INSURANCE

Suncorp kept misleading ads campaign

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Original article by Michael Roddan, Ben Butler
The Australian – Page: 17 & 20 : 21-Sep-18

The financial services royal commission has been told that Suncorp-owned insurer AAMI faced potential fines of up to $7.2m for misleading advertising in November 2017, but it was fined just $43,800 by the Australian Securities & Investments Commission. The radio ads promoted AAMI’s commitment to completely replace a policyholder’s home if it was destroyed, but failed to disclose that this was subject to a cost limit. AAMI’s in-force premium revenue from these policies was $426m for the year, providing a strong incentive to continue the ad campaign.

CORPORATES
SUNCORP GROUP LIMITED – ASX SUN, AUSTRALIAN ASSOCIATED MOTOR INSURERS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, FINANCIAL OMBUDSMAN SERVICE LIMITED, AAI LIMITED

AMP still taking fees from the dead

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Original article by Ben Butler, Michael Roddan
The Australian – Page: 3 : 18-Sep-18

Paul Sainsbury, the head of wealth management at AMP, appeared before the banking royal commission on 17 September. He told the inquiry that AMP had been charging life insurance customers a fee even after being informed that they had died. Sainsbury said the practice had been occurring since 2016, and the extent of the problem had been discovered after the royal commission was told earlier in 2018 that the Commonwealth Bank had engaged in similar practices.

CORPORATES
AMP LIMITED – ASX AMP, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, DOVER FINANCIAL ADVISERS PTY LTD, ALLIANZ AUSTRALIA LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, BORAL LIMITED – ASX BLD, COCA-COLA AMATIL LIMITED – ASX CCL

PM apologises for lack of action on banks

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Original article by Michael Roddan, Elizabeth Redman
The Australian – Page: 2 : 13-Sep-18

Prime Minister Scott Morrison told question time on 12 September that he regretted not holding the banking royal commission sooner. He described as appalling the evidence concerning the treatment of Baptist minister Grant Stewart who had tried to get Freedom Insurance staff to cancel a useless life insurance policy sold to his Down Syndrome son, with one employee calling Stewart a "bloody whinger". Treasurer Josh Frydenberg was highly critical of the misconduct of life insurer ClearView, which has admitted to 300,000 alleged breaches of criminal law over the provision of unsolicited advice.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, FREEDOM INSURANCE GROUP LIMITED – ASX FIG, CLEARVIEW WEALTH LIMITED – ASX CVW

Sack them all, says insurance boss

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Original article by Michael Roddan, Elizabeth Redman
The Australian – Page: 2 : 11-Sep-18

The banking royal commission commenced its investigation into the life insurance sector on 10 September. Senior counsel assisting the commission, Rowena Orr QC noted the industry had paid $6 billion worth of commissions to financial planners over the five years to 2017, suggesting this was a key factor behind the sector’s unethical behaviour. ClearView chief risk officer Greg Martin admitted to the commission that it had breached anti-hawking laws more than 300,000 times, and that it had a "full on sales" culture.

CORPORATES
AUSTRALIA. JOINT COMMITTEE OF PUBLIC ACCOUNTS AND AUDIT, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, CLEARVIEW WEALTH LIMITED – ASX CVW

Poor connection – ASIC to restrict life insurance telemarketers due to mass policy cancellation

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Original article by Ceyda Erem
mozo.com.au – Page: Online : 31-Aug-18

The Australian Securities & Investments Commission has found that up to one in five life insurance policies sold over the phone are cancelled during their cooling-off period. ASIC found that one of the main reasons for the high level of cancellation was the lack of information provided about important policy features. Meanwhile, research by Roy Morgan has found that 10.8 per cent of those holding risk and life insurance policies either switched their policies or actively thought about doing so in the year to June.

