Digital disintegration

Recently Zurich issued their Global Risk report for 2014.

Among the risks it discusses is Digital disintegration – the increasing risk of “cybergeddon” in the online world

The deepening reliance on the Internet to carry out essential tasks and the massive expansion of devices that are connected to it, make the risk of systemic failure – on a scale capable of breaking systems or even societies – greater than ever in 2014, according to the report.

Recent revelations on government surveillance have reduced the international community’s willingness to work together to build governance models to address this weakness.

The effect could be a balkanization of the Internet, or so-called “cybergeddon”, where hackers enjoy overwhelming superiority and massive disruption is commonplace.

It you have concerns about cyber risk insurance, speak with your Guardiain account manager.

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Is your business ‘normal’?

by guest contributor Michael Harrison

I admit to being an online shopper and I started this article thinking about the GST on imported goods debate.

Australian retailers contend that shoppers paying GST will level the playing field. Personally I think they are missing the point. I buy online for convenience when everything else is equal and when the retailer chooses to offer ‘normal’ or sub-standard service. Saving a few dollars is nice but if the “experience” I received from buying locally was remarkable, that’s where I would buy.

Two good examples of a remarkable experience are Apple and Nespresso. Both offer “something extra” at their retail outlets and both have a strong online presence. You only need to visit their shops to see why they are usually full.

I was mulling this over while I was staying at a hotel recently. I have stayed there before and it is a good hotel. Tripadviser® ratings show that most guests agree it offers good amenities and good value.

There was a minor issue with my booking. Even though I provided my frequent guest number it linked to someone else’s profile. It was fixed when I emailed the hotel pointing out the error.

The check-in service was pretty ‘normal’ but when I got the room my asthmatic wife immediately noticed that a previous guest had smoked in the room. They moved us to another room so no harm was done. Another ‘normal’ hotel experience!

On the Saturday night we went to the hotel restaurant for dinner and were told that it was fully booked for a function but we could get room service. We returned to our room and dialled guest services, only to be asked to “hold”. After more than three minutes I hung up and phoned back. This time the phone didn’t answer at all – it was simply placed on hold. That happened twice more before I went to the front desk, by then aggravated, and eventually got served.

Would I talk about this service? No, it was pretty ‘normal’.

What could have happened?

On check-in I could have been told that the restaurant was booked out on Saturday night and been given a list of local restaurants that were within walking distance. That way I could have done some research and made a booking.

When I went to the hotel restaurant I could have been given the nearby restaurant list with an offer to make a phone booking for me. It could also have been explained that I would still get my frequent guest discount if I chose to order from room service.

When I phoned guest services the operator could have said something like “Mr Harrison, if it’s not urgent can I call you back in a few minutes. I’m on my own and it’s really busy at present”. That way if I had needed urgent medical attention I could have said something.

Any of those responses would have made me feel like a valued guest and got me talking in a positive way about my experience.

Like the retailers, the hotel didn’t do anything wrong. They provided ‘normal’ service. They also didn’t give me any reason to recommend them.

Is your service ‘normal’ or do you look for ways to delight your customers?

 

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Social Media Tips

Insurance & Risk Magazine recently interviewed Evan Jackson, Managing Director of Guardian Insurance Brokers about his success using social media.

Evan said he has taken the time to think about and experiment with various forms of social media.

Linkedin, he says, is the one and only social network into which his business puts its time and energy. “LinkedIn targets our audience because it is all about business people and professionals,” he explains.

“Facebook is more about social interaction, not commercial interaction, and that is not where we need to be.” No matter which platform you choose, you need a reason to be there and a strategy to back up that specific reason, Jackson says.

Whether the purpose is to assist with the attraction of new business, to help in the recruitment process, to promote the idea of thought leadership or to keep clients informed, each reason requires a plan. “People think LinkedIn is a great source of business, that you just sign up and new business will come your way,” Jackson says. “But really it’s no different to the Yellow Pages. If you use it well, it allows you to build personal brand, to create and promote blogs, to make statements and to achieve true, two-way communication. You need to differentiate yourself from the market, and social media is a good way to do it.”

“If hundreds of people link to me on Linkedin, then as long as I’m providing them with content that they find useful, it means I stand out. Social media is an opportunity to differentiate yourself and your business in a meaningful way but, most of all, it’s a way to show intelligence.”

Evan’s No. 1 tip is: Add social media in to your marketing plan and set some goals. Decide out who will be handling the day-to-day management and keep your messages consistent. Keep in mind that the world of social media is always evolving. Stay current.

 

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Australia’s changing population

Every two years the Australian Institute of Health and Welfare produces its Australia’s welfare report. As an insurance broker it is important for us to understand and analyse the trends and how they might impact on our clients.

Here is some of the some of the key information.

We’re living longer

  • Between 1972 and 2012, the number of people aged:
- 65 or over increased from 8% to 14% of the population, and
- 85 and over rose six fold, from around 70,000 people to nearly 424,000.
  • The number of adults of ‘traditional working age’ (15–64) for every person of ‘dependent’ age (over 65 or under 15) is expected to drop from the current level of 2 to 1.7 by 2032.

