Rising Building Costs Leaving 85% of NZ Homeowners Underinsured

Rapidly rising building costs and changes to policy wording mean Kiwi homeowners are uninsured by an average of 28 percent – according to an industry expert.

Jo Mason CEO of NZbrokers, New Zealand’s largest insurance broking collective, says a spate of recent natural disasters has highlighted the need for homeowners to contact their broker and check what amount their home is covered for carefully.

“In the past six months we have had several devastating flood, fire, seismic and adverse weather incidents around the country.

“It is crucial that homeowners are aware of what it would cost to rebuild their house from scratch and review this regularly,” she says.

Mason says that changes to sum insured insurance policies could leave homeowners under-insured.

“Sum insured policies limit the maximum amount your insurer will pay in the event your home is totally destroyed.

“In an environment where building costs are rising at around 7-17 percent each year, there is no guarantee that the amount you are insured for will be enough to cover the cost of a total rebuild.

“What this means is that a house which cost $500,000 to construct just two years ago could be up to $185,000 more to rebuild today. Effectively the risk of the rebuild cost being greater than the insured value is borne entirely by the policyholder,” she says.

Mason says a recent Treasury report estimates that up to 85 percent of homes could be underinsured by an average of 28 percent.

She says as building prices across the country have risen by up to 17 percent, there is an urgent need for homeowners to check they are insured for the full replacement cost of their house, not just for a portion of it.

Mason says the cost of building materials, architectural features, council consents and a variation in the quality of workmanship mean the expense of a rebuild can vary significantly over time and across regions.

“My advice to homeowners is don’t take unnecessary risks, consult with an insurance broker in your area who can assess your needs and is able to advise what type of cover is best suited.”

Insurance Business NZ: AUB Group boss on 2015 highlights and challenges for 2016

AUB Group managing director Mark Searles tells IBNZ his 2015 highlights and what challenges he expects the company – and the industry – will face this year.

What have been the highlights of 2015 for you?
We’ve just achieved our 10th consecutive year of underlying profit growth since listing, which, given the recent state of the market, goes to show that our commitment to our sustainable growth strategy, and our disciplined approach (especially in respect to our owner-driver partnership model) is paying off.

Bringing together so many members of our extended AUB Group (formerly Austbrokers Holdings) ‘family’ both present and past with our industry friends and colleagues to mark our 30th anniversary was also a huge stand out. In New Zealand especially, one of our highlights was the coming together of BrokerWeb Management and Brokernet to form NZbrokers, the 3rd largest broking group in NZ. It’s been exciting to see the 55 broking partners combine their size and strength around a common vision and purpose. Partnership and collaboration are at the core of who we are and this has been supported by our broking and insurer partners, for the ultimate benefit of clients.

What do you hope 2016 will bring for AUB Group, especially NZbrokers?
Growth! It’s an exciting time for AUB Group and particularly for our NZbrokers network, and I hope to see plenty of organic growth and growth through the addition of new members to the NZbrokers family.  We look forward to further enhancing NZbrokers’ purpose of adding value to our partners’ businesses, and new initiatives to support partners and their clients.

What do you think will be the biggest challenges on an industry-wide level?
I’ve had a number of questions over the past year asking about the future of broking in an increasingly ‘direct’ world and the idea that broking will become increasingly marginalised in the SME space. I continue to argue that that’s rubbish.

This is a relationship industry and as long as our broker partners remain relevant to their clients they have a key role to play. Our partners have built up their clients’ trust over a number of years to be recognised as a trusted advisor to their business – enough to justify keeping their broker over going direct and saving a few dollars.

As I mentioned before it’s part of our role to be across issues that could impact our partners and clients and ensure clients have got the right solutions in place to protect the future of their business ensuring relevant solutions to meet their risk needs.

But of course it’s easier said than done! Making sure we can service ALL clients’ risk needs means understanding what’s happening in the regulatory, physical and now even the digital environment. This is where we, as a group, can really make a difference in supporting our partners.

What would you say are the burning issues/challenges you will have to tackle as a company?
The biggest challenge; or opportunity in our view, and one that we’re arguably helping to lead – is to provide our partners and clients with a ‘whole-of-risk’ approach. We started focussing on this journey two years ago not only to mitigate the effects of the insurance cycle but importantly as a key step to confirm our position as Australasia’s leading insurance and risk management specialist.

We’re able to leverage the power of our partnerships to respond to changes in legislation, environmental impacts, information and technology to ensure we’re well positioned to continue to provide the kinds of services clients need. If we’re always keeping clients at the centre of everything we do, giving due consideration to their full risk portfolio (people, physical and financial risks) and providing relevant solutions, the opportunity to help grow and protect their business will also help grow ours.

What recent innovations have made the most impact on AUB Group, either internal ones or external, and are there any internal ones in the pipeline that you can discuss? Leveraging our unique owner-driver partner model in areas outside of our traditional insurance broking heritage (so now extending to specialist underwriting agencies and risk services) marks an innovative and important shift that will provide us with sustainable growth and a competitive advantage into the future.

We also have a number of innovative initiatives across our business areas, such as electronic enablement of specialist underwriting systems.

See full article from Insurance Business New Zealand: http://www.insurancebusinessonline.co.nz/news/aub-group-boss-rubbishes-threat-of-direct-world-210321.aspx 

NZbrokers one of Insurance Business NZ’s top stories of 2015

7th most read Insurance Business NZ article in 2015 – not bad! See below for an excerpt from IBNZ’s article ‘2015 top story shocker’ regarding our initial partnership announcement.

“The brokers were making waves too however. When BrokerWeb Management, NZbrokers Holdings and Brokernet NZ announced their new partnership it put them in the 7th most read position.”

Click here to read the full article.

Group’s owner acquires one of NZ’s largest brokers

AUB Group (owners of NZbrokers) has acquired one of New Zealand’s largest brokers – the current Insurance Broker of the Year, Runacres and Associates – from IAG. The group has arranged the deal through its 80% owned entity AUB Group NZ Ltd, making the announcement this morning.

AUB Group CEO and managing director, Mark Searles, who is also chairman of AUB Group NZ, said the move was further evidence of the targeted expansion strategy AUB Group had for New Zealand.

“Runacres is a high performing broking business with a strong track record of sustainable growth over the past five years,” Searles said. Representing almost NZ$50 million GWP, 5,300 clients and with 30 staff across Christchurch, Auckland and Greymouth, Runacres is one of the largest brokers in New Zealand with a portfolio spanning corporate, commercial and personal clients.

Along with AUB Group’s existing equity interests, the group now directly represents NZ$200 million in GWP in New Zealand. On top of that it owns NZbrokers, which manages the largest cluster group of brokers in New Zealand. In total, either directly or through its partners, the group now represents NZ$550 million of GWP and is the third largest broking entity in the New Zealand market, the company said.

Keith McIvor, managing director of AUB Group NZ, told Insurance Business that not only was it great for the New Zealand market, it was great for Runacres too. “It puts the ownership of Runacres with a broking company ownership structure which you would hope can present it with more scale and more opportunity to grow. “I think it’s great for the people of Runacres because they are able to continue, under David Crick’s leadership, with their culture and their way to support their clients and grow the business.” McIvor confirmed that there would be no changes to the business at all.

“I would like to call this an ‘and’ strategy. We love this business and we think everyone within it has done an exceptional job. We would just like to support those people in the business and David Crick in his leadership role to continue to grow.” He added that there was likely to be more acquisitions to the Group in the future. “We still have a very healthy appetite for quality broking businesses to join us through our equity partners,” he said.

David Crick said he was ‘elated’ to be further strengthening their relationship with AUB Group NZ. “I am confident that this partnership will provide my team with an effective platform for continued growth,” he said.


Runacres & Associates Ltd wins Small/Medium Broker of the Year Award

NZbrokers is delighted to congratulate its member, Runacres & Associates Ltd, for winning the title of Small/Medium Broker of the Year at the New Zealand Insurance Industry Awards at the SKYCITY Convention Centre in Auckland last night.

The event, hosted by the Australian and New Zealand Institute of Insurance and Finance (ANZIIF), was a celebration honouring the achievements and professionalism of companies and individuals within the New Zealand insurance market over the last year. The Small/Medium Broker of the Year award was for insurance broking businesses in New Zealand handling up to $50 million of premium and who have demonstrated strong performance and outstanding service for their customers.

