Prof. Allan Manning

Loss Adjusters removed from Skilled Migration Program – Please help change the Government’s mind

Following political pressure about the number of home invasions and other crimes being committed by immigrants and the routing of the visa system by far too many,  the Australian Government have done away with the 457 Visas, and as part of this have removed insurance loss adjusting as an occupation/profession that is able to come into Australia.

From what I gather, this is not for any other reason other than a statistical analysis looking at the the number of visas that have been issued and due to the low number it is not required.

Nothing could be further from the truth. Looking at the AICLA diary it shows that there are around 350 qualified loss adjusters in Australia. At the time of writing I understand that there are 47 loss adjusters in Australia operating under a 457 visa.

Another statistic that I have heard is that the Australian Bureau of Statistics has around 3,500 people who record their occupation as loss adjusters. This, I can only assume, is in house adjusters, builders, forensic accountants or investigators who are doing primarily loss assessing. Also, some loss adjusters have moved into claims management due to the pressure of the job and or better salaries.

There are a couple of issues that need to be considered by the government. First up, there has been a 35% increase in complaints against general insurers in the 12 months of 2016-17. The fastest growing problem according to the Financial Ombudsmen Service (Source: ABC News).

The number of brokers complaining about claims service to me is at present at an all time high. This situation is likely to only to get worse with this change.

Secondly, like many sections of the insurance industry, loss adjusters have been caught up with generational change. The number of adjusters that have retired or sadly passed away has been more than most anticipated.

Thirdly, it takes at least 5 years for the brightest of people to be adequately trained to handle larger claims, particularly ones involving complex issues around business interruption, extra costs of reinstatement and the like.

Fourthly, we need to build our base of experienced adjusters to handle catastrophe situations. This is on top of the requirement to bring quality people in from overseas so that business as usual claims can continue to be handled fairly and promptly.

Fifthly, no one that I know who has come into Australia as a sponsored loss adjuster has committed any crime, been a burden on the government and there has been no exploitation by any employer. Everyone has paid their taxes and those that have come have been great for our economy and the communities they live in.

Finally, with the offshoring of many claims roles, the talent pool where those that want to become loss adjusters is reducing and with the pressure on adjusting fees the investment in training and education has put a strain on those firms committed to the profession.

The answer for as long as I can remember has been for the profession to attract quality adjusters from overseas to compliment the local team. Some of Australia’s most talented and respected adjusters working in the industry today fall within this category. What I would say is that many who have immigrated to Australia have participated most in the education process of younger adjusters.

If the government continue down the path of just looking at the numbers and not the important service that highly trained loss adjusters provide to both the insuring public and the insurance industry, then I see a perfect storm approaching for our industry.

If you would like to have your say, please go to https://employment.qualtrics.com/jfe/form/SV_eLq4aYmgAmqEDad

The deadline is this Wednesday, 20 June. The occupation is insurance loss adjusting.

I appreciate you are all busy but I do urge you to please take a few minutes and help get the message across that loss adjusting needs to remain on the skilled migration program. It is only if enough people in our great and important industry complain can we over turn this.

 

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2 milestones reached today

Today marks the 1,100 article posted to this site. As with all the services that the LMI team and I have developed, it is designed to educate in risk management and insurance, be a sales tool to insurance brokers, and protect the professional indemnity program of advisers.

We were recently told that we had done far more to assist brokers in these areas than any organisation in Australia or New Zealand and gives our partners a genuine advantage when providing advice to their clients. This spurs us to continue to invest heavily with our partners.

In 2005, we launched LMI ContinuityCoach.com which provided an inexpensive way of identifying risk and developing a plan to recover from a crisis event. Since then we have learned a great deal about the subject and received a great deal of feedback from our army of subscribers.

Over the past 4 years the team have been working on a complete upgrade which brings in areas of LMI RiskCoach, greatly improved risk identification, assessment and treatment features as well as a plan that is fully accessible from any mobile device.

