What is happening
We recently amended our Business Pack, Office Pack and Motor Trades products to update reference from the Quarantine Act 1908 to the Biosecurity Act 2015. This implementation includes updates to customer policy documents by Supplementary Product Disclosure Statement (SPDS)/endorsement for Quotes, New Business and Renewals. New Product Disclosure Statements (PDS)/Policies incorporating this change will be issues by April 2021. This change will not impact how we manage claims and is only updating the reference to the current Act.
When was this update effective from?:
- Quotes and New Business: from 6th September 2020
- Renewals: from 17th October 2020
- Mid Term Endorsements: terms will be amended where appropriate
Where can I view details of this change?
It will automatically be applied to Quotes, New Businesses and Renewals on the dates mentioned above. It will be applied as an SPDS/endorsement on the Certificate of Insurance/Schedule. You will also be able to download this where you normally get your PDS/SPDS or Policy/endorsements on the CGU Broker Portal by 17 October 2020.
How do I get more information about this matter?
Please contact your CGU Account Partner or Underwriting Team to discuss any further questions or concerns you have.
Date published - 12/03/2021
Countrypak pricing changes
As a business, CGU regularly reviews its portfolio to ensure its policies are fit for purpose and continue to be appropriately priced to reflect the risks faced by our customers.
We write to advise you of upcoming rating changes to Domestic Building and Contents (Section 1) and Farm Property (Section 2) of our Countrypak product.
What is changing?
Customers with CGU Countrypak Insurance will begin to see increases in their annual premiums for renewals from 27 February 2021. Renewal invitations for these policies will be available 6 weeks prior to renewal date, in line with our usual business practice.
Why are these rates increasing?
There are multiple reasons for these changes, including:
- Updates to our technical pricing platform, which enables us to assess risk more accurately at a postcode level
- Increased frequency and severity of natural peril events
- Increased average claims cost and expenses
- Adjustments based on customer claims experience – including unprofitable policies with consistent high loss-ratios
What does this mean for customers?
- Each customer will see a different increase based on their risk profile.
- For majority of our Countrypak customers, the increase will be between 0-20% of the annual premium.
- Customers located in drought-declared postcodes will continue to have annual premium increases capped at 20%.
Does the Drought Assistance Package still apply?
We offered our Drought Assistance Package from Nov 2018 until Nov 2020 and are still offering a reduced premium to drought impacted areas through the application of capping for impacted policies.
CGU also continues to offer its COVID-19 customer support measures to small business customers impacted by the pandemic (the current measures have been extended until 31 March 2021) – for more information go to: www.cgu.com.au/for-brokers/coronavirus
We continue to help customers who are experiencing financial hardship through the IAG Vulnerability Support model. This includes several different options aimed at helping customers experiencing financial hardship and domestic violence.
Can I get more information about the impact to policies I manage?
Please contact your CGU Account Partner who will be able to provide you with more information on the policies you place with CGU.
Date published - 19/02/2021
What is happening
2020 had a significant impact on our industry and created the need for us to review our position on a number of topics to help better manage our risk and align to our Reinsurance Treaty. Following the review, we will be implementing changes to CGU products, for both New Business and Renewals, to clarify our position on the following topics:
1. Communicable Diseases - We are amending all products to exclude Communicable Disease. However, the exclusion has two different applications:
a) Pandemic exclusion for Casualty Classes (including in packaged products); and
b) Communicable Diseases exclusion for all other Classes.
2. Silent Cyber - We are amending the majority of products to include a Cyber exclusion.
When is this happening?
We are implementing these policy updates from March 2021 in multiple phases commencing with SME, Professional Lines, Liability and Construction & Engineering. Agri, Commercial Motor and Fleet will follow at a later date.
Note: ISR updates were originally implemented in November 2020. A further refinement will occur in March 2021.
Where can I view more details of this change?
The Silent Cyber and Communicable Diseases amendments will cover all CGU products in line with our Reinsurance Treaty. These changes will automatically be applied to Quotes, New Business and Renewals in phases from 31 March 2021 onwards. They will be issued as a Supplementary Product Disclosure Statement (SPDS) or endorsement as required by each product line. You can also view this document for a guide on how it relates to SME polices.
1. Communicable Diseases
This is a general exclusion which applies to all SME, ISR, Construction & Engineering policies, with the exception of the Liability section (where offered). This exclusion encompasses not only pandemic losses but also excludes transmissible diseases including viruses, bacteria, parasites, and other organisms. This is being made as a general exclusion to reflect our Reinsurance Treaty and for clarity that the only cover for infectious disease is under the specific infectious disease provision where offered under the Business Interruption section. The exclusion includes a write back for physical damage to insured property caused by certain specified events (i.e. we still provide storm cover for insured premises even if the premises are closed due to an outbreak of a Communicable Disease on site). As part of implementation of the Communicable Diseases exclusion we have amended our Infectious Diseases extensions within the Business Interruption sections of our policies to operate with this exclusion and reflect overall policy intent. There is a reduction in cover previously provided with key points being:
a) The only diseases we provide cover for are influenza (but not Highly Pathogenic Avian Influenza or influenza that has pandemic potential),gastroenteritis/norovirus/rotavirus or legionnaires disease
b) The overall closure by public authority extension will be subject to a maximum limit of $250K
c) A 48-hour time excess will be standard across the clause
d) We will not be liable for associated clean-up costs
The definition of Premises impacted by closure following an outbreak of a covered disease is limited to the insured situation directly owned, leased, or controlled by the insured only and there is no radius extension.
