PI Insurance Online News

Sun, 19 August 2007
MBF To List On ASX
MBF Australia said it intends to demutualise and list on the Australian stock exchange in an attempt to grow and diversify its business. The health insurer said its plans have been endorsed by the MBF Council. It said a share market listing is likely in calendar 2008. The board believes that demutualising is in the best interests of policyholders, that it will maximise MBF's future growth potential and enhance its ability to compete in a rapidly changing environment," chairman John Conde said.

Sun, 21 October 2007
Medical compo payouts becoming more expensive
Damages payouts by doctors are on the rise again despite radical reforms to the medical insurance industry.

Australia's doctors were facing an insurance squeeze a few years ago as their premiums for medical damages insurance soared.

There is evidence today that the cost of medical payouts is still increasing, but the medical indemnity industry says the reforms have been a success.

The Institute of Health and Welfare says in the last financial year there were about 7,000 medical indemnity claims. Most were settled out of court.

Sun, 21 October 2007
Underinsurance: a potential time bomb for small business
Many Australian small businesses risk financial hardship because they are significantly underinsured.

New research from leading commercial insurer CGU shows that 65 per cent of small businesses have no business interruption cover, 47 per cent do not adequately insure their stock and contents, and 82 per cent of businesses that own buildings do not insure them appropriately.

CGU chief executive officer Mario Pirone said there was limited awareness in the small business community of the extent of the underinsurance problem.

"Most small businesses have no idea that they are underinsured or have the wrong cover until it's too late," he said. "It's only after they experience a major loss that the problem comes to light."

Fri, 16 November 2007
IAG's Hawker stands by his record
Insurance Australia Group Ltd (ASX: IAG.ax) chief executive Michael Hawker says although he is disappointed with the firm's current share price, he and his board are building long-term value for shareholders by concentrating on quality business.

Mr Hawker stood by his record as chief executive of IAG amid speculation that investors could be disappointed with his and the company's performance.

He also doused any speculation that former Promina Group Ltd chief executive Mike Wilkins had been hired to replace him.

"When we moved into the UK it became pretty clear to me that I needed to have a chief operating officer, so I started looking for one," Mr Hawker told AAP.

"And obviously someone with Mike's capability, being the chief executive of Promina, I had a great deal of respect for him.

"So I started having a chat to him and convinced him to come and join the organisation, so I'm very pleased that he decided to do that."

Mr Hawker said he was disappointed with IAG's financial results in the last 12 months.

Mon, 10 December 2007
Storm damage victim still awaiting payout
A Wallsend restaurateur says he is still waiting for a $500,000 insurance payout five months after his business was badly damaged in the June storms.

Brad Jones says he appointed a hydrologist to prove that the damage was caused by stormwater run-off, after his insurer said the damage would not be covered because it was flood-related.

Mr Jones says he had hoped to reopen his business before Christmas, but now that would not happen.

"It's crippled us basically, I mean I've lost the staff, they're out of work and it's now November," he said.

"You'd think all the Christmas bookings would be virtually in. It's peak season and we've got nothing.

"We miss it because they haven't acted efficiently enough to sustain a business and I just find that unacceptable."

Thu, 03 January 2008
Suncorp Deploys Guidewire ClaimCenter
Suncorp, the second largest general insurance company in Australia, and Guidewire Software®, a leading global provider of solutions to general insurers, today announced that Suncorp has successfully deployed Guidewire ClaimCenter® as its new system for home insurance claims.

Following a number of mergers and acquisitions, Suncorp had multiple claims systems. The company is consolidating its systems with Guidewire ClaimCenter, a single web-based system.

ClaimCenter is the technology foundation for Suncorp's claims business transformation and is enabling enhanced service for policyholders, agents, and service network partners; lowered claims expenses; improved claims handling processes; and more effective communication with Suncorp's network of repair specialists.

Mon, 07 January 2008
Financial security in the new year
A new survey, conducted by Citibank, reveals that almost half of all Australians have no insurance and close to a third are worried about their financial future.

The research also found 19 per cent of Australians would last only one week on their current savings if they lost their job, 45 per cent would last up to four weeks and only 23 per cent could last more than three months.

Citibank's sales and wealth management head, Cameron McLeod, said Australians needed greater saving discipline.



