{"id":29152,"date":"2015-03-30T10:54:29","date_gmt":"2015-03-29T23:54:29","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=29152"},"modified":"2015-04-05T15:27:51","modified_gmt":"2015-04-05T04:27:51","slug":"insurers-respond","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2015\/03\/30\/insurers-respond\/","title":{"rendered":"Insurers Issue Initial Response to Trowbridge"},"content":{"rendered":"

Insurers have responded with caution to the recommendations put forward by John Trowbridge in his Final Report\u2026<\/span><\/p>\n

<\/strong><\/p>\n

\"AIA<\/a>
AIA Australia CEO, Damien Mu<\/figcaption><\/figure>\n

AIA Australia<\/strong><\/p>\n

AIA Australia\u2019s CEO, Damien Mu<\/strong>, released an open letter to advisers last week, following the release of the Trowbridge recommendations.<\/p>\n

… any proposed remuneration structure needs to cover the costs of a sustainable advice industry<\/h6>\n

In his letter, Mr Mu said the issues covered in Mr Trowbridge\u2019s Report \u201c\u2026 are complex and the recommendations could deliver significant structural reform and impact on the life insurance industry.\u201d<\/p>\n

In stating AIA Australia\u2019s support of the need for positive change for the industry to continue meeting the life insurance needs of Australians, Mr Mu said his company\u2019s view is that \u201c\u2026any proposed remuneration structure needs to cover the costs of a sustainable advice industry which supports access to advice, quality of advice, choice of product and value for all Australians.\u201d<\/p>\n

Mr Mu continued, \u201cWe believe further work, analysis and discussion is required in these areas to ensure the right intended outcome is achieved.<\/p>\n

\u201cWe will review the Trowbridge report in detail as a matter of urgency and keep you informed of our views of the recommendations in the report, said Mr Mu, who added that the insurer remains resolute in its commitment to supporting and working proactively with its valued financial advice partners and the broader industry.<\/p>\n

Suncorp Life<\/strong><\/p>\n

Joining Mr Trowbridge on a panel at the start of the FSC Life Insurance Conference, Suncorp Life CEO, Geoff Summerhayes<\/strong>, acknowledged the insurers\u2019 role in the current industry issues.<\/p>\n

\u201cThe manufacturers have created this situation, in terms of our remuneration structures. I think the manufacturers absolutely accept that it\u2019s also our position to solve that\u2026 the payments are made out of manufacturers, so it\u2019s up to manufacturers to face into that and to remove that misalignment.\u201d<\/p>\n

The manufacturers have created this situation<\/h6>\n

He described the Trowbridge Report as a \u201clandmark report\u201d for the industry:<\/p>\n

\u201cIt will also be seen, in time, as a turning point for this industry. I am optimistic about the platform that John is proposing and our opportunity as an industry to grasp that.<\/p>\n

\u201cStructural change is difficult in any industry, and our industry is no different. It becomes even more difficult if you haven\u2019t made the structural change in increments along the way. For a variety of reasons, our particular sector has been less quick to evolve than some other sectors of the economy and financial services.<\/p>\n

\u201cSo when we front into the change that is now required, with the erosion of trust and confidence in the public debate, that change is painful. It\u2019s painful advisers, it\u2019s painful for licensees and it\u2019s painful for manufacturers.<\/p>\n

\u201cI think it\u2019s important that we digest, reflect, discuss and then move to action. Time has run out for this industry to continue to debate the merits of how to change to move forward. This now becomes a leadership issue for us as an industry \u2013 all sectors of the industry.\u201d<\/p>\n

Mr Summerhayes was a member of the Life Insurance Advice Working Group, in his capacity as an FSC Director.<\/p>\n

TAL<\/strong><\/p>\n

Speaking during the final panel session at the FSC Life Insurance Conference, TAL\u2019s incoming Group CEO, Brett Clark<\/strong>, said he was glad the report was finally out in the open.<\/p>\n

\u201cIt\u2019s out there now. It\u2019s not secret squirrel conversations behind closed doors \u2013 it\u2019s out there now, so we can deal with it.\u201d<\/p>\n

