Perth-based business insurance specialist, Zenith Insurance Services, is a family-owned business with keen insights into a number of industry sectors that helps it arrange the most appropriate insurance programs for its clients’ businesses.
Owner and operator Kim Gilbert founded this unique niche insurance brokerage almost 20 years ago, with a small office in Western Australia, and has since built a loyal and hardworking staff base embedded in the community. Zenith’s reach now extends across the nation, with confident clients in every state and territory. The company’s service-based approach focuses on the needs of each and every client, and has resulted in Zenith becoming firmly established as a leader in providing professional broking services to niche markets. The Australian Business Executive caught up with Mr Gilbert recently to discuss becoming a family-owned business, the niche market segments that Zenith services, and the state of the Australian insurance industry as a whole.
“Zenith has been operating for just over 19 years,” Mr Gilbert explains. “We commenced in 2001, so we’ll be celebrating our twentieth anniversary next year, which is a great milestone. We are now a family-owned business.”
Zenith was started by Mr Gilbert and two other business partners Doug Bird and Mark Lynch, but over time Mr Gilbert and his wife purchased their shareholdings, and eventually became majority owners of the business.
“We now have three of our senior brokers having a small equity position in the company. Currently we have 25 direct staff, and 5 authorised representatives, and we’re very proud of the fact that approximately 25% or more of the staff have been with the company for more than 10 years, and three have been with us for 15-20 years.”
The rest of the staff have been with the company for at least five years, showing that staff retention is a key focus for the business. Mr Gilbert believes this creates a foundation for building strong relationships with clients, aiding with client retention.
“I think I’m more like a lot of insurance professionals of my age or era,” Mr Gilbert says. “We sort of fell into insurance rather than choose it as a career, which is now what we’re trying to provide for younger people.”
Mr Gilbert completed High School in the country, and was waiting to go to university to study accounting when he was lucky enough to get a job at the RAC as a claims junior front counter officer, off the back of a relative working there.
“I assisted clients to complete motor vehicle claims forms. I spent probably the first 4-5 years of my career in claims at both the RAC and then at NZI Insurance. That taught me the most valuable lesson about insurance, and that is that claims are our shop front window.”
Insurance brokers are engaged by clients to build an insurance program that specifically meets their client’s needs or requirements, and then to ensure they receive their full entitlement under their policy if they are to experience a loss.
Servicing niche markets
“Zenith focuses on commercial business insurances, predominantly for small and medium enterprises and also larger corporate clients in our specialised market segments. We have a number of key, niche market industries, which are aged care, the community and disability services sector, Aboriginal health, transport and construction.”
The largest sector that the company services is the aged care industry, where it currently provides insurance broking services to about 7-8% of Australia’s aged care providers. Zenith also services around 40% of the disability services in Australia, including 7 of the 10 largest providers in Western Australia.
“We have had a long-term association with the National Disability Services in Western Australia, the NDS is the Australian peak body for non-government disability service organisations. We assist them with training, education forums for their members, and importantly we’ve been a sponsor of the Disability Support Awards in Western Australia since 2009.”
These have been particularly important awards for the company to be involved in, as they serve as a valuable way of recognising the exceptional contribution and commitment made by the disability services workforce.
“The primary difference between Zenith and its competitors is that Zenith has always had a specific focus on clients, and by that I specifically mean we see ourselves as acting as an extension of our clients’ operations, and we are there to provide specialist broking skills to those specialised market segments. We’re not trying to be everything to everyone.”
Mr Gilbert’s view is that by having its brokers as specialists in their specific market segments, Zenith is better placed to help each company understand the unique insurance exposures of its business in a particular industry.
“Therefore, we’re able to talk to clients about their business operations,” he explains, “their funding models, their exposures, and then provide advice on how they are able to transfer some of that risk from their balance sheet to an insurers balance sheet.”
Zenith is a proud member of the Steadfast broker group. It is the largest general insurance broker network, with the largest group of underwriting agencies in Australia, as well as having operations in Asia and Europe.
“The Steadfast organisation focuses on ensuring that all member brokers are able to provide their clients with exceptional service and superior products. It’s a huge benefit for us as an organisation, and our clients.”
The bigger picture
Over the years, Mr Gilbert has learned a number of lessons that have helped him progress in the industry, foremost of which is the fundamental idea that no business can be everything to everyone.
“Today, we live in a really litigious world,” he says. “I don’t believe it is possible to understand all the risk exposures for all the businesses that operate in our community, so that is why Zenith is structured in this way so that we can focus on specific industry segments. Our brokers have an intimate knowledge of their niche market and their exposures.”
