Risk Management Service (RMS) reports that insurers have experienced significant losses from natural, catastrophic perils in our region over the past few years. Additionally, they have faced poor investment returns, increased costs of reinsurance and claims inflation.
As a result, the RMS property cover placement team experienced their most challenging Australian property renewal negotiations to date, one that has brought significantly higher premium prices, with insurers hardening terms and conditions, changing natural peril sub-limits and declining the option of premium relief for higher deductibles or excesses.
In view of the sharp rise in costs and reduced coverage for Australian entities, RMS in consultation with the Division Services Ltd Board has chosen to subsidise this year’s rate increase to Adventist entities in Australia.
Unfortunately, the rate rise will still impact our local churches. However, this significant subsidy from RMS for the July 1, 2021 to June 30, 2022 property insurance renewal will offset a large portion of the cost increase Adventist sites would have otherwise experienced.
RMS manager Jonathan Hale affirmed that the decision to subsidise the rate increase was needed to lessen the financial impact to Adventist sites already struggling with the challenges of the past few years.
“Our concern was that mission and ministry could potentially be hampered by this unprecedented rate increase,” explained Mr Hale.
“The RMS team and the board felt strongly that sharing this cost increase would ensure the Church could continue the good work it does throughout the region.”
RMS hopes that rates will return to more tolerable levels over the next 12 months, however it is recommended that leaders, treasurers and CFOs set their budgets for another potential increase for the 2022/23 property insurance renewal.
RMS is a dedicated service department of the South Pacific Division of the Seventh-day Adventist Church.
For more details visit: https://www.rms.org.au/