K63 Insurance and Superannuation Funds

Westpac ‘rips off clients’ with life insurance

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Original article by Anthony Klan
The Australian – Page: 1 & 6 : 13-Oct-17

Shine Lawyers is leading a class action against Westpac and its BankSA, St George and Bank of Melbourne subsidiaries. The legal action alleges that Westpac charges more for life insurance policies when taken out through a Westpac financial planner than through a non-Westpac planner. Janice Shaddler of Shine says the Westpac customers it is representing are feeling "incredibly let down" for having trusted their Westpac adviser to do the right thing by them. A spokesman for Westpac says it will investigate the allegations.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, BANK OF SOUTH AUSTRALIA LIMITED, ST GEORGE BANK LIMITED, BANK OF MELBOURNE LIMITED, SHINE LAWYERS, SHINE CORPORATE LIMITED – ASX SHJ, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Questions over QBE’s plan for $1b buyback

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Original article by Alice Uribe
The Australian Financial Review – Page: 19 : 4-Oct-17

QBE Insurance Group has increased its provision for natural disaster claims in 2017 to $US1.75bn ($A2.24bn), in the wake of a series of such events in Australia and abroad. The insurer has advised that this will reduce its pre-tax earnings by about $US600m. David Ellis of Morningstar and David Spotswood of Shaw & Partners suggest that QBE may have to put its share buyback on hold. QBE recently advised that it has repurchased about 5.5 per cent of its stock to date.

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE, MORNINGSTAR PTY LTD, SHAW AND PARTNERS LIMITED, UBS HOLDINGS PTY LTD, FITCH RATINGS LIMITED, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, SUNCORP GROUP LIMITED – ASX SUN, FLORIDA CITIZENS PROPERTY INSURANCE CORPORATION, CITIGROUP PTY LTD, S&P GLOBAL RATINGS

Low income earners hit hardest by fees

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Original article by Michael Roddan
The Australian – Page: 22 : 20-Sep-17

KPMG has released a report which shows that the average superannuation fund balance on retirement is 6.2 per cent lower for members who have a default life insurance policy. However, life insurance fees means the average super balance on retirement is 14 per cent lower in the case of women whose annual income is less than $A37,000. Default insurance accounted for about 50 per cent of the $A14bn worth of insurance benefits that were paid out in the three years to June 2016. The Insurance in Superannuation Working Group will release its draft code of practice on 20 September.

CORPORATES
KPMG AUSTRALIA PTY LTD, INSURANCE IN SUPERANNUATION WORKING GROUP, RICE WARNER ACTUARIES PTY LTD, RAINMAKER INFORMATION SERVICES PTY LTD, INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIA. PRODUCTIVITY COMMISSION

QBE chief out as investors revolt

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Original article by Michael Roddan
The Australian – Page: 19 & 22 : 13-Sep-17

QBE Insurance Group has advised that Pat Regan will succeed CEO John Neal in January 2018. Neal’s resignation after five years in the role follows a 25 per cent fall in the general insurer’s share price since it revealed another earnings downgrade in June. QBE has announced a total of eight such downgrades since he took the helm. Shares in QBE closed 2.5 per cent higher at $A10.50 on 12 September.

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE, VELOCITY TRADE LIMITED, INSURANCE COUNCIL OF AUSTRALIA LIMITED, AVIVA PLC

Health insurers plan cheap policies for youth

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Original article by Andrew Tillett
The Australian Financial Review – Page: 3 : 12-Sep-17

Private Healthcare Australia CEO Rachel David says the private health insurance sector struggles to attract younger members. She was commenting on a proposal that would see younger Australians offered premiums at a discounted rate, with the Federal Government having been briefed about the idea. David does not think that older policy holders would object to the idea, as having more younger members in the system helps to offset the higher cost of older members, who tend to make claims more often.

CORPORATES
PRIVATE HEALTHCARE AUSTRALIA, EVALUATE, AUSTRALIA. DEPT OF HEALTH, AUSTRALIAN LABOR PARTY

NAB’s wealth builder vows to lift the game

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Original article by Cliona O’Dowd
The Australian – Page: 21 : 12-Sep-17

Matthew Lawrance, the recently appointed CEO of the National Australia Bank-owned MLC Super, acknowledges that there is a lack of trust and confidence in the superannuation sector that industry participants need to help restore. He says the media could help in this respect, by providing more balanced coverage of the sector. Noting that perhaps no more than 20 per cent of Australians seek financial advice, Lawrance says this is an area in which MLC Super could do more work.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MLC SUPER

‘Good debt’ to underwrite Future Fund

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Original article by Andrew White
The Australian – Page: 19 & 22 : 1-Sep-17

The Future Fund has posted an annual return of 8.7 per cent for 2016-17, compared with its target return of 6.9 per cent. However, chairman Peter Costello says returns and asset values are likely to be affected by an expected rise in interest rates. He adds that the Federal Government’s decision to postpone drawdowns by five years will allow the sovereign wealth fund to cover all unfunded public sector super liabilities, which are forecast to top $A200bn in 2021. The Government will increase what Treasurer Scott Morrison labels "good" debt to fund super liabilities between 2021 and 2026.

CORPORATES
AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIA. DEPT OF THE TREASURY, UNIVERSITY OF TASMANIA, QIC LIMITED, PORT OF MELBOURNE

Health premium cuts leave age bomb

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Original article by Sean Parnell
The Australian – Page: 3 : 15-Aug-17

A growing number of Australian health insurance policies have exclusions in them, as policy holders try to reduce premium costs. Most exclusions relate to pregnancy-related services and procedures seen as relating to old age, such as hip replacements and eye surgery. Many such exclusions are agreed to when the policy holder is young, but then forgotten about until later in life. The trend towards increased policy exclusions comes as governments try to reduce the exodus of consumers from the health insurance sector.

CORPORATES
MEDIBANK PRIVATE LIMITED – ASX MPL, NIB HOLDINGS LIMITED – ASX NHF, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, FEDERAL COURT OF AUSTRALIA, AUSTRALIA. DEPT OF HEALTH, AUSTRALIA. PRIVATE HEALTH INSURANCE OMBUDSMAN, CONSUMERS’ HEALTH FORUM OF AUSTRALIA, AUSTRALIA. DEPT OF HEALTH. PRIVATE HEALTH MINISTERIAL ADVISORY COMMITTEE

Super reforms blasted for favouring banks

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Original article by James Frost
The Australian Financial Review – Page: 16 : 14-Aug-17

Industry Super Australia contends that proposed superannuation legislation favours retail funds at the expense of those that ISA represents. ISA is of the view that the legislation will impose less scrutiny on bank-owned funds than not-for-profit funds, even though it states that the latter sector has outperformed bank-owned funds in recent years. ISA also contends that the proposed legislation will increase compliance costs and is in conflict with the Corporations Act.

CORPORATES
INDUSTRY SUPER AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF FINANCE, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Superannuation fund looks for a greenie to keep them in the black

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Original article by Eli Greenblat
The Australian – Page: 19 & 23 : 2-Aug-17

Vision Super hopes to attract new members for its sustainable balanced fund by targeting people who take part in climate change demonstrations and protest rallies. The superannuation fund, which boasts some 100,000 members in the local government sector and $A8.75bn worth of assets under management, is seeking to recruit a climate activist. John Roskam of the Institute of Public Affairs has questioned the appropriateness of Vision Super’s use of members’ funds to hire an environment activist.

CORPORATES
VISION SUPER PTY LTD, INSTITUTE OF PUBLIC AFFAIRS LIMITED, SUPERRATINGS PTY LTD, SEEK LIMITED – ASX SEK, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY