Factors that impact the cost of Professional Indemnity Insurance
- What your professional activities are
- How long have you been in business
- How many employees you have
- How much does your business turn over in revenue
- How much exposure do you have to key accounts
- How many claims (if any) have you had in the past
The list goes on.
So if you have the luxury of choice, how do you actually decide who to go with?
First off, speak to your broker. They have a wealth of knowledge of the who’s who of Insurance companies and the specialists in their fields. Additionally, brokers aren’t the insurer themselves so they can actually help if a claim process ever arises. This gives them great anecdotal insight into things like process and ease during the claims process. A valuable insight you can just find online.
After the cost of the policy, the valuable insights from your broker, we asked ourselves, what else could be considered when buying Professional indemnity insurance.
With the emergence of choice and responsible decision making from businesses, we decided to compare 10 of the top Professional Indemnity Insurance companies based on 3 factors that aren’t just related to the dollars and cents. We have researched long and hard to help give you a better understanding of the business behind the policy and help you make your next purchase, is a well educated one.
How big are they?
How big an organisation is can give you insight into everything from their financial security to the service you may receive. We will hunt down as much data as we can to give you an understanding of how big the business is behind the policy.
Who actually owns them?
From private enterprise to large multinationals. Who is actually behind the business? We will do our best to give you a better understanding of where your money is going.
3. Who actually owns them?
Tried and tested or newer to the market? How many years in the market can mean a world of difference.
Not everything is an exact science when you head out into the world of qualitative outcomes so we are going to do our best to give you as much information as we can. Our mission is to help you make the best decision possible. We have used everything we can find to collate the below from LinkedIn to shareholder announcements.
We will approach every insurer from factors 1 – 3 and then summarise accordingly. The order in which we have collated below is purely alphabetically based on their name from A – B.
AIG or American International Group
How big are they?
Short answer, humongous.
Publicly listed on the NYSE with a current market capitalization of over 20 Billion US Dollars at the time we wrote this report. That, quickly, easily puts them straight into the humongous category. As per their annual report to shareholders, as of 31st December 2019 they had 49,600 employee’s and operate in over 80 countries worldwide.
Currently, they are ranked the 17th largest insurance company in the world based on their total non-banking assets.
Who actually owns them?
They are publicly listed and traded meaning anyone can technically take some level of ownership of AIG. Given they are listed on the NYSE they have a very strong American presence. Their full name is American International Group which gives you a bit of insight into their past as well.
How long have they been in business?
AIG was founded in 1919 by an American in Shanghai, China. They have been in the Australian Market since 1957.
Allianz Australia
How big are they?
There must be some correlation of Insurance Companies starting with A and being really big because Allianz is REALLY BIG. Humongous even on our scale. Listed on the German stock exchange, at the time of this report they had a market capitalization of over 65 Billion Euros. Employing nearly 150,000 employees around the world and operating in over 70 countries. All of this makes Allianz humongous.
Currently, they are ranked as the second biggest insurance company in the world based on their total non-banking assets.
Who actually owns them?
They are publicly listed and traded meaning anyone can technically take some level of ownership of AIG. Given they are listed on the NYSE they have a very strong American presence. Their full name is American International Group which gives you a bit of insight into their past as well.
How long have they been in business?
AIG was founded in 1919 by an American in Shanghai, China. They have been in the Australian Market since 1957.
Berkley Insurance Australia
How big are they?
Berkley’s Australian operation looks to employ around 60 people (based on LinkedIn data) however their American owners are listed on the NYSE under stock code WRB and currently, at the time of this report have a market capitalization of around 10 Billion USD. They own and run 53 Berkley companies around the world and they are currently a Fortune 500 company. While not as big as the likes of Allianz or AIG, they are very big themselves.
Who actually owns them?
As mentioned above, they are owned by W. R. Berkley Corporation which is again, listed on the NYSE. Thus, making the ownership public. In saying this, their founder and still current Executive Chairman is the current major Shareholder. At the time of this report, he had 37,804,800 shares currently being traded at $54 USD…
Additionally, the major shareholders and largely international institutional investors.
How long have they been in business?
Berkley Insurance Australia was founded in 2007 however, W. R. Berkley Corporation was founded 1967 in America.