For the first time it incorporates many risk management features including risk reports which will assist in tailoring the insurance program to the client’s need and much more.

While the original ContinuityCoach was good for its day, Version 2 which we will be officially launching in early July, takes it to a whole new level. It will assist any business even if they never need to activate their plan.

If you would like to have demonstration of the new product when it is released please drop me a note at allan.manning@lmigroup.com

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Fined for using a mobile phone while in charge of a motorised lawn mower

As regular readers will know I am a very strong advocate against the use of mobile phones, particularly texting while driving. I support the introduction of exclusions in motor vehicle policies as a deterrent against this extremely dangerous practice.

I therefore read with interest that police in the UK pulled over a council employee who was, I gather, driving the motorised industrial ride on lawn mower, between jobs while using his mobile phone.

Not only is he expected to be fined but also disciplined by his employer.

If you are an employer, do you have a procedure in your staff manual about the use of mobile phones while in charge of any motorised vehicle. If not, it may be time for a review. Keep your staff, the public and your brand reputation safe.

Children on the farm. older brother driving a lawn mower, younger brother running after him

While looking for a suitable photo to compliment the article I found this one (see left) that immediately got me thinking about another obvious risk. Children in and around motorised equipment, especially on farms and parks. The dangers here are just too serious to picture but only a fool would ignore them!

 

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This is one piece of legislation that I would love to see come to Australia

I wish I had this warning on my phone

The UK Government is calling for a change in the legislation to make directors personally liable with fines of up to £500,000 for nuisance calls.

The UK already have legislation that allows fines to be imposed, but directors are avoiding the fines by winding up the companies, declaring them bankrupt only to open up again the next day. This legislation would close this loop hole.

I do not know anyone who is not sick of receiving time wasting calls that seem to come in on your mobile phone at the wrong time or on your home phone just when you finally get to sit down for dinner. This is despite the fact, I am yet to speak to anyone who has changed their telecommunications or electricity supplier after receiving such a call.

As fast as I block the number, the same company rings back on a different number a few days later. The Do Not Call Register is simply not working.

Obviously some people are taking up the offers or they would not be this daily impost on our time. I question just who is. I wonder if they need more protection from these calls than I do.

I would take the legislation one step further and not only make the directors of the telemarketing company that gets the fine(s) but also the directors of the product(s) or services that they are ringing to sell.

Come on government, protect our right to some quiet thinking and leisure time in this 24 hour world. Better still offer some protection to the trusting and vulnerable in our society.

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Warning: Suspicious Emails

These types of malicious emails are becoming more and more common, as well as trickier to pick up when they are real or not.

I set out below an example of one which one of our employees received which was in fact a scam/hack email. Luckily, they knew to not click.

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Lessons from the Tyre Industry for the General Insurance Industry

I recall quite plainly when the then NZI Insurance started advertising insurance on buses, my then state manager, Mr Russel Hay of the General Accident Insurance could not believe that any insurer would discredit the industry by advertising on the side of a bus. As a young man I did not see anything wrong with this but Mr Hay thought that this degraded the great profession of insurance and damaged the image of insurance generally as being a cut above commodities.

Oh how the times have changed!

Now, we see so many advertisements for Insurance in so many different media channels it isn’t funny. But, what message are we portraying to our customers?

I would suggest that first, insurance is easy, second, it doesn’t matter which policy you have, it is all about the price or the free theatre tickets or discount vouchers for an electrical store and lastly that loyalty does not pay and that you get a discount for moving insurers. The reality is that insurers do not make money on the average client in the first year that they have them, it usually takes 3 years with a good claims history before there are real profits to be made from the Insured. To encourage customers to chop and change year after year is not good for insurers, nor do I believe it is good for the Insured.

My advice to any insured is to pick an insurer and develop a long term sustainable relationship with them.

