Defence

Defence Support Group

The Defence Insurance Office saves Defence $37 million in insurance premiums

The Defence Insurance Office is responsible for managing Defence’s insurance administration, including the provision of technical advice in Defence and claims management services on behalf of the Department. John Fletcher explains.

Defence has insurance policies with Comcover for such things as property loss or destruction, directors’ and officers’ liability, motor vehicle accidents, third party injury and third party property damage. The office also provides a range of insurance-related services including access to industry specialists and advisors for project-specific advice.

Since the relocation of the then-Claims Management Office from Watsonia to Canberra in 2004, the office has implemented a change management program aimed at refocusing the efforts on a corporate view of Defence’s insurance needs, enhancing its services and streamlining many related processes.

In 2006-07, the office has achieved additional savings of $8.2 million on insurance premiums for policy year 2006-07. This builds on the recurrent savings achieved in previous policy years; $6 million in 2005-06 and $23 million in 2004-05. Over the last three years, the insurance office has negotiated premium savings that now total over $37 million each year.

These savings have been achieved as a result of the insurance office presenting a positive image of Defence’s risk profile in negotiations with Comcover Insurance Services and its insurance underwriters in the United Kingdom. In a softening insurance market, the Defence Insurance Office has been able to negotiate reduced insurance premiums that reflect Defence’s risk profile, insurance claims history and risk management policy.

With the Comcover Insurance Policy Renewal process just around the corner, the insurance office is busy reviewing Defence’s insurance policies in preparation for policy year 2007-08. The office aims to identify, quantify, manage and reduce insurable risk, championing an insurance and operational risk management culture in Defence.

Defence Insurance Office website

The insurance office website provides Defence personnel with a user friendly ‘self help’ insurance service and is designed to be the first point of contact for claims and general insurance queries at http://intranet.defence.gov.au/DSG/sites/Insurance/.

Claims management

The insurance office claims management team facilitates the management of around 2000 claims each year. This involves receiving notification of claims or potential claims against Defence, liaising with Comcover Member Services to manage the claims and obtaining all the necessary documents for on-forwarding to Comcover Member Services for final determination of the claims outcome. In many instances, this involves the appointment of specialist advisers, including loss adjusters and legal advisers, who assist Defence determine its legal liabilities and appropriate compensation to claimants.

Early notification of all incidents that could potentially result in a claim against the Commonwealth now or in the future is crucial to effective claim management processes in Defence. Assembling all relevant facts soon after the incident will greatly assist both Defence and claimants in determining liability in relation to a matter. Our ability to anticipate and report potential claims to our insurer assists Defence in convincing our insurers that our systems and process for identifying insurable risks and managing subsequent claims are in good order. Defence often receives claims several months or even years after an incident that are almost always problematic; so such delays should be avoided wherever possible.

The efficient and effective management of (often sensitive) claims made against the Defence is critical to maintaining our reputation as a good corporate citizen, particularly where there are high levels of interaction with local communities around bases and training facilities.

Recently, the insurance office introduced an electronic motor vehicle claims management process for reporting motor vehicle accidents and damage to Defence-owned vehicles. This streamlined process came into effect on 21 August 2006 (DEFGRAM 425/06 refers). Now, as soon as a motor vehicle accident or damage to a Defence-owned vehicle is reported, the office and our insurance provider are notified at the same time and a repairer is organised immediately. This new process has substantially reduced repair turn around times and the administrative burden on all involved.

Risk profiling

The insurance office is working with Comcover Member Services to complete an insurance risk profiling exercise for Defence. The objective of the risk profiling activity is to identify and analyse insurable risk exposures in order to ensure adequate insurance cover is in place to protect Defence. The initial focus will be on creating a risk profile for two of the insurance policies that Defence holds with Comcover, being the property policy that covers all insurable assets, such as buildings, contents and infrastructure, and the public liability policy, over the next six months. Insurance office staff and representatives from Comcover Member Services will be conducting a series of base visits and structured interviews with relevant regional/base representatives in order to gain the necessary information to create the risk profile. Once this profile is completed it is intended that this exercise will be extended to include the other six insurance policies that Defence currently holds.

Education campaign

In early 2007, the insurance office will commence a program of insurance-related seminars and presentations to provide insurance awareness and training to Defence staff. This education program will provide stakeholders with valuable insurance information.

The Defence Insurance Office is here to assist all Defence personnel with general insurance, risk management or claim-related queries. We are a friendly, helpful and committed team which is dedicated to, and takes pride in, delivering great customer service.

John Fletcher is Director, Defence Insurance Office, DSG.

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