Not long after Andrew Hall took the reins at the Insurance Council of Australia (ICA), he asked his former colleague Kylie Macfarlane to come on board to help establish a new strategy for the organisation. And the rest, as they say, is history.
Macfarlane joined ICA as chief operating officer in January 2021 after an extensive career in banking and other financial services organisations.
Her previous role was general manager of corporate responsibility at the Commonwealth Bank of Australia (CBA). There she had reported to Andrew Hall who was the executive general manager of corporate affairs. before joining the ICA.
A common background
Both Hall and Macfarlane worked at CBA during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services.
“We learnt so much, particularly from a corporate affairs perspective, and then we had to consider how we could right size that for a peak body, versus a large domestic bank, and that's been a really interesting process,” Macfarlane says.
Macfarlane, who studied economics at university, had always worked in large organisations including Colonial First State, Bankers Trust and AMP. She had also been a non-executive director of Greater Bank and Commonwealth Bank Group Super.
She says going from CBA, where she worked for over 17 years and which had around 50,000 employees, to ICA with 40 staff members was interesting.
“When you have only 40 people, you can't have bureaucracy. You must be lean. You must execute. You must ensure the organisation is governed properly and is efficient, effective and impactful.
“I enjoy the intimacy of ICA and love that I’ve become a jack-of-all-trades in my role as COO. I have such a diverse role and I am actively learning all the time,” she says.
Macfarlane leads ICA’s operational capabilities and its strategic work. She also works with the ICA board to ensure that the areas ICA focuses on add value to the general insurance industry and its consumers.
Her role oversees HR, finance and ICA’s environmental and social policy initiatives. She also heads data, IT and extreme weather response teams.
“Overall, I also get a lot of satisfaction out of our work supporting communities after an extreme weather event. I see it as a real privilege to be able to go into communities to support them when they are their most vulnerable,” she says.
Macfarlane adds that ICA is very focused on transitioning itself into a globally recognised peak body and supporting its members by advocating for the policies they and their customers require for an efficient and effective insurance system in Australia. “It has been incredibly fascinating,” she says.
“For example, I think we've gone from strength to strength in environment policy and the recent Deloitte report, titled The New Benchmark for Catastrophe Preparedness in Australia, gives us seven recommendations to build on that capability even more.”
The report, commissioned by the ICA and released at the end of October, reports on the operations of eight insurers. Together they received around 99 per cent of all home and contents, motor and small business claims related to the floods that affected northern New South Wales and south-east Queensland in February and March 2022, known in the industry as Cat 221.
Insurers' response to 2022 floods
In August, the government announced a parliamentary inquiry into insurer responses to Cat 221. It will focus on areas such as land use planning, affordability of coverage, supply chain issues, labour shortages, claims handling, and dispute resolution processes. A final report will be handed down during the third quarter of 2024.
Macfarlane notes: “So much of our focus now is on ensuring that we are working with government and the regulators and that we are reflecting on our role as an industry when extreme weather events happen.
"We are looking at how we support customers and communities to recover. I think the Deloitte report is an incredible piece of work that will help the industry to continue to build on its capability when extreme weather events occur.”
Of her achievements since joining ICA, Macfarlane is most proud of the report she spearheaded, Climate Change Roadmap Towards a Net-Zero and Resilient Future.
It charts a path for how insurers can achieve net zero in their own operations and claims supply chains. It also sets recommended targets for their investments and underwriting.
“The first anniversary of the launch of this road map report has just passed and we're about to release the second edition so it's an active piece of work,” says Macfarlane.
“I think it's been a real game changer. From here, continuing to elevate and build our capability around extreme weather responses so that we are seen as global leaders in this area is a real area of focus for me, as is working with the industry to understand what our workforce will look like in the future and how we become the employment industry of choice.”
Building insurance talent
Macfarlane observes that a lot of people don’t think about general insurance as a career path, yet, when they get into it, they love it.
"They see that the industry not only adds value to their professional careers but also to their sense of purpose and enjoyment," she says.
“I don't think we've talked about that enough as an industry and that's a real focus for us now. We're looking to launch our talent roadmap in 2024 which will speak to these issues.”
Macfarlane adds that when she talks about talent, she is not just talking about people who are coming out of university.
“It's about people of all ages and geographies around Australia who can train up to become claims handlers or work in a call centre. I am talking about how we function as an ecosystem to support Australians when they need it most.”
She believes that overcoming the talent challenges of the industry requires changing people's perception of what they think insurance is.
“Insurance is about giving people hope. It is about protecting them from adversity and supporting them to rebuild their lives when unexpected events happen,” she says.
“I guess it's about changing the dialogue around what insurance is and how it benefits our communities and our economy and why you should want to be a part of it.”
Narrowing the protection gap
Macfarlane reports that ICA is also very focused on the protection gap at present.
“That involves a conversation around the affordability and availability of insurance, how we ensure that Australians have access to insurance and that there are appropriate levels of insurance to protect their assets.
“Another area of focus is ensuring that we have the right regulatory settings in place to ensure that the industry can innovate and design products and services that are appropriate for our customers.
“It is all about allowing our customers to have access to the protection that they need and to do so in an environment where innovation is expected and rewarded as opposed to an environment that is burdened by regulation.”
Macfarlane will be part of the panel at ANZIIF’s General Insurance Breakfast on 6 December 2023 in Sydney. The theme for this year's event is "Climate Change, Catastrophe and the Effect on a Hard Market".