March 30, 2025 • 23 mins
What keeps you up at night about your business? For many Canberra entrepreneurs, the answer increasingly includes insurance costs, particularly skyrocketing workers' compensation premiums. This eye-opening conversation with Gallagher insurance brokers Ceshton Hanns and Andre Ferreira pulls back the curtain on the sometimes-mystifying world of commercial insurance.
The discussion tackles the pressing question of why premiums continue rising, especially in the ACT. While local business owners might question why distant catastrophes like Lismore floods affect their rates, the experts explain how the interconnected nature of insurance and reinsurance markets creates a global ripple effect. For workers' compensation specifically, the ACT's unique jurisdictional requirements combined with its relatively small private sector market contribute to higher premiums than neighboring states. Beyond these compulsory coverages, the conversation explores essential protections including cyber insurance (which even small businesses need as potential "gateways" for hackers targeting larger organizations) and business interruption coverage that keeps companies afloat during recovery periods.
This episode is supported by CareSuper.
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Episode Transcript
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Speaker 1 (00:10):
Hello and welcome to the Canberra Business Podcast.
I'm Greg Harford from theCanberra Business Chamber and
I'm joined today by KishtonHands and Andre Ferreira from
Arthur J Gallagher, better knownas Gallagher's, the Canberra
branch of the internationalinsurance broking firm.
Andre and Kishan, welcome tothe podcast.
Speaker 2 (00:28):
Thanks for having us.
Speaker 1 (00:30):
So I guess to start insurance broking to many people
has got a bit of a mystical earabout it.
Do you want to just tell us alittle bit about yourselves and
what is your role at Gallagher's?
Speaker 2 (00:42):
Yeah, so Gallagher is a global insurance brokerage,
risk management and consultingfirm.
We're actually the thirdlargest in the world.
Here in Canberra we've got ateam of almost 30.
And whilst we work for a globalcompany, we have a regional
footprint and we're still thefamily-run business, with the
Gallagher family still leadingthe company.
And my role here is I'm a teamleader and broker based here in
(01:07):
Canberra.
I've got over 25 years'experience and I specialise in
workers' compensation, so I'm anadvocate for our employers and
I try and help them navigateinsurance, particularly with
claims and risk management.
Speaker 1 (01:22):
So we'll come on and talk about workers' compensation
insurance a little bit later,because that's a really topical
issue at the moment.
But, andre, what's your rolebefore we dive into that?
Speaker 3 (01:32):
I'm a broker 20 years' experience in Canberra,
moved here from South Africa in2005.
We are at 15 years' experiencein the industry 2005, we had 15
years' experience in theindustry, very client-focused,
(01:52):
looking at the most positiveoutcomes for our clients and
ultimately being recognised as atrusted advisor to them all.
Speaker 1 (01:58):
So insurance brokers are not insurance companies.
You are not the people who areactually insuring your customers
.
What is it for those who mightbe confused about this, what is
it that brokers actually do?
Speaker 2 (02:11):
so insurance brokers act as intermediaries between
the clients and the insurancecompanies.
But it does extend beyond that.
As we work on risk management,claims management, I recently
had a client who's a businessconsultant and he said to me I
tell my clients that everybusiness needs a good accountant
, a good lawyer and a goodinsurance broker.
(02:33):
So I was quite happy with thatendorsement.
So our clients are experts attheir businesses and the
organisations that they run.
Whether they're a builder or adisability service provider or
an accountant, they know theirbusiness and insurance really
can be an enabler so that theycan do their business, protect
their hard-earned assets andprotect their employees.
(02:55):
And we partner with them tobecome a trusted advisor.
But at a really primary level,we help clients find the most
suitable insurance policies fortheir needs.
So we assess their specificneeds, and that, of course,
differs by industry andworkforce.
We research, compare variousinsurance policies from
different insurers and negotiatethe best options in terms of
(03:17):
coverage and cost.
And then we makerecommendations to our clients
that are going to be best suitedto their needs.
So they don't need to becomeinsurance experts as well as
running their business.
They can leave that to us andthen in the event of a claim,
then we help navigate thatclaims process and advocate on
their behalf to ensure fairoutcomes and we really provide
(03:39):
ongoing support.
So overall, insurance brokersoffer guidance and personalised
service to help clients makeinformed decisions about their
insurance coverage.
Speaker 1 (03:49):
Okay, Now there's a lot of concern that I'm hearing
in the business community at themoment about the costs of
insurance.
What are you hearing from yourcustomers?
Speaker 3 (04:02):
Well, greg, many of our customers are already
members of the Canberra BusinessChamber as well and they do
share with us, obviously, thechallenges they face in doing
business Increased costs, ofwhich insurance is one of the
costs they also find.
