I have written about the benefits of Unimutual membership in previous CEO Connects, and the feedback from Members and brokers about the service provided has been an absolute highlight of my first year. But this can understandably fall out of focus as people turn their minds to contribution levels in October. As we prepare to send out terms in the coming fortnight, I’d like to provide an update on what you can expect.

Firstly, as you have heard, the last two years have been particularly challenging for the insurance and reinsurance marketplace. They followed years of dropping prices and poor results. The transition of the broader market (from soft to hard) means that this year it is brokers, and not underwriters, that look battered and bruised after each renewal point – this was true at 30 June and even more apparent as we passed through 30 September.

As a member-owned organisation, Unimutual has control over how it prices the risk it retains; but it is still dependent on market conditions for the risk that is reinsured. We continue to push to get the best result for the Members, and reinsurance support remains strong. We also work to ensure protections are best suited to Members’ needs, even in a challenging market.

Property and Liability Protections

There are two key changes in the Property protection this year. The first – a return to each Member having their own individual limit – has been welcomed by Members. We recognised following discussions with Members that the “shared” limit implemented last year, while providing more than enough cover, created an element of confusion as well as internal communication challenges.

The second change relates to Temperature Controlled Environments. The definition will be broadened to Controlled Environments, and the cover will be restricted if the environment in question is not sufficiently mitigated. There is a grace period for 2019/20, so effectively no reduction in cover for unmitigated risk until 1 November 2020. Members and brokers are working through this change and taking the opportunity to continue to enhance risk management.

For the combined Liability protections there are no changes to the level of coverage provided. This is a great result in the current market as cover is typically restricted in a hardening market. Our reinsurance panel remains extremely supportive and we are pleased to be able to continue to offer broad and sector-specific cover.

Other Protections

Unimutual will continue to offer an Active Assailant protection and Environment Liability protection as an included benefit of membership. The hope is that such covers are never needed, but it is good to have them in place. Again, there are no changes in the level of cover provided.

Cyber protection has gone from a “nice to have” to virtually a compulsory purchase. Insurers and reinsurers are learning more and more about the risks protected, often unfortunately as claims arise. Unlike traditional property risk, the underlying cyber risks continues to change dramatically as both the attacks and defences continue to evolve. Recent developments with losses are also causing late pricing revisions.

Unimutual does not retain any of the cyber risk provided to Members. As such, the cover is driven by our reinsurance partners, but we negotiate a tailored product that leverages the size of the mutual to its benefit. When considering cyber coverage, with Unimutual or elsewhere, it is important to consider both the coverage and the post-event response. Some providers will not have the necessary expertise to assist if there is an attack (and the upfront price might reflect this!).

Management Liability is the other product that we offer to Members where none of the risk is retained by Unimutual. In fact, the Management Liability offering is arranged directly between Members and the insurer, but Unimutual facilitates the placement. Fortunately, this means that even our largest Members benefit from wide-ranging cover that is usually only accessible for organisations with turnover of under $100M. It also means that Members have some insulation against the effects of market trends, but no one is impervious. Currently, the market is applying significant increases in retentions and premiums due to poor claims experience for Employment Practices Liability and Crime coverage, as well as to concerns about potential claims moving forward. Members should be aware of the increased focus from insurers on this segment.

Next Steps

Member feedback about timeliness around renewal has been heard, and we will continue to work hard to get terms out as soon as possible.

I have refrained from specific pricing guidance in this update for two reasons; firstly, it is dependent on individual circumstances and secondly, in the current market conditions we want to make sure the necessary reinsurance is in place first.

If you have questions about renewal, coverage, or any other matters please do not hesitate to contact myself or any of the team.

In the meantime, please do not hesitate to contact myself or any of the team with any questions or concerns.[/fusion_text]