Brooklyn Underwriting
How big are they?
Like many of the Companies in this list, Brooklyn is owned by another overseas entity. Brooklyn itself is a decent sized organisation but if we looked at the parent company, things escalate.
Brooklyn Underwriting in terms of headcount is of modest proportions. Based on Linkedin they have between 11 – 50 employees with 28 currently identifying themselves as employees of the firm.
Then if you look at AXA, you have the largest insurer in the world. Employing over 125,000 people with revenues over 100 billion Euros.
Brooklyn Underwriting is considered a speciality agency operating out of offices in Sydney, Brisbane and Melbourne.
Who actually owns them?
Like many of the Companies in this list, Brooklyn is owned by another overseas entity. Brooklyn itself is a decent sized organisation but if we looked at the parent company, things escalate.
Brooklyn Underwriting in terms of headcount is of modest proportions. Based on Linkedin they have between 11 – 50 employees with 28 currently identifying themselves as employees of the firm.
Then if you look at AXA, you have the largest insurer in the world. Employing over 125,000 people with revenues over 100 billion Euros.
Brooklyn Underwriting is considered a speciality agency operating out of offices in Sydney, Brisbane and Melbourne.
How long have they been in business?
From what we can find, they have been operating in the Australian market since 2004. It’s parent company AXA was founded in France in 1816.
CGU Insurance
How big are they?
CGU currently has a network of over 1000 intermediaries, over 4000 staff and 75 branches around Australia. They are the largest General Insurer in Australia. That makes them very big.
In turn, CGU is owned by IAG (Insurance Australia Group) which is listed on the ASX under IAG with a current market capitalization of over 14 Billion AUD. That makes their parent, company humongous.
Who actually owns them?
As mentioned above, CGU is owned by IAG or Insurance Australia Group which is currently publicly listed on the Australian stock exchange. Meaning, anyone can take some level of ownership in the organisation.
How long have they been in business?
Long story short, the brand CGU was founded in Australia in 1998.
CHUBB
How big are they?
It is beginning to be a theme. Chubbs Australian operations are owned by International super power and Zurich based (while being listed on the NYSE) CHUBB LIMITED. Currently valued at a market capitalization of over 50 Billion USD.
The Australian outfit employs over 800 staff based out of offices in Sydney, Brisbane, Melbourne, North Sydney, Adelaide and Perth.
Who actually owns them?
As mentioned above, Chubb is owned by it’s Swiss/American partner company Chubb Limited. Publicly listed on the NYSE under the stock code CB.
How long have they been in business?
Due to acquisitions within the Australian Market they have technically been around for over 100 years locally however, from what we can find the business was registered under their current structure in 2000.
DUAL Professional Indemnity Insurance
How big are they?
On their website they claim to insure over 30,000 Professional Indemnity Insurance Policy holders every year. So, if that is the case, that’s pretty big! As in most cases, Dual are big however once you factor in who owns them (Hyperion Insurance) they are really big.
As per their own data, they employ over 120 people in Australia with offices in Sydney, Melbourne, Perth and Brisbane. They consider themselves a true SME insurer and are Lloyds of London’s largest intermediated coverholder in Australia.
Duals worldwide footprint claims to be the World’s largest independent underwriting agency, employing more than 600.
Who actually owns them?
Short answer, Hyperion Insurance Group.
Long answer; Hyperion Insurance Group is an international (English based) insurance intermediary group. Under the Hyperion Umbrella Group Entity lies insurance broking and underwriting businesses underneath one of which is Dual and thus Dual Australia.
Hyperion is over 25 years old which first opened in London. They are now in 38 territories around the world and employ over 5,000 people.
To put their size into financial context. In 2019 they had revenues of 725 MillIon Pounds, had over 300 Million Pounds in cash or cash equivalents and their earnings before interest, taxes, depreciation, and amortization were 211 Million Pounds.
They are currently privately owned and head office is in London, England.
How long have they been in business?
Dual Australia was established in 2004 and Hyperion has been around since 1994.
QBE Insurance
How big are they?
How big are they?