CORPORATES
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, ROY MORGAN LIMITED

One million potential for switching risk and life insurance policy providers

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Original article by Roy Morgan
Market Research Update – Page: Online : 13-Aug-18

New research from Roy Morgan shows that in the 12 months to June 2018, 1,008,000 risk and life insurance policies (10.8% of the total market) had the potential to change companies. This potential is the sum of the 242,000 that actually switched to another company and the 766,000 that renewed with the same company after having approached other companies. Of the total switching potential of 1,008,000 risk and life policies over the last year, the 35-49 age group is the biggest segment, with 425,000 or 42.2% of the total. The second largest segment is the 50-64 age group, with 360,000 or 35.7% of the total. Meanwhile, 27.9% of switching potential is in the $60,000 to $99,000 personal income group, with 281,000 policies. These are the latest findings from Roy Morgan’s Single Source survey, which is based on in-depth personal interviews conducted face-to-face with over 50,000 Australians per annum in their own homes, including over 10,000 interviews with people holding risk and life insurance policies.

CORPORATES
ROY MORGAN LIMITED

Shorten’s secret vow on health cap

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Original article by Joe Kelly
The Australian – Page: 1 & 6 : 16-Jul-18

Labor has previously announced plans to impose a two per cent cap on health insurance premium increases. However, Opposition leader Bill Shorten is understood to have told the Members Health Fund Alliance – which represents 23 small funds that cover 1.7 million Australians – that its members would not be affected by the proposed cap. Labor sources have indicated that the cap is aimed more at larger health insurance providers, and that imposing it on smaller providers would lead to more consolidation in the sector.

CORPORATES
AUSTRALIAN LABOR PARTY, MEMBERS HEALTH FUNDS ALLIANCE, AUSTRALIA. DEPT OF HEALTH, AUSTRALIA. PRODUCTIVITY COMMISSION, PRIVATE HEALTHCARE AUSTRALIA LIMITED

Directors hit in Hayne fallout

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Original article by Alice Uribe
The Australian Financial Review – Page: 1 & 2 : 9-Jul-18

Providers of directors’ and officers’ insurance have increased their premiums by an average of 70 per cent over the past six months due to costs incurred as a result of class actions. Eden Fletcher of Aon Risk Solutions notes that providers have moved to prevent further losses on class action policies they offer by inserting exclusions that would see them refuse to cover companies hit by class actions resulting from the banking royal commission. There are potentially up 20 class actions pending as a result of the royal commission, with AMP alone facing five lawsuits over its fee-for-no-service scandal.

CORPORATES
AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AON RISK SERVICES AUSTRALIA LIMITED, AMP LIMITED – ASX AMP, CHUBB CORPORATION, BERKSHIRE HATHAWAY INCORPORATED, AUSTRALIAN LAW REFORM COMMISSION, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, RABOBANK AUSTRALIA LIMITED, QBE INSURANCE GROUP LIMITED – ASX QBE, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, AMERICAN INTERNATIONAL GROUP INCORPORATED, XL CATLIN

ACCC slams health insurers

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Original article by Sarah-Jane Tasker
The Australian – Page: 17 & 28 : 26-Jun-18

Complaints to the Private Health Insurance Ombudsman rose by 30 per cent in 2016-17, with benefit payments again attracting the most complaints. The Australian Competition & Consumer Commission’s acting chair Delia Rickard says the health insurance sector needs to become more transparent about its policies if it wants to restore consumer trust. Australians paid around $A23.1 billion in health insurance premiums in 2016-17, an increase of $A1 billion over the previous year.

CORPORATES
PRIVATE HEALTH INSURANCE OMBUDSMAN, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, BUPA AUSTRALIA PTY LTD, MEDIBANK PRIVATE LIMITED – ASX MPL, THE HOSPITAL CONTRIBUTIONS FUND OF AUSTRALIA LIMITED, NIB HOLDINGS LIMITED – ASX NHF, HBF HEALTH LIMITED

Over 250,000 didn’t renew private health insurance

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Original article by Roy Morgan
Market Research Update – Page: Online : 15-May-18

A Roy Morgan Single Source survey shows that an estimated 256,000 Australians aged 14+ decided not to renew their private health insurance in the year to March 2018. This compares with 182,000 in the year to March 2017, making it the highest number for the last five years. Some 53.3% of consumers said the main reason for dropping out of health insurance was because it was "too expensive", up from 47.1% in the previous year; this was followed by "too much out of pocket expense", citied by 19.1% of consumers, up from 12.8% in 2017. An analysis of the individual major health funds shows that cost ("too expensive") is generally the main reason for each that members do not renew.

CORPORATES
ROY MORGAN LIMITED