CBN CEO lifts lid on largest GI authorized broker network

Community Broker Network or CBN is regarded as Australia’s largest general insurance (GI) authorized broker network. CEO Richard Crawford explains the challenges and the opportunities facing authorized representatives operating under CBN’s broker license. Crawford also talks about efforts to maintain best practice standards in the face of regulatory changes, a hard market and natural disasters.

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Daniel: [00:00:22] Hello and welcome back to Insurance Business TV. I'm Daniel Wood news editor of Insurance Business Australia. Today we're joined by Richard Crawford, CEO of Community Broker Network, or CBN. Cbn is regarded as Australia's largest general insurance authorised broker network and a member of the steadfast network, which it is here to talk about challenges and trends he's dealing with. Welcome, Richard. 

Richard: [00:00:45] Good day, Danny. 

Daniel: [00:00:47] First of all, let's just distinguish who you represent. Exactly. So you're you're in a way the largest network in Australia of authorised representatives who use your broking licence. Is that a way of summarizing. 

Richard: [00:00:59] That's correct, yeah. So we're a community of around 300 authorised representative businesses and collectively 900 people, all of whom deliver general insurance services to the Australian market. And so they're all part of our network where the licence holder and they're authorised representatives of us. 

Daniel: [00:01:24] And so typically, what sort of issues do the authorized representatives using your network? What sort of issues do you need to sort out with them? 

Richard: [00:01:35] Our role we see is to empower them to do their job. So essentially their job, which we empower them to do, is to provide the best insurance outcomes for their clients. So we sit between steadfast and the authorized representative and we'll do a range of things for them. First and foremost, we help them find the right kinds of products or services in the market to meet the needs of their clients. And we provide them with the technology, processes and systems to deal with their clients in an extremely professional, efficient and compliant way. So in alignment with the regulations steadfast provide an enormous range of tools and resources for brokers and authorized representatives in the market. It's our job to make them accessible, help people use them, learn how to use them for their best effect. And I guess finally, we're an industry or a profession that's increasingly dealing with legislation on one hand and regulation, but on the other, faced with enormous opportunity for efficiency and cost effectiveness. So our job is to create a platform for them that allows them to do business very efficiently. Effective use of time, saving customer time, and making sure that they're in the marketplace, doing what their profession requires them to do. 

Daniel: [00:03:07] Okay. So so these authorized representatives operate under your license. I mean, what are some of the challenges that come up in terms of, I guess, keeping them accountable and keeping your nose clean, so to speak? 

Richard: [00:03:20] Yeah, it's a it's an interesting question. And it defines, I guess, the role that we have is the collective need of the community. So the whole community uses the one license and in the main, everybody that's part of our community is pretty much switched on to the one thing which is to do the right thing by the client within the regulations. And in so doing, compliance becomes quite a secondary issue. The challenge for us is to make sure that there are no acts or omissions on their part which could put the license at risk or in fact create a negative outcome for the customer. So our job is to make sure they have the tools and resources to do the job well, that they have the systems. We also got to constantly educate and inform them about changing circumstances or regulations. And just through a program of audits and monitoring, we make sure there's no bad habits creeping into people's businesses and that they're continuing to work to a kind of best practice standard that will ensure that we deliver the outcomes we need to. 

Daniel: [00:04:31] The whole industry has had to deal with quite a lot of legislative changes over the last couple of years as a result of the Hayne Royal Commission. How is that going down with your your network? 

Richard: [00:04:43] In two ways. One, I think there's a general acknowledgement that where we're going is important to go and good for the profession. But there's also a challenge at the moment. The insurance market is a tough market at present. There's lots of events in the market, weather events. There's lots of claims and activity. Insurers are getting more selective about the risks they want. So broking business is certainly taking a lot of effort and initiative these days and then couple that with the shared workplace issues as a result of COVID. It's a busy environment to be in and also to be learning about new changes coming and keeping up with it. So that's our job. We're keeping on top of it with them. We're trying to integrate the changes slowly, have a good change management plan so that just in time, all of our practices or approaches have been updated. There's a couple of things. The neighbour, the National Insurance Brokers Association, have brought in a new insurance broking code of practice and with it a whole lot of implications for brokers to comply. And that's one of the areas that we're focused on and steadfast our parent and owner have brought in or of articulated their nine positions, which are their clear points of view about how businesses should operate to be effective and accountable. So we're using those two frameworks to help upgrade how we go about our job and making sure we keep the brokers on the right side of compliance. 

Daniel: [00:06:26] Sometimes that that must be a bit of a challenge. And last last month the Australian Financial Complaints Authority sort of revealed news of this claim dispute that you didn't lose, but it involved 301 thousand compensation in compensation in a claim for compensation, the organisation claiming that lost the dispute. But it did say that poor record keeping from CBN breached your duty of care. How do you deal with those sorts of complaints? And I mean, is that a is that a significant complaint or is that something fairly typical? 