As a young claims officer, we always checked how long the Insured was with us before making a decision on whether or not to deny a claim. With many insurers, the length of time you have been with them makes no difference to whether or not a claim will be denied, and certainly they are being penalised premium wise for staying with them.

To me, the industry has reached a new low with the recent release of the BizCover ad with someone cutting the most disgusting toenails. To me, it is so repulsive that I immediately changed the channel.

Compare that ad with the way that Bridgestone Tyres are advertising. It is creative and sends a powerful and important message. They are NOT advertising that they have the cheapest tyres, they are explaining the benefit of quality tyres when it matters.

Ironically, one of the first claims that I handled on setting up LMI Group was for a tyre retreading company who had a major fire. His belief was that he faced the same dilemma as the insurance industry, everyone buys his product not realising how important that product is until such time as they really need it. In the case of tyres, it is when you have to slam on the brakes and you expect them to safeguard your family, car and whatever it is you are trying to avoid hitting from injury or damage. In effect it is selling their tyres from a risk management perspective.

Insurance is exactly the same, it is all well and good looking for the cheapest and simplest policy until you really need it.

Just like tyres, insurance is about protection. Good insurance is about managing risk.

In now 47 years of my handling claims. In that time, only a handful of customers have ever discussed the premium with me after a claim, and in the few cases that have, in every case, it has been a negative experience not a positive. That is, they say, “I moved from this insurer to that insurer and saved X dollars, tell me again Allan, how much has that just cost me?” The answer is always at tens of thousands of dollars more.

Maybe I am just unlucky, but I have not met a single person who has had a good claims experience with the insurer that offers discounted theatre and other such benefits.

My recommendation to any insurer reading this is look to engage the same agency that put together the Bridgestone ad to advertise your products and brand insurance. The advice to any insured out there is, if you want to buy theatre tickets, buy theatre tickets, if you want to buy protection, speak to a quality insurance broker and or insurer and look at the coverage and claims service, not just the price. Remember, LMI ClaimsComparison.com is a free service unique to Australia to help you gauge the claims service you can expect from an insurer.

As for Mr Hay, I am sure he would turn in his grave at the way we now advertise / market insurance protection.

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Product Recalls Australia – 5th June 2018

This week’s product recalls includes the following:

Danish by Design Pty Ltd — Troll Lukas Cot

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Panasonic Australia Pty Ltd — Panasonic Toughbook Laptop

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FCA Australia Pty Ltd — MY 2016 – 2018 Alfa Romeo Giulietta

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Instinct Property Maintenance Pty Ltd — IBF400 Ethanol Burner

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Toyota Motor Corporation Australia Limited — Lexus NX200t, NX300h, RX200t, RX350 & RX450h (expanded recall)

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Toyota Motor Corporation Australia Limited — specific Prius, Corolla Sedan, Fortuner & Hilux vehicles (expanded recall)

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IKEA Pty Limited — SLADDA bicycle

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LASER Corporation Holdings Pty Ltd — Portable DVD Player 240V Mains Power Adapter

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R.M.S Titanic – Launched 106 years ago today

Today is the 106th Anniversary of the launching of the Royal Mail Ship Titanic in Belfast, Ireland.

As we all know, the 40,000 tonne ‘unsinkable’ ship struck an iceberg on the 14th April 1912 sinking early the next morning, the 15th April 1912 with a loss of around 1,514 lives.

Lloyd’s of London paid out £1,000,000 (modern day equivalent over £107,500,000) within 30 days of the sinking. To put this into perspective, total payouts on all marine claims by Lloyd’s that year was approximately £6,500,000.

Early in my career, I was told that there is no such thing as a prestigious account. The Titanic was marketed as a prestigious account and as a result, a very favourable premium of only £7,500 was charged for the £1,000,000 sum insured (and we think rates are cheap today!).

Being the avid collector that I am, I recently acquired a plate and cutlery which were manufactured for the Titanic but never made it on board. The items were put aside in a warehouse to replace theft and breakages, but with the sinking of the vessel, the items never got to be used. They now have pride of place in the reception of LMI Group’s head office in Melbourne.

