The Allianz Donna Walker Awards shine a light on individuals who have contributed significantly to the development of insurance professionalism and promoting diversity and inclusion throughout the industry.

The award winners were announced at ANZIIF’s Women in Insurance Virtual Event on 30 September.

Allianz Donna Walker Awards winners

Inspiring Leadership:

• Jo Broomhall, Executive General Manager, IPAR
• Hoa Bui, Managing Director, Bui Advisory and Non Executive Director, AIA Health

 Emerging Talent:

• Shannen de la Motte, Junior Legal Council, AIG

Words from the award winners

“I am truly honoured to receive the Donna Walker Award for inspiring leadership. Donna worked at CGU during my time there, and although we were in different divisions our paths crossed in the workplace and at events. I remember her kindness. I also remember how highly her team spoke of her leadership. Seeing senior female leaders like Donna in the industry inspired me – perhaps that would be me some day. Today, I am so proud of all the teams I have been part of and have led over my career. I am grateful to the many inspiring leaders and mentors who helped me take that next step. And in particular, to my team at IPAR, thank you. Every day you make me a better leader through your passion and commitment to our customers and to each other.”

Jo Broomhall

“I feel very honoured to win the Allianz Donna Walker award. Donna was a business leader who was universally respected, loved by her team, her peers and her company. The win was a huge surprise, there are so many talents in the industry; for me, it was a very special moment. Donna and I both worked for the same company at the start of our career around the same time. Donna was always a senior actuary that I knew of, before I met her in person, Donna being Melbourne based and I in Sydney. Nevertheless, I am happy that I met Donna while she was alive; and I still remember clearly the day I met her in person and what we spoke about.”

Hoa Bui

“The win has definitely been a highlight during lockdown. The submission process provided an opportunity to reflect on my career and identify opportunities for growth.  In a time where young professionals can be feeling a bit stagnant in their career due to the inability to connect face to face with others in the industry, it is refreshing to see these opportunities for engagement. Whilst I never met Donna, I recall reading about her passing back in 2019 and I was in awe of her career journey and the messages she stood for. She demonstrated the role of the modern executive, displaying the leadership qualities that I strive to develop.’

Shannen de la Motte

The Allianz Donna Walker Awards were created in memory of Donna Walker. Donna Walker was a much loved and respected member of the Insurance Community. She was appointed to the ANZIIF Board in March 2017 and was highly regarded across the industry, having developed a wealth of knowledge during her expansive career.

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Hoa Bui

Households in up to 12% of Australian postcodes may face pressure meeting annual home insurance premiums, a figure which represents around 7% of Australia’s population, according to a major research paper from the Actuaries Institute.^[1]

The paper states Australia has a sophisticated approach to pricing risk for natural disasters, which is reflected in premiums that can vary from less than $1,000 a year to above $10,000. But there is no clear and widely accepted measure for whether insurance is affordable, and data is lacking to gauge the depth of the problem. Without a measure of affordability and better publicly available data, it is difficult to target relief to those who need it.

Property Insurance Affordability: Challenges and Potential Solutions, aims to help policymakers better understand affordability issues, said Hoa Bui, President of the Actuaries Institute. “All stakeholders have a role to play in improving affordability, especially in northern Australia, where this is most keenly felt,” Ms Bui said.

“There is a compelling public policy case for examining cross-subsidising some premiums for those experiencing stress.” When housing affordability and cost of living pressures arise, property owners may let policies lapse or purchase less insurance than is needed. “This gives rise to what is considered a ‘protection gap’, property owners without sufficient insurance to recover well from loss events,” Ms Bui said. That gap is concerning for individuals, communities, governments (taxpayers) and charitable organisations because they are all called upon to bridge the gap through restoration and recovery of property and livelihoods.

Policymakers are looking for better ways ahead, as evidenced by the Australian Competition and Consumer Commission inquiry and the Royal Commission into natural disasters. State of the Climate 2020, a CSIRO and Bureau of Meteorology report released earlier this month, adds a further contextual imperative.

Property Insurance Affordability: Challenges and Potential Solutions, written by the General Insurance Affordability Working Group, has found that a consumer’s ability to pay for insurance is not always linked to their risk: a home built on a susceptible wind-swept beachfront, subject to tidal inundation, may be high risk, but the owners may be prepared for and able to afford significant insurance premiums.

But “… unfortunately, some homes in the highest risk areas tend to be in lower socio-economic groups; understandably they may not buy insurance”, said Rade Musulin, Chair of the Working Group and lead author of the report. Building codes, community resilience, changing climate and land use planning are all relevant factors. Building codes to date have focused on life safety and the current view of risk. However, a revision of codes may take years.

Social concerns arise when high premiums occur in communities that cannot pay; in places where homes have poor resilience ratings, where there are increasing instances of natural peril or where incomes are low. This may occur where circumstances change, which may also be the result of climate change.

A key feature of addressing affordability pressures involves increased mitigation. Government taxes could also be reviewed. But there is a compelling case for public policymakers to provide some support for those facing unaffordable premiums while still using economic incentives to encourage better behaviour to reduce risks in the long-term.

Support can be targeted through changes to insurance products and premium design (including, for example, community rating and risk equalisation), by providing direct subsidies or rebates, or by changing how insurance risk is pooled, either at the insurance or reinsurance level.

The arguments for targeted policies to reduce premium stress include increasing the take up of insurance, creating funds for research and mitigation, reducing government expenditure on post-event recovery, reducing intangible costs (such as mental health impact) in the event of loss from the ‘peace of mind’ that insurance can provide, and increasing overall economic activity by enabling development.

Guiding principles for change include:

• proper incentives for mitigation to lower overall losses over time;
• well-functioning private insurance markets which limit government intervention are desirable in an economy such as Australia’s; and
• risk-based pricing to support long-term policy goals.

The paper states there is need for temporary and targeted government intervention to help manage affordability, in at least the near term. Policy solutions should be reviewed as conditions change. Addressing affordability should include targeting the vulnerable, sending the correct economic signals to consumers and identifying what changes in behaviour are needed.

“There are complex trade-offs to be considered as part of solving problems of affordability. This paper aims to further the discussion around those issues,” Mr Musulin said. The paper asks, for example, how much economic pain is acceptable for consumers or households to bear? Should losses be funded pre- or post-events, and in what proportion? To what extent should costs be pushed out and thus borne by future generations?

“The overall goal should be to improve the risk profile of the population to maximise insurability of properties and minimise the need, in the longer term, for ongoing government intervention to promote resilient communities,” the paper states.

“We need to future proof Australia in a cost-effective manner to make affordable insurance available to as many people as possible.”

Read the paper.

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[1] Calculated by mapping a sample of 15,000 quotes from a Finity supplied national buildings quote dataset. These figures are illustrative only with the key limitation being new quotes may inaccurately reflect actual premiums paid.

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Ian Laughlin

An Actuaries Institute Taskforce has made sweeping recommendations for broad changes to Australia’s retail disability income insurance market to reset sustainability for a sector under threat.

Taskforce Convenor Ian Laughlin said without an overhaul, those who need cover may not be able to afford it in the future and life insurance companies selling individual disability income insurance policies will continue to suffer very large losses. “This is neither in the interests of customers nor the community at large,” Mr Laughlin said.

Mr Laughlin said the sector must offer products that provide more certain outcomes, are more easily understood by consumers with features and prices that better meet their needs.

Taskforce recommendations, circulated widely for stakeholders’ consideration, include a review of the law around life insurance, so insurers can better take into account fundamental changes to the way society views disability and returning to work. It issues a warning that regulators will continue to intervene until the sector shows sustainable improvements in practices and outcomes.

Individual disability income insurance policies provide critical cover for those who may lose their income because of disability. About 850,000 policies are currently on issue, which is an indicator of the importance of the market. But the Taskforce formed the view that “the market is at risk of failure”.

“The lack of sustainability of the disability insurance market is one of the most pressing issues for life insurers today,” said Hoa Bui, President of the Actuaries Institute and a key member of the Taskforce. “We’ve looked at the issues through a consumer lens to find a way forward for all parties,” Ms Bui said.

The report Disability Insurance Income Provisional Findings and Recommendations states “the product has become more and more complex over time, making it difficult for customers to understand and be satisfied with claims outcomes. At the same time, affordability and accessibility for those needing cover is declining.

“Increasingly, those with cover are finding the cost prohibitive, and the more-healthy policyholders are then likely to not maintain cover.”

The report, which includes findings, recommendations, and a paper on the framework for a ‘reference product’ for risk and uncertainty assessment, involved input from over 40 actuaries, and discussions with regulators ASIC and APRA, Treasury, CEOs, boards, lawyers, consumer advocates, claims and underwriting professionals, doctors and financial advisers.

It follows the release earlier this year of a KPMG research paper, commissioned by the Actuaries Institute, that found life companies lost $3.4 billion over five years by selling complex products to individuals, which ultimately, threaten the viability of the sector.

The Taskforce has not taken into account the likely negative impact of COVID-19 on future claims.

Outcomes the Taskforce hopes to achieve after further industry input include:

• product features, underwriting and claims practices that promote closer alignment between consumers and providers of insurance;
• stable prices over time;
• sustainable outcomes for insurers; and
• community confidence around fairness and the enduring value of the insurance.

A failure to bring about reform would result in loss of productivity in communities, a rise in demand for community and family-based support, increased social security costs and, for those who need support, a decline in mental health, a loss of confidence and self-worth.

Recommendations include:

• insurers gain better insights into customer claims experience;
• simpler and cheaper products with a focus on return to health and work;
• strong controls over the level of benefits paid;
• products that can be updated to allow for advances in medicine, technology and society’s expectations;
• sustainability heat maps and a review of Board composition to ensure risks are understood and managed;
• clear examples of best interest duty and changes to product ratings; and
• standardised collection of medical information and better underwriting and claims data.

“The Taskforce strongly believes that the problems are more deep-seated and diverse” than just product terms and conditions, Mr Laughlin said, adding CEOs believe the product has lost the principle of indemnity, and said there was too much capital invested in a market with a relatively small base. Boards may not receive the right analysis to allow directors to understand the extent of long-term guarantees and risks.

Mr Laughlin said loss minimisation, a feature of many other insurance contracts, is not explicitly expressed in disability income insurance contracts. Should those making claims have a duty to return to work as soon as possible to minimise benefits paid to them, especially where a return can aid recovery?

He said the rise in mental health claims and community expectations around return to work rates are not easily accommodated, and Treasury and APRA should review the 1995 Life Insurance Act to test whether it remains fit for purpose.

The next steps include stakeholder and industry feedback. Consultations close on October 31.

Read the full paper.

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Jennifer Lang

The Actuaries Institute has named Jennifer Lang 2020 Actuary of the Year.

Ms Lang’s role this year, in leading the Actuaries Institute’s COVID-19 response, has been recognised as a major contribution to the profession and the communities in which actuaries work.

The Institute’s COVID-19 Working Group brought together more than 80 actuaries, as volunteers, who assessed the potential impacts of the pandemic on the profession, public policy, business and the community. A Pandemic Resource Centre was established to help actuaries support their companies manage and mitigate the impacts of the pandemic.

“The work of the COVID-19 group, under Jennifer’s leadership, is making a significant contribution,” said Actuaries Institute Chief Executive Elayne Grace.

“The group has provided strong guidance to the profession in unprecedented times, across a very broad range of practice areas. It has resulted in 17 pandemic briefings and more than 70 articles.”

Institute President Hoa Bui said Ms Lang’s work highlights the relevance of actuarial skills to policymaking and real-time, national events. “Jennifer’s ability to bring rigor with her actuarial skill set to looking at issues around COVID-19 particularly stood out,” Ms Bui said. “She is able to guide the Working Group, to bring data to the table to solve problems that hamper communities, business and policymakers in very different ways. That thinking helps lead change.”

Ms Lang has worked in the United Kingdom and Australia, in insurance and as a Chief Actuary, CFO, and as a consultant. She has also been noted for her a role as a mentor to younger actuaries, and for her blog, Actuarial Eye.

She inspired the establishment of the Actuaries Institute’s Hackathon program, now in its third year, which invites not-for-profits to bring their problems to actuaries – in particular, younger actuaries – who volunteer to help find solutions. The Hackathon has worked for a wide range of NFPs including the Cancer Council, the Benevolent Society and the Prisoner Fellowship Group.

“It was great to be involved with young actuaries,” Ms Lang said. “But all actuaries generally, come into their work with a notion that they want to help people and solve problems within society widely. This award, which I am delighted to accept, also reflects the work we have done in the COVID-19 group.

“As a profession, actuaries bring to bear skills in scenario testing, modelling out to the future, and statistical and financial insights. We have skills in long-term projection, and we explain risks and uncertainties to Boards and senior managers.

“As a group, we spent a lot of time this year helping members and the community make sense of the pandemic and the economic crisis that has followed. We bring data-driven thinking; we follow evidence to help determine a course of action.”

Ms Lang is also a member of the Actuaries Institute’s Climate Change Working Group. She drove the development of an Information Note for Appointed Actuaries working in life, general and health insurance to help them consider climate-related risks in their work.

Climate change is an area where actuaries have increasing influence, and where young actuaries are taking their skills to help solve complex problems. The Actuaries Institute developed the Australian Actuaries Climate Index, which tracks the prevalence of extreme weather conditions and changes to sea level across Australia.

Ms Bui said that the Actuary of the Year is a prestigious award presented to a member of the Actuaries Institute who has made a notable contribution to the community and has brought credit to the profession.

“Jennifer is a most worthy recipient of the Actuary of the Year award, we all congratulate Jennifer and thank her for her valuable contribution to the profession,” Ms Bui said.

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In her Presidential Address, Ms Bui said more than half of the Institute’s members are under 35- years of age. “Young actuaries are globally connected, they are close to emerging trends,” Ms Bui said. “Engaging young members of the Institute, harnessing their energy and their knowledge, will help bring about faster change to benefit society and the profession.”

Ms Bui said the environment, climate change, and the digital and data sectors are growth areas for actuaries. “The world we live and work in is changing very rapidly and in fundamental ways,” Ms Bui said. Actuaries are turning their talent to help manage these significant emerging risks.

“We have an important role to play, to bring evidence-based recommendations to public policy across many sectors,” said Actuaries Institute chief executive, Elayne Grace. “Hoa brings business context and rigour to her leadership role. I look forward to working with her.”

Almost a third of the Institute’s members work in data analytics, an area of immense importance to business and governments of all levels when it comes to formulating public policy.

“The Institute’s expertise is routinely sought by policymakers, both here and overseas,” Ms Bui said. “As a profession we have a role to help our society deal with emerging risks such as climate change and mental health.”

During the year, Ms Bui expects the Institute to deliver major papers on intergenerational wealth and equity, and the gig economy. She also expects the profession to actively contribute to discussions on the role of data, privacy and the ethics around its use.

“Data is the future,” Ms Bui said. “If we manage it wisely, I see a world where actuaries do much more than ‘data’ work. Actuaries have tremendous skill in the design, explanation and interpretation of data and can harness its power.”

But she also warned that an ‘insatiable thirst’ for data leads to sensitive issues around the integrity of data and how data is managed and used.

“What we bring to the table, that data scientists don’t necessarily have, is the business context and the rigour with which we approach data analysis,” she said. “And of course, our professionalism.”

Ms Bui said the Actuaries Institute has built strong momentum in specific areas. The Institute built the Australian Actuaries Climate Index, a measure of the occurrence of extremes in weather, from high and low temperatures to rain fall or lack of precipitation. The Institute is a regular advisor to Treasury in areas that include superannuation and retirement policy, and consults with industry across general insurance, life insurance, banking, risk, IT and health.

Ms Bui pointed to her own story as an actuary. She emigrated from Vietnam with her family when she was 18.

She graduated from Macquarie University with a Bachelor of Economics (Actuarial Studies) in 1984, when there were just six women in a class of 40 in the first year of her actuarial course.

In 2019, 33% of Actuaries Institute members were women; 670 members were working in Asia and of almost 5,400 members 1,100 were working overseas.

Ms Bui is the first Asian-born and the seventh female President of the Actuaries institute. Five of the seven female presidents have been appointed in the last 10 years.

“We are seeing an improvement in the gender diversity of the profession’s leadership. My election as president reflects the diversity of our membership and its governing body. Three of the nine members of the Actuaries Institute Council are Asian born and five have worked extensively overseas.

“This diversity is not only appropriate, it is essential if we are to succeed in a world where the major issues we face – such as climate change, mental health, and the impact of the digital revolution – are so significant that no one country can hope to solve them in isolation.”

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