In these Spotlight discussions, we sit down for a chat with the individuals that make up the Unimutual community, to share the experiences of the parts that make up the whole.
Simply put, we provide a cost-effective method of insuring their assets, people, and responsibilities, so that they can continue to function. These are high-risk institutions, by nature. They do everything. You look at a complex university, into medicine, dentistry, veterinary sciences, engineering… the spectrum of things they do is enormous. And the risks that they are exposed to are enormous as well.
We provide something that is stable, that covers those risks. With 28 years of experience, we understand these businesses well, and this allows us to tailor policies to best fit their needs.
We are proactive for Members about risk management – for example, making people aware that cybercrime is a big issue. We lead them where we think the world is going – to risks that they may not yet recognise, but are firmly on the horizon. We aim to be ahead of the curve and encourage them to come with us.
Many of the Unimutual staff originally come from Member sectors, so they understand them.
I have been involved since day one. I was Vice Principal at the University of Western Australia for 37 years, and at the time those founding universities could not get liability insurance cover. We felt we were being taken advantage of by the market, and that the market was charging us premiums above what the risks were. We also had a strong belief that by coming together we could pool our risks and access better options.
I was in the first working party set up to review insurances. At first we didn’t quite know what to do, but the solution was setting up a mutual, and it’s grown ever since. The vision started with providing the best possible protection, at the best possible price, to Members – and it’s that way today. The reason we were set up is the reason why we will continue.
We are a discretionary mutual and therefore not an insurance company – an important structural and legal distinction – and that discretion must be exercised by the Board.
You sign a Membership agreement each year, which mirrors an insurance agreement but also defines your rights as a Member. If/when you make a claim, the Board has the discretion to accept and pay your claim. The Board would never not accept a worthy and true claim. If a claim comes in that’s not covered by the wording, but that the Board believes should have been, it exercises its discretion and pays regardless. Often we would use our discretion this way if we feel an issue is endemic to the sector, and something that should be included in cover.
The other side of the Board’s role, like any other, is to set the strategic direction of the company. The Board has a of maximum twelve people, out of which four are independent directors appointed by the Board for their expertise. In addition to myself, having analysed what we believe the company needs, we have appointed two people with deep knowledge of the insurance industry, and one another with a long history in change management and communications strategies.
The rest of the Board (up to eight) are elected by Members – so the balance of power always rests with Members. There is also a very clear commitment to try to maintain equality on the Board.
“the solution was setting up a mutual…The vision started with providing the best possible protection, at the best possible price, to Members – and it’s that way today.”
It’s more an ethos that we’ve got, than a structure – that we’re not for profit. Anything that we have as surplus, we plow back into the Membership. It is Members’ money, so the money is always for the benefit of the members. We do not pay it out to shareholders.
Christine’s innovation with apps; Simon’s risk management activities; trying to improve the accuracy of valuing research; these efforts are all possible because of that guiding principle.
We are also different in how we settle claims. For example, we’ve had a couple of tragic liability claims. In one of the major ones, we accepted liability and put a million dollars on the stump on day two. We said ‘we want to do the best we can to get this young person looked after, we want the best of medical care for them. We want counseling for all the colleagues involved’.
I’m not sure that the insurance industry would do that, and so quickly. And when it comes to these instances and many others, it’s not dollar figures, it’s people’s lives that are affected.
We are very quick to get on to a claim: “What do you want? How can we settle it for you and how can we help you get back up?”
I would argue, although it’s hard to define, that if Unimutual wasn’t here the sector would pay more overall for insurance – that eventually prices would go up and, perhaps more importantly, the quality of the paper [policies] would go down. Members would lose a partner that understands the unique nature of their sector, and is built around Member’s interests rather than its own. The individual insurance policies wouldn’t be geared as specifically as ours are to the sector’s needs. In addition, our current Members would lose the discretionary aspect, and that’s quite important particularly for sensitive claims.
One example is a university that wanted to publish a critical but politically sensitive book: the public sector refused to insure the university. We looked at it, and said yes, do it.
There have been a couple of cases where we have defended academic freedom. We said, “go for it, we’ll back you” and funded the organisation to fight it. And it’s not just ‘in principle’ issues. There was one where a cross-infection occurred between horses and human beings, despite everyone saying it wasn’t possible.
The gamut of risks these organisations run is enormous – and they have far, far reaching knock-on effects. Often in one fell swoop you protect a university’s reputation, a student that’s trying to get a PhD, and an actual physical asset – but it’s wider even than that. Many Members have had freezer problems in recent years: if you stand back, consider our risk mitigation efforts, and say “we’ve protected this gene pool or that slice of brain samples or this sample from multiple sclerosis” it is a win for Australia. You protect scientific advancement, the means of improving the health of the general public, the educational experience of future employees…
“The gamut of risks these organisations run is enormous – and they have far, far reaching knock-on effects.”
One of the big things facing us all is climate change – in particular how Members can protect their assets against climate change effects, like flooding. In large part, this has to be done in the forward planning phase (for example by not building basements) in anticipation rather than just reacting to claims experience.
Another is the effect of incidents like plagiarism on reputation – in particular with regards to international students for example, which injected $32 billion into the Australian economy last year. A change in reputation can negatively affect this and it can take years to right itself if it does occur.
Being a Member of a group.
When I began working at UWA in the 1960s, it was a very isolated role. But back then, Universities had senior professional administrators, often career administrators, and we were very connected. We got together, we talked to each other – I’m not so sure that is as strong today as it was then.
Unimutual provides that glue, which I don’t think you’d get in another way. We provide that method of connectivity, from directors of finance to facilities managers to risk managers. The exchange of ideas, thoughts: we help you stimulate them.
How can you best support people who are very busy, may be early on in their careers and/or come from a private sector background, and without the time or budget to travel?
We use technology to enable individuals at Member organisations to tap into that network of peers more easily: if I’ve got a problem, somebody else has had it and they’ve probably got a solution.
When I was started working, I hated asking questions. I’d go into a meeting and there was one person who always asked the question that I wanted to ask, and she’d get an answer. Modern technology allows you to put your hand up without embarrassment and just get help you need. I think we all need help in trying to get through life and get through our workspace. I think that that’s something unique the Mutual provides: you belong to a club.
A day in the life of a procurement manager – We previously spoke to UOW Member and Technical Committee participant John Da Fonte about his University’s approach to risk and experience of membership – read his responses here.