Quantitative Research Study for: Golf Australia Industry Insurance Survey 2007 Final Report for Tender Prepared by: Martin Hirons Golf Australia Contact:

Quantitative Research Study for:

Golf AustraliaIndustry Insurance Survey 2007

Final Report for Tender

Prepared by: Martin Hirons

Golf Australia Contact: Alex McGillivray

February 2008

|December 2007Golf Australia – National Insurance Survey – Quantitative Report 2

OUTLINE

Background

Objectives

Methodology and Sample Profile

The Key Findings

Section 1 – Player/Member Insurance

Section 2 – Club/Business Insurance

Section 3 – Other General Data

Appendix One – The Questionnaire


Background

Golf Australia (GA) is responsible for the administration and development of Amateur golf in Australia. Under the current charter and strategic direction of management, GA wishes to ensure that the game…

• Is inclusive and accessible to all

• Has relevant branding

• Grows in terms of participation

• Develops and implements an effective industry structure

• Promotes relevant core values

• Has financial stability.

One of the key management issues for the industry continues to be Insurance coverage for club golfers. GA is currently conducting a strategic review of an industry wide insurance program that has the potential to deliver improved coverage - at a lower sustainable cost to Member States, Clubs and ultimately club members.

The review process has involved a number of stages including the creation of a working group, a review of other insurance programs, a national club survey and wide consultation across the golf industry - as well as an evaluation of possible implementation methods.

This document presents the key results from the club survey that was sent out to all member clubs in October 2007. In total, over 330 representatives from member clubs responded to the survey, representing a response rate of approximately 22% (from the 1531 member clubs). This sample size reflects a standard error of +/- 5.4%.

Any queries about the data presented in this report can be directed to Alex McGillivray at GA.


Objectives

The key objectives of this study involve the following…

• Overall…

– To provide key data that provides an overview of the current insurance issues and practices of the club market in Australia

– To inform the GA decision process in terms of an industry wide insurance product for both clubs and individual golfers and members

– To assist in the tender process for the development of a ‘nationwide’ policy

• More specifically, the objectives involve…

– Understanding the markets use and purchase of player insurance and public liability policies

– Determine the level of public liability coverage – as well as player to player cover, injury cover and equipment cover.

– Determine the penetration and use of respective insurance providers

– Understand the range of premiums paid across the spectrum of clubs and Associations

– In addition, data was collected around…

– Club/Business Insurance practices and premiums

– Club liability protection including directors and officers – as well as a range of other policies


Methodology and Sample Profile

The data presented in this document was obtained via a mail out/email survey sent to all member clubs on October 24th, 2007

In total, over 330 representatives from member clubs responded to the survey, representing a response rate of approximately 22% (from the 1531 member clubs). This sample size reflects a standard error of +/- 5.4%.

Respondents were provided with both hard copy and email formats to maximise response rates – there were no duplicate surveys received. The survey was designed by GA staff and the working panel. The sample profile is provided to highlight the club profile that responded to the survey.

SAMPLE PROFILE - CLUBS

N

# %

TOTAL 330 100

Region/Area

MetroMajor RegionalOther Regional

9739

165

321355

No. of Members

<250250-499500-9991000+

145545152

48181717

Note: Sub-samples vary due to the construction of the survey template used by GA


Key Findings - Section 1: Player/Member Insurance


Player Insurance Policy

Player Insurance Policy

Region No. Members

Total Metro Regional Other Reg <250 250-499 500-999 1000+

% % % % % % % %

Yes 55 78 54 42 37 56 71 89

No 45 22 46 58 63 44 29 11

Base: Total sampleQ1 Does your club purchase a Player Insurance policy or similar for members?

Alarmingly, just over half of clubs claim to have a player insurance policy. There are distinct patterns that emerge – metropolitan clubs are most likely to have coverage and as member numbers increase, so does the propensity of a club to have player insurance coverage.

i


Coverage of Player Public Liability

Coverage of Player Public Liability

Region No. Members


% % % % % % % %

Yes 95 96 81 97 92 100 91 96

No 5 4 19 3 8 0 9 4

Base: Have Player Insurance Policy Q3. Does the Personal player policy cover the players public liability?

Overwhelmingly the majority of clubs that have a player policy also have public liability cover for players – major regional areas are relatively weak on coverage (81%), when compared to other segments.i


Level of Public Liability Coverage

Level of Public Liability Coverage

Region No. Members


% % % % % % % %

Less than $1.0m 3 - 6 3 4 - 3 -

$1m-$1.9m 2 1 6 - 2 - 3 -

$2m-$4.9m 3 1 - 3 4 - 3 -

$5m-$9.9m 6 6 - 9 7 15 6 2

$10m-$20m 85 92 88 81 83 78 85 98

Over $20m 1 - - 3 - 7 - -

Mean $13.7m $14.2m $13.3m $13.8m $13.1m $14.6m $13.4m$14.8

m

Median $15.0m $15.0m $15.0m $15.0m $15.0m $15.0m $15.0m$15.0

m

Base: Have Player Insurance Policy Q4 If yes, what level of Public Liability under the player liability policy?