(04:24):
Obviously, their customers haveless to spend, so, all in all,
it's harder for them to dobusiness, but that also,
conversely, leads into increasedpremiums.
You know why are premiumsincreasing the way they do?
And it's the same inflationarycosts that are faced by our
(04:46):
clients, which the insurancecompanies face as well, and they
increase their premiumsaccordingly, especially the
frequency and severity of claimsand the resultant impact on
claim costs.
Locally, we can think 20January 2020, we had a massive
(05:09):
hail event in Canberra, whichsome businesses are still
feeling.
2022, lismore had the biggestfloods in Australia.
Most recently, we're having theeffects of tropical cyclone
(05:31):
Alfred.
All of these is going to driveclaim costs.
The number of claims are goingto drive through supply and
demand of services.
It's all going to have aneffect and all those effects do
drive premiums.
Speaker 1 (05:45):
So I appreciate you're not here to defend the
insurance companies, butthere'll be people listening to
this who say, well, thehailstorm was five years ago and
Lismore's not here in the ACT,and Cyclone Alfred hopefully not
as horrific as it may be is along way from here as well.
So are premiums set lookingonly at ACT-specific factors?
(06:09):
Or is it Australia-wide or eveninternational?
Speaker 2 (06:12):
It goes as far as international I mean the recent
fires in America.
That's all going to have animpact on the cost of
reinsurance.
So insurance companies buyinsurance as well.
So reinsurance.
So insurance companies buyinsurance as well, so
reinsurance.
So whilst premiums are set andthe risk factors locally are
(06:32):
taken into account as well asthe industry-specific risks, but
globally, and definitely withinAustralia, the risk monitoring
and overall impact of the costof claims, the economy, all of
those things actually do driveit.
So it's a very big picture.
Speaker 1 (06:50):
Kirsten, you touched on workers' compensation
insurance a little earlier.
That's a big pain point formany of our members at the
moment.
I'm hearing about premiums thatare escalating substantially,
doubling year on year in somecases, and being more expensive
here than elsewhere in thecountry.
What's your take on that?
(07:12):
And again, what's driving thosepremium increases?
Speaker 2 (07:16):
Again, it does come back down to the cost of claims,
but more broadly than that,within Australia we don't have a
.
Every jurisdiction is different, so we don't have states
aligned with each other.
So if you're buying workerscomp insurance in New South
Wales, it's different to ACT asit is to WANT.
(07:38):
So every jurisdiction has itsown legislation and with that
comes the cost implications ofclaims.
And so a business thatultimately looks the same on
paper in terms of revenue andthe type of services they're
providing might be the same, buttheir cost of workers'
(07:59):
compensation insurance isdifferent because of those
jurisdiction differences.
And whilst ever the legislationsits as it is and there's no
reform, then those claims costsare ultimately managed by the
scheme.
And that's something we'rereally we're hearing from
everyone in Canberra and thequestion is raised, raised why
(08:22):
is Canberra more expensive thananother state that has mining
and logging and forestry and um?
So it's hard for businesses tocompete, um, to win business,
when their workers conversationpremiums are.
But ultimately that questionkeeps coming back to the cost of
(08:44):
claims.
Speaker 1 (08:46):
And it's a small market too.
Right, absolutely.
And what many people don'tquite appreciate, of course, is
that there's a different schemefor the public service here, so
the actual number of peoplecovered by the workers'
compensation scheme isrelatively small, and that must
drive cost right.
Speaker 2 (09:02):
Absolutely yeah.
Speaker 1 (09:06):
So overall, I mean workers' compensation is just
one of the insurances thatbusinesses are advised to be
looking at, and of course it'sactually compulsory here in the
ACT to have workers'compensation insurance.
Speaker 2 (09:20):
What other?
Speaker 1 (09:20):
kinds of insurance do you recommend businesses should
be thinking about taking out?
Speaker 2 (09:27):
Well, the reason to purchase insurance is always
driven by the customer and itcould be a contractual
obligation, so, whether that bea lease or a contract of service
, it could be things likeworkers' compensation, so
they're obligated, as you say.
But insurance really canprovide financial security and
peace of mind to cover a lossthat would otherwise be
(09:51):
devastating financially to abusiness.
So clients and businesses workhard to build up their assets
and have a successful businessand really insurance is an
enabler sometimes to be able tojust get the cover that they
need to operate their business.
But more importantly, it's asafeguard for those businesses
(10:13):
because the cost of not havingit can significantly increase
the impact in the event of adisaster.
But ultimately there's alwaysthings like liability insurance
and workers' compensation is atthat basic level, but it really
needs to protect assets andwhether those assets are your
people or your tangible assets,then you need to have cover to
(10:38):
protect what you've built.
Then there's things that arehard to see, like cyber
insurance and the impact of allof the people involved in it's a
collective that we keepeveryone's data safe.
