One thing about our team is that they are pretty committed, not only to Real Insurance, but also to people around them. Our team helped out with serving some lunch to people in our local community recently. Thank you to our team! You guys are great.
Some local press that came from it:
Norwest based business, Real Insurance, will make Christmas come early for the residents of Hopetoun Village in Castle Hill by serving a delicious lunch on Monday November 23.
Six volunteers from Real Insurance will be on hand to serve the guests and clean up afterwards on what promises to be a gourmet day for all involved.
Roger Grobler, CEO of Real Insurance says: “Over the past year, Real has experienced great success and it is time to start giving something back to the communities that have helped us to grow.
“This is the first of a series of ‘Real Needs’ initiatives that we will be undertaking in various communities over the coming months. They are simply about our staff caring for people and the company has come to the table by providing those who volunteer with a days paid leave.
“For the Hopetoun lunch we have six Real Insurance volunteers and I would like to thank Tami Turner, Suzanne Zerafa, Aaron Heger, Adele Franks, Ann Roi and Kathleen Sheehan who volunteered their time to serve lunch to the residents of Hopetoun.”
Hopetoun Village is operated by Anglican Retirement Villages (ARV) and is set on the eastern boundary of almost 120 acres of beautifully landscaped gardens in Castle Hill. It offers a safe and relaxing atmosphere within a caring Christian community.
Paul Poleweski, Hopetoun Village manager says: “We are delighted to see the staff from Real Insurance giving something back to the senior members of our community. Over 50 people will attend between the ages of 65-99 years.
“At Hopetoun Village we pride ourselves on providing people with an opportunity to enjoy really good times without having to worry about maintaining a property, cleaning gutters and mowing lawns. This is a very active and vibrant community. A community within which people are really enjoying their golden years.”
The ARV has many Villages across Sydney and numerous volunteering opportunities available. All those interested in volunteering should call Leanne Martin, Volunteer Coordinator on 02 9421 5446.
Posted by Rebecca Sendt at 9:26 AM
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Which companies and institutions do you need to trust the most? I would guess airlines, your children’s school and insurance companies. In fact, you need to trust your insurance company a LOT more than your bank. When something goes wrong (your house burns down, you crash into the proverbial ferrari or at worst you die), you need to rely on your insurer to be there to pay out the financial loss. That is big trust.
And yet, many people would not think of trust when they think about their insurance company. In fact, they think of distrust. They think of claims being denied. They think of a fight with the insurance company to get the claims paid. Is this a fair assessment? I think not.
In looking at the question of trust and insurance, we need to look at three things:
1. What is the purpose of insurance, and how does it work?
2. Why does the perception of mistrust exist in the first place?
3. How good or bad is it really? Should I trust my insurance company?
How does insurance work?
The original social purpose of insurance is a community of people that each pay a little bit of money into a pool, and when something bad happens to a few of the people, the pool helps them to get back onto their feet. Over time, private institutions (insurance companies) have taken the role of administering these pools, and reaching into their own pockets when the money in the pool dries up and there is still claims to pay. In Australia insurance companies like Real Insurance are regulated by the Australian Prudential Regulatory Authority (APRA). APRA makes sure that insurance companies are well managed, and that they have enough capital to pay claims even when the pool of premiums are not enough. Australia has a very strong financial system, and insurance companies are part of that strong system.
So we have strong insurance companies in Australia. How does an insurance company work? Simplistically an insurance company charges premiums in return for covering you for things that can go wrong. When those things go wrong, insurance companies pay out financial compensation in order to get you back on your feet. Other than claims insurance companies need to cover their costs with the premiums. And insurance companies like car insurers typically have very small margins (profit) which are also covered by the premium. Insurers need to be large in order to have the scale to make money at all, and in years where Australia has Victoria bush fires and multiple storms in Queensland, some insurers make losses instead of profits.
Perception of mistrust?
Policyholders can be broken up into three categories:
1. People who want insurance. This is by far the largest category.
2. People who want insurance, but who would be less than honest at claiming if the opportunity presents itself. So for example, claiming extra for that Playstation 3 they always wanted.
3. Professional criminals, who go out to defraud insurance companies with clever schemes and plans. This is obviously a small group of people, but they cost all of us (policyholders included) big money.
Insurers do their best to make sure the people in group 1 get the best possible service, and get paid out as soon as possible. Insurers do however also need to make sure the people in group 2 are not allowed to over-claim (which is illegal). Insurers actively try to avoid group 3, but do not always succeed.
This is a difficult balance to strike. If an insurance company has no controls and just pays out on every claim, the people in groups 2 and 3 will take advantage to such an extent that the insurer will go out of business. If all insurance companies let groups 2 and 3 claim freely, the cost of insurance will go through the roof.
On the other hand, most people take out insurance to take out insurance, and not to steal. It is unfair to treat these people (by far the largest group) like criminals on account of groups 2 and 3.
How good or bad is it really?
So do insurers treat people like criminals? How difficult is it really to claim? Here are some facts:
In Australia a very consumer friendly, independent, free process exist to dispute claim decisions by insurance companies. It is the Financial Ombudsman Service (FOS). If you are unhappy about a claims decision, you can appeal for free to the FOS. Decisions made by the FOS are very consumer friendly.
Looking at FOS statistics: For Real Insurance 1 in every 570 claimants dispute the claims decision. Of those, the IOS determines that in 3 of the 4 cases the Real Insurance decision was fair. What does that mean?
It means the likelihood of a claims decision being made that is unfair, is very low indeed. In fact, we only get it wrong (by independent assessment) 1 in every 2,280 claims.
Most insurance companies (and certainly Real Insurance) are not out to catch you out. Insurance companies are in the business of paying claims and restoring people’s lives to what they were prior to the loss. Our core purpose at Real Insurance is to protect the quality of people’s lives.
Real Insurance is part of the Hollard Insurance Group. Hollard is an APRA authorised insurer. For more details see APRA.
Posted by Roger Grobler at 11:46 AM
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At Real Insurance we also have an internal blog for our team. The following blog post had such a positive response that I thought it is worthwhile to repeat here.
Trust
I am in trouble with quite a number of people for not updating the blog regularly. I am grateful for that. It would be much worse if it just stayed un-updated with nobody even noticing.
I have been meaning to write this blog entry for a long time. It is a very important subject to me personally, and I hope I do it justice.
What does it mean to trust someone? Who do you trust?
Typically when we think of trust, we think of people we know, and we think of their honesty or integrity. Trust goes a bit further than just that though. I may for example trust my wife more than anyone else, but would I trust her to perform surgery on me? Never.
So what does that mean? Trust must be about more than just character or integrity. It must also be about ability. So if my wife was a surgeon (i.e. she had the capability to perform surgery on me), plus I trusted her integrity and character, I would trust her to perform surgery on me.
I trust her with a lot of things, like my children. Why? Because I trust her integrity, character, but also her ability to be an amazing mother.
Why is trust so important?
Trust means confidence. It means that when we deal with one another, we do not have all the friction of managing the distrust. If I trust someone and they say something slightly wrong, I trust that they meant the right thing. If I distrust someone, they may say entirely the right thing, but because of my distrust I think they mean something sinister. If I trust the people that work around me, and they trust me, then we will do things faster and significantly better than a team that do not trust each other. The principle applies to any relationship, work or private.
So for someone to trust me, what does it take?
Trust can be broken into two components: Character and Ability.
Character is the traditional thing that people think of when they think of trust. But it is useful to look at character just a bit further. Character can further be broken up into Integrity and Intent.
Integrity is your roots. It is not always visible, but it is always there. People with strong integrity do the right thing even when other people are not watching, and when it is very difficult to. Integrity means honesty with courage. People with poor integrity will always find it difficult to build trust.
Intent is your motive or your plan. There is a really good story that illustrates it:
A husband and wife were driving interstate. The wife was driving and the husband sleeping in the back of the car. The wife got tired and asked if he could take over the driving. They swapped places. As she was about to get into the back of the car she remembered she left something on the front seat. She closed the back door. Her husband, who was already behind the steering wheel, assumed the slamming door meant she got in, and he drove off, leaving her by the side of the road.
Another driver traveling in the opposite direction saw this happening. He immediately assumed a case of domestic abuse, with a husband abandoning his wife on the side of the road. He called the police. The police picked up the wife, who immediately said that her husband drove off unwittingly. Not for one moment did she even think he did it maliciously, because she has been married to him for 30 years, and she trusted his intent implicitly. The husband on the other hand was quite confused getting a call on his mobile phone from the police, asking where his wife is. He answered "in the car with me". Much to his surprise the police man handed the mobile phone to his wife.
In this story, something happened which looked to the outsider like something completely different to what really happened. The wife saw it for what it is, because she trusted her husband's intent.
How many times has one of your colleagues or team mates said something and you took it the wrong way because you did not trust their intent? They may have said something completely innocently, but you took it the wrong way. This has happened to all of us. And distrust makes it a lot worse.
