K63 Insurance and Superannuation Funds

Insurers’ share prospects bleak

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Original article by Ruth Liew
The Australian Financial Review – Page: 18 : 7-Sep-15

Shares in QBE Insurance Group have risen by 13.6 per cent so far in 2015, while Insurance Australia Group has shed 20.6 per cent and Suncorp Group is down 10.2 per cent. Credit Suisse has warned that the outlook for Australian insurers is challenging, noting that the August 2015 reporting season was generally disappointing for the sector. Insurers are also facing growing competition from online rivals such as Youi and Budget Direct.

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG SUNCORP GROUP LIMITED – ASX SUN CREDIT SUISSE (AUSTRALIA) LIMITED YOUI PTY LTD BUDGET DIRECT INSURANCE AGENCY PTY LTD REAL INSURANCE CITIGROUP PTY LTD UBS HOLDINGS PTY LTD COMMONWEALTH BANK OF AUSTRALIA – ASX CBA MEDIBANK PRIVATE LIMITED – ASX MPL

Global investors want Australian assets: HSBC

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Original article by Larry Schlesinger
The Australian Financial Review – Page: 45 : 3-Sep-15

US, Canadian and European pension funds are seeking Australian commercial property because the long-term demographics look good, according to HSBC’s global head of corporate real estate, Andy Armstrong. Visiting from London, Armstrong says strong population growth, urban infrastructure renewal and a business-friendly environment make Australia a stand-out economy for real estate investment.

CORPORATES
HSBC BANK PLC, ERNST AND YOUNG, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, MACQUARIE BANK LIMITED – ASX MBL, HSBC BANK AUSTRALIA LIMITED

Calls to limit $21b super fees ‘gouge’

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Original article by Joanna Mather
The Australian Financial Review – Page: 7 : 28-Aug-15

National Seniors Australia has called for rules to force superannuation managers to cut back on fees, which amounted to $A21 billion a year. If funds did not voluntarily moderate fees, the regulator might have to step in, CEO Michael O’Neill said. Grattan Institute CEO John Daley told the National Reform Summit there was insufficient competition in the super industry to drive down fees. He has proposed a plan to save $A5 billion in fees which involves a tender process and a series of no-frills super products.

CORPORATES
NATIONAL SENIORS AUSTRALIA LIMITED, GRATTAN INSTITUTE, SUPERRATINGS PTY LTD, KPMG, AUSTRALIAN LABOR PARTY

New front opens in activists’ war

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The Australian Financial Review – Page: 2 : 24-Aug-15

HESTA’s decision to sell its stake in Transfield Services is a sign of things to come. Australian-listed companies must be prepared to be challenged by environmental and social activists. Divestment campaigns are no longer limited to tobacco, gambling or weapons. Environmental and social issues are now also scrutinised by activists. For investors, this is a worrying development.

CORPORATES
TRANSFIELD SERVICES LIMITED – ASX TSE, HEALTH EMPLOYEES’ SUPERANNUATION TRUST AUSTRALIA LIMITED, ALLAN GRAY AUSTRALIA PTY LTD, WILSON SECURITY SERVICES, AUSTRALIAN NURSING FEDERATION, HEALTH SERVICES UNION OF AUSTRALIA, UNITED VOICE

QBE also anti-intervention while dividend higher, profit up 24pc

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Original article by Ruth Liew
The Australian Financial Review – Page: 19 : 19-Aug-15

QBE Insurance Group has reported a 24 per cent rise in its first-half net profit to $US488 million ($A661 million). The group will raise its dividend payout ratio from the current level of 50 per cent of annual cash profits to 65 per cent in 2016. Announcing the results on 18 August 2015, QBE CEO John Neal spoke against the idea of government interference in Northern Australia’s insurance market. Exposure to a high risk of natural disasters in the region makes insurance cover expensive to residents.

