain speed).  The past three years have seen more clients take up these types of policies.

Wider insurance bodies have started lobbying for a catastrophe reinsurance pool (as seen in New Zealand with cover for earthquakes), which would enable greater access to insurance following natural catastrophes.  This effort is gathering momentum, but it will take time before material changes are seen.  

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Capital markets: the 2008 Global Financial Crisis (GFC) impacted the insurance industry in ways we had never witnessed before. Insurance was seen as a safe haven for investors who looked to diversify their portfolios away from superannuation funds and bonds. 

In the current environment of natural catastrophes, rising interest rates, and ongoing instability brought on by the pandemic, we could see capital markets diversify away from insurance. If this is the case, there could be an extension of hard market conditions where the demand outstrips supply.

Climate Change will continue to significantly impact the insurance market, in positive and negative ways.  On one side, insurance products will evolve with additional cover/limits being offered for clients to re-build their properties using materials that are more environmentally friendly, thus lowering the wider carbon footprint.  At the moment, these materials can be expensive to source.

On the flipside, as communities expand, it’s likely that urban sprawl will continue to extend into higher exposed flood and bushfire zones, leading to more pressure on local building laws and the issuing of building permits.  With that comes an expectation for insurers to offer more cover for natural catastrophe perils than they are comfortable providing.  As an example, right now, insurers are ultra-vigilant in the amount of flood cover they offer, especially in parts of Australia that have sustained a surge in flood claims. In fact, some parts of Australia are fast becoming un-insurable when it comes to floods.      

I think the sharing economy is an interesting aspect as well, especially at the retail/domestic level.  I don’t think it will be long until we see householders in suburban streets pooling their insurance, or perhaps setting up their own Mutual or Captive to secure affordable insurance.  This involves self-insuring more risk and using a non-traditional form of insurance such as a Mutual or a Captive to finance it.  In the past, there was a belief that only large companies used Mutuals and Captives, however, the market is increasingly open to this way of thinking. This is pie-in-the-sky type of stuff, but you can’t count this out in the future if the hard market conditions continue.

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I think the biggest misnomer consumers have about insurance is that insurers don’t like paying claims.  Whilst there is an element of truth to this, insurers understand that paying claims quickly and efficiently is the whole reason insurance exists.  Insurers pride themselves on their claims management and the service that supports this.

Insurance is there to protect a client in the event of sudden and unforeseen losses, not to act as dollar swapping or as a maintenance type of policy.

I believe this perception developed over the past 20 years, when the market was in its ‘soft cycle’, when there was less focus on bottom line profitability and a greater drive for market share through premium growth.  Bringing our clients and carrier partners closer together through enhanced relationships will help to challenge this perception and provide more clarity around how a tailored insurance program can support clients.

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Having spent close to half my life in insurance, I might be biased but it really is the best-kept secret from a career standpoint. I don’t think we promote the opportunities or meaning that comes from it working in the industry enough. 

We are seeing a major shortage of new talent coming up through the ranks which is putting pressure on hiring and retention.  At Honan, we have a comprehensive employee value proposition to ensure that we develop and retain our team.

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It’s fair to say the GFC challenged the traditional view of market dynamics and what drivers alter the insurance market from soft to hard and vice versa.  The frequency and severity of catastrophic events is greater than ever before and we’re seeing that reflected in the number of multi-billion-dollar losses. As a result, insurers require more data and information to make educated underwriting decisions when assessing and pricing risk.

This means it has never been more important for clients to have a clear understanding of their business operations, risk exposures, and risk management systems. Not only do insurers require this information when deciding whether to offer cover, but the growing cost of insurance has seen some clients elect to self-insure, placing more pressure on their balance sheet, so understanding what levels of redundancy and mitigation exist in maintaining operations is essential.

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For me, service is about acting as the client’s risk management advisor.  This means listening to a client, truly understanding their risks and those within their sector, and drawing on market intelligence and experience to present a solution.  It’s not about selling insurance but presenting clients with quality options to help them manage, retain, and (if necessary) transfer their risks.

Service also means maintaining relationships, both in Australia and overseas.  In my experience, it’s about matching up the right insurer with the right client.  This can influence insurers’ willingness to provide coverage, pricing terms & conditions, longevity in supporting the client’s needs, and most importantly, claims management and settlement. 

Service is also about market relationships, engagement, and partnerships.  At Honan, whilst excellence in client management is part of our DNA, we also value and nurture trading relationships with insurers.

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Being a successful and effective Placement broker requires strong product, technical and market knowledge, a flair for problem-solving, and the ability to establish and maintain relationships both internally and externally. 

Above all else, I think the most valuable skill is the ability to establish trust and rapport with clients and insurers. If you are going to advise a business owner, a CFO, or Treasurer how to spend money, they need to be confident that you know what you are doing and that your recommendation is correct – all the time. This really speaks to our core value “We see our clients”, where we make it a priority to check in with them throughout the year, sharing relevant updates and insights, and taking the time to really understand their business.

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In Placement, you always have to be on your game. No two days are similar, and things can and will change very quickly. My energy comes from my downtime, whether that’s spending time with family and friends, the occasional weekend away, or my weekly round of golf.