Please take a minute and have your say

I appreciate that it is a very busy time for many people in the insurance industry, but the survey for this year’s Mansfield Awards for Claims Excellence closes at 8am on Tuesday.

So please take a few minutes over the weekend and have your say on who has done the right thing, lifted their game, let you down or anything in between.

A reminder that the Mansfields is not based on a nomination process and every insurer and underwriting agency is open to win. There are no fees to either complete the survey or to be included in the survey.

The awards themselves are a not for profit initiative with the purposes of, as the name suggests, recognising and claims excellence, driving positive change in the insurance industry, and rewarding the claims team that do great things for their insureds, the company and brand insurance.

To have your say please visit 

If you would like to come along and help celebrate the champions of claims, please go to to reserve your place.

Thank you in anticipation of your time.

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Blog question – ISR Mark IV or Mark V, which is better?

I received this question which is not that easy to answer.

On more than one occasion I have come up against a competing broker who states to clients that Mark V is better than the Mark IV therefore even if the Mark IV terms are more competitive the client has been so bamboozled they believe it. What is your view, is the Mark V better than the Mark IV? If so, why is Mark IV mainstream and so very few brokers use Mark V? Discussions with underwriters are that the Mark IV is the preferred.

Mark (Name and email provided)

I think the best place to start is with a bit of history. The Industrial Special Risks (“ISR”) Mark IV Advisory was introduced in 1987 for two main reasons.

  1. In an attempt to stop the massive under declaration that was going on within the industry. This was happening as the test for co-insurance, up until that time, was on all assets across all locations. As such, the cost of doing a valuation on all the buildings, all the contents and the stock of a large client with multiple locations was greater than the value of most claims and so the test was not being done. The Mark IV fixed this by making the test at the location of the loss. In exchange, co-insurance was dropped from 90% to 85% on Material Damage claims. On Business Interruption it remained at 100%. As an aside, this was changed to 80% on both Material Damage and Business Interruption in line with Business Pack policies.
  2. There was a need for standardization. Reinsurers, insurers, brokers and loss adjusters were constantly being caught out by the fact that there was no standardization. By having one standard contract which could be altered by endorsement, made it better for all parties concerned.

By 1990, a number of errors in the 1987 Mark IV Advisory wording, as it became to be known, were identified. This lead to a new committee to review the wording and ultimately meant the introduction of the Mark V (Advisory) wording.

This, to me, is a much better worded document, in that it is easier to read, but it was a complete reshuffle of the sections and there were some major changes that brokers in the main did not like.

This led to two things happening. The first was, to me 28 important changes were made to the Mark IV wording to create the Mark IV Modified wording. One of the changes was the burglary losses had to be reported to the police.

The second was that a second version of the Mark V ISR wording, the Mark V Modified wording, was introduced which kept the structure but brought the cover back in line with the Mark IV Advisory.

In the research I carried out writing my 3 volume text on the Industrial Special Risks policy, I identified just over 200 differences in the 4 versions of the wordings. I prepared a table which is in Volume 3 of the ISR book set which shows all the difference.

So which is better?

There is no one answer here. Both policies are now over 20 years old and have stood the test of time although major changes have been or are currently being made to both.

Why there is no right answer is that neither is designed to fully protect any single industry let alone any single insured. The idea behind the policy is to be the foundation of a tailored policy that provides the required protection to the Insured while providing an adequate premium to the insurers accepting the risk. As such, there are, at last count, over 600 endorsements to the Mark IV and over 400 for the Mark V.

Both policies can be tailored by someone who understands the policy to provide the same protection as the other.

Across the market, I believe that there are many more Mark IV wordings in all its current variations in place and as a general rule of thumb I would say more people are comfortable with this wording than the Mark V.

Having said that, some brokers prefer the Mark V and are very conversant with it.

Sorry there is no simple answer here. Both can provide great protection if tailored to the clients needs. Both can leave a client unprotected if not tailored by a skilled professional.

There are three common things that can lead to problems. The first is to just continue on with the same coverage as last year. I see schedules that have not had the sub-limits and endorsements reviewed for years and they are no longer appropriate for that client.