Founded in 1981 by Anthony Runacres, Runacres & Associates have become recognised for being totally client-focussed and experts in delivering business-to-business insurance services and bespoke insurance solutions to the commercial sector.

Managing Director Jim Harris noted that Runacres has truly delivered superior levels of customer service, relationship management, innovation and communication supported by strong retention and growth records, as well as sound financial management of the business.

“Having now been under the leadership of Managing Director David Crick for the last six years, Runacres & Associates has grown to include an Auckland, Christchurch and West Coast Division and gone from strength to strength, which clearly demonstrates what we mean by our NZbrokers vision to be New Zealand’s most trusted insurance and risk solutions network and challenger brand.

“On behalf of NZbrokers, our sincere congratulations to David and the whole team at Runacres & Associates on securing this prestigious award, which is a significant achievement – well done to you all!” said Mr Harris.

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Hawke’s Bay merger to double BWRS’ Napier operations

Hawke’s Bay Insurances Ltd (HBi) has merged with BrokerWeb Risk Services Ltd (BWRS) which will take effect from 1 November 2015.

“This is being achieved by way of BWRS acquiring the Goodwill and associated assets of HBi,” HBi’s Bill Reilly and BWRS’ David Archer said in a joint statement yesterday.

“The coming together of these two businesses will produce an enhanced Hawkes Bay broking business of size that Bill and David know will ensure the high standards of client service aspired to by both companies will be best sustained into the future in an increasingly complex insurance market,” the statement continued.

The two operations will continue as separate divisions of BWRS in their own premises for a period of time, and all staff members are to be retained in the combined operations, the statement said.

The Napier operation of BWRS will continue to be run by incumbent BWRS Hawkes Bay regional manager Bruce Lewis and Bill Reilly will continue in charge of the HBi business.

BWRS chief operating officer Alan Black will be overseeing the coming together of the two businesses.

“For all of us  involved it will be ‘business as usual’ and, certainly for our insurance company partners we are intent on these moves creating an even stronger bond with those insurers who have assisted us over the years,” Reilly and Archer said.

Austbrokers Holdings is a 50% equity partner of BWRS and CEO Mark Searles said he was pleased with the latest development.

“It’s great to see the momentum of growth is continuing after our recent expansion into New Zealand,” he told Insurance Business.

“David Archer (CEO of BrokerWeb Risk Services Limited) has done an outstanding job of working with HBi’s Managing Director Bill Reilly to bring together two businesses with a strong client focus – they will be a good cultural fit.”

He added: “This acquisition is another step towards NZbrokers’ vision of combining its strong New Zealand heritage, local expertise, national footprint and global reach to be New Zealand’s most trusted insurance and risk solutions network.”

Source: http://www.insurancebusinessonline.co.nz/news/hawkes-bay-merger-to-double-bwrs-napier-operations-207217.aspx

Five Minutes With…Jim Harris, NZbrokers

Jim Harris NZbrokers

Why did you get into insurance?
My father was manager of NIMU in Pukekohe and Rotorua so I had a taste for it growing up, having followed him around panel-beater shops for many years as a school boy.

How would you sum up insurance brokers in three words?
Delivering financial security.

What’s the strangest thing you’ve ever arranged cover for?
I can’t comment on the strangest, but the most interesting was insuring Air New Zealand back in the early 80s, and particularly providing “testing cover” on jet engines.

How would you change the industry?
I would ban underwriters and brokers from trying to compete on IT systems platforms and utilise the 100’s of millions of dollars currently expended/wasted  by individual companies on developing a “common” and “standard” industry wide IT systems platform which delivers full connectivity across all lines of business and totally streamlines the way we transact business. The significant savings could then be directed towards attracting, training and rewarding experienced, knowledgeable and high performing insurance professionals.

What’s the most important thing a broker can do to develop their business?
Be totally customer driven and focussed – always!!!

What’s the best advice you’ve ever been given?
Always be true to yourself and your values.

If you were Prime Minister for one day, what would you do?
I would reinstate and support the “family unit” as the centre of all things good in society.

What has been the highlight of your career?
I’ve had the pleasure and privilege of building Intermediary Insurance Services, MMI, Allianz and now BrokerWeb/NZbrokers, but the greatest highlight is having the pleasure and privilege to work with so many wonderful people, who have become close and lifelong friends.

