Lion is known as one of Australasia's leading beverage and food companies. The company also manufactures some of Australia and New Zealand's favourite milk, juice, yoghurt, cheese and soy beverages. They employ nearly 7,000 people and invest heavily in their human resources.

One of the company's most successful strategies is its focus on relationships – between the company and its many stakeholders.

This case study highlights the importance of leadership and investment in stakeholder relationships across a number of touchpoints with the business.

Read this exciting new case study at http://www.afrbiz.com.au/case-studies/lion-leadership-diversity-and-the-importance-of-great-people.html

Insurance is a key part of the nation’s economy, and is critical for managing risk within our businesses and communities. Assessing risk accurately is critical to insurance’s value proposition and provides substantial benefits to society at large. NRMA Insurance and CGU are committed to raising public awareness of the importance of protecting assets adequately against risks, including from natural disasters, to minimise their economic and social impact. An important part of this objective is to positively impact individual, organisational and government behaviour so that we can prepare for and respond appropriately to extreme weather events – and build safer and more resilient communities.

http://www.afrbiz.com.au/case-studies/insurance-and-weather-in-australia.html

Australians may have to pay $30 a year for daily mail delivery or face a less frequent service.  Recently, Australia Post chairman John Stanhope said a user-pays postal system was a viable option after the company's letter operations ­suffered a $218 million loss last year with letter volumes falling by more than 25% from 2008.  Under a user-pays model, residents would pay a yearly fee in addition to the stamp price, which increased from 60¢ to 70¢ in March. Alternatively, they could opt not to pay the fee and switch to a cheaper three day a week mail delivery system.  Fears that mail volumes could completely disappear within the next decade would put the iconic role of the ‘postie’ in jeopardy.

Read Australia Post’s ‘Building the logistics of a nation’ case study here.

http://www.afrbiz.com.au/case-studies/australia-post-building-the-logistics-of-a-nation.html

 An authoritative report or guide helping readers to understand an issue, solve a problem, or make a decision. White papers are used in two main spheres: government and business-to-business marketing.

On 20 June 2013, the Australian Business Roundtable for Disaster Resilience and Safer Communities launched a White Paper, prepared by Deloitte Access Economics, that details a more sustainable and comprehensive approach to managing natural disasters. For more information, go to australianbusinessroundtable.com.au.

Underwriting involves measuring risk exposure and determining the premium that needs to be charged to insure that risk. The information used to evaluate the risk will depend upon the type of coverage involved. 

Capable of being maintained at a steady level without depleting financial, community, or natural resources.

An insurer who sells policies to customers through intermediaries, such as brokers, agents, motor dealerships and financial institutions. 

Insurance and weather in Australia

This Case Study discusses the concept of risk management and how insurance is vital in managing business, economic and societal risk. It also examines how our communities can be made safer and more resilient to natural disasters.

As a result of reading this Case Study, students should be able to:

• Explain what insurance is and how it works 
• Describe the concept of risk management
• Understand the effects of natural disasters on Australia's economy, businesses and society 
• Discuss how communities can use preventative measures to increase resilience and manage risk

Introduction

NRMA Insurance and CGU Insurance are part of Insurance Australia Group (IAG) and offer personal and business insurance products in Australia.

Insurance and why it’s important

Insurance is about a group of people in a community sharing risk.  A large number of people pay a small amount of money (known as a premium) into an insurance ‘pool’ to cover for any losses they may sustain through unforeseen circumstances.

Natural disasters and extreme weather events

Australia has suffered some of the world's largest natural disasters.  Over the past five years, floods, bushfires, cyclones and hailstorms have cost billions of dollars to private property and public infrastructure. 

Impact of natural disasters on wellbeing

Much of the focus of responses to natural disasters usually centres on the cost of physical damage to property. But the impact on an individual and community’s wellbeing is of even greater concern.

Making Australian communities safer and more resilient to natural disasters

Prevention is always preferable to cure. To achieve this, we need to identify ways to implement resilient and sustainable economic, social and environmental outcomes to safeguard our future.

Conclusion

Insurance is a key part of the nation’s economy, and is critical for managing risk within our businesses and communities.

To download this case study as a free pdf, click the button below:

Introduction

NRMA Insurance and CGU Insurance are part of Insurance Australia Group (IAG) and offer personal and business insurance products in Australia. NRMA Insurance have been operating for 88 years and offer a range of personal insurance products such as comprehensive motor insurance, home and contents insurance, comprehensive third party insurance, home security, lifestyle and leisure insurance and business insurance. They manage the insurance needs of millions of customers in New South Wales, Queensland, Australian Capital Territory and Tasmania.

CGU Insurance is one of Australia’s largest intermediary-based insurers and is supported by a nationwide network of insurance advisers and business partners. CGU has been protecting the Australian way of life for 160 years by providing a comprehensive range of market-leading products that encompass commercial, rural, personal, and workers’ compensation insurance needs.

Insurance and why it's important

Insurance is about a group of people in a community sharing risk.  A large number of people pay a small amount of money (known as a premium) into an insurance ‘pool’ to cover for any losses they may sustain through unforeseen circumstances. Most people own something valuable, such as a car, house, furniture, or a business. They want to protect these valuables, along with less tangible but equally important things, like their health or ability to work.

If a person’s property is damaged, stolen or destroyed, or if someone suffers an injury, the ‘pool’ of money is used to help pay for repairs, replacement or compensation for injury.

Insurance is all about peace of mind. Deciding to take out insurance cover means that people don’t need to pay the full cost of the loss or damage when an event occurs. When the worst does happen, insurers step in to help people and businesses quickly get back on their feet, minimising disruption and financial burden.  This is an example of risk management, identifying and assessing possible threats and taking steps to mitigate potential negative outcomes, either by reducing the likelihood of these events occurring, or planning effective ways of dealing with them if they do. Risk management is an important part of business management, as well as being something that we all do in everyday life.

Insurance premiums are calculated based upon the level of risk. This is known as a ‘price signal’. The price signal makes people aware that they are exposed to a significant risk and encourages people to take necessary steps to reduce their exposure.

Insurance is a key part of Australia’s economic infrastructure, underpinning much of our national economic activity, from building a skyscraper to purchasing a family car.

Insurance also plays an important role in making people and businesses more aware of the risks they face.

Understanding your exposure to natural disasters is an important part of making Australian communities and businesses safer and more resilient to natural disasters.  Whilst we can’t control the weather, there are many things we can do to minimise the economic and social impact of natural disasters.

Natural disasters and extreme weather events

Australia has suffered some of the world's largest natural disasters.  Over the past five years, floods, bushfires, cyclones and hailstorms have cost billions of dollars to private property and public infrastructure.  From the Black Saturday bushfires in Victoria to Cyclone Oswald in Queensland, natural disasters have also claimed many lives and directly affected hundreds of thousands of people.

The cost of reconstruction and recovery after a natural disaster is considerable. For example, the Australian and Queensland governments have incurred over $7.5 billion in reconstruction and recovery costs following the 2010-11 Queensland floods and Cyclone Yasi. A recent White Paper, launched by the Australian Business Roundtable for Disaster Resilience & Safer Communities found that in 2012 alone the cost of disasters to the Australian economy was more than $6 billion. These costs are forecast to double by 2030 and rise to an average of $23 billion per year by 2050.

Insurance companies have paid out more than $3.7 billion to policyholders for these same events. Even before the events of the last five years Australia’s annual average insured losses due to natural perils was estimated at around $1 billion. As well as the personal losses suffered by people in natural disasters, such as the destruction of homes, vehicles and possessions, they can also have a significant effect on Australian business.  Anyone who runs a business knows that an event that causes business interruption can be a major setback, and in some cases, cause immediate financial loss and lead to irreparable damage.  A business interruption can include loss of stock, damage to premises and the inability to carry out normal business practice due to logistical constraints such as telephones not working or roads being closed. This in turn can lead to job losses and businesses closing, further affecting the economy.  However, businesses who have taken out business interruption insurance cover may help to pay ongoing costs and protect profit margins until the business is back on its feet and back at its profit level before the interruption.

The following graph is a good example of just how much it costs to cover loss and damage from extreme weather events:

Forecast total economic cost of natural disasters 2011-2050:

Understanding weather patterns, their potential impact, and steps that can be taken to reduce the risks they pose is a critical part of the work undertaken by the insurance industry. Insurers are responsible for underwriting weather-related catastrophes by calculating, pricing and spreading insurance risk in order to meet claims when they arise. Extreme weather events have a significant impact on the insurance industry in a number of ways such as insured losses, staff resources, claims costs and business interruption. Insurers also have an interest in calculating the potential impact of weather so they can reduce the risk exposure faced by business and the community. 

Impact of natural disasters on wellbeing

Much of the focus of responses to natural disasters usually centres on the cost of physical damage to property. But the impact on an individual and community’s wellbeing is of even greater concern. Natural disasters cause significant disruption to every-day life, often resulting in post-traumatic stress and even loss of life. The loss of loved ones, the sight of flames engulfing homes or people being rescued from the roof of a house as flood waters rise can be devastating. These are enormously stressful events which can turn lives upside down and take away our sense of safety and security. 

After a catastrophic event, it is very common for people impacted to experience a range of emotions including shock, guilt, sadness and anger. The shock of disaster loss can be reduced through a range of personal strategies, including psychological support, ‘planning activities and appropriate insurance cover. Seeking out support to help cope with traumatic stress is an important part of the recovery process. There are a number of organisations who make available information on dealing with the effects of natural disaster.  Some example supported services are provided below: 

Headspace	http://www.headspace.org.au/
Reachout	http://au.reachout.com/
Mindhealth Connect	http://www.mindhealthconnect.org.au/
Lifeline	http://www.lifeline.org.au/
Healthdirect	http://www.healthdirect.org.au/
Australian Psychological Association	http://www.psychology.org.au/

Making Australian communities safer and more resilient to natural disasters

Prevention is always preferable to cure. To achieve this, we need to identify ways to implement resilient and sustainable economic, social and environmental outcomes to safeguard our future. 

Building safer and more resilient communities requires a collective approach from government, business and the community. All  of us have  a responsibility to protect communities so we can reduce the number of lives lost and limit damage to property. Implementing measures to safeguard the future will also  ensure a faster return to work and limit the number of days when businesses are closed. Greater resilience also reduces risk exposure and the cost of insurance claims. This, in turn, helps to keep the cost of insurance down.

Research shows that the budgetary impact of responding to and recovering from natural disasters could be significantly reduced through carefully considered pre-disaster investment.  One dollar spent on mitigation can save at least two dollars in recovery costs.  Federal government spending on mitigation initiatives represents around only 3% of what it spends on post-disaster recovery and reconstruction. An example of investment is providing in the following table:

*Funding provided to States and Territories for disaster resilience initiatives under the National Partnership for Natural Disaster Resilience

**Funding provided to States and Territories for recovery and reconstruction under the Natural Disaster Relief and Recovery Arrangements.

Source: Australian Government Budgets.

The following key areas of adaptation will significantly enhance Australia’s resilience to natural disasters:

• Planning and zoning decisions - the risk of natural disasters must be a determinant of where new properties are built;
• Digital evaluation mapping - communities require access to information about  flood and bushfire danger zones;
• Investing in mitigation infrastructure - putting measures in place to protect and minimise the effects of extreme weather events in populated areas;
• Strengthening building standards - houses need to be built to withstand severe weather conditions;
• Education programs - educating the community about ways they can prepare for and protect themselves from the effects of extreme weather.

Flood

The most effective safeguard against floods is accurate flood data to ensure houses are not built in flood zones. Municipal councils are responsible for the maintenance of flood maps, which can be used to help residents understand the risks associated with living in flood-prone areas. Council flood maps are the best source of information because they know their local area better than anyone else and have access to detailed and specific data.

Insurers use flood maps and data to determine the price of insurance premiums.  The price of insurance (premium) depends on the risks involved and flood risk is usually targeted to specific geographic areas. In addition, flood damage is expensive to fix. So if homes or businesses are located in a flood prone area they will be more expensive to insure.

Flood levees are the most effective and widely used protection against floods. A levee is a structure designed to prevent or control flooding. These man-made structures are used to divert water from a flood-prone area so that communities can be protected.

Bushfires

The nature of bushfires makes them difficult to prevent. Every house in a bushfire zone must have a plan that can be readily activated. There are additional precautions that can be taken in high risk bushfire areas to reduce the risks. These include:  keeping foliage under control; ensuring gutters are clear of debris; planting trees that are less likely to ignite (due to lower oil content); keeping firewood and mulch away from the house; and installing sprinkler systems and ember screens.

When a fire approaches, more extreme measures need to be taken. These include: filling gutters with water; moving flammable items such as outdoor furniture, doormats, hanging baskets away from the house; hosing down the outside of the house; and ensuring the valves on gas cylinders are not facing the house (Source: NSW Rural Fire Service).

Conclusion

Insurance is a key part of the nation’s economy, and is critical for managing risk within our businesses and communities. Assessing risk accurately is critical to insurance’s value proposition and provides substantial benefits to society at large. NRMA Insurance and CGU are committed to raising public awareness of the importance of protecting assets adequately against risks, including from natural disasters, to minimise their economic and social impact. An important part of this objective is to positively impact individual, organisational and government behavior so that we can prepare for and respond appropriately to extreme weather events – and build safer and more resilient communities.

Corporate social responsibility describes how companies manage their day-to-day business processes to produce a positive impact on society and the environment and can include specifically-designed programs that ‘give back’ to the community.

Toyota Motor Corporation Public Affairs Manager Katarina Persic shared how the global car giant develops partnerships and makes decisions when it comes to community and social responsibility at the Not for Profit and Corporate Partnerships conference in Sydney

Toyota describes its efforts as ‘social contribution’ and believes employee engagement and involvement is crucial in developing effective CSR strategy.

Toyota focuses on three main objectives: environment, traffic safety and education – all areas that impact the organisation’s business - as well as giving back to local communities generally.

In 2003, the company developed its Community Spirit Program. This focused on capacity building of Not for Profit partners, delivering long term sustainable benefits, supporting the business objectives of all parties and encouraged employee and dealership participation where possible. However, the program still lacked real impact.

"I knew something was missing and that was employee engagement," Persic said. Evaluation within the business showed Persic’s hunch to be correct and the Toyota Community Foundation was created in 2011.

"I recruited 12 employees from the company to become 'champions' and have input into what the community foundation will do," she said.

From this, Toyota established a workplace giving program in relation to disaster relief where the company matched employee donations. Toyota also established a community and employee fund which gives grants to community groups via their local government partnerships.

"Local activity must align with the global vision," she said.

"Corporate philanthropy and community investment for Toyota Australia must balance the three stakeholder needs."

Toyota's stakeholder needs for corporate philanthropy include the needs of the local community, employees of Toyota and the shareholders of Toyota in Japan.

"[Head office] tell us [Public affairs managers] to find Not for Profits that you believe are doing good and build their capacity," she said. Toyota concentrates on NFPs that are established and have clear and proven goals, rather than start-ups.