Sun, 25 May 2008
Insurance Australia Forecasts Narrower Margins
Insurance Australia Group Ltd. said storms and higher borrowing costs will harm profitability, weakening its case for QBE Insurance Group Ltd. to increase a A$8 billion ($7.5 billion) takeover offer.

Chairman James Strong today reiterated that QBE's bid is ``inadequate'' and said his Sydney-based company is taking steps to reverse three years of declining profit. Insurance Australia forecast an insurance margin of as little as 6 percent for this fiscal year, down from a February estimate of up to 11 percent.

``Shareholders will be putting more pressure on the directors to take another look at QBE's bid,'' said Steven Marsh, who helps manage the equivalent of $632 million, including QBE shares, at Trust Co. in Sydney. ``The Board really needs to consider whether QBE's management has a better track record.''

Insurance Australia, the nation's worst-performing insurance stock in 2007, fell 2.1 percent to A$4.29 at the close in Sydney while QBE rose 1.2 percent to A$24.84, giving it a market value three times bigger than its rival. The combined company would dominate the local market for insuring everything from cars and real estate to work-place injuries.

QBE, which gets more than 70 percent of earnings overseas, is Australia's largest property and casualty insurer. Insurance Australia is the nation's biggest auto and home insurer.

Insurance Australia said storms cost the company about A$135 million between January and early April, while higher borrowing costs may cut insurance profit by A$55 million.

Margins, Revenue Growth

The company's insurance margin -- underwriting profit and investment returns as a percentage of premium sales -- will be between 6 percent and 8 percent for fiscal 2008, less than a February forecast of 9 percent to 11 percent, it said in a statement today.

Insurance Australia also cut an estimate for growth in revenue from premiums to between 5.5 percent and 6.5 percent, from between 7 percent to 9 percent previously.

Insurance Australia Chief Executive Officer Michael Hawker last reported an increase in profit in February 2005. The company appointed Mike Wilkins, former head of rival Promina Group Ltd., chief operating officer on Oct. 26, the same day Hawker cut his forecast for insurance premium growth.

``This will have some impact on our next profit result,'' Hawker said in an interview. ``Margins were affected mainly by the widening of credit spreads and storms, neither of which we believe are systemic. We believe the insurance cycle has bottomed.''

Strong today said Insurance Australia will try to reverse the earnings slump by raising premium prices to reflect higher claims costs, adjusting investment its portfolio and reducing expenses.

May Deadline

QBE on April 22 said its proposal of 0.142 shares and 70 Australian cents for each unit of Insurance Australia's stock will remain open until May 5.

`There was some expectation that the company would clear the decks after QBE made its bid,' said Richard Wallace, who helps manage $138 million at Wallace Funds Management in Sydney. `Insurance is a cyclical business, and IAG is probably one of the more transparent insurance companies in terms of informing the market where it's at.'

SOURCE: Stuart Kelly, Bloomberg

Thu, 30 October 2008
Advisers' fees under a cloud
Super fund members who have watched their savings shrink are bound to take a close look at commissions...



Tue, 04 November 2008
Accountants welcome SMSF guidance
The guidance note was issued by the Government’s Auditing and Assurance Standards Board (AUASB), which described the guidance note as “providing a road map to guide auditors through the application of AUASB standards and the complex requirements of the legislation and regulations governing the audits of SMSFs”.

In a joint announcement responding to the guidance note, CPA Australia, the Institute of Chartered Accountants in Australia and the National Institute of Accountants welcomed the initiative as reflecting the increasing social and economic importance of SMSFs.

The statement described the guidance note as being “the next step in a series of initiatives designed to assist, protect and enhance the role of auditors of SMSFs as well as helping trustees discharge their responsibilities”.

The guidance note has been released only a few months after the Australian Taxation Office saw fit to detail a range of shortcomings on the part of SMSF trustees.

SOURCE: Money Management



Tue, 11 November 2008
Credit card rate rises threaten recovery
INTEREST rates on credit cards are continuing to rise, undermining the impact of the Reserve Bank's aggressive bout of rate cuts...



Tue, 18 November 2008
Melbourne man pleads on super charges
A 70-year-old Melbourne man has pleaded guilty in the Melbourne County Court to charges relating to allegations of misconduct relating to superannuation...

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