The second leg of Trust is Ability. And ability again can be explained by Capabilities and Results.
Capabilities are easy to understand. It is the ability and talent to do what needs to get done. My wife (even though I know she has the talent) never studied to become a surgeon. So she does not have the skills and knowledge to perform surgery, and therefore not the capability.
Results is what gives you credibility. Results are the past performance where you proved to people you can do the job. You can do the job and you can do it well. Who are you going to trust more? The surgeon that has the perfect track record and that has been recommended to you by a few people, or the surgeon that lost his license due to malpractice, or a bad set of results?
Building trust
At a personal level trust is incredibly important in all your relationships. Not only at work, but also in your personal life. The higher the levels of trust, the more fulfilling and productive your relationships are going to be with those around you.
Trust is not like falling in love. You have control over it. The good news is that you can improve and grow the extent to which people trust you. And the more people trust you, the more they will behave in a way that engenders trust, so that you will end up trusting them more.
Act with high integrity. Always. It takes acting with integrity consistently over a long time to build trust. It takes a single instance of not acting with integrity to destroy trust.
Declare your intent. Make sure people know what your plan is, so that they don't see one thing and experience another. Check your intent. Are you being selfish, or selfless?
Build your capabilities. Focus on your strengths. Become better and better.
Produce results. Consistently.
Real Insurance
Now taking all of that at a personal level, and apply it to our business. Trust is incredibly important for Real Insurance. We will not thrive if people do not trust us.
I don't want to make this post longer than it already is, and will write some more about trust in Real in a next post.
In the mean time, please share some thoughts with me on how we can act as a company to create trust amongst ourselves and with our customers. I will include feedback received in the next post.
The thoughts above are based on an amazing book called "The Speed of Trust", by Stephen M Covey. I highly recommend it.
Posted by Roger Grobler at 7:29 AM
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A geeky guy (he says he is a science teacher) made a compelling short video. Watch it. It is humble, compelling, contains very little hot air (except when he explodes gas in a bottle), and makes you think.
Your thoughts?
Posted by Roger Grobler at 10:00 AM
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I am delighted to announce that Clive Mendes joined Real Insurance as our brand new Chief Operating Officer. Clive and his family (Astrid his wife, and his twin baby daughters Fabian and Francesca) moved all the way from Berlin to join our team.
Clive is an international insurance veteran and former CEO of Royal Insurance’s Italian operation and Group Strategy Director of Royal & Sun Alliance.
I am very please that we found someone of Clive’s experience and calibre. So successful was Clive’s role in setting up the Royal Insurance operation in Italy that the Italian super brand has been written up as a case study in Marketbusters, a Harvard Business School text book. Clive’s next job is to get Real written up in book!
Some more about Clive: At 23 he was the youngest country manager in the history of the Royal Group when he was appointed to a general manager role in the Bahrain office. He later went on to manage the Lisbon office. Clive says that for the first time in a very long time he is actually conducting insurance in English!
Clive says: “Real Insurance is not unlike the Royal operation in Italy in its early days. It is growing rapidly, has some very innovative and ground breaking products and for a company its age, it is already quite advanced and sophisticated in its thinking across every department.
“My goal is to help the Real Insurance team become a truly stand-out business to which customers faithfully and happily bond and which is respected by its peers and society in general for world-class performance, operating excellence as well as leadership and innovation across the business.”
Clive studied Languages (Arabic, Spanish and Portuguese) at Glasgow University, Business Administration at Edinburgh University and a BA in Music from the Open University. He was born in Jamaica and has lived in the UK, Spain, Portugal, Bahrain, Germany and Italy. He speaks seven languages! - Arabic, Spanish, Portuguese, Italian, French, German and English.
He also composes music.
Clive joins a strong Real Insurance team, which means the best is yet to come!
Posted by Roger Grobler at 2:40 PM
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Magda Walczak, who is on our Real team, attended a breakfast recently where someone from Zappos spoke. She blogged about it, and it is a worthwhile read.
The original post is
here.
If you’re gonna fail, fail fast
Everyone has heard about Zappos phenomenal company culture, which helps Zappos live up to its reputation for having excellent customer service. Yesterday I had the opportunity to attend a briefing with the head of Marketing at Zappos, which inspired the following golden nuggets of wisdom and give a bit of insight as to what makes Zappos click.
