Call to reveal industry statistics
An industry commentator is urging the Financial Services Council to make public its quarterly member statistics. But one insurance boss says if that's going to happen, the Council will have to up its game.
Friday, March 6th 2015, 6:00AM
by Susan Edmunds
They comprise new business per quarter per member company and in-force premium income. The data covers all risk products.
Consultant David Whyte, a former managing director of AIG, said the statistics should be available for scrutiny by advisers and consumers to help them make an informed judgement on the state of the company.
“In particular, the in-force metric should be published quarterly for every Life Company as a true measure of progress – or otherwise, as the case may be. In the absence of transparency, advisers and consumers will speculate, and such ill-informed guesswork can be damaging – so why not provide some accurate information upon which stakeholders can make better value judgements.”
He said it was particularly galling for AFAs who were required to regularly disclose their own financial positions. “I see no reason why the financial conditions of the product providers should not be similarly disclosed.”
That information would be a factor in advisers deciding where to put business. “It should be a matter of public record.”
Members of the FSC can see each other’s statistics and Whyte said that gave a distasteful implication of a “mates’ club” operating.
But FSC chief executive Peter Neilson said the statistics were prepared as a service to members, which they paid for. “if we provided them to everyone else there wouldn’t be much reason for members to pay.”
He said the FSC had steered away from making any comment about individual members. “No matter what we would say it would cause problems.”
Industry participants who wanted access to the statistics could sign up to be associate members of the FSC for a couple of thousand dollars, he said.
He estimated about $1000 of each member’s fee was the cost of providing the statistics.
Partners Life managing director Naomi Ballantyne said the FSC should be providing more statistics and distributing them more widely.
But she said most insurers would not support the statistics in their current form being made public. "If they just publish the new business market statistics they're not helpful to the public and they're detrimental to people who are worried about their market share and could stop supplying the statistics."
But she said there would be support for new statistics such as claims information broken down by causes of disability and causes of trauma claims. "That kind of information is really important and should be made available."
Other information that could be collected might include claims experience and lapse rates, she said. "They would be really useful talking points to talk about the industry. The FSC should be there to tell people what the industry does and for us to hold ourselves to the standard we believe is the appropriate standard to treat customers."
Neilson said the Reserve Bank was in the process of putting together a system for reporting industry statistics. “They will probably have something available in the next couple of years. They cover every registered insurer.”
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