In 2015, the AMA was formed as a result of the decline of motorcycle clubs being able to source affordable public liability insurance for their activities.
Since then, the AMA has helped many clubs to not only survive but to thrive, and is unquestionably responsible for the increase of junior and senior off road motorcycle sales in this country.
But even before the inception of the AMA, Australia was entering a crisis relating to insurance for sport and recreation activities and unfortunately, the AMA is now part of this crisis.
The Australian Government knows very well how unappetising Australia is to the insurance world as they went so far as to produce a report in December of 2021 "The Show Must Go On https://www.asbfeo.gov.au/.../DMF_Final-Report_Public.pdf...' discussing a DMF as a solution to the insurance crisis facing Australia’s amusement, leisure and recreation sector.
Even with zero public liability claims, our efforts to obtain public liability insurance has been declined by QBE, Kiln and AXA XL, which as far as insurers go, these 3 syndicates are the most specialised in motor sport and without any one of these 3 on the program then the chance of filling capacity, ie. insurers wearing the entire risk is unlikely, for what they see as a high risk activity.
As the markets have already been approached by our broker and flooded by others acting for AMA clubs and declined, if we were to approach them again through another broker, it would not change the position, ie. these decisions would not be overturned.
So all that to say, the Lloyds of London insurance market has closed the door on the AMA and we are locked out. This means the AMA is now uninsured and uninsurable for any and all activities.
There is however one solution remaining, which is to create a new entity along with a Discretionary Mutual Fund (DMF). Such a discretionary trust would be a risk sharing arrangement between members and affiliates, and would be supported by insurance.
If we had our own DMF, members and affiliates would make contributions to the fund, which would be held in a designated bank account and managed by a trustee company. The fund would exist to pay for the majority of losses.
This means the above insurance syndicate(s) would be willing to play ball as they are not bearing the entire risk, and are not in the immediate firing line of a public liability claim, but would be an additional layer of protection to cover extraordinary losses above a certain level.
So having a $2 million dollar fund could mean the above insurance syndicate(s) could provide a $20 million public liability insurance policy for high risk activities such as motorcycle sport and recreation, because we would have a $2 million dollar fund residing in front of the public liability insurance policy to "take the hit" in the event of an insurance claim.
However, this DMF to the value of $2 million dollars would initially need to be funded by members and affiliates or investors or through a loan from industry or others that want to ensure that competition and an alternative to MA exists in this country.
Ongoing maintenance of the fund would most likely be achieved through affiliation fees and or other levies or fees. In simplified terms, this fund would be your own insurance company and you would be contributing to its continued success.
We will produce a poll shortly to help determine if members, affiliates and industry want to travel this path as this whole process of setting up a DMF, a new entity and the sourcing of supporting insurance could easily take 6 months or more.
You can also help by communicating with local bike shops, importers, manufacturers and related businesses, inviting them to be a part of a solution that gives you and them ownership of your own fund and certainty of the future of motorcycling in this country.
In the meantime, all motorcyclists and the motorcycle industry must come together so we can lobby for laws that cap sport and recreation related insurance claims in Australia. Without this change, Australia will forever be unattractive to the insurance world. New Zealand has this, why can't we?
Another update will follow shortly to outline our obligations to members and affiliates during this difficult time.
Kind regards
The AMA Team.
Original Post: https://www.facebook.com/AMAClubs.Com.Au/posts/pfbid0JoWt6jF8maVo6bHB6NtowqLUR4cm9QZmLd36k5kTFADrBWCkjX2kCBMdbEAMyJ8Dl