Focus
Zappos didn’t enter the market thinking “let’s be the best online shoe store” because that’s too limiting as a business. They started with “let’s be best at customer service.” Now that Zappos is expanding, it’s easy for them to retain their core competency of customer service excellence while adding other product lines like clothes. What does your company focus on? If you succeed at the thing you want to be good at, what comes next? Can you take it to the next level or is it limiting your potential for future growth? Are you focusing on the right thing?
If you’re gonna fail, fail fast
Zappos performed several failed experiments such as selling consumer electronics (margins were too low to allow them to retain their high level of customer service) or international shipping (costs were unsustainable). Each time, they learned their lesson quickly so that they can move on and from their mistake and focus on things that are working well, thus getting rid of distractions and limiting costs. Does your company let things go at the right time or do people’s egos let bad initiatives linger on?
Loyalty – take care of your customers
While new customers and growth are important, don’t forget who made you successful in the first place. Retain your existing customers and keep them happy and they’ll tell their friends. How much does your company care about retention versus new business acquisition?
Start with culture and values
Culture starts at the top with company leadership. Usually the CEO’s personal values are in alignment with the overall company values. The CEO will probably hire upper management whose values also match. As companies grow, companies sometimes forego cultural fit in favour of recruiting more people, faster. This could have irreversible repercussions. The sooner you recognise the importance of company culture in recruitment, the better off the company will be. Does your company cultivate the common thread of culture and values and use it to its advantage?
Transparency and trust
At Zappos all employees have access to company data like sales figures, financial information, etc. Most companies would see that as a risk for leaking sensitive information out to the public. But Zappos employees self select. By the time they apply to work at Zappos they know what kind of company it is and they identify with it. Half the screening process during recruitment is for cultural fit. Employees are offered $2000 to leave Zappos upon completion of their probation period. By the time someone is an employee, Zappos is confident they’ve got the right person on board, someone they can trust. Does doing something like this at your company send shivers down your spine? How many of your employees would you trust with sensitive data? Do you have the right people (people you trust) working for you?
No sales or discounts
Zappos doesn’t do discounts or sales. The theory goes that if you discount something once, people won’t pay full price for it ever again. This doesn’t apply to everyone, but if you can get away with never discounting your product, why not?
Don’t overpromise and underdeliver
An example used by Zappos was their experiment with overnight shipping. Due to their volumes and arrangements with shipping companies, they are able to offer overnight shipping on all orders. Since they don’t have control over the whole value chain of the shipping process, they don’t offer overnight shipping. If there’s a snowstorm and the shipping company’s planes can’t take off, then Zappos won’t be able to keep their promise to their customer. Instead, they promise standard delivery times, but they surprise a lot of customers with overnight shipping. They’re under-promising and over-delivering instead of the other way around. It’s not about doing everything for the customer. It’s about setting expectations and meeting them. Does your company have a lot of disappointed customers? How many of them are upset because their expectations were not set correctly?
Posted by Roger Grobler at 7:49 AM
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I found the following image in Arthur Alston's "
Stuhf" blog.
Sad but true in many companies. Especially insurance companies. "Not invented here".
Posted by Roger Grobler at 6:17 PM
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I came across an interesting article comparing US health insurance to car insurance. The premise is that if car insurance worked like health insurance it would not work at all. Because it would mean that your insurance would have to pay for new tyres, services, maybe even petrol. Car insurance fortunately does not work that way, and that is why it is affordable and why it works.
The article is reproduced below if you are interested. The original link is
here.
Opinion
Why can't health insurance be more like auto insurance?
If insurance paid for every oil change and engine failure, we'd have an autocare crisis, too.
By Zach Krajacic
from the August 5, 2009 edition
BUFFALO, N.Y. - Imagine how much automobile insurance would cost if it paid for all expenses associated with owning an automobile – oil changes, engine failures, worn-out tires, brakes, rust, and so on. The number of people who couldn't afford car insurance would rise dramatically, and we would have a car insurance crisis in America.
That is the situation with healthcare. As health plans increasingly pay for almost every service or procedure, ameliorate our every discomfort, and succumb to every cultural whim and fad, the price of insurance continues to rise.
Health plans are paying for every imaginable benefit – while automobile insurers are not – because of both consumer demand and state mandates.
The demand for additional healthcare benefits is greater than for additional automobile insurance benefits because many people feel entitled to have access to every possible healthcare service. The costs of additional benefits are not always clear to consumers; thus, many people perceive the benefits to be "free." In response to consumer demand, health plans sometimes expand coverage on their own. In other cases, they are forced by politicians running for reelection to cover additional services or procedures.