Earlier this year, I received a piece of coal that had been recovered from the wreck of the Titanic and I think this is where my collection will finish.

I never thought I would be lucky enough to own a piece of this history, let alone 4. 

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Are Interest Costs claimable as an Increased or Additional Increased Cost of Working?

This is a question often put to me as some loss adjusters and insurers push back when it is claimed.

If I start with the actual wording from the Australian Industrial Special Risks policy which is found in many other policies, it reads:

“The Insurance under this Item is limited to Loss of Gross Profit due to: (a) Reduction in Turnover; and (b) Increase in Cost of Working, and the amount payable as indemnity there under shall be:…

…The additional expenditure necessarily and reasonably incurred for the sole purpose of avoiding or diminishing the reduction in Turnover which, but for that expenditure, would have taken place during the Indemnity Period in consequence of the Damage, but not exceeding the sum produced by applying the Rate of Gross Profit to the amount of the reduction thereby avoided.”

If the Insured needs to pay a deposit on replacement stock or machinery or even make a fortnightly pay-roll and need to borrow funds to keep the business afloat, while the business has been disrupted due to an Insured Event, or because the Insurer has not made sufficient progress payments to allow them to fund this expenditure from insurance monies, then to me, in any interpretation of the Increased Cost of Working definition, the Insured is entitled to claim the additional interest that they have incurred in consequence of the damage.

I stress, the interest expenditure cannot be existing interest, for that should be included as an Insured standing charge in any event and be fully covered under the Item No. 1 (a). The two tests, being sole purpose test and economic limit test, obviously would both apply.

In view of the relatively low interest rates that are currently being charged around the world, I do not expect that the interest charges, unless the claim was protracted for an extended period of time and the amount borrowed was significant, would not pass the economic limit test. If it did not, or the Insured only had additional increased cost of working cover only, then the Insured would be able to make the claim under “Item No. 4 (Additional) Increased of Cost of Working”.

This reads:

The insurance under this item is limited to increase in cost of working (not otherwise recoverable hereunder) necessarily and reasonably incurred during the Indemnity Period in consequence of the Damage for the purpose of avoiding or diminishing reduction in Turnover and/or resuming and/or maintaining normal business operations and/or services.

Here, the coverage goes further and states that the expenditure only has to be made to maintain normal business operations. Therefore, it goes without saying that if the insured had to borrow additional funds to maintain normal business operations and/or services then the interest paid to do so would be an additional increased cost of working.

Claims for this item are a relatively new phenomenon, typically brought about by the fact that some insurers are no longer willing to make reasonable progress payments to assist the insured during the initial phases of a loss. In fact, some insurers insist that the Insured incur the costs under Material Damage before they will reimburse them. In such cases, if their insurer has failed them and they have had to rely on the banking or other finance sector and incurred a cost to do so, then surely this is a legitimate Increased Cost of Working. To deny such a claim is a clear case of wanting the cake and eating it too.

To me, this is such an obvious increased cost of working, I cannot understand why it is being refused so often.

Perhaps, if it continues the only alternative will be to have it tested by the courts, but to me, it is a lay down misere.

 

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Product Recalls Australia – 29 May 2018

The Takata saga continues…

 

Mercedes-Benz Australia/Pacific Pty Ltd — Mercedes-Benz MY 2017 “GLC” Passenger Cars

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Kia Motors Australia — Soul PS

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Daimler Truck and Bus Australia Pacific Pty Ltd — Mercedes-Benz Actros Trucks

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Ford Motor Company of Australia Limited — Ford Kuga and Escape

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Miss Maud — Assorted Bakery Products

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Ford Motor Company of Australia Limited — Ford Focus and Kuga

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Ford Motor Company of Australia Limited — Ford Courier, Econovan and Ranger

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