This allows Zenith to provide specific insurance products to each business. This means having an understanding of the fundamentals behind those niche industries to be able to provide the right advice and products.
“For example, with the current COVID-19 situation, the Department of Health have advised that aged care providers need to ensure that all people entering their facility are required to have a flu shot. That isn’t limited to employees and resident families but also the external service providers such as builders, plumbers, electricians etc. that we need to go onsite in the event of a claim. At the moment understanding and knowing those intricacies is vital and we need to ensure the insurers and loss adjusters understand the industry requirements.”
The insurance industry plays an enormous part in the Australian economy, with insurance brokers ensuring that both big and small businesses have the appropriate insurance in place and are able to take care of their clients claims when they occur.
Mr Gilbert thinks people underestimate how much impact the insurance industry and the broking profession has on the national economy.
“The contribution collectively made to the community is clearly being demonstrated at the moment, given the recent bushfires, floods, cyclones and hailstorms which will see billions of dollars invested into the community to help businesses and families recover following their terrible losses.
“I think the insurance industry is now under a fair amount of pressure with all the recent natural disasters and is now confronted with the issue of COVID-19 which is impacting on all businesses and individuals throughout Australia and across the globe and it will also impact on the insurance industry.”
The global impact of the pandemic could run into billions of dollars, and so the insurance industry will be called on to support the community where possible. Zenith, like most businesses, is likely to experience a significant financial impact.
“What that is, I can’t really say at the moment, I believe that the impact on our business will be delayed because, as businesses have reductions in turnover – their stock levels reduced and their wages reduce because of letting staff go – their insurance requirements will reduce, and in some cases businesses will close and therefore cancel their insurance.”
Collectively, the industry is likely to see a significant impact both from an insurers’ perspective and the broking profession, but it is likely to be another 3 to 6 months before the impact on the industry is able to be properly assessed.
“I certainly think that it will get worse before it gets better,” Mr Gilbert adds. “The insurance broking profession will probably see a degree of consolidation as a result of the impacts of COVID-19 and the impact on the market in general.
The Australian insurance market as a whole has very robust prudential requirements monitored by APRA (Australian Prudential Regulatory Authority) and therefore I think they will survive and come out the other side of this in probably better and stronger shape than other parts of the world.”
In addition to the current crisis, the recent Australian Royal Commissions into the finance sector, the aged care industry and the disability services sectors have unfortunately identified examples of sub-standard service that will need to be dealt with, which has diminished the communities trust in certain respects.
Zenith had some peripheral involvement in the Aged Care Royal Commission by assisting our clients with their submissions in response to certain questions all aged care providers were required to answer. With the assistance of our supporting insurer and their panel of legal advisors, Zenith provided our clients not only with cover for certain legal costs in relation to their submissions, but also significantly reduced costs for other legal services rendered to assist clients with their royal commission obligations.
Whilst there were particular issues identified with a small number of operators in the aged care industry the Aged Care Royal Commission can now specifically focus on how the industry can make it better in the future, how we can provide the level of care that older Australians deserve, and importantly we need to make it sustainable and affordable for Australians for the foreseeable future.”
Insurance brokers were not considered a major concern and not mentioned in the Financial Royal Commission, with the profession being recognised as being employed by its clients, with the primary focus for insurance brokers to being ensure their clients have the appropriate insurance programs in place to protect them in the event of a loss.
“As a result, there weren’t any real cases identified where general insurance broking was found wanting in the delivery of the professional services that they were engaged to do. That doesn’t mean that we’re not under the microscope. There is a review currently being undertaken in regards to conflict remuneration and whether commission paid to brokers represents a conflict remuneration.
Given brokers are always client focused with most of our insurance programs and products reviewed on an annual basis, I do not believe there is any conflict as we are always acting in our clients best interest and earn our income”
Mr Gilbert considers the insurance industry to be in reasonable shape in general, with new codes of conduct soon to be issued from both the Insurance Council of Australia and the National Insurance Brokers Association of Australia.
“Brokers are looking to make sure that we are able to continue to deliver the highest level of professional service,” Mr Gilbert concludes, “and continue to make sure that our clients are the recipients of the benefits of our professional services.”
With so many years of experience behind it, and a focus on specialising in niche market segments, Zenith is well placed to continue strongly into the future, despite current economic conditions. Find out more about Zenith Insurance Services by visiting www.zenithis.com.au.