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Insurance

Wesfarmers completed the sale of its insurance businesses in June 2014.  Prior to this, Wesfarmers Insurance operated in the general insurance and financial services sector providing underwriting and broking solutions.  

Until June 2014, Wesfarmers Insurance provided underwriting and broking solutions to corporates, small-to-medium sized businesses, not-for-profit organisations and individuals across Australia, New Zealand and the United Kingdom. With more than 4,000 employees, our revenue this year was $2.1 billion.  As of June 2014, the insurance underwriting, insurance broking and premium funding operations have been sold and transitioned to new owners.

Due to the change in ownership, sustainability data for the Insurance division that would have had an immaterial impact on Group data has not been recorded this year.

Material issues

Prior to divestment our insurance businesses focused on six key areas to improve our sustainability:

  • Effectively responding to catastrophe events
  • Continuing to provide ongoing training and development for our people 
  • Continuing to create a safe and diverse workplace
  • Ensuring our businesses have a positive impact on the communities where we operate 
  • Contributing to the insurance industry through policy development and regulatory programs 
  • Managing the transition to new ownership smoothly with regard to all our stakeholders

Responding to catastrophe events

Following the earthquake in Christchurch in February 2012, Lumley in New Zealand continued its extensive program to support communities in the affected areas through prompt processing of claims and the re-building program.  As at 30 June 2014, Lumley had completed the payment of 75 per cent of total claims (66 per cent domestic and 91 per cent commercial) which exceeded the industry average of 68 per cent (54 per cent domestic and 79 per cent commercial).

75 per cent of total NZ earthquake claims paid

 

Providing training and development for our people

An ongoing series of WILD (Wesfarmers Insurance Leadership Development) leadership development programs were held throughout Australia and New Zealand for more than 80 emerging and experienced leaders during the year.

In Australian underwriting, the business implemented a new Learning Management System (LMS) designed to provide staff with a more effective platform to store, track and utilise learning content.  The LMS covered over 110 compliance, induction, product and underwriting modules, and as at 30 June 2014, over 360 scheduled offerings of instructor-led sessions across leadership, safety, sales, customer service and creating an inclusive workplace were delivered.

In our broking operations, OAMPS became the first broker in Australia to provide its people with open access to the online learning resources of National Insurance Brokers Association, the peak industry body, launched in February 2014.

Creating a safe and diverse workplace

Following the launch of an enhanced health and safety program in the previous year, the division was successful in achieving its safety stretch target with a 16 per cent improvement in Total Recordable Injury Frequency Rate (TRIFR) for the year. The division reported a TRIFR of 4.1 against the prior year's 4.9. Key strategies driving this improvement included the delivery of health & safety leadership training across the division, the development of office ergonomics standards, the launch of the iSAFE framework to all staff and the implementation and monitoring of minimum building standards and building management policies for specified catastrophe events.

During the year, four Quarterly Women in Leadership Forums were run across Australia and New Zealand driving further awareness and harnessing support across more than 260 leaders across the division. In addition, the launch of local Women in Leadership Networks commenced in November 2013 enabling local networking between emerging and established leaders to take place. Senior women across the division implemented the Women in Leadership events with executive sponsorship and the support of local leaders.  

TRIFR reduced from 4.9 to 4.1

Safety Incidents

chart data indicator
2014   4.1
2013   4.9
2012   7.1
2011   2.5
2010   3.6

 

Positive impact on the communities where we operate

Wesfarmers Insurance continued to have a positive impact on the local communities where it operated. In OAMPS Australia, more than $140,000 was raised for the Make-a-Wish Foundation and team members participated in the Ballarat Cycle Classic which OAMPS sponsored for the sixth year. This included the Horsham branch raising $5,000 in a trivia night and the Adelaide branch raising $1,000 through sponsorship of their teams in a triathalon. 

In Australian underwriting, WFI again supported rural and regional charities including the Mates 500 relay. Other parts of the business undertook fundraising activity supporting the Wayside Chapel, Cancer Council and Movember, along with a $10,000 contribution made to Mission Australia by Lumley Insurance in place of Christmas gifts to brokers. In Lumley New Zealand, teams participated in Earth Hour, cooked dinner for families at Ronald McDonald House in Auckland, hosted a Breast Cancer Foundation breakfast and supported staff members who were actively involved in their local communities.

In Crombie Lockwood New Zealand, almost $20,000 was raised for a range of activities including golf days for the Malaghan Institute and the Cancer Society.

$140,000 raised for Make-a-Wish Foundation

 

 

Contributing to the insurance industry

We continued close engagement with the Insurance Council of Australia (ICA) by providing submissions to the draft Prudential Practice Guide CPG 220 - risk management, Key facts sheet, Regulatory efficiency initiatives, Victorian Fire Service Levy Monitor Act guidelines and the Insurance Contracts Amendment Act 2013 – changes to the duty of disclosure. In addition, the team contributed to the development of the General Insurance Code of Practice, launched by the ICA in July 2014.

Effectively managing transition to new owners

In transitioning the insurance businesses to their new owners, we have taken into account the interests of the various stakeholders of the businesses.

Employees across the division received regular communications from leaders during the sale process when milestones occurred, such as achievement of regulatory approvals, and to address frequently asked questions on their future. Employees in broking, premium funding and underwriting were transitioned to new owners on equivalent terms and conditions with minimal disruption to their working arrangements. Internal communications were carefully transitioned to new owners to help employees feel a sense of continuity.

In the lead up to the sale of the underwriting operations to IAG, team leaders at all levels were offered the opportunity to participate in 'Leading Change' sessions designed to equip leaders with the skills and knowledge to confidently and positively influence and manage team members through change. In addition, many people had the opportunity to attend sessions focused on self-awareness and maintaining resilience and motivation levels through change.

As part of the sale, the division developed and continues to execute transitional service arrangements to ensure continuity of internal and external service delivery to the businesses while people, systems and processes are separated from Wesfarmers and integrated with the new owners. This has resulted in little or no disruption to the service received by customers of the businesses during the transition.