Really big. Humongous even. QBE is Australia’s second largest after IAG or Insurance Australia Group (we covered IAG off above). Their yearly revenues are circa 11 Billion AUD, they have approximately 40 Billion AUD of assets under management and insure just about anything. They have a current market capitalisation of around 11 Billion AUD at the time of this article and employ over 12,000 people. They have employees in over 27 countries and are one of the worlds largest general insurance.
So, basically, they are really, really, really, big.
Who actually owns them?
In the instance of QBE, QBE is the owning entity. Unlike many other insurance companies that provide their Professional Indemnity Insurance under differently named arms of the business, QBE operates as QBE.
QBE is an Australian publicly listed company and is traded under the ASX code QBE. Given they are publicly listed, techinaly anyone can take some level of ownership in QBE however in common fashion, their top shareholders and mostly large corporations and investment firms. For example, as we type this HSBC’s Australian branch currently owns over 35% of the company’s shares followed by JP Morgan owning over 20%.
So, while it is an Australian listed organisation, their profits go everywhere.
How long have they been in business?
QBE was founded in Townsville (of all places) by two Scottish migrants in 1886. Since then through natural growth and acquisitions, they have grown to be one of the largest general insurers in the world.
Vero Insurance
How big are they?
VERO is big. It should come as no surprise, they are owned by an even bigger international entity however, VERO in their own right are a very large insurer. As per LinkedIn, VERO has around 500 employees in Australia and provides insurance products for Business, Car/Vehicle and Home Insurance.
Suncorp who owns them are humongous. So big even, they are Australia’s Largest General Insurer.
Who actually owns them?
Short answer, Suncorp.
Long answer; This is a very long story that we will keep as brief as possible. They are currently owned by AAI which inturn is Suncorp Metway. Suncorp is an Australian Insurance, Finance and Banking Organization based out of Brisbane. They are publicly listed on the ASX under the code ‘SUN’. Currently they have a market capitalization of around 11 Billion AUD. They are one of Australia’s Mid Sized banks and Australia’s Largest General Insurer.
Being publicly traded, anyone can take a stake however they are a bit of a mirror image of QBE with their top two shareholders being HSBC (28%) and JP Morgan (19%). So, their profits are spread far and wide.
How long have they been in business?
This is a tough one. Due to the million different name changes, entity changes and structural changes, it is a bit of a mess. The VERO website claims roots back to 1833 however you can have a look at their timeline and make your own judgement here.
The closest thing we can find is that VERO as it is today was founded in 2003.
Zurich
How big are they?
Humoungeos. Zurich’s Australian based activities are owned by the Swiss based Zurchish Insurance Group AG which is one of the worlds largest organisations.
Internationally they have around 54,000 employees operating in over 210 Countries and Territories. They have a current market capitalization of approximately 43 Billion and annual revenues of nearly 50 Billion.
While they do provide a significant amount of Professional Indemnity Insurance policies, they are even bigger in life insurance as of 2019 due to the acquisition of OnePath Life, they become one of Australia’s largest life insurers.
Who actually owns them?
Zurich’s operations in Australia are owned by the holding company and founding organisation Zurich Insurance Group which is a Swiss Insurance Company.
They are publicly listed on the Swiss Stock Exchange under code ‘ZURN’. GIven their size and the nature of public entities like Zurich, while anyone can own them, they are mostly owned by large corporations.
How long have they been in business?
Zurich in Switzerland was founded in 1872 however their Australian presence isn’t quite as old.
They started as Commonwealth General Assurance Corporation or CGA was founded in Australia in 1920 however they became part of the Zurich family in 1961.
Conclusion
Having a deeper look at 10 of Australia’s top Insurance companies we found a few themes reappearing.
They are nearly always owned by someone else. No matter what name they trade under, when you take a closer look under the hood you find a corporate ownership structure that nearly always ends in a parent or holding company.
Insurance is big business. Like, really big business. Once you go down the rabbit warren of ownership you find that most Professional INdemnity Insurance providers are, or are owned by some of the worlds largest organisations. Many times, publicly traded companies and it’s hard to tell where their profits are really going.
Given the nature of the industry and the providers being big business, it makes sense to speak to a broker. Brokers deal with these organisations every single day and know what they are like to deal with when it matters. When you then factor in the ever changing risk environment and the fickle nature of insurers appetties consulting a broker is a must.