July is here and millions of new policies are in place. But a disappointingly high number aren’t, and brokers are less than complimentary about the reason. They say insurers have been slow and unresponsive through the June renewals period, and in many instances have set conditions that beggar understanding.

“Cherry-picking” the acceptable parts of the business while ignoring liability has also been a problem. Some underwriters wrote to brokers over the past few weeks telling them not to send any more slips in, because they couldn’t handle them. 

Underwriting agencies have come in for plenty of praise, with brokers saying the specialist knowledge of many of the agencies seemed to help in getting faster results. Coffs Harbour broker Richard Cunningham named Pacific, JUA, InterPacific and Triton as particularly helpful to him, but said the experience with the insurance companies generally was “hideous”.

Rob Parsons, MD of BGS Insurance Brokers in Melbourne’s eastern suburbs, said the biggest problems have centred around liability renewals. “I think what’s happened – and the underwriters have said this – is that everything has gone back to the book. If the book says we don’t like it, you won’t get renewed.

“Some underwriters will renew the general accident part of the policy, but they won’t touch the liability section. That causes major problems because it’s much harder to place liability business by itself than as part of a package.”

But Mr Parsons said these aren’t just specific June 30 problems. “The same problems are happening right across the board whether it be April, May or June. It’s just the way the industry is at the moment.”

Joan Staehr of Abbott-Staehr Insurance Brokers in Geelong, Victoria, said most of her policies will be renewed, but not without plenty of trouble. “Underwriters and the insurance industry have just been born to be cursed,” she said. “The underwriters don’t bother to read the [policy] closings so we keep having to send them back. It makes it all very difficult.”

Mr Cunningham said underwriters “haven’t wanted to know us brokers. Without the support of underwriting agencies we just wouldn’t have got cover. It’s been hard because the insurers can still afford to pick and choose what they want to cover.”

Many brokers we contacted agreed with Mr Cunningham that the insurers have ignored good business and turned their backs on brokers, but NIBA Vice-President Frank Earl, MD of Arthur J Gallagher Brokers in Sydney, doesn’t subscribe to that view. He said the call from some underwriters to stop sending out slips was a response to brokers flooding the market.

“It is probably the toughest market we have had in 15 years, and some brokers need to get better organised,” he said.  “This scattergun approach creates a paper nightmare.

“Brokers should rethink they way they do business, and begin to build better relationships to get the inside run. At the end of the day, we all have to work together and there is no point beating up on each other.”

Sydney broker Brian King agrees that the blame game is not the way to deal with the hard market. Like many, he and his staff worked 14 to 16 hours a day, six days a week, for the past month. “We have been productive, and our rates have been firm but not insane,” he said. “ Our clients have been reasonably pleased but a lot have had it very cheap for a long time with business decisions based on price rather than product.”