Australians are likely to have to pay higher home insurance premiums as insurers seek to recoup some of the $1.6 billion in claims they will have to pay out as a result of the flooding in Queensland and cyclone Yasi warns QBE Insurance chief executive Frank O’Halloran.
Australian insurers face further pricing pressure as global re-insurers demand higher premiums for substantially increasing their exposure to the risk of Australian natural disasters.
Australian insurers with exposure to the earthquake in New Zealand say it is still far too early to tell the extent of their liability to the disaster, as the calculation of costs relating to the damage caused have yet to be totalled.
Insurance Australia Group (IAG) says it has received and responded to more than 2000 calls from its customers in the aftermath of the natural disaster.
Australian insurance major QBE has moved to end speculation that its chief executive is poised to step down. QBE chief Frank O’Halloran has run the company for the last twelve years, and the insurer says that he would continue in that role “for the foreseeable future”.
Rumours of Mr. O’Halloran’s departure ricocheted around the insurance industry this week, when speculation began to emerge that Mr. O’Halloran would hand over the reigns of the company to Peter Harmer, a senior executive at insurance broker AON.
Australian insurance major IAG has had its bottom line severely hit by storms that have raged in Melbourne and Perth, as well as losses incurred at its UK division.
Australia’s largest general insurance company as measured by written premiums said its net profit for the year ending June 30th fell precipitously year on year. Net profit dropped from $181 million last year, to just under half, or $91 million this year, after the insurer’s UK unit generated a substantial loss, and unprecedented weather in Melbourne and Perth drove up natural peril claim costs.
Financial planners are fiercely opposing the proposal by the Cooper Review, which would ban commissions on insurance in superannuation, fearing that many clients will not be able to afford a fee which is charged upfront.
The Association of Financial Advisers has leveled the accusation against many of the proposals recommended by the review, which was conducted under the leadership of former Australian Securities & Investments Commission chairman Jeremy Cooper, of threatening the income of thousands of planners, by banning the practice of commission payments on all insurance products that are part of the super, including group risk and personal risk.
Australian insurance major QBE Insurance Group is seeking to allay investor fears over its exposure to the BP oil spill disaster, and reiterated the point that it has significant re-insurance cover, which would be more than adequate to cover large claims.
Australian insurance major IAG saw its shares plunge to 15 month lows and by as much as 11 per cent following the company cutting guidance on its full year insurance margin.
Banc-assurance group Suncorp-Metway is returning the residential mortgage backed securities market, in a further sign of growing confidence, pricing a $1 billion issue, after investor demand forced the company to double the size the original issue from $500 million.
Banc-assurance company Suncorp-Metway says that it intends to improve its general insurance underlying profit margin by at least 3 per cent over the next couple of years as it seeks to simplify the structure of the business.
AXA Asia Pacific Holdings (APH), the target of an intense takeover battle now says it is amenable to a new bid from jilted suitor AMP, which it would consider on its merits.