Secondly, the Limit of Liability is set based solely on the Declared Value of a single location. There has to be adjustments for the additional benefits and possible escalation between the date of the start of the policy and when reinstatement of a destroyed asset finally takes place. LMI have a Limit of Liability Calculator on LMI RiskCoach and LMI PolicyCoach to assist brokers get this right.

Finally, where a broker simply copies quotes from one ISR to another. Particularly from the Mark IV to the Mark V or vice versa. The policies and endorsements are different and they need to be treated differently.

I hope this helps in your understanding.

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Dame Joan Collins thoughts on claims preparers

When Steve and I were over in London last, we met with the director Alex Balcombe of Harris Balcombe one of two firms vying for the title of the longest running claims preparation company in the world. They are one of the foundation members of the International Institute of Claims Preparers (“IICP”) and now have the 6th generation of the one family still involved.

Alex had to cut the meeting short as he had just been appointed to a claim for the well known English actress, author, and columnist Dame Joan Collins.

Now all the rectification work has been completed and the claim settled, Dame Joan offered her time to do a testimonial. What resonates with me in the interview is the way she explains the strength of the relationship that develops between the Insured and the claims preparer as they help them through a very difficult time of their lives. Like so many of the LMI team, the claims preparer becomes part of the Insured’s family.

To view the short video go to

Well done Alex, it is this sort of care that we demand in our membership at the IICP.

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Driver-less car technology fails a pedestrian. Lessons still to be learned.

While visiting my daughter in Phoenix, Arizona at the start of the year I saw a number of driver-less Uber vehicles driving around the University of Arizona campus in Tempe (a suburb of Phoenix). At that stage, all the vehicles had a driver and you could opt to have the car drive itself or have the driver drive it. Having borrowed my daughter’s car I did not get a chance to try it out.

With this background, I was saddened to hear of the death of Ms Elaine Herzberg, 49, who became the first person to be killed by an autonomous vehicle when she was struck by one of these Uber vehicles while pushing a bicycle on a road in Tempe.

At the time, it was reported that the vehicle ignored her. I have just learned that the investigation into the cause found that the Volvo XC90 vehicle did in fact detect Ms Herzberg, but “decided” to ignore her, deeming her a “false positive”.

The report identified that there was a problem with the software which determines how the vehicle reacts with objects it detects. In a nutshell, while the sensors on the vehicle detected the pedestrian, the car’s software didn’t deem it necessary to react straight away.

While this is the third death that I am aware of involving a driver-less car, considering the massive number of kilometers that have now been driven, the technology is the way of the future and will greatly reduce traffic accidents and road trauma injuries overall. And my bet is that there have been far fewer deaths with this technology than there were with the introduction of motorised vehicles in the 19th Century.

It does, of course, raise the question as to which type of insurance will be called upon to respond to any claim made for injury or damage as a result of such a collision. Will the motor insurer, or in this case compulsory third party insurer, have a right to recovery from the software company? We live in interesting times.

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Thanks InsuranceNEWs and all those that wrote

Just a quick post to thank Terry McMullan and the team from InsuranceNEWS for picking up on my blog post on Monday about the effect that the Australian Government’s decision to remove Insurance Loss Adjusting from the Skilled Migration Program will have on our industry.

A number of people saw either the InsuranceNEWS article or my blog post and have written in expressing their concern. The deadline for this is today so if you have not already, please complete the public submission on why this proposal will be damaging to both the insurance industry and the Australian people generally at

To be clear, we are looking to ensure the Insurance Loss Adjuster profession (599612) remains on the STSOL (short term) and preferably moved to the MLTSSL (medium long term) lists.

This, I think, all comes down to few people really understanding the value of general insurance, and the claims function in particular. We see this with the number of claims to the Financial Ombudsmen Service and the need for government enquiries.

This demonstrates the importance of the Mansfield Awards for Claims Excellence, set down for July 5 in Sydney.

Besides brokers and insurers helping the cause, we have also had help from those who know people in government and working with senior personnel within the major loss adjusting firms operating in Australia, we will be seeking to meet with government advisers and politicians to explain our cause.

Thanks again to all those that are helping in trying to have the decision to remove loss adjusters from the skilled migration occupation list overturned..