CORPORATES
QBE INSURANCE GROUP LIMITED – ASX QBE, SUNCORP GROUP LIMITED – ASX SUN, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, NATIONAL GENERAL HOLDINGS CORPORATION, NIKKO ASSET MANAGEMENT GROUP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Transfield dumped in human rights protest

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Original article by Sally Rose
The Australian Financial Review – Page: 3 : 19-Aug-15

Superannuation fund HESTA has sold its three per cent stake in Transfield Services because of concerns about risks associated with the group’s management of the offshore detention centres on Manus Island and Nauru. HESTA manages super savings of doctors, nurses, and other workers in the healthcare and community services sectors. Many of its members are concerned about reports of mismanagement in offshore detention centres.

CORPORATES
HEALTH EMPLOYEES’ SUPERANNUATION TRUST AUSTRALIA LIMITED, TRANSFIELD SERVICES LIMITED – ASX TSE, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED

Super tax breaks ‘lurks for the rich’

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Original article by Joanna Mather
The Australian Financial Review – Page: 5 : 19-Aug-15

The Grattan Institute advocates a review of superannuation tax breaks, negative gearing and the capital gains tax discount which, the institute says, are used mainly by rich Australians. The institute states in a paper to be presented at the National Reform Summit that wealthy Australians do not need tax incentives; they would save for retirement without them.

CORPORATES
GRATTAN INSTITUTE, THE MENZIES RESEARCH CENTRE LIMITED, THE CENTRE FOR INDEPENDENT STUDIES LIMITED

Wait for super needed, but political poison

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Original article by Sally Rose
The Australian Financial Review – Page: 25 : 6-Aug-15

The preservation age for superannuation should be raised from 55 at present. Actuaries warn that the current rules do not reflect rising longevity. The shadow minister for financial services and superannuation, Bernie Ripoll, made comments on the issue of access to super at the Financial Services Council’s annual conference on the Gold Coast on 5 August 2015. He agreed that the preservation age should be lifted. However, such a measure would be unpopular among voters.

CORPORATES
FINANCIAL SERVICES COUNCIL, RICE WARNER ACTUARIES PTY LTD, AUSTRALIAN LABOR PARTY, BT FINANCIAL GROUP PTY LTD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, NATIONAL SENIORS AUSTRALIA LIMITED

Up to 80 funds ought to close: Chant West

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Original article by Sally Rose
The Australian Financial Review – Page: 6 : 5-Aug-15

Chant West’s Ian Fryer estimates that only about 40 of the 120-plus superannuation funds that offer default MySuper accounts are competitive. He notes that super funds with at least $A10bn in assets under management have much lower fees and deliver higher returns that their peers with less than $A5bn worth of assets under management. Some 89 super funds fit into the latter category, and Chant West believes the majority of them should either merge or be closed down.

CORPORATES
CHANT WEST FINANCIAL SERVICES PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, TRANSPORT INDUSTRY SUPERNNUATION FUND, LESF PTY LTD, CONCEPT ONE PTY LTD, CLUBSUPER, SMARTSAVE SUPER, AMG UNIVERSAL SUPER, FINANCIAL SERVICES COUNCIL, AUSTRALIA. FAIR WORK COMMISSION, GRATTAN INSTITUTE, MINE WEALTH AND WELLBEING

Up to 80 funds ought to close: Chant West

roymorgansocial Leave a comment

Original article by Sally Rose
The Australian Financial Review – Page: 6 : 5-Aug-15

Chant West’s Ian Fryer estimates that only about 40 of the 120-plus superannuation funds that offer default MySuper accounts are competitive. He notes that super funds with at least $A10bn in assets under management have much lower fees and deliver higher returns that their peers with less than $A5bn worth of assets under management. Some 89 super funds fit into the latter category, and Chant West believes the majority of them should either merge or be closed down.

CORPORATES
CHANT WEST FINANCIAL SERVICES PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, TRANSPORT INDUSTRY SUPERNNUATION FUND, LESF PTY LTD, CONCEPT ONE PTY LTD, CLUBSUPER, SMARTSAVE SUPER, AMG UNIVERSAL SUPER, FINANCIAL SERVICES COUNCIL, AUSTRALIA. FAIR WORK COMMISSION, GRATTAN INSTITUTE, MINE WEALTH AND WELLBEING