In these CEO Connect messages, Ty Birkett provides an oversight of high-level issues and developments.
I thought now was an opportune time to provide a further high-level update from Unimutual as the year progresses. It has been a great experience to continue to meet with Members and brokers and I am appreciative of the feedback.
For Unimutual Members, July is normally characterised by two important events.
The first is providing an update on exposure data. Thank you for all of those who have provided the information, and we continue to work with the stragglers! Timely information is important to ensure that we can collate the information for our reinsurers (for submission in mid-August) and strive to be in a position to provide a timely renewal for Members.
The second is the budgeting process. We are very conscious that Members need to provide budget information well ahead of the 1 November renewal date, even though pricing is not yet known.
This challenge is not unique to Unimutual and is one of the challenges of the cyclical nature of insurance markets. We continue to see upward pressure from our insurance and reinsurance partners and Pete Watts has put together a very good summary of the drivers of the current pricing pressures. The key takeaways are that (1) there remains significant upward pressure – even attractive, loss-free property accounts saw above 20% increases at 1 July, and (2) the insurance market continues to not want to release terms early.
It is important to remind ourselves that Unimutual is owned by Members for Members. It is your Mutual and exists purely for your benefit. I spoke of the history and benefits in CEO Connect #2, including that the Mutual doesn’t need to deliver a profit to shareholders.
In CEO Connect #1, I covered the reasons for the 2018 increases. As mentioned, 2019 will again see the challenging combination of a late and increased reinsurance renewal, however, we are in a significantly stronger position this year for a couple of reasons. Firstly, the Mutual is now running at a balanced budget with reserves above target, and secondly, the year-to-date claims experience is very good (especially in comparison to last year). While we cannot control the pricing and timing of our reinsurance partners, our expectation is that the outcome for our Members will be more positive than the overall market.
Each Members’ circumstances are different (in terms of history, exposure, and claims experience). As such, rather than attempting a blanket comment on terms, I would encourage a continuation of the open dialogue between ourselves, Members, and brokers.
Unimutual is proud of the sector-specialist cover that is provided to Members. Insurance markets tend to restrict cover and expand exclusion lists in a hardening market or after a run of claims.
As a Member-owned organisation, there is no benefit in doing this. The intention is to continue to provide the market-leading level of cover to all our Members.
The only two coverage areas where we are working with our reinsurance partners are around limits of cover – with the goal of Members having their own limits of cover rather than one shared across the Mutual – and around how we continue to balance the level of cover for controlled environments against contribution levels. We will keep you up to date on both.
In the meantime, please do not hesitate to contact myself or any of the team with any questions or concerns.
Still being relatively new in my role, the wonderful collegial nature of Unimutual continues to amaze me. The strength of the Mutual lies in the willingness of Members to share their experience with the Mutual and other Members.
You will hopefully have seen the steady flow of informative material as we continue to consider the risks that our Members face – from those risks that are currently front-of-mind (such as drones and cyber, and with further articles to follow on cladding and contractors), to those that emerge in the future. I would encourage everyone to visit our website and follow our LinkedIn page to make use of these updates. Thank you to all of those who have contributed to these shared bits of knowledge…. especially those brave enough to be captured on film!
An important part of this collegial approach is the annual conference. The response this year has been astounding, but fortunately, having discussed it with Kerry and Christine, I have decided not to send a plea for attendees to bring tents …. well not just yet anyway! I look forward to catching up with everyone attending.
Chief Executive Officer, Regis Mutual Management Ltd