Veracity - October 2018 edition

By  Vero Insurance

Message from Anthony

The rise and rise of word of mouth

Word-of-mouth advice is becoming increasingly powerful. In Vero’s 2018 SME Insurance Index, it was found that many business owners and decision makers are increasingly relying on non-professional sources of advice when evaluating insurance decisions. In fact, it showed an uplift of 10% to 58% of SME respondents turning to peers, colleagues and even family members for advice.

This seemingly challenges the former status of the internet as being regarded as a ‘source of all truth’. There is no doubting the significance of the online platform as an information source. Tens of thousands of marketers worldwide use the medium as a key sales vehicle.

What is now appearing as a trend however, is the balancing of this information source with other closer and more personal influences.

A growing trend

The annual SME survey quizzed over 1600 SME business owners and decision makers across Australia. They represented a cross-section of industry categories and included businesses varying in scale from micro to medium-sized.

Respondents were asked about their attitudes to financial products and changes they had made in their buying decisions over the past year. Among their responses was the increasing reliance on peers as a trusted source of information and advice.

So, what are the implications of this growing trend? What opportunities can be identified?

It suggests the role of non-professional influencers is growing in importance, so the question then becomes how to harness this trend. On closer inspection, the findings point to a potential marketing tactic for brokers to pursue.

“If peer group sentiment and word of mouth are becoming more potent, then brokers need to find ways to nurture them,” said Anthony Pagano, Head of Commercial Intermediaries at Vero.

“It means modifying and adapting current strategies, but it can reap real rewards.”

Asking the question

What are you doing to improve your rate of referrals from happy, satisfied clients? How many brokers are actively encouraging positive word of mouth?

Arguably the single most important aspect of your relationship with your clients is the quality of service you deliver. As you know, relationships are at the heart of our industry, and the best way to enhance and grow positive relationships is by consistently providing the best possible advice and delivering service excellence.

The follow-up, ‘after sales’ service you offer your clients is also going to impact on their appreciation of you. This can either lead to their recommendation of your performance or a less than favourable review.

Important too is to simply ask your clients to refer you to their friends, associates and colleagues.

By understanding the growing importance of personal referrals to your future business, you can start making these issues a real priority today.

As last year’s Warren Tickle Memorial Award winner Adam Ware said: “If peer advice is so influential, then as brokers we will have peers that we can share our knowledge with. That knowledge could also spread to other peer groups if seen as valuable.”

So where could the future take us?

There is no doubt that online channels will continue to offer an important source of information to both business and private clients for years to come. But the trend identified by Vero’s research could be evidence of the medium’s evolution as it becomes more cluttered with information that is often conflicting and contradictory.

This could help explain why more and more clients are turning to their colleagues, associates and family members for more personal, practical advice based on their prior experiences.

“To capitalise on this trend, you need to make sure your advice and service standards are at their highest,” said Anthony Pagano.

“We’ve created a planning template to help you develop a clear referral strategy.”

Vero referral strategy template - blank

Vero referral strategy template - hypothetical

“Then all that’s left is for you to ask your clients to tell their friends!”

2018 RM Advancer Awards Finalists announced

Category finalists in Australia’s premier risk management awards have just been announced.  

The RM Advancer finalists are: 

Commercial (More than $100 million annual turnover)

  • Coca Cola Amatil
  • Interflow
  • UnitingCare Queensland

Workers Compensation and Liability (More than $100 million annual turnover)

  • Baptistcare WA
  • DP World Australia
  • Gold Fields Australia
  • Sussan Group
  • The Reject Shop

Small and Medium Enterprises (Less than $100 million annual turnover)

  • Goodwin Aged Care
  • Mind Australia

SME has been combined into a single category and a record number of nominations have been received in the Workers Compensation and Liability category this year.

The winners will receive 200,000 Virgin Velocity points*.

The RM Advancer Award winners will be announced on 25 October at an exclusive gala event in Melbourne.

Thank you for your support and good luck to the finalists!

 *Prize is subject to availability. Terms & conditions apply. Please visit RM Advancer 2018 website for more details.

Young Professional Broker of the Year revealed at NIBA Convention

Craig Anderson from Austbrokers ABS in Sydney was named the 2018 Warren Tickle Memorial Award winner at the NIBA Convention. Chosen from the five state finalists who represented the very best of our industry, Craig was thrilled to win.

Congratulating him, Anthony Pagano, Vero’s Head of Commercial Intermediaries said: “Craig has demonstrated an outstanding commitment to his professional development, providing leadership to peers and a dedication to high standards and excellence.”

“The quality of all the finalists is the reason Vero has been a proud supporter of NIBA’s Young Professionals and the Warren Tickle Memorial Award for more than two decades.”

Vero has sponsored the Warren Tickle Memorial Award since 1990, demonstrating a continued commitment to the professional development, peer leadership and high standards of excellence amongst our young brokers.

Learn more about Craig Anderson by watching this short interview.

Event season – Are you and your clients prepared?


Weather events can happen at any time during the year but most natural disasters occur between October and April.

In preparation for the impending event season, here you’ll find some useful suggestions, tips and links to assist you.

We’ve also included some information about our claims processes should you or your clients need to make a claim during this period.

Whether it’s on the ground, answering your call or processing your claim, when disaster strikes, Vero is here to help.

Giving our Intermediary partners the edge

The Suncorp Learning Campus is a unique education program giving our Intermediary partners exclusive access to a range of low-cost market-leading educational resources.

Tailor-make your own learning experience, by picking and choosing courses to suit a range of learning needs, budgets, time-frames and locations.

All the courses have been CPD accredited with key industry bodies.

Andrew Mair, Suncorp’s EGM Intermediaries said: “This is an investment in helping our partners to develop the skills and knowledge of their people, build stronger businesses and deliver better advice based products, services and outcomes for their clients.”

Want to find out more?


Is an online licence giving you access to a wide range of topics to help build your capability and grow your business.

There are over 320 modules to choose from - everything from customer service, leading diverse teams, sales and business planning to innovation, creativity and performance management.

When and where

Participate in the training anytime, anywhere and as often as you like, valid for 12 months


Specially priced at $85.25 (incl. GST) for our partners


Click here to register with Skillsoft today

 Skillsoft flyer

RM Insight article - Slips, trips and falls in the workplace

Slips, trips and falls sign

This month’s RM Insight article provides information on injury resulting from slips, trips and falls in the workplace. 

Whilst this should be easy to prevent, involving simple risk management techniques, the scale of the problem shows it is still very much prevalent in today’s workplace, with the real cost being human pain and suffering.

AFCA - New external complaints resolution body

From 1 November 2018 a new external authority, the Australian Financial Complaints Authority (AFCA) will service complaints about financial products and services from Australian consumers and small businesses.

The AFCA will replace the Financial Ombudsman Service Australia (FOS) and the Superannuation Complaints Tribunal (SCT) which both currently handle external disputes.

Please note, Suncorp’s dispute resolution process will not be affected by the introduction of the AFCA.

Losses from large non-catastrophic events add to insurance costs

Building on fire

We often hear talk in the market about losses from large catastrophes and their related reinsurance costs, but Insurers also face increasing pressure from non-catastrophic losses which can have a significant impact on premiums.

The reality is that seemingly minor events can be major reasons behind increasing costs.

This is particularly evident when we look at losses in commercial property. Disturbingly, it is estimated that across the industry over 30% of losses are caused by arson.

These events can involve a range of people and motives, from disaffected staff members to competitors – even pyromaniacs. Arson for profit can lead to deliberately lit fires with perpetrators seeking to defraud insurers. Even thrill-seeking children can be the cause of significant fires.

“We are working closely with fraud specialists to determine trends and help better understand this,” said Anthony Pagano, Head of Commercial Intermediaries at Vero. 

“Our own Vero team of risk engineers are experts at identifying risks and putting plans in place to minimise their impact. They can be very proactive in addressing the causes of these large losses.”

A recent example includes a fire in a West Australian hotel which the licensee was found to have arranged. It resulted in a $1.5 million claim. Pleading guilty to fraud at trial, the licensee is now serving a lengthy jail sentence.

Other major losses

Other causes for major non-cat losses include machinery breakdowns, water and storm damage, fire and malicious damage. Business interruption insurance can play a large part in each of these instances with policy holders making significant claims for loss of revenue and other costs sustained after such events – sometimes for a protracted period.

To help brokers better understand the impact of these losses, Vero used data from over 40,000 claims to create the Risk Register tool. It demonstrates typical claims and brackets them by industry type and insurance category.

For example, the Risk Register tool shows that in the construction industry, theft is the greatest contributor to losses, responsible for around 22% of claims, while water damage through bursting or leaking pipes accounts for less than 5% of claims.

Contrast this with the retail industry where claims for accidental loss or damage are the most prevalent at 13%, with electronic breakdown and ‘slip, trip and fall’ the least common with just 4% of losses each.

Is the policyholder the building owner?

Another source of grief for all insurers is that it’s believed around 15% of people insuring commercial buildings are not the building owners. This can result in issues when it comes to a claim. Commonly the issue of a tenant insuring the property raises an issue around the policy holder’s interests to insure the premises for its full value.

Robert Leach, National Manager Liability & Major Loss Claims at Vero, said most larger businesses have ISR policies that provide cover for material damage and other losses associated with their business being unable to operate because of an insured event, and these additional coverages can significantly impact the overall cost of claims.

“With a large fire claim, it is important to focus on getting the business running again as soon as possible. Having a repair strategy that emphasises both the quality and speed of repair is a key element in mitigating the costs of larger claims,” Robert said.

EPS claims expanding exponentially

Of further concern is the escalation in claims costs for losses associated with expanded polystyrene (EPS) sandwich panel. Two large EPS events in 2016 and 2017 have ramped up annual losses from $30 million to $80 million per annum. This versatile construction material is used in multiple applications across the construction, food and beverage, packaging and insulation industries.

Amongst other risks facing commercial insurers is the build-up of hazardous and combustible materials at large recycling facilities. As these stockpiles continue to grow, so do the risks.

If the above losses continue to increase, it will put pressure on the Industry’s position on cover and price. To help combat this, insurers, brokers and customers are working together to proactively mitigate potential risks.

“Our risk engineering capabilities are widely known and respected and their services can significantly defuse major accidents. For example, Vero risk engineering services were employed during the design phase of automatic sprinkler protection improvements at a major food manufacturer in Tasmania,” said Anthony Pagano.

“The client implemented them and this made the difference when an oil fryer duct fire was successfully controlled. This kept a potential $100 million plus claim to a below deductible event.”

Want to find out more?

There is a great deal of information on risks to be gained by taking a closer look at the range of industries and their losses.

Visit the Vero Risk Register Tool and enter your details to register.