What’s your favoured style of coffee?
Having always had a coffee on my desk during my early years in the industry, I now can’t drink it at all, so now enjoy a trim hot chocolate – with marshmallows of course, unless my grandchildren are around.

Union, league, soccer or other?
Having played the game for over 25 years it’s union, union, union, but also football, as both my sons played, followed now by my grandson and one of my granddaughters.

If you could invite three people to dinner, dead or alive, and excluding family and friends, who would they be and why?
Billy Connolly for his wonderful sense of humour and his travel stories;
Bruce McLaren for his motor racing driving and car manufacture prowess;
Richie McCaw as our greatest All Black captain and player.

Complete this sentence: If I wasn’t in insurance, I would be…
Retired, as having thoroughly enjoyed over 47 fantastic and stimulating years in the insurance industry, I can’t imagine doing anything else.

Original article published by Insurance Business New Zealand: http://www.insurancebusinessonline.co.nz/news/five-minutes-with-jim-harris-nzbrokers-206341.aspx

NZbrokers sets out to shake up industry

NZbrokers’ entry into the New Zealand market will benefit the New Zealand broking community and the insurance industry as a whole, its managing director says.

NZ Brokers Holdings was created after Austbrokers acquired 100% of BrokerWeb Management, as well as 50% of BrokerWeb Risk Services, in a deal worth more than $20 million late last year.

Austbrokers Holdings first entered the New Zealand market in 2006 through its partnership with Insurance Advisernet, taking a 38% equity stake in Insurance Advisernet NZ.

The BrokerWeb deal was billed as a major shake-up for the New Zealand broking industry.

NZ Brokers Holdings then launched NZbrokers, bringing together the members of BrokerWeb Group and Brokernet Group to become the third largest broking group in New Zealand.

NZbrokers said the combination of the broking groups meant it had $420 million in total gross written premium (GWP) annually and 54 businesses serving more than 120,000 clients spanning the length of New Zealand.

Including Advisernet, the wider group has more than $500 million in GWP and 84 adviser businesses.

Jim Harris, former managing director of BrokerWeb Management, was appointed managing director of NZbrokers.

Harris said there would be a number of benefits to brokers who were part of the group. The size of the organisation would give members access to resources and business systems that would be out of their reach as individual broker businesses. “It reinforces everything we stand for. With greater size we have greater strength and position and influence and the ability to secure more benefits and advantages not only for our members but for their clients,” he said.

He said the combination of BrokerWeb and Brokernet had been a natural fit.

“BrokerWeb and Brokernet were very much aligned in terms of their professionalism and standing and respect in the marketplace. For us it was a very good fit and gives us the ability to do things together in a much more meaningful way than we could have done separately.”

The backing of Austbrokers also provided a number of benefits, he said.

The NZbrokers team was recently in Australia looking at the services Austbrokers delivers to its members there.

Harris said: “We can tap into those resources, whether it’s marketing or compliance and that gives us a much greater ability to deliver additional services in those areas to our members. Our ethos is we operate very much in a collaborative way and it’s relationship- and partnership-based and built on a high level of trust and transparency.”

But Harris said while the level of scale would bring benefits to members, the group was focused on retaining its personal touch. “Size of course matters and gives us additional leverage but it’s very much on a partnership basis recognising we need to work together. There’s value in doing that, recognising that there needs to be value and benefit flowing both ways. But size gives stability and the ability to provide more benefits and secure more advantages going forward.”

First on the to do list is binging BrokerWeb and Brokernet advisers together to work on the same broker management platform.

That would mean designing a “best of both worlds” solution, based on the systems they each currently use, Harris said.

“The project is going to examine both systems and the advantages and benefits of both with the view of bringing those together and building a world-class system going forward. Also, while we are doing that we are looking at opportunities for connectivity and streamlining the way we do our business, looking at accessing information for managing the businesses, marketing initiatives…all those sorts of thing.”

Harris said the group was formed with the intention of giving respected, professional indigenous brokers the opportunity to not only survive in a changing environment but grow and prosper. “We believe we have that ability and can deliver that to those people.”

There has been a lot of consolidation in the market recently as individual brokers moved under the wing of bigger corporates and insurers merge. Harris said it was inevitable that would continue.

