Tag Archives: ICIB

In a Volatile World – Make Sure You Have the Right Values Insured

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The world is increasingly volatile with newspapers being filled with stories of economic doom and gloom. Continuing issues with supply chains are impacting the availability of all imported goods including building materials, replacement parts, and machinery.

Inflation is set to hit levels not seen since the late 80’s and early 90’s.The consequence of this is that prices continue to rise increasing the cost of living and doing business here in New Zealand and globally. Your Insurance Values Need to Keep Up With all of these changes it is essential that your Material Damage (Property) and Business Interruption policies are reviewed regularly to ensure that your cover is at the right level. These policies will include limits that you select for your assets and loss of profit, and typically these will be variations of:

  • Buildings
  • Plant/ Machinery/Equipment
  • Stock
  • Loss of Gross

The amounts detailed in your policy schedule and shown against these items are the maximum amount that the insurer will pay in the event of a claim. Insurers confirm this within the policy by stating that the maximum payable in the event of a claim is the amount included within the schedule provided by you.

It may be tempting in a time of generally increasing costs to leave insurance values as they are. However, come claim time, you may find that the insurance policy is insufficient to reinstate the loss incurred and ensure the continuity of your business. Underinsurance Under insurance is very common in New Zealand and can happen for a number of reasons:

  • Not understanding the basis of the values to be insured;
  • Not including all costs in the sums insured e.g. debris removal and/or site improvements;
  • Currency fluctuations where businesses are heavily dependent on imported machinery;
  • Not accounting for delays or shortages in the supply chain;
  • Not reviewing values annually;
  • Not factoring in increasing prices.

Under Insured Claims Reports in the UK show that:

  • 70% to 80% of business that suffer a major disaster go out of business  within three years
  • Companies that are not open again within 10 days are unlikely to survive

A good disaster recovery plan, together with properly insured assets/revenue to provide adequate funds for recovery, will increase the chances of survival.

Deliberate underinsurance will be a problem at claim time and may impact the decision of the insurer on whether to pay the claim, and if so on what basis. While insurance concepts such as
“Average” do not, in the main, apply in NZ, insurers are not obligated to settle claims where there has been deliberate misinformation/underinsurance.

Next Steps

Getting the sums insured correct for your business is critical to its survival in the event of a loss. We recommend:

  • Talking with a professional valuation firm and/or
  • Implementing a valuation programme with a qualified valuer to ensure  sums insured are regularly reviewed.

If you arrange premium funding for your insurance programme then it may be possible to fund the cost of the valuations at the same time.

Navigating the fast-moving world of cyber risks

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Commentary on cyber risk seems to be in the news almost every day. With good reason. Many organisations from the Government, through to consulting firms, business associations and insurers are all trying to raise awareness of the risks that SME businesses face.

The simple fact is that cyber risk and threats are developing and changing. It is a fast-moving area that can seem confusing to anyone who does not have a deep understanding of IT. The risk is ever changing, and business responses need to keep up. That is a challenge.

Financial Impact of Cyber Attacks on SMEs in New Zealand

The average financial impact of a cyber-attack on a business is running at $159,000 according to a survey issued by Hewlett Packard and quoted in Scoop toward the end of 2021. Yet less than 5% of New Zealand SMEs have Cyber Insurance.

Insurance

While it is always better to avoid an incident, insurance can play an important role in helping if and when an attack happens. Just like cyber threats, cyber insurance is rapidly changing.

What can be covered?

There is no standard insurance policy. Different providers have different offerings, with differing limits but cover is generally available as follows:

● Incident Response – providing cover for IT forensics, legal, breach notification and
any emergency communication required following an event
● Cybercrime – cyber extortion, ransomware attacks, theft of funds, social engineering
e.g. responding to requests pretending to be your CFO etc
● System Damage/ Business Interruption – data re-creation , income loss, extra
expense, hardware replacement or repair
● Privacy Liability – fines and penalties

Critical Additional Services

When you buy cyber insurance you are not just buying insurance for the costs you incur if there is a loss.

