Blog question – The variability of private motor insurance premiums

With the plethora of advertisements on television advertising motor insurance each claiming to be able to save the insured money, the question that I am often asked is ‘Why do insurance premiums vary so widely?’

Brand New Cars In Stock

Factor in issues such as the age of the vehicle, its ease of being stolen, its colour (which affects visibility), attractiveness to thieves can all go towards effecting the premium.

Savings in premium can be made by taking a higher policy excess. With private motor insurance the vast majority of policies are very similar in their coverage with minor exceptions which would be regarded as ‘bells and whistles’ items in the main but what is important is the claims service. For most people having a car off the road is a major inconvenience particularly if you rely on the vehicle for work travels or getting children to and from school, sporting commitments etc and so the claims service should be something that should be taken into consideration.
Just a reminder that is a comparison of the claims rating and is a free service at:

Home page of

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Zurich Global Risks Report 2016


Recently, I shared the key concerns of Risk Managers who took part in the Allianz Global Risks Survey.

Zurich Insurance have also produced a global risks report which has just been released for 2016. The list here includes geoplegal risk, climate change and cyber risks as the high priorities.

A copy of the report can be found here:


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Blog Question – Fixtures and Fittings

The following was a question received 18th January 2016.

“A typical business contents policy includes cover for fixtures and fittings, where the insured is a tenant:

a) landlords fixtures and fittings when the tenant is liable under a lease agreement; and b)tenant’s fixtures and fittings installed for his use.

However most policies do not define what is meant by fixtures and fittings.  What do you believe fixtures and fittings means in the context of the policy? For example,would fixtures include buildings?


Brett [Surname and email provided]”


I replied with the following:

Thank you for your question Brett.

As the policy does not define what fixtures or fittings mean then their ordinary everyday meaning is what is used. Fixtures are described in the Macquarie Dictionary [3rd edition] as:

“something securely fixed in position; a permanently attached part or appendage of a house, etc.”

Fittings on the other hand are defined as:

“anything provided as equipment, parts, accessories etc.”

Based on this definition I do not believe that buildings themselves would fall under the definition but rather it is items that are fixed or attached to the building. This would include plant machinery such as air conditioners, cupboards, shelves, alarm systems, light fittings, curtains, blinds and the like.

I trust this explains the situation.




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LMI Group and The Financial Services School partnership

LMI Group and The Financial Services School are pleased to announce a partnership focusing on delivering high quality technical education to the insurance industry.

It is a natural transition for LMI to enter the education world and this joint venture will see the merging of the education resources of LMI and The Financial Services School. The merging of these resources will build on the school’s current education program and provide greater opportunity for the insurance industry to enjoy a wide range of training options. The Financial Services School will maintain its RTO status delivering qualification courses from traineeships through to Diploma level. Our strategy of providing personal service to our clients has worked well for a number of years and this will not change.

There will be a direct focus on blending continued professional development programs with qualification courses.   The venture will be jointly coordinated by Dr Allan Manning and Carl Greenhalgh from LMI and Val Phinn from The Financial Services School.   As part of the merger we will be focusing on working with the education sector to improve the current training framework and ensuring competitive education training programs are available to the insurance industry.


If you would like more information about this, please contact Val Phinn, Allan Manning or Carl Greenhalgh.

Val Phinn at (07) 5498 5176 or email at

Allan Manning at (03) 9835 9900 or email

Carl Greenhalgh at (07) 3262 8033 or email

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Business Interruption still the number one risk facing risk managers.


Allianz Global Corporate and Specialty (AGCS) published its Allianz Risk Barometer for 2016. Businesses supply chain interruption remains the top risk for businesses globally. This has been the fourth year that business interruption has filled this position.

What is of interest is that business interruption is not being considered solely caused by physical loss or damage to property but also driven by cyber attacks, technical failure and geopolitical instability.

We at LMI have seen a number of business interruption losses resulting from prevention of access during the bush fires in several Australian states.

Also of concern to risk managers are changes in marketing, market conditions and cyber incidents.

Natural catastrophe has dropped two positions to number 4. This reflects the fact that globally, natural disasters reached their lowest level since 2009, although Australia did suffer more than its fair share with the Insurance Council of Australia classifying six events as catastrophe events.

Despite business interruption being such an important class of insurance protection, we find that far too many businesses do not have any business interruption insurance and while many that do, are under insured sometimes grossly.

I conclude by explaining that the AGCS survey is carried out with over 800 risk managers and insurance experts from more than 40 countries taking part.

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Bush fires and Under insurance – not a good mix.

Risk Maximum
With all the claims I’ve personally been involved in with bush fires, I’ve not seen one that’s been adequately insured.

In many cases the people have been less than half insured and the major issue is that the insurances are not been reviewed for a number of years.
Of course this has left the business and/or home owners in a terrible situation financially which converts to emotional or mental stress issues.

It’s all well and good to treat insurance as a cost, or just another bill to pay year on year, but it has to be remembered that it’s protecting, often, the home and business owners life’s work.

I therefore again urge everyone to review their insurances each and every renewal, to ensure that the sum insured are adequate and that the cover afforded protects your home or your business in accordance with your own risk appetite.

Please learn from the terrible consequences faced by the bush fire victims I’ve been helping.

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EPS Panelling suspected in Dubai Fire

That spectacular fire that occurred on the high rise building in Dubai just before midnight on New Year’s Eve is yet another reminder of the importance of ensuring that the insured have insulated panelling used, in residential properties in particular, are fire rated.

The fire in Dubai is the latest in a number of buildings including one in Melbourne where the fire spread has been linked to the use of extruded polystyrene which untreated is highly combustible.

The use of insulating panels is becoming more widely used in construction for two reasons, one it is a relatively inexpensive method of cladding and secondly it has, ironically, good insulating properties.

Fire spread is only one issue with this material, the second being that there are no Australian standards as yet to cover the waterproofing and unless the material is installed correctly, the joints, particularly in corners, are prone to leak and I suspect there will be many claims for water damage occurring in the years to come in many of the buildings that have been clad in this material.

Yet another issue is that rendering straight over the EPS or similar material has proven not to stand up well to hail damage.

The problem I see for many insureds is that once it is rendered while they may think the property is masonry (brick, concrete or stone) it is in fact not and that could inadvertently be disclosing an incorrect material to their insurer.

dubai-address-hotel-fire A fire engulfs The Address Hotel in downtown Dubai in the United Arab Emirates December 31, 2015 (Source: Reuters)

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Fire Service Levy in NSW finally to be scrapped

fsl tax It was a great Christmas present to hear that the NSW government have, after many years of talking about it, finally agreed to remove fire service and SES levy’s on insurance.

This will greatly improve the affordability of insurance for both home and business owners in property, construction and the all-important business interruption.

The only disappointing thing is that we have to wait another 18 months before it is implemented with the tax to be replaced by a fairer more broad based tax linked to property rates which will take effect from the 1st July 2017.

Why I say this is fairer is that the whole community benefits from a well-trained and funded fire and state emergency service and we should all contribute to cost of this, not just those that are prudent and risk adverse enough to insure.

The NSW government are to be congratulated for finally bringing their state in line with all the other mainland states and territories and now the pressure is on Tasmania to remove it from their business owners.

A number of people have been involved for many years to have this tax removed, including NIBA, The Insurance Council of Australia, LMI Group through its NoTaxOnInsurance initiative and others. All are to be congratulated for their combined efforts.

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