Some insurance brokers are immersing themselves in particular industries more than ever before. In the process, they’re becoming specialists and more marketable to potential clients. An industry broadly described as accommodation is a current focus for Barrack Broking.
Barrack’s director Graeme Hay (pictured above), said, traditionally, this sector focused on hotels, motels and resorts. Today, Airbnb-style accommodation and other sharing platforms come under this definition.
“We also work with student accommodation providers and regional workforce accommodation owners and operators,” he said. “We think of it quite broadly.”
Brokers at a hotel and accommodation expo?
For the first time, Sydney-based Hay recently attended the Hotel + Accommodation Industry Expo in Sydney (see video below).
“My view is if we want to make a difference to the people that are involved in the accommodation industry then we really should immerse ourselves in it,” he said.
“They have a broad membership across all the traditional hotel, motel and resort-style businesses,” said Hay. “We also work closely with a company corporate Resort Brokers [Resort Brokers Australia] who are involved in the real estate side of hotels and motels changing hands.”
He said these relationships are in their early stages. At the expo, where Barrack seemed to be the only insurance industry firm present, they partnered with Resort Brokers.
“I didn’t see anyone that I knew from within the insurance industry and that may have been because the focus was very broad in terms of what was being covered at the show,” said Hay.
He said people did approach their stand to discuss insurance difficulties.
“Some also wanted to talk generally about where they were thinking about investing, so that was really good to learn about,” he said.
The expo, he said, showcased industry stakeholders’ offerings with “quite a lot of focus” on useful emerging technologies. Hay said this was one area where his insurance broking skills came into play.
How can brokers help the accommodation industry?
“Often, while these technologies are designed to perform a certain function that might be efficiencies or a customer experience being enhanced, with my risk and insurance hat on I can often identify which are good risk management tools as well,” he said. “That can actually help to minimize some of the risks that the accommodation industry would have in areas of their operations.”
The relationships his firm is building across the accommodation sector are also yielding useful information on the main insurance challenges.
“We know from speaking with the Accommodation Association that they field quite a lot of inquiries about, for example, the difficulties of obtaining insurance and the cost of insurance which have been on the increase over the last few years.”
He said a range of factors impact these insurance challenges.
“Depending on geographical location, style of accommodation and the activities that an accommodation business might provide, whether they’re a property owner or an operator of accommodation, that can also introduce risks,” said Hay.
Insuring property assets
Hay said insuring property assets is one common focus area for the range of different industry participants.
“Whether you’re a property owner or a property operator there are physical assets that need to be insured and depending on the location and the construction there are challenges around which insurers and what level of insurance that they’re prepared to offer,” he said.
From the perspective of insurers, he said the market can find it difficult to offer the accommodation industry cost-effective solutions. One issue common to many businesses, not just accommodation-related, Hay said, is a “heightened sensitivity” from insurers to natural catastrophe risks like bushfires.
He said this nat cat sensitivity is impacting a diverse range of accommodation sector businesses.
“I do feel like we see it more often [in the accommodation sector] because these can be national and international businesses exposed to all of the different things that Australia has to offer in terms of the location and the sort of natural catastrophe risk hazards that exist in different parts of the country,” said Hay.
The liability issues faced by accommodation businesses are also a shared industry concern.
“For example, when a patron or a third party comes to the site and suffers an injury or has damage – all of those things exist whether it’s a caravan park, a luxury resort, student accommodation or mining accommodation,” said Hay.
Then come the unique risks facing these different businesses within the accommodation sector.
“There are those kinds of recreational activities that are key to a caravan park operation and therefore the risks associated with them,” he said. “So water activities, hiring bikes and things like that.”
At a luxury resort, said Hay, risks could vary depending on whether there is a spa or valet parking, for example.
An industry study could be in the works
Some of these insurance complexities and possible solutions could be addressed in an upcoming study.
Hay said his brokerage has discussed with the Accommodation Association the possibility of running a study on their members’ insurance position to “try and develop a comprehensive solution for the industry.”