…it\u2019s out there now, so we can deal with it<\/h6>\n

He said the proposals were comprehensive and transformational:<\/p>\n

\u201cWe\u2019ll talk a lot about the adviser commission and remuneration outcomes, but it will actually go well beyond that. It will go to most parts of our business and advisers\u2019 businesses. It\u2019s about how we market ourselves, our services \u2013 I think we will see product innovation, we\u2019ll see underwriting innovation and innovation around product delivery.<\/p>\n

\u201cWe should not underestimate the change it represents for us. We should be sure of ourselves before we move forward with pace… Importantly, we should understand what we believe to be the macro outcomes for our industry.<\/p>\n

\u201cWhen we saw the FoFA changes come through a few years ago, we saw seismic shifts in the way distribution organised itself. Was that all for the benefit of consumers? I\u2019m not sure about that. I would caution us to reflect on a time where we saw some significant changes in adviser remuneration structures and think about those as we go forward,\u201d Mr Clark said.<\/p>\n

ANZ<\/strong><\/p>\n

Alexis George<\/strong>, Managing Director of ANZ Wealth\u2019s insurance business told FSC Insurance Conference attendees that the release of the report was a \u201cwatershed moment\u201d for the industry.<\/p>\n

…we\u2019ve been set a challenge as an industry<\/h6>\n

\u201cWe\u2019ve got some debate still to occur on some of the finer points of the recommendations that John Trowbridge put out today. However, we have a stake in the ground right now, and I think, as an industry, we need to be responsible and move forward\u2026,\u201d Ms George said.<\/p>\n

\u201cCertainly we have to consider the economics for the industry as a whole: for our advisers, for our customers and for the insurance manufacturers, and understand the implications of certain decisions.<\/p>\n

\u201cBut my take out is that we\u2019ve been set a challenge as an industry; we can\u2019t keep discussing \u2013 we do need to move forward. We have an expectation, not just from the regulator and the Government but from customers, that we are going to move forward, and I want to embrace that challenge.\u201d<\/p>\n

NAB<\/strong><\/p>\n

NAB Wealth Group Executive and CEO of MLC, Andrew Hagger<\/strong>, described the review process as comprehensive, and welcomed the release of the report.<\/p>\n

It is important we work together…<\/h6>\n

\u201cWe recognise the report addresses complexities, recommends improved remuneration practices and aims to balance stakeholder interests whilst focusing most importantly on the needs of individual customers. We will now take the time to consider its findings,\u201d Mr Hagger said.<\/p>\n

\u201cIn 2014 we took the step to move NAB Financial Planners away from upfront commissions. Of course, to effect positive and lasting change we need an industry-wide solution.<\/p>\n

\u201cIt is important we work together to engender trust and confidence in the advice process and ensure more Australians receive the advice and insurance cover they need.\u201d<\/p>\n

CBA<\/strong><\/p>\n

In a statement from Annabel Spring<\/strong>, Group Executive Wealth Management at CBA, the bank welcomed the report.<\/p>\n

This is a comprehensive report and a constructive contribution to industry reform<\/h6>\n

\u201cThis is a comprehensive report and a constructive contribution to industry reform. We support the intent of the report which is to ensure the accessibility and affordability of quality financial advice and life insurance for all Australians. It is critical that the life insurance and financial advice industries work to implement sustainable remuneration structures.<\/p>\n

\u201cA life insurance industry code of practice which binds insurers, licensees and advisers will both improve outcomes for customers and the efficiency of the industry.<\/p>\n

\u201cWe believe advisers need a choice of insurers and products in the provision of advice to provide a range of options to meet the best interests of all customers.<\/p>\n

Ms Spring said CBA was carefully reviewing the report to understand and consider the implications of the recommendations for our customers, advisers and our businesses.<\/p>\n","protected":false},"excerpt":{"rendered":"

Insurers have responded with caution to the recommendations put forward by John Trowbridge in his Final Report\u2026<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,8,241,4,270],"tags":[],"class_list":["post-29152","post","type-post","status-publish","format-standard","category-company-news","category-compliance-regulation","category-conferences-and-events","category-products","category-remuneration"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/29152","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=29152"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/29152\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=29152"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=29152"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=29152"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}