Humbled at the Midway Club
It was a most interesting day for me at the Midway Club today. The Club was founded by senior insurance personnel who had moved from interstate as a way of welcoming them and their wives to Melbourne. As a rough around the edges Brisbane boy who had gone to a public school, I was a little worried when I was transferred to Melbourne to take over the running of GAB Robins Loss Adjusters after a number of senior personnel had resigned to start Robertson & Co.
The Midway Club members were very kind to me from the start after Norm Griffiths of Munich Re first asked me to come along as his guest. I joined in 1992 and many of the original members and others who joined at the same time as I are still members.
First up I was humbled and made speechless when I was presented with a set of blazer buttons from Lloyd’s of London. One member had them in his collection and had donated them to club for auction to raise money for the club but the members all chipped in last meeting when I was not present and decided to present me with them for my help in the background for the club with support staff, web services etc., and secondly my love of things insurance history. To say I was chuffed is an understatement. They will go straight to the poolroom until I find a fitting blazer to attach them to.
Like many in the industry, the general mood of the club was one of extreme disappointment at what is coming out in the Royal Commission. Many had examples of claims where it can only be described as bad faith was being exercised. In the worst case a senior representative of an insurer had made a file note to say the Insured does not have means to fight this, continue with the denial. When the Insured did battle on the judge was naturally appalled by the approach taken by the Insurer. While not taken to task on this matter, the person involved was before the Commission.
What was most upsetting was the fact that where company officials had cost their employer sometimes many millions of dollars, completely destroyed any customer relationship, they still retained their job.
It is my view that we do need to bring in bad faith penalties and meaningful fines for breach of contract, and or misleading advertising.
One Insurer had $426 million in premium income and yet their fine for false and misleading advertising for not one but a total of four infringements was $43,200. This represents only 0.001% of the premium income. As the Commission stated a small price to incur to do business.
Interestingly through the meeting I received two texts from friends advising that they were not going to renew with this insurer as they did not trust them and asked for the name of a good insurance broker.
The group talked about culture but also on the method of remuneration of senior staff and whether this was driving poor behaviour with self interest overpowering customer care.
We all hope that the bitter medicine we all felt the industry was taking will lead to positive change.
I wish to publicly thank Les Burke as President of the Midway Club and all the members for the very kind and much appreciated gift.