In December last year, Freedom Insurance Group provided an update on its earnings expectations for the last six months of 2018.
“Having regard to management accounts and anticipated results for the remainder of the half year, Freedom expects that for the six months ended 31 December 2018 it will record an EBITDA loss of between $9 million and $10 million, compared to previously advised expected EBITDA loss of between about $7 million and $8 million,” the group said.
“This updated earnings expectation excludes any remediation. The revised earnings expectation reflects lower than anticipated net revenue, due to higher commission clawbacks, and higher one-off external consultant costs.”
Freedom will provide a further detail regarding its financial performance at its half-year financial results announcement in late February 2018.
Earlier this month, Freedom failed to acquire the St Andrews life insurance business from Bank of Queensland.
The troubled business recently completed its strategic review, which was prompted by ASIC’s recommendations about the life insurance industry.
As part of the review, which was conducted in collaboration with Deloitte, the Freedom board identified that the company may face a liquidity shortfall during calendar year 2019 arising from the timing of payments of commission clawbacks in the absence of receipts of commissions from new business sales.
“In this regard, the company is considering alternate options to address the potential shortfall,” the group said in a trading update.
“In addition, Freedom is implementing initiatives to improve operational efficiency and reduce costs.”
Freedom expects to make a provision for net remediation costs in its financial accounts for the period ending 31 December 2018 of between about $3 million and $4 million.
FIG is not a life insurer. It’s a company which sells life insurance to the punters which policies are actually written by real life insurers behind the scenes. Big difference
Why dont they just exclude mental heath claims for Income Protection. Cliaimants are taking advantage of other people’s insurance premiums who are funding their holiday from work.
I deal with claims on a daily basis. It is in the psychlogists’ best interests to keep the person on claim for a “mental health condition” as the client is forced to continue to see the psychologist at least monthly to be able to continue to claim.
I have had one client on a mental health claim for 5 years cos he was sad his wife left him which lead to him being unable to work, then whilst off work he was made redundant, and now because he is old (57) he cannot return to work because noone will hire him. He even got paid out TPD cos the psychologist signed the claim form (and a statement which i worded to ensure the claim was paid) and the GP cannot contradict the psychologist (due to the legal ramifications of doing so).
100% of the mental health claims i have dealt with were just people taking advantage of the insurers and if it had been 30 years ago they would have been laughed at and told to “harden up, thats just part of life”
its big call to call out everyone on MH claims…there are scammers in car insurance, GPs, workers comp, rife in police, everywhere. I doubt its the majority so really what you are calling out is the scammers… so to remove MH would put people who are genuine at risk. This is simply not fair. Insurers need to be better at handling claims, but I do understand it can be difficult because of the sensitivity of the issues. In my experience a TPD wont be paid “because a psychologist signs a form”. Several reports, including from different GPs are obtained and this occurs over a period of time.
Insurers have been so beaten up by the trash media they are now far more willing to pay dubious claims than risk another “evil insurance company won’t pay claim to crying man who’s nice to his mother” story. They have effectively given up on claims assessment based purely on policy rules and are now doing it based on potential bad publicity. Of course the only way to fund all these additional claims is by raising premiums. That’s why we’ve seen such huge premium increases in recent years.
I have been hearing Insurance crap for 20 years . First it was AC and L , biggest in the market in income protection but made no profit . ! How come they continued and got gobbled up by AMP . Then its AMP and MLC , oh we need to put our rates up each year , but then come out with some initial marketing that will get you a 30% discount on Bundles ? Then MTAA super , premiums up 50% in one year for my wife’s policy , then start coming down each year . Now CBUS reduced rates by about 30% this year . For the record , Death and TPD insurance is very profitable , and it is pretty hard to stuff up .( But obviously possible !!!!!)
AC&L (which started life as ACC) became part of National mutual (AXA) , not AMP.
AXA then got gobbled up by AMP. Term and TPD aren’t the loss leaders here, it is IP cover. TPD is more difficult to claim, so much so, that were it not for ”best interest” duty I would recommend lower levels of TPD in favour of truly comprehensive IP cover.
The real reason Term and TPD cover is so profitable is because most polices are out of force by the time the claim could have / would have been made.
As for industry funds and increased premiums, they were way under priced to begin with.
Just for the record, the last thing you want to be associated with is a life insurance company which isn’t profitable. ….; it’s how they can afford to pay claims