Brokering for hospitality: pouring a schooner of the best insurance plan

Brokering for hospitality: pouring a schooner of the best insurance plan | Insurance Business Australia

Brokering for hospitality: pouring a schooner of the best insurance plan

Matrix Insurance Group is not your usual brokerage and its co-founder and director, Oliver Whittingham (pictured), is not your usual insurance professional. Based in Perth, the Western Australian brokerage firm caters for clients in WA and across Australia. One core area of Matrix’s business is arranging and advising general insurance for SMEs. With access to over 120 different brokers and insurers, Matrix prides itself on finding the right policy at a competitive premium.

On top of providing for its SME client base, Matrix also boasts a unique speciality with a fascinating story. The brokerage has a large customer base of hotels and pubs, but not in the areas you may imagine. Rather than based in CBDs or popular beach spots, Matrix caters for establishments in regional and rural Australia – historic places with stories to tell.

So how did Matrix and Whittingham first get involved in hospitality insurance?

“While working in London for five years, one of my key areas of focus was the late-night leisure industry; nightclubs, bars, taverns and venues,” recalled Whittingham. “I really enjoyed the buzz of the hospitality industry and it was an area of insurance I could really relate to.”

When Whittingham returned to Australia in 2008, his observation was that insurance for hospitality establishments, particularly smaller places in regional areas, needed to change.

“It was obvious there wasn’t enough choice for publicans, and they felt that the big corporates didn’t really ‘get’ their business and that cover wasn’t tailored to their specific business needs,” Whittingham explained. “Protecting these hotels to ensure they’re covered correctly is very rewarding – they’re part of the fabric of our great Australian culture.”

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“Hotels and pubs such as these certainly do face unique challenges when it comes to insurance,” said Whittingham. He explained that challenges include areas of: construction, the geographical position of places away from resources, those situated in bushfire prone areas, the old age of the building, poor building quality and maintenance, presence of asbestos and those in cyclone exposed coastal townships.

Similarly, the uniqueness between establishments means that it is hard to create a ‘one-size-fits-all’ policy.

“Most hotels and pubs are placed into the Lloyd’s of London market,” said Whittingham. “Each venue is different from one another and each face different challenges, so it’s demonstrating to Lloyd’s markets that each one needs to be looked at and underwritten on its own merit and risk profile.”

Underinsurance is also a real problem. Whittingham explained that it is often a challenging topic of conversation with publicans, but a very important one.

“It is critical to ensure asset values reflect reasonable replacement values to ensure policies will respond when relied on,” he explained. “The help of Google maps, satellite imagery and building replacement calculators is significant, but with the rising cost of insurance premiums in the property sector and heavy taxes and emergency levies in some states this presents an ongoing challenge.”

“Insurers are looking closely at hotel and pub building replacement values and will sometimes request professional building replacement valuations, or even refrain from quoting if they feel a building may be underinsured,” he added. “One piece of advice for publicans is that they need to ensure the replacement value reflects the structure or contents that they have there currently, not what they would build in the event of a total loss.”

Having worked closely with Matrix’s clients, and recently gone to meet-up with those in regional Australia, Whittingham is well aware of the history of each place, and the unique story it has to share.

“Many of the hotels that we insure are over 120 years old and hold many stories and memories – they are a real community hub and meeting place for locals, tourists and passers-by,” said Whittingham. “Many of the older ones hold a Heritage listing, which preserves the look and feel of the hotel and town.

“One thing is for sure, the more remote the pub, the better the beer seems to taste after a long drive. I’m still working on convincing my family and friends that when I’m off on another country pub road trip that I am actually working!”