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Wednesday, 5 December 2012

ASIC strikes blow for all brokers in online

ASIC has warned operators of insurance and credit comparison websites of the need to ensure that they comply with their obligations under consumer protection laws.

The regular has said in light of the growth in comparison websites,ASIC said it is focused on ensuring these sites are providing accurate information and not providing misleading or inaccurate information that can steer consumers towards unsuitable or more expensive products.
ASIC has already identified a number of concerns with some comparison websites, including that some of the websites:
  • only compare a limited number of brands/products from a limited number of providers. This may not be clearly disclosed which creates the impression that the extent of comparison is much broader than it actually is
  • use ‘ratings’ and ‘rankings’ for products without a clear explanation of the basis for those ratings and rankings
  • refer to ‘special offers’ and ‘featured products’ without properly explaining the basis of selection of certain products.
ASIC’s focus on insurance specific comparison websites found that on some websites:
  • there was insufficient disclosure relating to website operators who were related to the issuer of the insurance brands being compared
  • comparisons were provided on the basis of price without any warning that different products may have different features and levels of coverage, and
  • the operators of websites are not appropriately licensed or authorised to provide financial services.
ASIC also reminded operators that websites that allow consumers to obtain and/or compare insurance quotes will generally be providing financial services. If so, these operators need to be licensed or be an authorised representative of a licensee.

ASIC recognises that consumers can benefit from the increasing opportunities to research and compare financial products online,” said ASIC commissioner Peter Kell. “For this to occur, operators of comparison websites must take care to ensure they accurately portray the features and limitations of the products compared. They also need to ensure that any information they provide, including quotes, is reliable, accurate and up-to-date.

“We will be targeting this area of the market and we will take regulatory action where necessary to ensure that operators of financial product comparison websites comply with the law,” added Kell.

Insurance? No thanks, I can manage myself

You’ve just got a payrise. Do you pump the extra cash into wealth protection or splurge it all eating out? No prizes for guessing Australia’s answer to that question.
According to a TAL survey, Aussies would prefer to spend extra income dining out rather than taking out or upgrading insurance to protect their lifestyle and financial commitments.
That’s not to say that Australians are a frivolous lot. When asked what they would spend a 10% payrise on, building up savings (58%), paying off bills (30%), paying off the mortgage (28%) and cutting credit card and loan debts (25%) took the top four spots amongst respondents.
However, while Aussies seem to have grasped the basic financial principle of reducing debts and save more, wealth protection hardly gets a look in. Only 5% of respondents would opt to take out/ or upgrade personal insurance (income, disability, life and illness), and only 4% would take out another form of insurance.
These results are largely in line with Lifewise/NATSEM findings that 95% of Australians have inadequate insurance in the event they could not earn an income.
“We undertook this survey as part of our efforts to continue to better understand Australians’ perceptions and behaviour towards life insurance and societal changes. It is clear that that the deleveraging taking place since the GFC is still a priority for consumers.
“We know most people don’t have enough insurance in place to meet their commitments and maintain their and their family’s lifestyle should their ability to earn an income stop. These figures reveal that most people would rather do almost anything other than start life insurance or enhance what is probably inadequate cover.”
So, what can you do to improve the situation? Minto suggested that “as an industry, we need to focus on ways of better demonstrating and communicating the value of the forms of life insurance – income protection, permanent disability cover, lump sum upon death and critical illness lump sum.”

Saturday, 1 December 2012

Broking giant has new CEO

Mr. Cutter joins OAMPS from ANZ where he is currently the chief risk officer. His prior roles include president and CEO of GE Money Australia and NZ, COO of credit cards at Halifax/Bank One and senior roles in marketing and risk at ANZ and NAB.

OAMPS Australia, part of Wesfarmers Insurance, has announced Mike Cutter is the broking giant’s new chief executive.
In September OAMPS stated it had concluded its eight-week search for a new CEO by announcing a mystery “external candidate” has been given the nod.
“Insurance broking is an important part of Wesfarmers Insurance’s growth strategy and we are pleased to attract a leader of Mike’s calibre to OAMPS,” said Robert Scott, managing director, Wesfarmers Insurance.
“Mike’s track record as a CEO and his deep experience in sales and distribution will complement OAMPS’ management team and help lead the next phase of growth for the business.”
During his time as CEO of GE Money, Cutter led a team of 5,500 and had responsibility for a distribution and sales presence that involved over 250 branches distributing financial services and insurance products. He was also responsible for managing relationships with ASIC and APRA during the remediation of GE’s Hallmark Insurance business in Australia.
Cutter will commence employment at OAMPS in early 2013.