So then there's requirementsfor cyber insurance.
The list can be endless andit's I know, no day's ever the
(11:01):
same because we look at so manydifferent types of insurance
policies and we work with somany different industries.
But really we need to hear fromthose business owners what are
the risks?
What keeps them awake at nightas well?
So my mantra is always I wantmy clients to be able to sleep
at night.
So if something can be that arisk can be transferred or an
(11:23):
asset can be protected by aninsurance policy, then that's
that safeguard.
Speaker 1 (11:29):
So let's just talk about cyber insurance
specifically for a moment,because I think there's a lot of
businesses who kind of oftenthink, oh, cyber security is not
really a risk for me becauseI'm relatively small I hear that
quite often from businesses butthe risks are real, right, that
you could be hacked into, youcould be subjected to ransomware
(11:50):
, that your data could be takenand published in the deep
recesses of the dark web fornefarious purposes.
Do you think businesses aretaking cyber security seriously
enough?
Speaker 2 (12:01):
Do you think businesses are taking
cybersecurity seriously enough?
I think those that arecontracted to the government are
being forced to understand it,which is good, but then
ultimately needs to be moreeducation around it, and that
needs to be a collective at agovernment level, as well as
insurers and the IT providers.
(12:21):
The mystery around cyberinsurance is is to a lot of
people, it's another languagethat's spoken and the acronyms
and what do they understand.
But it could be simply that iftheir systems aren't up to date
or there's a patch not putthrough, and they may contain or
hold a certain amount of datadata but they also could be a
(12:42):
gateway into a biggerorganisation, so they just could
be a contractor to a biggerorganisation, and these cyber
criminals will use that gatewayto get into the real data that
they want to access.
And cyber crime is an alarmingand escalating risk.
Speaker 1 (13:02):
Now I appreciate here we're talking very, very
general observations about theinsurance market.
Nobody's asking you to providespecific advice here.
But, andre, do you find yourcustomers I mean, is it like
domestic insurance, where youpay, have a higher excess to
reduce your premiums or perhapsput limits on your level of
cover?
Is that what happens on thecommercial market as well?
Speaker 3 (13:24):
Most definitely I mean insurance.
Ultimately is you know whereyou select how much of your risk
you want to transfer onto aninsurer and obviously, the less
you know, the more you'reprepared to take the risk on in
terms of a higher contributionto a claim.
(13:44):
Insurers will recognise thatand offer you a lower premium.
Speaker 1 (13:51):
There'll be some people listening to this who
perhaps roll their eyesparticularly around cyber
insurance, and say well, youknow, I get a questionnaire
asking me a whole lot oftechnical detail that I don't
understand, and I pay all thismoney to insurers and I never
claim, but the premiums go upevery year.
They'll be asking themselves doI really need insurance?
What's your response to that?
Speaker 2 (14:15):
Well, it can usually be very hard to do business
without it.
So the reason to purchaseinsurance is always driven by
the customer, their attitude torisk, and it comes back to those
things that.
Do they have a contractualobligation?
Do they need to take outinsurance to win a contract?
(14:36):
Do they need to protect all oftheir assets?
It really comes down tounderstanding what their
attitude to risk is as well.
So one person may feel thatit's okay if something happened,
a disaster or a loss happened,I could cover that, and that's
okay.
That's great if you don't needit.
(14:57):
But ultimately, if a largeevent happens or a loss that
would be devastating, that youcan't recover from, then you
would need insurance, or youwould definitely be in a better
position to have insurance.
Speaker 1 (15:11):
And is it right that some of the risks that you're
insuring against are potentiallyunforeseeable, particularly in
the public liability space?
You might not see somethingcoming that does hit you, but
your insurer will step into thebreach, presumably to pick up
the bill.
Speaker 2 (15:29):
Definitely.
I mean there's regulations andcompliance on businesses, that
they may have all the checks andbalances in place, but
accidents happen, things can gowrong, advice can be given and
there's always that supply chainas well.
So where someone ultimatelyfeels either wrong done by then,
(15:50):
they may cast their net whiteto seek damages from a lot of
people, and that can be.
You know, in the constructionindustry it could be something
like the principal and thebuilder, right down to the
quantifier Everyone involvedwill get roped into being
responsible to answer to thatclaim.
And that's where you may nothave even foreseen that risk
(16:13):
coming, but the insurer wouldstep in.
Speaker 1 (16:18):
Do you think business people generally understand the
level of cover that theyrequire?
Speaker 3 (16:25):
Another good question , as Keshen had alluded to
before, there's so many reasonswhy businesses need to have
insurance to trade, trade, andwe do find that, other than that
basic level of insurance, we dospeak to all the additional
(16:48):
covers which which are availableto them and have them
understand especially the valueof having valuations of their
business done to to insureagainst being underinsured.
That's particularly good advicewe offer.
And then I mean you talkedabout cyber and looking at the
(17:10):
additional exposures that canreally catch a small business
off guard.
Business interruption is one ofthem where we we really sort of
put an emphasis on that,because should a major event
happen and it may take some timefor that business to get back
(17:32):
up to their feet, how will theysurvive?
And business interruption isone of those forms.
So we're continuously lookingand working with our clients to
ensure that they have a widerange of coverage.
Speaker 1 (17:47):
You raise an interesting point about business
valuations.
Speaker 2 (17:50):
What other?
Speaker 1 (17:52):
paperwork or documentation should business
owners be thinking about keepingin the event of a claim?
Speaker 2 (18:00):
Definitely any of their contractual requirements
and they can date back sevenyears that you would need to go
back potentially if you'd givenadvice in a matter or on a
contract.
So I also build propertyvaluation, so that's really
important to always be lookingat the valuation of, and taking
(18:23):
into account construction costsand looking at updating security
systems, fire protection.
All of those things really needto be taken into consideration.
Speaker 1 (18:39):
So, given the importance of insurance, what is
it that businesses can do tokeep their premiums?
Speaker 2 (18:46):
down.
Speaker 1 (18:46):
In a domestic situation, you can install a
burglar alarm or put some CCTVin, but what's the best thing
businesses can be thinking about?
Speaker 2 (18:54):
Definitely risk management.
A lot of risk can be managedwith insurance actually being
the last line of defence.
Or insurance is a risk transferoption when you're looking at
your risk matrix or framework.
So Gallagher's definitelyfocused on risk management and
working with clients to have aframework that works alongside
(19:15):
their insurance program.
Because when we present asubmission to an insurer that
includes proactive measures,then that has a significant
impact on our negotiations.
So for organisations, especiallynot-for-profits, good
governance is key of proactivemeasures, then that has a
significant impact on ournegotiations.
So for organisations,especially not-for-profits, good
governance is key.
For a property owner thatconducts, say, regular
thermographic scanning of theirelectrics or roof inspections,
(19:38):
then their submission is goingto be favoured over one that
hasn't prioritised thatmaintenance.
So, and coming back to thepoint of like a client's risk
tolerant, whilst one clientmight want to keep premiums down
by increasing deductibles,another client might want to
focus on the highest level ofcover in the event of a claim.
So we need to listen topartners and our clients to say
(20:02):
what can they do to keep costsdown, what's feasible and
ultimately hope that that alsoenhances their business.
Speaker 1 (20:12):
Now, of course, there's steps businesses can
take to keep your costs down,but they often come at a cost
themselves.
So is it right to say that thetrade-off for customers or for
businesses is to be thinkingabout the value of the
investment to protect the assetversus the cost of insurance?
Speaker 2 (20:32):
Yeah, it can come down to a simple calculation
like that and often we see aclient might look at the cost of
their insurance, but then whenwe look at, say, the percentage
of their turnover or theinvestment of their business,
but then when we look at, say,the percentage of their turnover
or the investment of theirbusiness, and then we look at
what is the margin of that costultimately and that's where I
(20:57):
think insurance really doesprovide that value and a broker
talking through all of thosedecision makers with the client,
then that can give them comfort.
Speaker 1 (21:07):
Excellent.
So some really interestingthings there to be thinking
about.
I think for many businesses,particularly small businesses,
do you think you know across theboard?
Do you think businesses havethe cover they need?
Speaker 2 (21:23):
I think that they do.
I think Canberra in particulara well-educated, well-informed
jurisdiction and hopefully, thatthey're choosing to protect
assets whilst they'reconsidering those costs and
running their business.
So, ultimately, if they'respeaking with their insurance
(21:46):
broker and understanding, youknow, to the level that they
need to, of what's going tohappen, because, ultimately, if
they that day comes when perhapstheir building is on fire and
they give us that call and go,keshton, this is the day.
I didn't think I'd have to callyou, but I am and then it's
well, we're glad that they cancall us and that policy is going
(22:08):
to respond.
Speaker 1 (22:11):
Excellent.
Well, thank you very much forthat.
Now, of course, today we'vebeen talking insurance and it is
important to note that, to theextent that any of the
information provided in thispodcast could be considered
advice, it does not take intoaccount any of your personal
objectives.
Your advice it does not takeinto account any of your
personal objectives, your needsor your financial situation.
You should consider whetherproducts and levels of cover
presented are appropriate foryou and always review all
(22:33):
relevant materials, includingany product disclosure
statements, policy wordings andany difference in conditions
notice before deciding to takeout an insurance policy.
I'm Greg Halford from theCanberra Business Chamber.
I've been talking to KeshtonHands and Andre Ferreira from
Gallagher.
It's been great having you onthe podcast.
I really appreciate the insightyou've brought through to us
today.
Thank you, Greg, Thanks forhaving us Now this podcast has
(22:55):
been brought to you, of course,by the Canberra Business Chamber
with the support of Care Super,an industry super fund with
competitive fees and returns,exceptional service and a focus
on real care.
Don't forget to follow us onyour favorite podcast platform
for future editions of theCanberra Business Podcast and
we'll catch you next time.
Hello and welcome to the Canberra Business Podcast.
I'm Greg Harford from theCanberra Business Chamber and
I'm joined today by KishtonHands and Andre Ferreira from
Arthur J Gallagher, better knownas Gallagher's, the Canberra
branch of the internationalinsurance broking firm.
Andre and Kishan, welcome tothe podcast.
Speaker 2 (00:28):
Thanks for having us.
Speaker 1 (00:30):
So I guess to start insurance broking to many people
has got a bit of a mystical earabout it.
Do you want to just tell us alittle bit about yourselves and
what is your role at Gallagher's?
Speaker 2 (00:42):
Yeah, so Gallagher is a global insurance brokerage,
risk management and consultingfirm.
We're actually the thirdlargest in the world.
Here in Canberra we've got ateam of almost 30.
And whilst we work for a globalcompany, we have a regional
footprint and we're still thefamily-run business, with the
Gallagher family still leadingthe company.
And my role here is I'm a teamleader and broker based here in
(01:07):
Canberra.
I've got over 25 years'experience and I specialise in
workers' compensation, so I'm anadvocate for our employers and
I try and help them navigateinsurance, particularly with
claims and risk management.
Speaker 1 (01:22):
So we'll come on and talk about workers' compensation
insurance a little bit later,because that's a really topical
issue at the moment.
But, andre, what's your rolebefore we dive into that?
Speaker 3 (01:32):
I'm a broker 20 years' experience in Canberra,
moved here from South Africa in2005.
We are at 15 years' experiencein the industry 2005, we had 15
years' experience in theindustry, very client-focused,
(01:52):
looking at the most positiveoutcomes for our clients and
ultimately being recognised as atrusted advisor to them all.
Speaker 1 (01:58):
So insurance brokers are not insurance companies.
You are not the people who areactually insuring your customers
.
What is it for those who mightbe confused about this, what is
it that brokers actually do?
Speaker 2 (02:11):
so insurance brokers act as intermediaries between
the clients and the insurancecompanies.
But it does extend beyond that.
As we work on risk management,claims management, I recently
had a client who's a businessconsultant and he said to me I
tell my clients that everybusiness needs a good accountant
, a good lawyer and a goodinsurance broker.
(02:33):
So I was quite happy with thatendorsement.
So our clients are experts attheir businesses and the
organisations that they run.
Whether they're a builder or adisability service provider or
an accountant, they know theirbusiness and insurance really
can be an enabler so that theycan do their business, protect
their hard-earned assets andprotect their employees.
(02:55):
And we partner with them tobecome a trusted advisor.
But at a really primary level,we help clients find the most
suitable insurance policies fortheir needs.
So we assess their specificneeds, and that, of course,
differs by industry andworkforce.
We research, compare variousinsurance policies from
different insurers and negotiatethe best options in terms of
(03:17):
coverage and cost.
And then we makerecommendations to our clients
that are going to be best suitedto their needs.
So they don't need to becomeinsurance experts as well as
running their business.
They can leave that to us andthen in the event of a claim,
then we help navigate thatclaims process and advocate on
their behalf to ensure fairoutcomes and we really provide
(03:39):
ongoing support.
So overall, insurance brokersoffer guidance and personalised
service to help clients makeinformed decisions about their
insurance coverage.
Speaker 1 (03:49):
Okay, Now there's a lot of concern that I'm hearing
in the business community at themoment about the costs of
insurance.
What are you hearing from yourcustomers?
Speaker 3 (04:02):
Well, greg, many of our customers are already
members of the Canberra BusinessChamber as well and they do
share with us, obviously, thechallenges they face in doing
business Increased costs, ofwhich insurance is one of the
costs they also find.
(04:24):
Obviously, their customers haveless to spend, so, all in all,
it's harder for them to dobusiness, but that also,
conversely, leads into increasedpremiums.
You know why are premiumsincreasing the way they do?
And it's the same inflationarycosts that are faced by our
(04:46):
clients, which the insurancecompanies face as well, and they
increase their premiumsaccordingly, especially the
frequency and severity of claimsand the resultant impact on
claim costs.
Locally, we can think 20January 2020, we had a massive
(05:09):
hail event in Canberra, whichsome businesses are still
feeling.
