Australia has seen slow take-up of telematics but that will change as more vehicles roll off the production line with the tracking systems built in, Zurich Head of Customer and Proposition Development Nick Cook says.

He told brokers at the company’s Generation Z forum in Melbourne that telematics will see conversations about insurance become increasingly sophisticated.

The system, which records drivers’ behaviour, is often discussed in relation to the data that insurers and police can draw from it, but Mr Cook says insureds will also be able to use the information to negotiate their insurance. 

He says brokers and insurers will have to engage in discussions with customers who only want to pay for when they drive.

LMI Group MD Allan Manning also told the seminar that product recall claims are increasing.

He cited a case where two insurers argued over whether the matter was a professional indemnity or directors’ and officers’ issue, and suggested brokers consider having both covered by one insurer. 

Professor Manning says brokers have to beware of being sued for their advice if an insurer says the policy does not cover the loss, and solicitor and business management expert Keith Hanslow told the seminar “the professional who gave the advice is the second line of insurance”.

Mr Hanslow says brokers should beware of giving free advice, such as when they are approached at social occasions. “You don’t have all the facts, it’s done in a hurry and there is no documentation.”

He recommends that brokers tell enquirers to call them at the office later or to send an email.

Mr Cook says brokers can differentiate themselves from direct insurers by helping clients through the increasing amount of compliance, regulation and legal complexity. This is particularly the case for a growing number of companies sourcing goods or selling internationally.

“You will only get proper advice from using a broker. You won’t get it from sourcing SME insurance online,” he said.