The first quarter of this year has been a trying time for many. We are in the grip of a global pandemic, with COVID-19 having a ripple effect across all points of the compass. The economic fallout has also been acute for many sectors and industries. The Australian Treasury is forecasting higher unemployment rates and a contraction of the economy across several sectors. While Australia is beginning to see the easing of restrictions, it will be quite some time before things return to ‘normal’.
Over the past several weeks, EBM has been sharing regular updates and resources to support clients during COVID-19. For your ease of reference, this information is available at www.ebm.com.au.
In this edition, we look at privacy and data protection in the COVID-19 era. Amid the economic upheaval, lockdowns, physical isolation and finding new ways of delivering goods and services, business owners have also had to transition employees to work remotely. And in the mad dash, many may have neglected privacy and data protection.
Bushfires, cyclones, storms and floods have also impacted homes and businesses across the country. As we brace for winter, we encourage you to ensure your property is prepared and your insurance policies are up to date.
Finally, we explore the rise of the gig economy and how workers are exposing themselves if the appropriate insurance covers are not in place.
We hope you find this edition of Insurance Insight informative and that you, your colleagues and family are staying safe.
Managing Director - Corporate Broking
Managing Director - Broking
Privacy and data protection in the COVID-19 eraCOVID-19 has moved faster and at a scale that has left most businesses and organisations gasping.
GETTING GIG-Y WITH IT
As more people embrace the ‘gig economy’ many are forgetting to check on the insurance implications.
Is your business one of the 53% of SMEs whose cash-flow is hampered by late payment? Did you know you can do something about it?
Incoterms ® 2020 came into effect on 1 January. Here’s what you need to know about the changes to insurance provisions.
JobKeeper and Workers' Compensation Update
The Government’s JobKeeper wage subsidy program is designed to help businesses affected by COVID-19 to cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.
Upcoming Workers’ Compensation Webinars in May 2020
New South Wales
icare is hosting the following webinars:
- Understanding workers’ compensation policy, claims and managing risk in a COVID-19 environment
- Updates from the icare Medical Office (Telehealth and Allied Health Services)
To register or for more information visit icare.
WorkCover Queensland is hosting the following webinar with Cooper Grace Ward Lawyers:
- The duty of care owed by employers during COVID-19
To register or for more information visit WorkCover Queensland
WorkSafe Victoria is hosting the following webinar:
- Workplace Manslaughter Webinar
To register or for more information visit WorkSafe Victoria
EBM’s Specialist Injury Management team
If your business is faced with a Workers’ Compensation claim, please contact your Account Manager or EBM’s Injury Management team.
NEWS IN BRIEF
COVID-19 changes insurance claims
Physical distancing and lockdown measures imposed by the government to combat the spread of COVID-19 have changed the types of insurance claims being made, according to insurer IAG. The company has noted that fewer car insurance claims have been made, while home and contents, travel-related and landlord insurance claims have risen. The Insurance Council of Australia also noted that while the number of claims has not increased, the types of claims being made has changed, with fewer motor vehicle claims and more household insurance claims – with one of the most common claims being for kitchen fires as a result of more people cooking at home.
Federal Treasurer forecasting budget deficit
Australian Federal Treasurer, Josh Frydenberg, outlined a sobering economic outlook on 12 May 2020. Treasury is forecasting the unemployment rate to reach around 10% in the June quarter. Between 14 March and 18 April, accommodation and food services saw the largest fall in jobs at 33.4%, followed by the arts and recreation sector at 27%. In March, business and consumer confidence saw the largest declines on record. The ASX200 lost more than a third of its value in just over four weeks. In April, surveys showed that job ads halved and activity in the construction, manufacturing and the services sector had their largest ever monthly falls. New motor vehicle sales fell by 48% through the year, and house sales fell by 40%. Domestic and international air travel is down by more than 97%. The scale of the economic shock is hitting the Australian federal budget bottom line.
A series of bushfires across NSW, Queensland, SA and Victoria that impacted homes and businesses from 8 November 2019 was declared a catastrophe by the insurance industry on the same day. Some 183 postcodes across four states were caught up in the event with more than 34,500 claims, worth in excess of $2.26 billion, lodged as of 23 April 2020.
The clean-up from the severe hailstorm that struck South East Queensland on 17 November 2019 continues. As at 23 April 2020, almost 28,000 claims had been lodged, with a value in excess of $435 million.
The series of destructive hailstorms that struck parts of Victoria, the ACT and NSW on 18, 19 and 20 January, was declared a catastrophe by the ICA on 19 January 2020. As at 23 April, more than 119,000 claims had been received with a value of $1.43 billion.
The ICA declared its sixth weather-related catastrophe in five months after severe storms and flooding lashed parts of Queensland and NSW in early February. More than 92,000 claims – 67% building, 27% contents, 6% motor –valued in excess of $800 million had been lodged by 23 April.
EBM policyholders caught up in the natural disasters should contact their Account Manager for claims assistance.
NIBA’s Bushfire Royal Commission submission
In response to the Royal Commission into National Disaster Arrangements established on 20 February, the National Insurance Brokers of Australia (NIBA) called for ‘fairer’ fire services funding. NIBA highlighted insurance-based taxes such as the Emergency Services Levy in NSW and the Fire Service Levey in Tasmania impacted insurance affordability: “In NSW taxes and levies can increase the cost of some insurance policies by up to 70%. In Tasmania, premiums can be increased by almost 34% as a result of taxes and levies.” NIBA pointed out that all other mainland states have abandoned the insurance-based levy in favour of a fairer and more broad-based property levy. “Unlike property levies which spread the burden of funding emergency services across the broadest range of beneficiaries,” explained NIBA, “insurance-based levies have been widely criticised for being inequitable, forcing responsible property owners to pay for a service that is beneficial to all of society, while those who do not insure their risks continue to receive the benefits.”
ICA addresses insurance inquiry
The Insurance Council of Australia has addressed the House of Representatives Economic Committee inquiry into the country’s general insurance industry. ICA chief Rob Whelan noted how the industry itself is being disrupted by the pandemic in terms of how insurance businesses currently operate but that they are being flexible and adaptive and remain on hand to provide urgent services to policyholders who continue to lodge claims at this time. Whelan also reiterated that the Hayne Report did not find systemic issues with the general insurance industry. He concluded: “Insurance is a necessity. It underpins the economy. We need to ensure the industry remains prudentially strong and retains the capacity to take on risk in the community. This is especially important as Australia recovers from the immense economic and social pain caused by the pandemic and natural disasters.”
Top business risks for 2020
According to the 2020 Allianz Global Risk Monitor, changes in legislation, cyber incidents (cyber breaches in Australian business rose by nearly 80% in 2018) and climate change are the three most important risks facing Australian businesses. Globally, cyber incidents, business interruption, changes in legislation, natural catastrophes, and market developments were the top priorities.
Insurer concerns revealed
According to JP Morgan’s General Insurance Barometer, climate change and corresponding natural perils are the top concerns currently facing the insurance industry. The report noted the triple-threat of accelerating climate change, increased numbers of bushfires and high natural peril costs were the biggest concern for the industry, with a strong rise in catastrophe costs in Australia since 2003. Climate risk was also one of the top three risks identified in the 2020 edition of Global Insurance Law Connect’s Risk Radar report. Technology (disruptive environment) and the war for talent (high demand for qualified professionals) round out the major industry concerns.
Share this article: