Across the insurance industry there is growing concern about recruitment issues, including the aging workforce and the need to attract more young people into the profession. One way to help confront those challenges is to shine a light on successful young insurance professionals. The upcoming Insurance Business Award’s Young Achiever prize is an opportunity to celebrate younger members of the industry.
Insurance Business caught up with him to find out how a younger professional sees the industry’s insurance challenges?
Downie said many of his clients are medium to large corporates and often financial institutions including fund managers, family offices and private equity firms. He also has “quite a big book” of construction and engineering businesses.
“So there’s a bit of a variety,” he said. “But being a qualified chartered accountant, I probably lean more towards large financial companies, or companies with big D&O [directors and officers], PI [professional indemnity], cyber, EPL [employment practices liability] and statutory liability policies.”
IB asked Downie what insurance challenges are on his mind when he’s dealing with these clients?
“There are probably four big ones,” he said.
Downie’s first insurance challenge is the state of the economy.
“I think the current economic conditions have meant that many businesses and companies are under financial pressure,” he said. “That's leading to really tough conversations about affordability and the levels of cover.”
To the extent, said Downie, that some clients are “scrutinising every cost.”
He also mentioned pressures from the ongoing spate of takeovers and industry consolidation.
“There's a lot of mergers and acquisitions (M&A) activity and some clients are going insolvent, others are really looking to take lower limits,” said Downie.
He suggested that self-insurance is being considered more often, “particularly on some of those bigger accounts.”
The result of this tough economy, he said, is lots of risk management work for brokers.
“As insurance brokers, we now need to demonstrate a clear value to our clients and show how we add value in that risk management value chain,” said Downie. “So you're probably seeing a lot more brokers being quite active with their clients around risk management.”
The PSC broker said another big challenge, especially in the corporate space, is “a major tightening of underwriting standards” which is leading, potentially, to coverage restrictions. He said this is particularly the case in Australia.
“At the same time,” said Downie. “You've got the regulator that's really looking to tighten up requirements, particularly around cyber, financial crime and any climate related disclosure and ESG [Environmental, social and governance],” said Downie.
For example, in July, CPS 230, a regulation that aims to strengthen operational risk management by large insurers, comes into force. Some industry insiders say this standard is an industry “game changer”.
“So that's another big one,” said the PSC broker.
“Then, at the front of everyone's mind is cyber,” said Downie. He referred to the incident, just days ago, at one of Australia’s largest IVF providers.
“That just shows you that the big end of town is getting targeted,” he said. “So imagine what's happening at that mid to small level of town?”
Downie said he’s “continuously” having discussions with clients about how to manage these four challenges.
“Also, I think there is a lot of capital coming back into the Australian market,” he said. “On different lines you are seeing more of a softening market and then there are some other lines where you see more hardening.”
Which means, he said, brokers have to approach their risk and insurance challenges, “client by client and case by case.”
This year’s Insurance Business Awards is at the Hilton Hotel in Sydney on May 2. There are 20 awards categories celebrating the work of claims teams, brokers, underwriters, insurers, BDMs, authorised representatives (ARs) and insurtechs.
There are also accolades for young achievers, lifetime achievers, women of distinction, top CEOs and for excellence in diversity, equity and inclusion.
The evening includes a black-tie gala dinner, drinks, music and entertainment.
