K63 Insurance and Superannuation Funds

Super fund satisfaction down in May, but still up on a year ago as Australians withdraw up to $10,000

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Original article by Roy Morgan
Market Research Update – Page: Online : 14-Jul-20

New data from Roy Morgan’s Superannuation Satisfaction Report shows an overall super fund satisfaction rating of 63.6% in May. This is down 0.9% points on the previous month, but an increase of 2.9% points on May 2019. Compared to a year ago the largest increase by sector was for Retail Funds, which increased 2.2% points to customer satisfaction of 58.7%. Also increasing their satisfaction were Industry Funds, up 1.9% points to 64.4%, and Public Sector Funds which increased 1.6% points to 72.7%. Although Self-Managed Funds were the only sector not to record an increase, they still maintain a high overall satisfaction rating at 72.3%, down 1.9% points on a year ago. Unisuper has the highest customer satisfaction rating of the Industry Funds, ahead of CARE Super and AustralianSuper. The highest placed Retail Super Fund is Colonial First State followed by OnePath and MLC. The report’s findings are from Roy Morgan Single Source, Australia’s most trusted consumer survey, compiled by in-depth interviews with over 50,000 Australians each year.

CORPORATES
ROY MORGAN LIMITED, UNISUPER LIMITED, CARE SUPER PTY LTD, AUSTRALIANSUPER PTY LTD, COLONIAL FIRST STATE GROUP LIMITED, ONEPATH AUSTRALIA LIMITED, MLC LIMITED

Retail super funds face member flight

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Original article by Cliona O’Dowd
The Australian – Page: 15 : 8-Jul-20

Research by KPMG suggests that nearly 25 per cent of retail superannuation fund members are likely to switch funds during the next year, compared with less than 10 per cent of industry super fund members. KPMG partner Tim Thomas says lower fees of industry funds is a major contributor to the expected exodus of retail fund members. However, he cautions that industry funds risk a similar loss of members if they do not take action to improve the quality of their services. KPMG has also found that nearly 80 per cent of consumers now prefer to interact with financial services providers via digital channels.

CORPORATES
KPMG AUSTRALIA PTY LTD

Funds face more outflows: APRA

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Original article by Samantha Bailey
The Australian – Page: 15 : 7-Jul-20

Data from the Australian Prudential Regulation Authority shows that superannuation fund members have now withdrawn some $18.1bn via the federal government’s early access scheme. APRA expects the new financial year to prompt another surge in applications to withdraw money from super funds. People who have experienced financial hardship due to the coronavirus pandemic can withdraw up to $10,000 from their super fund in both the 2019-20 and 2020-21 financial years.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Slim returns among super’s top performers

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Original article by Joanna Mather
The Australian Financial Review – Page: 6 : 7-Jul-20

Chant West has forecast that the median superannuation fund will post a return of minus 1.3 per cent for 2019-20. The firm also expects the returns for growths to range from minus six per cent to three per cent. Meanwhile, First State Super is among the super funds that have defied the trend, posting a return of 1.3 per cent for the financial year. Cbus achieved a return of 0.75 per cent, and chief investment officer Kristian Fok says a number of factors contributed to the positive return.

CORPORATES
CHANT WEST FINANCIAL SERVICES PTY LTD, FIRST STATE SUPER, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND

Media Super poised for $62b Cbus link

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Original article by Joanna Mather, Michael Roddan
The Australian Financial Review – Page: 3 : 25-Jun-20

Media Super chairman Gerard Noonan has confirmed that the industry superannuation fund is in the "very early stages" of talks regarding a merger with Cbus. He stresses that Media Super is likely to retain its own branding if the deal proceeds. The fund short-listed Cbus and AustralianSuper as potential merger candidates following a tender process. Media Super has about 75,000 members and some $6bn worth of assets under management. Data from the Australian Prudential Regulation Authority shows that Media Super has lost an average of six per cent of its members annually over the past three years.

CORPORATES
MEDIA SUPER LIMITED, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, AUSTRALIANSUPER PTY LTD, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

APRA probes super fund pain

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Original article by Gerard Cockburn
The Australian – Page: 16 : 25-Jun-20

The Australian Prudential Regulation Authority will increase its oversight of the nation’s superannuation funds in response to the coronavirus pandemic. APRA will require super funds to provide it with a range of data on both a monthly and quarterly basis for the duration of the health crisis. Amongst other things, APRA is concerned about the impact of the federal government’s early access scheme is having on super funds, with almost $16bn having been withdrawn to date.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Early access super requests near $15bn

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Original article by Gerard Cockburn
The Australian – Page: 15 : 16-Jun-20

Data from the Australian Prudential Regulation Authority shows that 2.12 million people have applied to withdraw money from their superannuation fund via the federal government’s early access scheme. Some $14.8bn has been paid out to 1.98 million fund members; AustralianSuper heads the list, having paid out $1.98bn to 264,404 members. The early access scheme has been criticised by the ACTU in a submission to a Senate committee hearing into the federal government’s response to the coronavirus pandemic.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIANSUPER PTY LTD, ACTU

Insurers face big loss from income policies

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Original article by Michael Roddan
The Australian Financial Review – Page: 23 : 5-Jun-20

The Australian individual disability insurance sector has lost a combined $5 billion over the past five years. Australian Prudential Regulation Authority executive member Geoff Summerhayes warned in late 2019 that individual disability insurance products may soon become unviable in Australia if the industry did not take suitable action. However, despite his warnings and the sector’s ongoing losses, individual disability insurance providers are continuing to sell unsustainable products during the COVID-19 shutdown.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, CLEARVIEW WEALTH LIMITED – ASX CVW, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AMP LIMITED – ASX AMP

Brace for negative super returns: Silk

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Original article by Richard Gluyas
The Australian – Page: 13 & 20 : 29-May-20

AustralianSuper’s balanced investment option has posted a return of minus 3.3 per cent for the year to April, following a coronavirus-induced rout in financial markets in the March quarter. CEO Ian Silk has warned that the balanced option is likely to post its first negative return for a financial year since the global financial crisis. However, he notes that the balanced option has delivered an average return of eight per cent over the last decade. Silk adds that some 200,000 AustralianSuper members have utilised the federal government’s early access scheme.

CORPORATES
AUSTRALIANSUPER PTY LTD

Super sector should shrink 80pc: report

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Original article by James Thomson
The Australian Financial Review – Page: 19 : 25-May-20

Management consulting firm Right Lane contends that a major rationalisation of Australia’s superannuation sector is necessary. Associate principal Abhishek Chhikara suggests that there is scope for 3-5 large "generalist" funds and 7-10 niche funds that are focused on specific industries or types of super products. Right Lane estimates that a super fund needs a minimum of 500,000 active members in order to operate efficiently, and ideally they should have between one and two million active members. The firm expects the pandemic to increase the pressure on smaller funds.

CORPORATES
RIGHT LANE CONSULTING