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Product Recalls Australia – 19 June 2018

This week’s product recalls includes the following:

Volkswagen Group Australia — MY18 Volkswagen Polo


Overseas Vehicle Sales — Cadillac Escalade 2007 – 2014

Kia Motors Australia —MY 2015-2019 YP Carnival

Volvo Group Australia — Mack Granite, Mack Trident, Mack Titan and Mack Super-Liner trucks

TJM Products Pty Ltd — TJM Recovery Gear Snatch Strap 8,000KG 9M

Blue Sky Foods Company t/as The Food Company — Garlic, Chilli & Thai Basil

Ford Motor Company of Australia Limited — Ford Everest and Ranger

Intervet Australia Pty Ltd trading as MSD Animal Health — LED Keyring Torch

Open Side Investments Pty Ltd t/as Ronda Food Products — French Style Duck Pate, Wild Mushroom and Cracked Pepper 150g

DNZ International Trading Pty Ltd trading as Ximi Vogue — Various sunglasses

To see more recalls, please visit:

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Natural Perils – learn more about floods, hurricanes, sinkholes, and volcanoes with Disaster Week on SBS

Coinciding with the release of LMI’s Version 2.0 next month, SBS is kindly running a 4 part series of documentaries on Natural Perils.

While Natural Perils are only 1 of 12 categories of risk that ContinuityCoach addresses, it is an important one with not all necessarily covered by insurance.

Sinkholes: Deadly Drops’

Imagine if your backyard just disappeared one day – falling into a hole that opened up in the ground. Or if your house split in two when a sinkhole collapsed underneath where you live. This documentary looks at the destructive force of sinkholes, which can occur suddenly, taking property and lives down into the earth with them. Combining first-hand accounts and geological explanations, this three-part documentary series provides a fuller understanding of the naturally occurring, potentially deadly phenomenon.

Watch Sinkholes: Deadly Drops on Sunday 17 June at 7:30pm (AEST) on SBS.

 ‘Killer Floods’

We’ve seen some devastating floods in Australia and tsunamis hitting our neighbours in the past couple of decades – surges of water that have left hundreds of thousands dead and caused billions of dollars’ worth of damage. Examining the way a number of landscapes have been changed, scientists hypothesise whether cataclysmic deluges could be the cause and not gradual erosion. They also try to determine what the cause of the floods might have been and whether ones of that magnitude could strike again.

Watch Killer Floods on Monday 18 June at 8:30pm (AEST) on SBS.

‘Killer Hurricanes’ (Cyclones Typhoons)

Hurricanes, typhoons, and cyclones kill 10,000 people on average a year, and can cause immense damage to infrastructure and residences. But were these super storms any more or less powerful throughout history? That is the focus of this documentary, which sees scientists looking at evidence of hurricanes from up to 1000 years ago, starting with the Great Hurricane of 1780, which struck throughout the Caribbean and killed an estimated 22,000 people. What do their findings suggest about what we can expect from hurricanes in the future? I think we all know the answer to this one.

Watch Killer Hurricanes on Wednesday 20 June at 8:30pm (AEST) on SBS.

‘Killer Volcanoes’

While many natural disasters have a localised impact, volcanic eruptions can cause mayhem on a global scale. So while Australia may think we avoid this one, do we? With more than 1500 active volcanoes in the world, of which about 50 erupt each year, this is an occurrence we are all too familiar with today. And while some volcanic activity from throughout the centuries is well known (such as the Vesuvius explosion that consumed Pompeii), scientists in this documentary analyse evidence of what might have been the largest eruption in human history.

Watch Killer Volcanoes on Friday 22 June at 8:30pm (AEST) on SBS.


Being in business is all about managing risk. While natural perils are certainly one to consider, another big one to consider is caused by humans. As with all our eServices, a great deal of work has gone into the coaching/training element to assist brokers and their clients identify, evaluate, and treat risk in their business.

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Addressing the lack of understanding about Compulsory Third Party (‘CTP’) insurance often referred to as Green Slip insurance

Steve Manning, an old friend Mike Quinlan and I are concerned at the many reports that have come out recently about the lack of understanding about CTP insurance.

With this in mind, Mike is preparing a guest post and Steve is preparing a short video on the topic for his Insurance Bites YouTube Channel.

I will let everyone know as soon as they are up and ready for viewing.

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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

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 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

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