Addition of a Pandemic Exclusion on our Casualty Classes - this excludes any cover for liability as a result of a listed human disease under the Biosecurity Act or a public health emergency declared by the WHO or a pandemic or epidemic declared by the WHO or Australian Government. This aligns to our liability Treaty renewal. Presently we apply an endorsement on certain occupations to exclude some diseases under the liability policy.
2. Silent Cyber
Whilst the majority of our products do not respond to a cyber event, to clarify our intent in cover and to meet our Reinsurance Treaty requirements, we are specifically excluding loss due to a cyber event.
If you would like more information, please contact the relevant Underwriting Team or your Account Partner.
Date published - 15/03/2021
What is happening
In 2020 we established a Pricing Taskforce to proactively review our pricing processes and identify any inconsistencies with what we have promised to customers. The aim of the program is to resolve any issues and ensure that appropriate corrective action is taken.
This review identified two preliminary impacts to customers:
1. Minimum Premium disclosure, and
2. Cupping disclosure
Earlier communications advised you that a disclosure on Minimum Premiums that are applied to our Private Motor, Home and Landlords, Commercial and Farm Motor Products will now be added to ensure greater transparency on the minimum premiums we collect under certain policy sections and conditions.
We identified that some CGU customers were entitled to premium refunds as they did not receive the discount they were entitled to. Between 9th and 15th February 2021 brokers with customers impacted by this issue for current policy years, were sent a refund notification letter and a refund cheque and remittance advice to distribute to each customer.
A disclosure on Minimum Premiums that are applied in our Private Motor, Home and Landlords, Commercial and Farm Motor Products will now be added to ensure greater transparency on the minimum premiums we collect under certain policy sections and conditions. Any discounts will be applied to the policy, only to the extent any minimum premium is not reached. This means that any discount that you may be eligible for may be reduced.
Further work is underway to determine impacts to previous policy years that may result in further refunds.
When calculating renewal premiums, we apply a cupping process that limits your renewal premium from significant premium rate fluctuations.
Our policy documentation did not disclose that the cupping of premiums may result in discounts only applying to the policy to the extent any minimum cup was not reached. This has resulted in some customers not receiving the full discount they were entitled to.
We are in the process of identifying impacted customers and expect to finalise this investigation over the coming months. We will contact you once this process is complete outlining what action we are taking.
Please contact your CGU Account Partner to discuss any further questions or concerns you have.
Date published - 12/03/2021
On 18 February 2020, the Australian Securities and Investment Commission (ASIC) extended the Unfair Contract Terms (UCT) Bill to extend consumer and small business unfair contract term protections to the insurance industry. The result is that IAG/CGU, along with the broader Australian insurance industry, has been analysing our policies’ wording, identifying terms that may be deemed unfair and have been working hard to update our policies to reflect fairer terms. CGU recognises that community expectations of the insurance industry continue to evolve, and we always strive to meet those expectations.
As we progress these changes, we wanted to keep you informed on what’s happening.
When is this happening?
Due to the large number of affected products, over 500 wordings, equating to over 19,000 individual adjustments, we are implementing UCT wording changes in a phased approach:
Phase 1 - Personal Lines and Construction & Engineering is now complete
Phase 2 – SME and Agri will be effective for all products for renewals and new business 29th May 2021, excluding CountryPak and Farm Motor which are effective 12th June 2021
Phase 3 –Badged Wordings, Manufactured Wordings and Professional Risks
Fleet, Liability & ISR are in scope and currently under review
We will continually review and monitor what products will be in scope for UCT changes. Should we identify, or if the relevant legislation outlines additional products or our collateral that require updating, we will implement the necessary changes.
What do I need to know about the changes?
The changes being implemented are not aimed at changing the level or type of cover that our customers currently receive. We are making changes to the language used in the Product Disclosure Statements (PDSs) to make them clearer, more customer focused and to better reflect our current processes.
What do I need to do?
The UCT amendments will result in a new suite of PDS/Policy Wordings. If you use a PDS in your role, or communicate with customers about matters regarding a PDS’s/Policy’s Wording, such as claims, customer relations or complaints, you will need to ensure you are using the latest version sourced from the correct system such as the CGU Broker Portal.
If you would like more information, please contact your Account Partner or the relevant Underwriting Team.