Richard: [00:07:02] You know, any complaint of that size is really significant, but any complaint that, you know, is borne out of a negative client outcome causes us to stop and pay attention. The challenge is that in this instance, there was a lack of clarity about who agreed to what, because there were poor records or notes in regard to the conversation. And, you know, that may only be a couple of moments lapse or one phone conversation or one omission, you know, in an organisation that deals with 300,000 plus policies a year. But the challenge is that, you know, that's enough. And so we have, you know, we're actually held to account more for our habits than anything else. And we have to make sure that brokers are constantly keeping, as Robert Kelly calls them, contemporaneous notes, so that when the time comes to get clarity on who said what and what was agreed, then it's simply a matter of referring to the file. In this instance, the fire record wasn't there. The client outcome wouldn't have been any different, but it certainly wasn't omission that was picked up and we were reminded of at the time. 

Daniel: [00:08:20] So what happens after something like that? Is there an education process that you go through or what's the what's the system look? 

Richard: [00:08:27] Absolutely. And this this compliance process I talked about a little earlier and the management of our community is that immediately becomes both a reminder and an education opportunity. We've got to remind people that they have to look at their daily habits and ensure that record keeping and file making is part of those daily habits and rituals. We we certainly have it as part of our audit program, and we constantly look across all the files and records in the business to ensure that we're seeing consistency and up to date information. And we include it in our community development days and our online training. Just to remind people what's required 99% of the time it's not an issue, but it only takes that lapse, that small lapse to create a problem. 

Daniel: [00:09:23] Let's look at some of the wider challenges across the industry. One of them is weather events and all the flooding we've been having over the last few weeks across the East Coast and the tens of thousands of claims. What do you see as some of the lessons coming out of these sorts of events? 

Richard: [00:09:40] I think the challenge is that we need to get moving in our agenda for mitigation and prevention. At the moment, there's a lot of focus on insurance and sort of compensation and I guess after the fact, dealing with the outcomes of poor planning and zoning and licensing. But the challenge with insurance is it's only meant to compensate people where everything else has been done but wasn't able to mitigate the loss. So for us, we have to get back into these communities and work with them and work with government to stop the losses from occurring or where there are floods or other weather events occurring to mitigate the losses that happen. Because on the East Coast now, a lot of these things that were once considered rare weather events are becoming increasingly commonplace and northern New South Wales, southern Queensland at the moment is just in a continuous state of turmoil due to weather events. So I think, you know, the answer is insurance isn't the answer. In most cases. The answer is in working with the government and the community to make these communities sustainable in the long term. And obviously, beyond that, all the stuff that we should be doing in respect of global warming and weather cycles to try and address what the community is doing in the long term sense. 

Daniel: [00:11:14] How does that work through your eyes? Because I suppose the other side of this is educating customers about more risk savvy. Is that something that's that's changing, do you think? 

Richard: [00:11:27] Absolutely. And so the whole risk management piece is far more critical rather than just insure it and move on. We really when you deal with a broker, you're dealing with someone who can advise you around how you can manage the total cost of the risk and the loss. And so, you know, Steadfast has got some fantastic tools in risk profiling and risk management that brokers can access that help clients identify and address the risks inherent in their own situation. There are also new products on the market that we're dealing with through insurers every day, things like digital and remote risk assessment tools that allow us to look at clients situation or circumstance without even attending the property, actually be able to understand and advise them on what needs to happen. I mean, a lot of cases right now, clients will find it very difficult to buy insurance or buy insurance they can afford without the attendant risk management effort in the first place. So brokers are very much aware of that. And across our industry now, the you know, the emphasis on clients doing that first hundred yards of getting the risks in good shape and preparing themselves so that insurance, ultimately the product that's bought and applied to the risk is the best product fit for purpose at exactly the right price. 

Daniel: [00:13:00] The last question before I let you go. I guess on one side of the equation is the customer, you guys are kind of in the middle somewhere. The government is on the other side with mitigation. I mean, this mitigation tune, the ICA, has been pushing it for years. I'm sure you've been saying it for a long time as well. I mean, do you think the government is really listening finally, or is it is it still very hard to get that message across? 

Richard: [00:13:23] There is very much more interest every day and the ICA is becoming increasingly effective at engaging with government and we as a profession are becoming far more effective at lobbying within the community and also lobbying to government. So I think so. I think the recent round of events is forcing the government to consider what's happening. And there's no doubt things like the reinsurance pool where government funds are being applied to the insurance end of the circumstance, are really going to inform people as to real cost. So hopefully we're getting breakthrough. I think we are. And I think the broader community are saying, oh, actually, now that this is we can see the link between global warming and climate change and what we're experiencing every day. I think there's a recognition that we're going to actually have to step back and do a little bit more than simply buy a policy and live in hope, you know? And I think hopefully that education process will continue and gather pace. 

Daniel: [00:14:33] Richard Crawford, thanks very much for your time. 

Richard: [00:14:36] Thanks a lot, Danny. Good to meet you. 

Daniel: [00:14:38] And Richard Crawford is CEO of Community Broker Network. You're watching insurance business TV , bye for now.