AFSL Responsible Manager Engagement - Cyber Insurance Underwriting Agency

Background

Power Insurance Consulting (PIC) was engaged by a specialist cyber insurance underwriting agency* seeking to establish and scale its Australian operations under an Australian Financial Services Licence (AFSL).

As a new entrant to the Australian insurance market distributing cyber insurance products through brokers nationally, the business required experienced Responsible Manager oversight to ensure its governance framework, compliance systems and operational practices aligned with the Corporations Act and ASIC regulatory expectations.

The engagement required deep insurance market expertise combined with practical regulatory knowledge to support the establishment of a compliant and scalable underwriting agency platform in Australia.

Project Scope

PIC provided Responsible Manager (RM) services supporting the licensee’s AFSL obligations across governance, compliance and operational oversight.

PIC assisted the business in establishing and maintaining a comprehensive compliance framework aligned with ASIC regulatory guidance and the general obligations of AFSL licensees. This included oversight of the development and implementation of core compliance policies covering areas such as;

• adequacy of financial and human resources,
• organisational competency,
• risk management,
• conflicts of interest management,
• breach reporting and incident escalation,
• complaints handling and dispute resolution,
• client money management,
• outsourcing governance and oversight, and
• document retention and regulatory record keeping.

Working closely with senior management, PIC provided guidance on broker distribution strategies, product governance considerations and regulatory expectations applicable to underwriting agencies distributing insurance products in Australia.

PIC’s principal, Gerry Power, also provided specialist insight on Australian cyber insurance policy wording requirements to ensure alignment with the Insurance Contracts Act 1984 (Cth) and local market expectations.

The Outcome

The engagement enabled the underwriting agency to establish a robust governance, compliance and distribution framework aligned with Australian expectations while supporting the launch and expansion of its cyber insurance operations.

As part of the AFSL application process, the underwriting agency was granted its Australian Financial Services Licence by ASIC within approximately 13 weeks, authorising the business to deal in, advise on and provide claims handling services in relation to general insurance products.

ASIC required that PIC’s principal, Gerry Power, be nominated and maintained as a Key Person and Responsible Manager under the licence, recognising his extensive industry experience and regulatory competence.

The result was a well-governed underwriting agency platform capable of scaling broker distribution while maintaining strong regulatory oversight and compliance with AFSL obligations.

* Case study references are de-identified and provided for illustrative purposes.

Insurance Broker Tender Review

Background

Power Insurance Consulting (PIC) was engaged to conduct an independent review of an insurance broker tender for a large Australian corporate* with a complex, multi-line insurance program. The client required a trusted, structured process that would support a defensible board decision and provide clear visibility of broker value, service commitments, and total cost of risk. The insurance program had been managed by the incumbent broker for more than 30 years.

Project Scope

PIC designed and managed a rigorous tender review process under a formal probity framework. The project scope included assessing the alignment between the client’s operations, including its global distribution footprint, and the insurance coverage in place. The review also included the development of a tailored evaluation methodology with weighted scoring aligned to the client’s risk profile, operational requirements, and governance expectations.

Broker submissions were assessed on a consistent, like-for-like basis across program design, service delivery, claims advocacy capability, broker renumeration, innovation, and broker capabilities.

A central focus of the review was transparent remuneration analysis. PIC identified, normalised, and compared broker fees and all forms of non-fee remuneration, including commissions and other insurer related payments. A comparable services assessment was produced to clearly distinguish services included within core broker fee from those requiring additional charges, enabling a true value for money comparison.

PIC also evaluated proposed transition arrangements, including servicing team, open claims management continuity, and insurer handover processes, to minimise operational and claims disruption in the event of a broker change. Findings were consolidated into board-ready recommendations supported by a documented decision log and a clear implementation roadmap.

The Outcome

The outcome was a rigorous, independent, fair, defensible broker selection process that enhanced the client’s understanding of their insurance program, materially improved the cost of broking services, strengthened governance, and positioned the client to achieve improved pricing and coverage at their insurance program at renewal and over the medium term.

The review resulted in the appointment of a new insurance broker rather than the long standing incumbent, demonstrating the effectiveness of a structured and independent market review process in identifying the broker best aligned to the client’s current risk profile, service expectations, and governance requirements.

*  Case study references are de-identified and provided for illustrative purposes.