As important, if not more so, are the additional services that the cyber insurers will provide, and these can include:

● Pre Policy Risk Assessment – an external review of your systems and
vulnerabilities, undertaken as part of the underwriting process, to help you
understand your risk and mitigations
● Real Time Threat Assessments – some insurers will provide Apps and tailored
notifications on new threats specific to you and your industry
● 24/7 Cyber Response Services – immediate access to cyber response teams with a
range of disciplines to immediately help prevent and/or recover from attacks/incidents.

These services can prove invaluable. When reviewing any Cyber insurance proposal a review of the additional services and response/ recovery support are as important as the premium offering

Summary

Cyber is now an established risk for all businesses. It poses a very real threat. The cost in time- and money to recover from an incident can be significant for SMEs. Cyber insurance can play an important role in both helping avoid and recover.
If you would like to talk through whether Cyber insurance can help you manage cyber risk please contact me – william.horvath@icib.co.nz 

On your side in fast changing times

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Businesses are operating in uncertain and unpredictable times when 50 to 100 year events such as pandemics, droughts and floods are happening with more regularity.

In Hawke’s Bay the rural sector has had two consecutive summer droughts while Napier was struck by a major flood event that damaged houses, vehicles and businesses.

A well-established New Zealand insurance brokerage firm ICIB has set up in Hawke’s Bay, much to the joy of the firm’s chief executive and former Hastings Boys’ High School student Grant Milne.

ICIB Hawke’s Bay is being headed up by experienced insurance professional William Horvath, who moved from Wellington to the sunny Hawke’s Bay with his family in 2008. William had previously worked with Grant and jumped at the chance to set up ICIB in the region as well as become a shareholder.

“We are a high touch insurance business which means that we work face-to-face with our clients to work out the best insurance solution for them based on their risk profile.

“By touching base with them regularly we understand their current, most up to date status of their profile and adjust their risk profile accordingly.

“It’s all about the right insurance for the right price, which isn’t always the cheapest price, as that’s when businesses can come unstuck.

William says ICIB provides brokering services to many different businesses with expertise within construction, wineries, food & beverage, manufacturers, engineers, horticulture, and exporters.

 He says the key is delving into a clients business, so we can identify key risk areas that are quite often over looked, such as key customers and suppliers. Does the client have one of these and what would happen if this key supplier or customer is no longer able to supply or take your product? How does this impact the business and its balance sheet?

A recent example was a client that has a key customer that accounts for 30% of the business revenue. The key customer had an insured loss and was not able to trade for 6 months, so our client had a drop of revenue, which took our clients company from making a profit to a considerable loss situation, which would have resulted in having to lay off staff to reduce costs. We had covered this risk exposure with our client and they had agreed to take the cover for this risk exposure, which meant our clients policy responded to cover this loss of profit while their key customer was not trading. Which was a satisfying result as our client didn’t need to look at cost cutting and was able to keep all their staff during this period, when we know it is a challenge to find quality staff in this market.

Grant says ICIB uses its knowledge and experience to identify and recommend to clients the best insurance solutions.

“We understand that building, managing and growing a successful business isn’t easy, and we think that managing risk shouldn’t add to your workload. That’s why we use our knowledge and experience to identify, innovate, select and build solutions that let you focus on what matters most – running your business.

“We’ve been future-proofing businesses for over 45 years – long enough to see the value of our approach in action. As one of New Zealand’s most successful independent risk advisors and insurance brokers, we work hard to help businesses protect themselves against the unpredictable and the unknown.

ICIB exudes transparency and discloses its income from the insurance underwriters. Grant says developing trusting, long-lasting partnerships is ICIB’s focus.

“We’re one of the first risk advisory services in New Zealand to offer full transparency around fees and pricing.  This open approach builds trust and confidence in our services and continually allows us to deliver value as your business evolves and grows.

Grant says ICIB’s  deep understanding of New Zealand’s industrial and commercial markets has helped them create innovative, sector-specific solutions for businesses working in specialised industries.

ICIB is a member of the NZbrokers network. NZbrokers is New Zealand’s largest insurance broking collective, representing over 87+ independent businesses across the country, from Kerikeri to Invercargill, and everything in between. Recognising the benefits of working together, the driving philosophy behind their rapid success is that each member leverages the strength and capability of the national group, while retaining their successful formula of local knowledge and long-standing relationships.