This year's UAC membership renewals are a slight increase on fees paid last year. This is the first year since 2002 that there has been an increase. The rise is due to CPI increases and additional expenses, including a major update on the website, which is currently in progress, and preparation of UAC submissions on relevant issues to regulatory authorities, for example UAC's response to Treasury's Corporate & Financial Services Regulation Review Consultation Paper (see below). UAC requires professional assistance for preparation of such submissions. Gold Seal Risk Management assisted UAC in developing the FSR response paper.
UAC is the peak body for Australian general insurance underwriting agencies. With more than 65 corporate members, it represents the large majority of agencies. With agencies writing an estimated $1.6 billion of business a year for their insurer principals, they are an important segment in the marketplace and it is vital they have a strong, effective voice. Your UAC membership is valuable and I urge you to renew. This year UAC is asking all renewing members to provide more detailed information on their renewal forms to ensure UAC's records are up to date.

UAC submission to Treasury
Including assets and turnover in test criteria for small businesses' general insurance would create additional complexity and uncertainty for intermediaries, UAC has told the Federal Treasury.
In its submission on Treasury's Corporate & Financial Services Regulation Review, UAC said the test should be kept simple and not based on information that could be "sensitive, unknown or difficult to obtain".
Exempting secondary service providers from issuing financial services guides (FSGs) to clients would have limited benefits in the insurance industry because brokers and insurers provide different services.
While UAC agrees in principle to the relief, an underwriting agency and a broker would be reluctant to enter into an agreement where one accepted responsibility for services provided by the other. The requirements should be relaxed without need for agreements. In secondary service situations the client typically has a licensed intermediary acting on its behalf. The client is adequately protected by the intermediary and would not be adversely impacted by not receiving an FSG from the secondary service provider.
Instead of defining classes of risk insurance products to avoid cross liability of licensees in relation to agents' conduct, ASIC should expand its authorised representative register to reflect particulars. It should also issue guidance on cross-liability provisions.
The industry would welcome separate training provisions for general and personal advice, but standards should not be reduced.

Bob Lee
Chairman
Underwriting Agencies Council

Mark your diaries now for the forthcoming UAC broker expos.

Friday, August 25 - Melbourne
9.30am-noon, followed by an industry lunch
Venue: Grant Hyatt, 123 Collins St, Melbourne

Friday, September 8 - Wollongong
Timing and venue to be advised.

Friday, October 27 - Albury/Wodonga
Timing and venue to be advised.

Friday, November 24 - Perth
Western Australian Cricket Association
UAC business expo 10am-12.15pm, pre-lunch drinks, 12.30pm-1pm, lunch and NIBA Divisional AGM, 1pm-3pm.
Contact: Tony Pinnegar, NIBA WA Divisional Committee Secretary, phone (08) 9429 4474

Here's a selection of photos of UAC members' exhibition stands at the Brisbane Expo in April.

Here's a selection of photos of UAC members' exhibition stands at the Sydney Expo in May.

UAC chairman Bob Lee addressed an ANZIIF regional conference on UAC's behalf. An edited version of UAC's media release follows. It was publicised in several industry trade publications, reinforcing UAC's status in the industry.

Media release

Underwriting agencies muscle in on Australian market

As the global trend to outsourcing intensifies, underwriting agencies are becoming more significant players in the Australian insurance industry, says Bob Lee, chairman of the Underwriting Agencies Council (UAC).
Mr Lee, who is also CEO of the Dexta Group, said underwriting agencies were writing specialist, niche lines for which brokers and insureds may otherwise be unable to buy affordable coverage.
He told an ANZIIF regional conference at Coffs Harbour, NSW, that underwriting agencies had developed into a real alternative in the market. They now accounted for $1.6 billion in annual premium income, or 8% of the commercial insurance market. Of that premium income, $320 million represented Lloyd's of London security, with the rest going to domestic and international insurers.
"The outsourced business model is a proven, successful formula in most industries, and insurance is no exception," Mr Lee said.
Consolidation among Australian insurers also had fuelled growth in the agencies sector. The market had dropped from 170 general insurers in 1998 to 133 by the end of 2005. Mr Lee said further consolidation was likely.
"With the top five insurers writing 80% of the business, that provides opportunities for niche, specialist players," he said.
Underwriting agencies offered experienced, skilled people; specialisation and focus; service-driven cultures; lean, mean cost bases; profitable business partnerships; transparency and professionalism with insurers and reinsurers; and were fully licensed and regulated by ASIC.
The underwriting agency concept was introduced to Australia in the 1950s, although Lloyd's coverholders have existed in the market for more than a century. There are around 150 underwriting binding facilities in Australia with the majority managed by private underwriting agencies.

This article is supplied by UAC Associate Member Gold Seal