“Consolidation also creates opportunities and we think we will continue to see people deciding to seek their own fortune and set up their own businesses. With consolidation comes size and corporatisation and that doesn’t fit everyone. In the New Zealand market it’s very much a personal relationship-based business. I think there’s an opportunity for brokers to operate at that level. If you look at our organisation, we’re very committed to local people serving local people.”

Harris said NZbrokers’ goal was to be New Zealand’s most trusted insurance and risk solutions network. “We have become the true challenger brand in the market and have the ability to compete with anyone. We have very, very good national representation and that in itself creates opportunities.”

Insurance premiums have softened recently and competition has increased, but Harris said having the backing of a group would help brokers navigate that.

“Given the extensive benefits and support provided by NZbrokers, its members and clients are well-positioned to manage their way through and take full advantage.”

David Crick, chairman of Brokernet New Zealand, said: “Our collaboration with NZbrokers brings significant size and scale to our members. This will facilitate robust partnerships with the insurer panel, and ensure our clients’ interests are further protected.”

Harris said: “The emergence of NZbrokers as the challenger brand and significant player in the market is good for its members and their clients, its strategic partners and the industry as a whole.”

He said the group was based on four pillars – collaboration, respect, tenacity and momentum. “We are building partnerships, standing shoulder-to-shoulder with members, acting with integrity and honesty at all times, looking for solutions and looking to work with our partners in a meaningful way and investing in success and striving to create a bright future. Those four pillars underpin the future we have.”

Meanwhile, Austbrokers has announced its new equity partnership with Allied Health Australia, a leading occupational health and safety rehabilitation service provider.

“This acquisition reinforces Austbrokers’ disciplined approach and appetite to deliver on its strategy. Austbrokers has long signalled its intention to expand scale in risk services provision, and take our highly successful Owner-Driver business model further into this market segment,” said Austbrokers Holdings chief executive and managing director Mark Searles.

Full article available on pages 34-35 of CoverNote magazine: http://issuu.com/benefitz/docs/cn_september_2015_web/37?e=0

NZbrokers member Runacres & Associates finalist in 2015 NZ Insurance Industry Awards

The Annual New Zealand Insurance Industry Awards will be announced on Thursday 5 November 2015 at the SkyCity Convention Centre in Auckland. The event is a celebration to honour the achievements and professionalism of companies and individuals within the New Zealand insurance market during the preceding year.

NZbrokers is proud to have one of its members, Runacres & Associates Ltd, nominated in the Small/Medium Broker of the Year category. This award is for insurance broking businesses in New Zealand handling up to $50 million of premium and who have demonstrated strong performance and outstanding service for their customers.

In order to reach this stage, as a finalist in this category, Runacres has already demonstrated high levels of customer service, relationship management, innovation and communication supported by strong retention and growth records alongside sound financial management of the business.

We wish Runacres every success at the gala event on 5 November.

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NZbrokers Principals Day

On Thursday 3 September, NZbrokers held its first Principals Day, with over 90 Principals coming together at the Langham in Auckland under a united banner to bring the vision, values and brand to life.

The group was also joined by more than 40 insurer partners, to provide them with a better understanding of NZbrokers, as the third largest broking group in New Zealand.

Keith McIvor (Director NZbrokers and Managing Director NZbrokers Holdings, Austbrokers Head of Group Development) and Jim Harris (Managing Director, NZbrokers) welcomed attendees and provided an operational review and insight into what the next six months will look like.

Corporate Anthropologist Michael Henderson (a NZ local) helped the team define the NZbrokers culture, and Vanessa Lyons (Head of Marketing) took the group through the elements of the NZbrokers brand and toolkit for applying the brand. Nigel Speakman, Director of Impetus Business Development, initiated a value proposition workshop for the NZbrokers attendees. The Principals Day also included a panel with the NZbrokers insurer partners.

The next major event on the horizon is the NZbrokers conference bringing together the Partners and their teams in February.

Photos from the NZbrokers Principals Day


Principals Day Opening Act, Lyrica


Keith McIvor, Director NZbrokers, Austbrokers Head of Group Development


Jim Harris, Managing Director NZbrokers


Insurer panel


The excitement builds as the group comes together for the first time under the NZbrokers banner!