2022, lismore had the biggestfloods in Australia.
Most recently, we're having theeffects of tropical cyclone
(05:31):
Alfred.
All of these is going to driveclaim costs.
The number of claims are goingto drive through supply and
demand of services.
It's all going to have aneffect and all those effects do
drive premiums.
Speaker 1 (05:45):
So I appreciate you're not here to defend the
insurance companies, butthere'll be people listening to
this who say, well, thehailstorm was five years ago and
Lismore's not here in the ACT,and Cyclone Alfred hopefully not
as horrific as it may be is along way from here as well.
So are premiums set lookingonly at ACT-specific factors?
(06:09):
Or is it Australia-wide or eveninternational?
Speaker 2 (06:12):
It goes as far as international I mean the recent
fires in America.
That's all going to have animpact on the cost of
reinsurance.
So insurance companies buyinsurance as well.
So reinsurance.
So insurance companies buyinsurance as well, so
reinsurance.
So whilst premiums are set andthe risk factors locally are
(06:32):
taken into account as well asthe industry-specific risks, but
globally, and definitely withinAustralia, the risk monitoring
and overall impact of the costof claims, the economy, all of
those things actually do driveit.
So it's a very big picture.
Speaker 1 (06:50):
Kirsten, you touched on workers' compensation
insurance a little earlier.
That's a big pain point formany of our members at the
moment.
I'm hearing about premiums thatare escalating substantially,
doubling year on year in somecases, and being more expensive
here than elsewhere in thecountry.
What's your take on that?
(07:12):
And again, what's driving thosepremium increases?
Speaker 2 (07:16):
Again, it does come back down to the cost of claims,
but more broadly than that,within Australia we don't have a
.
Every jurisdiction is different, so we don't have states
aligned with each other.
So if you're buying workerscomp insurance in New South
Wales, it's different to ACT asit is to WANT.
(07:38):
So every jurisdiction has itsown legislation and with that
comes the cost implications ofclaims.
And so a business thatultimately looks the same on
paper in terms of revenue andthe type of services they're
providing might be the same, buttheir cost of workers'
(07:59):
compensation insurance isdifferent because of those
jurisdiction differences.
And whilst ever the legislationsits as it is and there's no
reform, then those claims costsare ultimately managed by the
scheme.
And that's something we'rereally we're hearing from
everyone in Canberra and thequestion is raised, raised why
(08:22):
is Canberra more expensive thananother state that has mining
and logging and forestry and um?
So it's hard for businesses tocompete, um, to win business,
when their workers conversationpremiums are.
But ultimately that questionkeeps coming back to the cost of
(08:44):
claims.
Speaker 1 (08:46):
And it's a small market too.
Right, absolutely.
And what many people don'tquite appreciate, of course, is
that there's a different schemefor the public service here, so
the actual number of peoplecovered by the workers'
compensation scheme isrelatively small, and that must
drive cost right.
Speaker 2 (09:02):
Absolutely yeah.
Speaker 1 (09:06):
So overall, I mean workers' compensation is just
one of the insurances thatbusinesses are advised to be
looking at, and of course it'sactually compulsory here in the
ACT to have workers'compensation insurance.
Speaker 2 (09:20):
What other?
Speaker 1 (09:20):
kinds of insurance do you recommend businesses should
be thinking about taking out?
Speaker 2 (09:27):
Well, the reason to purchase insurance is always
driven by the customer and itcould be a contractual
obligation, so, whether that bea lease or a contract of service
, it could be things likeworkers' compensation, so
they're obligated, as you say.
But insurance really canprovide financial security and
peace of mind to cover a lossthat would otherwise be
(09:51):
devastating financially to abusiness.
So clients and businesses workhard to build up their assets
and have a successful businessand really insurance is an
enabler sometimes to be able tojust get the cover that they
need to operate their business.
But more importantly, it's asafeguard for those businesses
(10:13):
because the cost of not havingit can significantly increase
the impact in the event of adisaster.
But ultimately there's alwaysthings like liability insurance
and workers' compensation is atthat basic level, but it really
needs to protect assets andwhether those assets are your
people or your tangible assets,then you need to have cover to
(10:38):
protect what you've built.
Then there's things that arehard to see, like cyber
insurance and the impact of allof the people involved in it's a
collective that we keepeveryone's data safe.
So then there's requirementsfor cyber insurance.
The list can be endless andit's I know, no day's ever the
(11:01):
same because we look at so manydifferent types of insurance
policies and we work with somany different industries.
But really we need to hear fromthose business owners what are
the risks?
What keeps them awake at nightas well?
So my mantra is always I wantmy clients to be able to sleep
at night.
So if something can be that arisk can be transferred or an
(11:23):
asset can be protected by aninsurance policy, then that's
that safeguard.
Speaker 1 (11:29):
So let's just talk about cyber insurance
specifically for a moment,because I think there's a lot of
businesses who kind of oftenthink, oh, cyber security is not
really a risk for me becauseI'm relatively small I hear that
quite often from businesses butthe risks are real, right, that
you could be hacked into, youcould be subjected to ransomware
(11:50):
, that your data could be takenand published in the deep
recesses of the dark web fornefarious purposes.
Do you think businesses aretaking cyber security seriously
enough?
Speaker 2 (12:01):
Do you think businesses are taking
cybersecurity seriously enough?
I think those that arecontracted to the government are
being forced to understand it,which is good, but then
ultimately needs to be moreeducation around it, and that
needs to be a collective at agovernment level, as well as
insurers and the IT providers.
(12:21):
The mystery around cyberinsurance is is to a lot of
people, it's another languagethat's spoken and the acronyms
and what do they understand.
But it could be simply that iftheir systems aren't up to date
or there's a patch not putthrough, and they may contain or
hold a certain amount of datadata but they also could be a
(12:42):
gateway into a biggerorganisation, so they just could
be a contractor to a biggerorganisation, and these cyber
criminals will use that gatewayto get into the real data that
they want to access.
And cyber crime is an alarmingand escalating risk.
Speaker 1 (13:02):
Now I appreciate here we're talking very, very
general observations about theinsurance market.
Nobody's asking you to providespecific advice here.
But, andre, do you find yourcustomers I mean, is it like
domestic insurance, where youpay, have a higher excess to
reduce your premiums or perhapsput limits on your level of
cover?
Is that what happens on thecommercial market as well?
Speaker 3 (13:24):
Most definitely I mean insurance.
Ultimately is you know whereyou select how much of your risk
you want to transfer onto aninsurer and obviously, the less
you know, the more you'reprepared to take the risk on in
terms of a higher contributionto a claim.
(13:44):
Insurers will recognise thatand offer you a lower premium.
Speaker 1 (13:51):
There'll be some people listening to this who
perhaps roll their eyesparticularly around cyber
insurance, and say well, youknow, I get a questionnaire
asking me a whole lot oftechnical detail that I don't
understand, and I pay all thismoney to insurers and I never
claim, but the premiums go upevery year.
They'll be asking themselves doI really need insurance?
What's your response to that?
Speaker 2 (14:15):
Well, it can usually be very hard to do business
without it.
So the reason to purchaseinsurance is always driven by
the customer, their attitude torisk, and it comes back to those
things that.
Do they have a contractualobligation?
Do they need to take outinsurance to win a contract?
(14:36):
Do they need to protect all oftheir assets?
It really comes down tounderstanding what their
attitude to risk is as well.
So one person may feel thatit's okay if something happened,
a disaster or a loss happened,I could cover that, and that's
okay.
That's great if you don't needit.
(14:57):
But ultimately, if a largeevent happens or a loss that
would be devastating, that youcan't recover from, then you
would need insurance, or youwould definitely be in a better
position to have insurance.
Speaker 1 (15:11):
And is it right that some of the risks that you're
insuring against are potentiallyunforeseeable, particularly in
the public liability space?
You might not see somethingcoming that does hit you, but
your insurer will step into thebreach, presumably to pick up
the bill.
Speaker 2 (15:29):
Definitely.
I mean there's regulations andcompliance on businesses, that
they may have all the checks andbalances in place, but
accidents happen, things can gowrong, advice can be given and
there's always that supply chainas well.
So where someone ultimatelyfeels either wrong done by then,
(15:50):
they may cast their net whiteto seek damages from a lot of
people, and that can be.
You know, in the constructionindustry it could be something
like the principal and thebuilder, right down to the
quantifier Everyone involvedwill get roped into being
responsible to answer to thatclaim.
And that's where you may nothave even foreseen that risk
(16:13):
coming, but the insurer wouldstep in.
Speaker 1 (16:18):
Do you think business people generally understand the
level of cover that theyrequire?
Speaker 3 (16:25):
Another good question , as Keshen had alluded to
before, there's so many reasonswhy businesses need to have
insurance to trade, trade, andwe do find that, other than that
basic level of insurance, we dospeak to all the additional
(16:48):
covers which which are availableto them and have them
understand especially the valueof having valuations of their
business done to to insureagainst being underinsured.
That's particularly good advicewe offer.
And then I mean you talkedabout cyber and looking at the
(17:10):
additional exposures that canreally catch a small business
off guard.
Business interruption is one ofthem where we we really sort of
put an emphasis on that,because should a major event
happen and it may take some timefor that business to get back
(17:32):
up to their feet, how will theysurvive?
And business interruption isone of those forms.
So we're continuously lookingand working with our clients to
ensure that they have a widerange of coverage.
