As a result of the number of representations from members and supporters, HBAG initiated moves to review present insurance arrangements impacting small to medium sized home builders. This is the initial correspondence to QBE.
Marcelle Pavlov
Head of Distribution
Elders Insurance and Underwriting
Builders Warranty Business
Australia Pacific
Via email: marcelle.pavlov@qbe.com
Dear Marcelle
At its last meeting, the Home Builders Action Group [HBAG] decided to seek a review of the Indemnity Insurance arrangements as they presently impact small to medium sized builders and their clients in Western Australia. You can see HBAG here https://hbag.com.au/
HBAG is the first to acknowledge the valuable role played by the present insurer, but it is becoming increasingly clear that the notion that “one size fits all” is no longer relevant in an industry as disparate as the home building industry is in Australia. Trading conditions vary from state to state with, in Western Australia, home builders emerging from the worst trading conditions that many builders are able to recall. The result is a delicately balanced recovery now moving in the right direction but, in many cases, still handicapped by the “legacy loss making contracts” that are being subsidised from the cashflow of more recent, profitable contracts. In that position, it is essential that all of the actors in the industry (and insurance is a key element) should contribute to and not detract from or slow down the nascent recovery.
Of course, there are a number of considerations that recommend themselves:
- Would it be helpful to have a greater choice i.e. more than a single insurer;
- Are the present arrangements sufficiently flexible to cater for the differing nationwide conditions of the home building industry;
- Is there room to improve the efficiency of present insurance arrangements and benefit from a reduction in cost; and importantly in
- Western Australia’s case are present arrangements supporting and promoting the recovery of our industry.
In the first instance, HBAG has written to:
- Its members and supporters asking them to consider and advise HBAG of changes they believe will achieve the insurance environment that is optimal for their business; and to
- All members of the parliament in W.A. informing each that, in the context of the state election on 8 March, housing is a priority issue and insurance is a key and important part of a successful Housing Policy.
You may wonder why HBAG is sending you this note. Simply explained, it is because HBAG would prefer to work with you to achieve the best outcome by drawing on your experience and adding the specialised knowledge that our members have.
To that end, could you please advise, if you wish to liaise with HBAG on this review, the officer to whom we might relate.
Finally, as a matter of interest, I am attaching the recommendation HBAG media release sent to Government in respect of the Niche Living debacle. Unfortunately, in HBAG’s view, the Government chose only two of the four recommendations HBAG made. In addition to the Media Release I am attaching, HBAG made previous private recommendations along identical lines to the Minister for Commerce.
Best wishes
Yours sincerely