To make health insurance more affordable, state governments should stop mandating additional benefits and rescind all of their previous mandates. In addition, both private and public insurers (such as Medicare) should agree to pay for only costly and essential medical services and procedures (similar to the way they banded together to pledge to reduce $2 trillion in healthcare expenses a few months ago).
Under the system I am proposing, health insurance would pay for emergencies and urgent care, diagnostic tests and X-rays, medically necessary surgery, hospitalization, therapy, and any other critical services that few people could afford to pay out of their own pockets. Individuals would pay for routine, discretionary, and elective services – such as doctor visits, acupuncture, marriage counseling – on their own.
This type of system – which has not yet been tried – would lower healthcare costs and make insurance more affordable for everyone, especially the uninsured, by reducing the number of healthcare services that are used. When the use of services goes up, health insurers must raise premiums to pay for the increase in expenses. This makes it more expensive for insured people to keep their health coverage, while also making it more expensive for uninsured people to purchase coverage.
Insurance is intended to be a pooling of people's money to pay for large, unexpected expenses – not for every expense that is incurred. In other words, it is supposed to be a safety net for catastrophic events.
Yet many Americans go to the doctor for all kinds of trivial ailments, because their insurance pays for it. True, many people want this type of coverage, but that is because they do not understand the long-term cost implications. If Americans want to keep the current healthcare system sustainable (and it appears they do), then they need to take on more financial responsibility for their healthcare. People who choose to visit the doctor for the sniffles should pay for it themselves rather than making everyone else pay for it. If they did, the use of services – and thus the cost of healthcare – would go down.
If we can budget for our phone, electric, cable, and gas bills, as well as for unexpected household and automobile expenses, then we can budget for routine healthcare services. This would require some families to forgo the purchase of a plasma TV, but it would make health insurance more affordable.
In addition, most health plans even cover lifestyle choices that have been sold as medical conditions by lobbyists, pharmaceutical and medical companies, politicians, the media, and pop culture. Some of these covered services – such as cosmetic procedures, birth-control pills, and abortion – do not even address a diagnosis. (Contrary to popular belief, pregnancy is not a malady.) If there is no medical condition, then health insurance should not be paying for it.
By shouldering a greater burden of their healthcare costs, Americans would probably eat more healthily, exercise more, quit smoking, and lead healthier and happier lives. A healthier population would use fewer medical services, which would lower healthcare costs and premiums.
When it comes to healthcare, we should not confuse luxury with necessity. By transforming health insurance into a system that simply pays for essential medical services and procedures, more Americans would be able to afford insurance – and there would be far fewer uninsured Americans.
Zach Krajacic is a writer in Buffalo, N.Y.
Posted by Roger Grobler at 10:16 AM
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Last night I attended the
ANZIF Annual Award dinner. ANZIF stands for Australian and New Zealand Institute of Finance and Insurance. The evening opened with a striking and moving video showing the Victoria Fires and the floods and cyclones we have experienced over the last year. It showed the moving images and videos of people that have lost not only homes and possessions, but loved ones. It was striking sitting at a black tie gala event, and the evening opens up with what can only be described as raw human tragedy.
The point of the video is that the insurance industry steps in when bad things happen, and I felt proud sitting there knowing that we played our part in getting people back on their feet after those events. It also made me wonder why people go uninsured, or underinsured, when the relative cost of being properly insured is low, compared to the suffering that ensues if you are not adequately covered.
A number of years ago NRMA had TV advertising that showed similar footage: Cyclones, fires, mayhem, destruction. I wonder if it worked. What was fascinating in an intellectual sense, is that our new business volumes spiked immediately after the Vic Fires and the floods. The more actual images showed on the news, the more new insurance clients we got. The news prompted people to act and get home insurance. That is one good thing that came from the tragedies, although it did not fix the problem.
I am fascinated by the horrific pictures on cigarette boxes. It is difficult to imagine someone still lighting up after taking out a cigarette from a box with horror images on it. It will be good to know whether the images work or not.
I found a worthwhile
video about shock advertising. It shows some examples of shock advertising and discusses the ethics surrounding it. Should insurance companies employ more shock advertising? Should we show more footage of tragedy in our advertising, as opposed to talking about how much you can save or features and benefits?
The video clip shows advertising against Meth use in Montana in the US. The advertising is horrific. It is mini horror movies. But the stats are incredible. Montana went from #5 state in Meth use to #39 in 2 years. The advertising worked.
Is shock advertising the answer to Australia’s under- and un-insurance problem?
I wonder.
Here are two examples of the Montana Meth project:
Posted by Roger Grobler at 10:48 PM
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