Speaker 1 (17:47):
You raise an interesting point about business
valuations.
Speaker 2 (17:50):
What other?
Speaker 1 (17:52):
paperwork or documentation should business
owners be thinking about keepingin the event of a claim?
Speaker 2 (18:00):
Definitely any of their contractual requirements
and they can date back sevenyears that you would need to go
back potentially if you'd givenadvice in a matter or on a
contract.
So I also build propertyvaluation, so that's really
important to always be lookingat the valuation of, and taking
(18:23):
into account construction costsand looking at updating security
systems, fire protection.
All of those things really needto be taken into consideration.
Speaker 1 (18:39):
So, given the importance of insurance, what is
it that businesses can do tokeep their premiums?
Speaker 2 (18:46):
down.
Speaker 1 (18:46):
In a domestic situation, you can install a
burglar alarm or put some CCTVin, but what's the best thing
businesses can be thinking about?
Speaker 2 (18:54):
Definitely risk management.
A lot of risk can be managedwith insurance actually being
the last line of defence.
Or insurance is a risk transferoption when you're looking at
your risk matrix or framework.
So Gallagher's definitelyfocused on risk management and
working with clients to have aframework that works alongside
(19:15):
their insurance program.
Because when we present asubmission to an insurer that
includes proactive measures,then that has a significant
impact on our negotiations.
So for organisations, especiallynot-for-profits, good
governance is key of proactivemeasures, then that has a
significant impact on ournegotiations.
So for organisations,especially not-for-profits, good
governance is key.
For a property owner thatconducts, say, regular
thermographic scanning of theirelectrics or roof inspections,
(19:38):
then their submission is goingto be favoured over one that
hasn't prioritised thatmaintenance.
So, and coming back to thepoint of like a client's risk
tolerant, whilst one clientmight want to keep premiums down
by increasing deductibles,another client might want to
focus on the highest level ofcover in the event of a claim.
So we need to listen topartners and our clients to say
(20:02):
what can they do to keep costsdown, what's feasible and
ultimately hope that that alsoenhances their business.
Speaker 1 (20:12):
Now, of course, there's steps businesses can
take to keep your costs down,but they often come at a cost
themselves.
So is it right to say that thetrade-off for customers or for
businesses is to be thinkingabout the value of the
investment to protect the assetversus the cost of insurance?
Speaker 2 (20:32):
Yeah, it can come down to a simple calculation
like that and often we see aclient might look at the cost of
their insurance, but then whenwe look at, say, the percentage
of their turnover or theinvestment of their business,
but then when we look at, say,the percentage of their turnover
or the investment of theirbusiness, and then we look at
what is the margin of that costultimately and that's where I
(20:57):
think insurance really doesprovide that value and a broker
talking through all of thosedecision makers with the client,
then that can give them comfort.
Speaker 1 (21:07):
Excellent.
So some really interestingthings there to be thinking
about.
I think for many businesses,particularly small businesses,
do you think you know across theboard?
Do you think businesses havethe cover they need?
Speaker 2 (21:23):
I think that they do.
I think Canberra in particulara well-educated, well-informed
jurisdiction and hopefully, thatthey're choosing to protect
assets whilst they'reconsidering those costs and
running their business.
So, ultimately, if they'respeaking with their insurance
(21:46):
broker and understanding, youknow, to the level that they
need to, of what's going tohappen, because, ultimately, if
they that day comes when perhapstheir building is on fire and
they give us that call and go,keshton, this is the day.
I didn't think I'd have to callyou, but I am and then it's
well, we're glad that they cancall us and that policy is going
(22:08):
to respond.
Speaker 1 (22:11):
Excellent.
Well, thank you very much forthat.
Now, of course, today we'vebeen talking insurance and it is
important to note that, to theextent that any of the
information provided in thispodcast could be considered
advice, it does not take intoaccount any of your personal
objectives.
Your advice it does not takeinto account any of your
personal objectives, your needsor your financial situation.
You should consider whetherproducts and levels of cover
presented are appropriate foryou and always review all
(22:33):
relevant materials, includingany product disclosure
statements, policy wordings andany difference in conditions
notice before deciding to takeout an insurance policy.
I'm Greg Halford from theCanberra Business Chamber.
I've been talking to KeshtonHands and Andre Ferreira from
Gallagher.
It's been great having you onthe podcast.
I really appreciate the insightyou've brought through to us
today.
Thank you, Greg, Thanks forhaving us Now this podcast has
(22:55):
been brought to you, of course,by the Canberra Business Chamber
with the support of Care Super,an industry super fund with
competitive fees and returns,exceptional service and a focus
on real care.
Don't forget to follow us onyour favorite podcast platform
for future editions of theCanberra Business Podcast and
we'll catch you next time.
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