We’re working longer

Over the last decade, the labour force participation rate for people aged 65 or over doubled from 6% to 12%. For men aged 65–69, the rise was from 20% to 34% and for women aged 65-69 the increase was from 9% to 20%.

Part-time work has increased

Almost 30% of employed people worked part-time (less than 35 hours per week) in 2012, compared with 17% in 1982.

Families and households are changing

  • Due to the ageing population, couple families without children in the household are projected to exceed the number of couple families with children by 2014.
  • Lone-person households, which currently account for 24% of all households, are expected to be the fastest growing household type in the current decade.

More households have mortgages

Of the 69% of Australian households that own their home, 36% have a mortgage and 33% do not. The reverse was true a decade ago.

Cost of housing is soaring

House prices were more than 7 times the average household income in 2011 compared with 4 times at the start of 2002.

We are more educated

67% of people aged 25 to 64 held a non-school qualification in 2012 compared with 54% in 2002.

More elderly people are in home care

Of the people aged 65 and over who needed care in 2010-11, 719,000 were participating in the Home and Community Care Program and 158,700 were permanent residents in Australian Government-subsidised residential aged care facilities.

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NFP’s & Associations need expertise

Guardian partners with and provides risk management solutions to many Not for Profit (NFP) organisations and industry associations.

The benefit of using a specialist broker is that they understand the unique differences and idiosyncrasies of the industry.

The role of associations can range from acting as an industry advocate to providing support or even buying discounts and advantages to members.

Guardian’s Heather Blanco who looks after our NFP and association clients says it is important for organisations to stress member or supporter-only benefits in their marketing and other materials. This potentially motivates non-members and potential supporters to learn more.

For example, in developing a web strategy NFP’s and associations need to decide if they are positioning mainly to recruit new members, attract donations or retain existing members or supporters.

To learn more about our association expertise contact Heather on 08 8238 0139

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Employee Fraud continues to rise

With employee fraud continuing to rise, it is more important than ever to do thorough reference checking according to Guardian CEO, Evan Jackson.

The top three categories of employee fraud are generally workers compensation fraud, money theft and asset theft (such as computers).

Every claims officer can relate stories of employees with supposedly disabling back injuries being seen shopping, payments being made to fake creditors or inventory disappearing even though sales are down.

One red flag is employees being reluctant to take leave but according to Jackson, “the best thing is to be diligent without becoming paranoid. Going overboard lowers morale.”

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Evan Jackson announced SA Broker of the Year

Guardian’s Managing Director has been named SA Broker of the year.

NIBA created the prestigious national award to identify and recognise high performing broker professionals.

A Board committee, chaired by NIBA CEO, Dallas Booth advises on the selection criteria and the awards process.

NIBA is the national association for licensed life and general insurance brokers in Australia. It is a not for profit organisation and neither sells insurance products or represents insurance companies. NIBA is the national voice of insurance brokers and an advocate for insurance consumers.

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SMEs should be prepared for fraud

Guardian Managing Director Evan Jackson warned that business owners should be on the alert for fraud after it was revealed that Insurance Company Dual Australia had been hit for $17million.

It has been alleged that senior claims officer Josie Gonzalez set up a law firm with her husband Alvaro Gonzalez and invoiced the insurer for fictitious legal charges.

The huge amount of this fraud proves that any firm, no matter how big or small, can become a victim of fraud, especially as people struggle to maintain their lifestyle because of the sharp rise in the cost of living.

In the case of SME businesses the ramifications of employee fraud can be extremely severe. Apart from the financial implications a fraud can have a significant negative impact on a company’s reputation.

To discuss fraud protection cover talk with your Guardian account manager.

 

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Changes to Insurance Contracts Act

Recent changes to the Insurance Contracts Amendments Act create greater obligations for all parties to an insurance policy.

Under the bill, the insurer’s duty of utmost good faith will also apply to third party beneficiaries and changes to the duty of disclosure require extends the requirement on an insurer to give notice of an insured’s duty of disclosure to renewals where it was previously only required for policies prior to inception.

The passing of the bill is regarded as good news for the industry.

For consumers, there is an extension of rights to third party beneficiaries; there are improvements to the rights of insured in relation to the duty of disclosure and eligible contracts.

For insurers, there is confirmation that notices can be delivered by electronic means.

Any questions should be directed to your Account Manager.

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Insurers support flood decisions

Insurers have mostly welcomed the Federal Government’s decisions to rule out premium subsidies for policyholders in high-risk flood zones as well as not making it compulsory for all household policies to offer flood cover.

The Government announced its position on the issues in its response to the Productivity Commission report Barriers to Effective Climate Change Adaptation.

Suncorp spokesperson Natasha Fenech said Suncorp agrees with the Government’s decision not to proceed with premium subsidies for those at high flood risk.

“We need to reduce the risk for everybody rather than just for high-risk homes,” she said, adding that mitigation also addresses the issue of community safety in catastrophe events.

Allianz Australia GM Corporate Affairs Nicholas Scofield says Allianz also backs the Government’s decision not to make flood cover mandatory.

But he says Allianz did recommend a flood reinsurance pool in its submission to the Natural Disaster Insurance Review, and supported “a well-designed subsidy mechanism that was incorporated into domestic property insurance in a way that does not undermine insurance pricing and risk selection principles”.

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