Tiny underwriting agencies in the country are in a bit of a bind, according to New Zealand Underwriting Agencies Council (NZUAC) executive director Nigel Edmiston. Speaking with Insurance Business, Edmiston cited a particular challenge when it comes to growing the NZUAC membership.
“The challenge is that a lot of the very small agencies are financially stretched, and we of course charge fees to become a member of NZUAC,” he said. “So, while we think our fees are modest, for very small businesses, especially startups, paying anything to an association such as ourselves can be a bit of a stretch.
“So, it’s a real dilemma, because they really need to be a member of an association so they get access to advice and support and other members so they’re not standing alone on their own… They need to be members, but sometimes they just can’t afford to be. So, it’s a challenge.”
According to the executive director, the challenge exists even with a tiered cost structure.
Edmiston told Insurance Business: “For an agency that has only up to five employees – which a lot of them are only one or two, and often one-man bands – we only charge $2,000. For between six and 10 employees, we charge $3,000. And for over 10 employees, we charge $4,000.
“Very large companies that do about $400 million in premiums – a $4,000 fee for them is insignificant. Whereas the little guys, $2,000 for a startup business can be a lot of money.”
The executive director added that there is the question of whether members are getting value for their money. In this regard, Edmiston believes the value ultimately becomes obvious to companies once they get on board. It’s convincing them to become members in the first place that is proving to be tricky.
“In some ways, they can’t afford not to be members,” asserted the Suncorp New Zealand alumnus, who is about to start a new campaign aimed at highlighting the benefits to non-members. “But in practical terms, they can’t afford to be members. So, it is a dilemma for them. We’re trying to work with them to help them through it, but it’s not always easy.”
Formed to ‘provide a voice’ for underwriting agencies in New Zealand, the NZUAC is a spin-off standalone organisation from the Underwriting Agencies Council in Australia. It has the backing of Lloyd’s, which Edmiston said is the biggest sponsor of the Kiwi representative industry body.
Aside from underwriting agencies as voting members, the NZUAC also consists of business service partners or companies that specialise in areas like claims management and insurance technology. Edmiston shared that they have a new supplier partner joining in May.
Meanwhile, in addition to constantly working on expanding the association’s membership, the NZUAC is also currently busy organising its next expo which is slated to take place in the third quarter.
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