The vast majority of clubs that have a player insurance policy are covered for public liability of between $10m-$20m for the player liability policy. The smaller clubs are at greatest risk – as are those outside the metro and major regional towns. The mean coverage varies between low $13m to mid $14m.

i


Player to Player Liability

Player to Player Liability

Region No. Members


% % % % % % % %

Yes 98 100 100 94 96 96 97 100

No 2 - - 6 4 4 3 -

Base: Have Player Insurance Policy Q5. Does the Public Liability include player to player liability, (e.g. if a player hits another player?)

Player to player liability coverage is almost universal for those clubs with a player insurance policy – again smaller or more remote clubs are most at risk, although only marginally.i


Injury Coverage

Injury Coverage

Region No. Members


% % % % % % % %

Yes 97 100 100 91 92 97 97 100

No 3 - - 9 8 3 3 -

Base: Have Player Insurance Policy Q6. Does the Player policy cover injury?

Clubs under 1000 members and those outside regional centres are least likely to have injury coverage as part of their player insurance policy (the smallest clubs with less than 250 members are most vulnerable here) – although injury coverage is almost universal. The 97% represents 53% of all clubs.

i


Capital and Weekly Benefits

Capital and Weekly Benefits

Region No. Members


% % % % % % % %

Capital Benefits

• Below $50k 16 4 25 27 37 18 3 4

• $50k-$100k 75 89 60 63 50 64 91 93

• $100k plus 9 7 15 10 14 18 6 2

Weekly Benefits

• Below $250 6 2 6 10 14 9 - -

• $250-$500 83 89 75 78 75 78 93 86

• $500 plus 11 9 19 12 11 13 7 14Base: Have Player Insurance Policy Q7. What level of player injury cover does the policy provide?

The majority of the benefits sit at the mid-points – that said, smaller clubs are far more likely than the larger clubs to have $100k plus in capital benefits – while weekly benefits are more centred on the mid range of $250-$500.

i


Equipment Coverage

Equipment Coverage

Region No. Members


% % % % % % % %

Yes 81 93 90 64 65 72 94 91

No 19 7 10 36 35 28 6 9

Base: Have Player Insurance Policy Q8. Does you policy include equipment coverage i.e. golf clubs, buggies (non-motorised)?

Members of smaller clubs and those outside metro or major regional clubs are at some risk in terms of equipment coverage – up to a third of these are not covered for equipment. At the total level this represents 45% of all clubs.

i


Level of Equipment Coverage

Level of Equipment Coverage

Region No. Members


% % % % % % % %

Below $2000 6 1 11 11 15 5 6 -

$2000 - $2,999 4 1 - 7 9 - 3 -

$3000 - $4,000 28 32 33 25 12 29 41 34

$4000 plus 62 65 56 57 64 67 50 66

Base: Have Player Insurance Policy and Equipment coverageQ9. If so, what level is the equipment covered?

The majority of equipment coverage is greater than $4000 – typically metro based clubs have higher levels of coverage. That said, over a quarter (28%) of all clubs have equipment coverage between $3000 and $4000. The mean figures are from high $3000s to approximately $4500.

i


Level of Excess and Reach

Level of Excess and Reach

Region No. Members


% % % % % % % %

Excess

• Up to $100 18 13 12 30 24 14 21 15

• $101-500 54 61 41 42 30 43 59 66

• $500 plus 28 26 47 28 46 43 19 20

Australia Wide

• Yes, Australia only 94 97 94 91 92 95 94 98

• Yes Aust and overseas 1 1 - - - - - 2

• No 5 1 6 9 8 5 6 -

Base: Have Player Insurance Policy and Equipment coverageQ10. Is there an excess for any one equipment claim, if so how much (maximum occurrence)?Q11. Is the equipment coverage Australia-wide?

The excess fees are variable, with the majority (54%) sitting between $101-$500. The majority of coverage is Australia wide. i


Premium Paid

Premium Paid

Region No. Members


% % % % % % % %

Under $3.00 6 4 16 7 7 12 3 7

$3.00 - $4.99 5 - 5 12 11 8 3 -

$5.00 - $5.99 3 5 - - - - 8 2

$6.00 - $6.99 1 3 - - - - 3 2

$7.00 - $7.99 5 7 - 3 - 4 6 9

$8.00 - $9.99 10 16 5 5 2 8 6 24

$10.00 - $14.99 38 31 37 43 29 44 42 36

$15.00 - $19.99 19 19 26 17 27 16 17 13

$20.00 - $24.99 10 11 5 10 16 8 8 7

$25 plus 4 4 5 3 9 - 6 -

Mean $12.96 $13.16 $12.74 $12.74 $14.96 $11.58 $13.21 $11.39

Median $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50 $12.50

Base: Have Player Insurance Policy and equipment coverage Q12. What is the premium paid per individual player for your policy?

