1. Insurance Collective Update
Roadshows, 14th & 15th November 2018

2. Agenda The Power of the Collective Scheme Claims Performance
Market overview
Local NZ market
International market
Outcome of 2018 Renewal
Modal Valuation Tool
This presentation is provided in confidence by Crombie Lockwood (NZ) Limited (Crombie Lockwood). The parent company of Crombie Lockwood is Arthur J. Gallagher and Co (Gallagher).

3. The Power of the Collective
Ability to create a single programme structure enabling:
the broadest coverage available
loss limit basis maximising insurer capacity
access to the full market both locally and internationally
the most competitive premium
Ensures assets
in high seismic zones have access to sufficient levels of cover; unavailable on a stand alone basis
in low seismic zones benefit from lower premiums due to the economies of scale of the combined group
All assets, whether viewed positively (such as new builds) or negatively (churches pre 1934) by insurers are all fully covered
Ability to run a managed self retention pool to deal with low value/high frequency claims outside of insurers in a more cost effective manner providing further cost benefits
Access to other collective benefits such as Modal Valuation Tool

4. Local New Zealand market
Limited number of insurers; all internationally owned
Capacity restrictions in high seismic zones driving rate increases
Severe weather events continuing
Poor loss records despite on-going rate increases
NZ Insurer “Net Combined” Quarterly Results: Reserve Bank Insurance Income Statement
September 2017
December 2017
March 2018
June 2018
103.6%
102.5%
100.2%
100.4%

5. International Market
Historically more stable due to geographical spread of risks
Typically higher rates – stability at a cost
2017 results impacted by global events; 3 US hurricanes, Asian floods and Mexico earthquake
Lloyds of London 2017 results – GBP3.4billion underwriting loss
Recent Lloyds report has rated New Zealand as 2nd only behind Bangladesh, as highest worldwide annual expected loss from natural disasters, as a proportion of GDP
2018 is expected to be declared the worst year in a decade for Worldwide catastrophe losses

6. How the International market views New Zealand
International seismic zones - New Zealand

7. International Market
In previous years post large underwriting losses rates have reduced quickly in following years
Lloyds seeking to prevent this cycle happening again
More stringent underwriting plans required from all syndicates

8. Scheme Claims Performance
3 year loss ratio (claims v premium) – 190%
5 year loss ratio (claims v premium) – 130%
Major losses:
Nov 2015 – fire $1.4M
Dec 2015 – arson $0.4M
May 2016 – arson $2.3M
Feb 2017 – fire $3.4M
First year under Concordia 2017/18 – 32% loss ratio

9. Outcome of 2018 Renewal
Despite the pressures in the current market, renewal secured at expiring rates; a result which is unique in the present market conditions
We negotiated rating discounts with Concordia, resulting in savings for a number of congregations, for positive features such as
monitored alarms
sprinkler systems
NBS levels above 67%
If claims continue to be at a more acceptable level throughout 2018 we will apply pressure to reduce the perils rates for 2019

10. Modal Valuation Tool
Useful cost-efficient alternative to Professional Valuation as a means of calculating an appropriate sum insured to reinstate a similar sized property using modern techniques and building materials.
This is a tool that has been commissioned by Presbyterian Bureau Services Trust specifically to assist with the prohibitive cost of regular revaluations.
Can be accessed free of charge online at
A full user guide can be accessed online under the “Guides and Documents” section at

11. Modal Valuation Tool

12. Contacts presbyterianinsurance@crombielockwood.co.nz
GARETH KNIGHT  ACII, ANZIIF (SNR ASSOC) CIP, DIPIB SENIOR BROKER | CORPORATE DDI | M E
STEVE WALSHAM GROUP BROKING MANAGER | CORPORATE DDI | M E