Premiums are spread across the pricing dynamic – the mean and medians are spread primarily between $11.50 and $13.00 – with members at smaller clubs paying a premium price for coverage. i


Key Findings - Section 2: Club/Business Insurance


Club/Business Insurance Coverage

Club/Business Insurance Coverage

Region No. Members


% % % % % % % %

Yes 88 77 95 95 77 96 100 100

No 12 23 5 5 23 4 - -

Base: Total sample Q13. Does your club have insurance?

While the majority of clubs have club or business insurance coverage, the alarming fact is that only three quarters of Metro based clubs do so – and these clubs are typically smaller clubs that have under 250 members

i


Policies Covered

Policies Covered

Region No. Members


% % % % % % % %

Director/Officer 64 92 80 49 30 75 94 100

Association 34 48 48 26 20 40 46 53

Employment Practices 54 87 67 37 23 56 82 96

Professional Indemnity 49 80 70 32 18 49 80 88

Public Liability 98 100 97 98 96 100 100 100

Voluntary Workers 85 93 83 82 73 90 94 96

Base: Have Club/Business insuranceQ15a. Does your club insure against any of the following…

There is wide variability in the type of business or club coverage taken out by these stakeholders. Public liability, voluntary workers and directors/officers being the most common options purchased. As expected larger clubs and those based in the Metro areas are more likely to have coverage across each policy type.

i


Volunteer Coaches/Co-ordinators Coverage

Volunteer Coaches/Co-ordinators Coverage

Region No. Members


% % % % % % % %

Yes, only on club premises 43 44 51 41 33 54 43 56

Yes, including outside the club 23 47 17 12 7 17 39 42

No 35 10 31 47 60 29 18 2

Base: Have Club/Business insuranceQ17. Are your volunteer coaches and/or coordinators covered under a club policy?

Two-thirds of all clubs (66%) which have a club policy have some form of coach/co-ordinator coverage. Metro clubs and those with larger memberships are more likely to have coverage than others.i


Public Liability Coverage of Development Program Participants

Public Liability Coverage of Development Program Participants

Region No. Members


% % % % % % % %

Yes, only at the club 42 45 49 40 32 48 55 50

Yes, outside the club 20 39 23 12 9 17 30 40

No 37 16 29 48 59 35 15 10

Base: Have Club/Business insuranceQ18. Does your club Public Liability policy provide cover for claims brought against participants of your development programs?

Similar patterns exist here - with Metro clubs and those with more than 500 members more likely than other segments to have coverage of development program participants.i


Public Liability Coverage of Members

Public Liability Coverage of Members

Region No. Members


% % % % % % % %

Australia Wide 34 66 32 21 18 28 46 69

On our course 45 26 41 53 51 52 40 25

No 21 9 27 25 32 20 14 6

Base: Have Club/Business insuranceQ19. Does your club Public Liability policy provide cover for claims brought against your members?

Eight in ten clubs (79%) are covered by their public liability policy for claims against members – although regional and ‘other’ clubs are less likely to be covered when compared to other segmentsi


Key Findings - Section 3: Other General Data


Club Incorporated

Club Incorporated

Region No. Members


% % % % % % % %

Yes; incorporated Association 73 59 72 80 83 76 63 48

Yes, Company Ltd 22 32 23 16 7 24 35 50

No 6 8 5 4 10 - 2 2

Base: Total sampleQ22. Is your club/venue incorporated?

Three quarters (73%) are incorporated with one in five (22%) a Company Limited by guarantee. Larger clubs and those in the Metro area are more likely to be a Company Limited by guarantee.i


Other Data

There were a range of other questions relating to background data included in the survey.

The detailed tables have been provided to GA and are available upon request.

• Just over half (51%) of all clubs make visitors ‘honorary members’ under their respective rules and constitutions

• Two thirds (67%) of clubs have non-member rounds covered under the clubs public liability policy

• A total of 57% of clubs own their course – with 43% owned by an ‘other’ interest

• Insurance payments are spread across the year – although 28% are paid in either June or July.

Documents

Quantitative Research Study for: Golf Australia Industry Insurance Survey 2007 Final Report for Tender Prepared by: Martin Hirons Golf Australia Contact: