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30 Apr 2018

Consumer credit reporting agency Equifax has lost a considerable amount of money dealing with legal and security costs in the fallout of its major data breach.

The company’s first quarter earnings report reveals it has spent US$28.9 million (about AU$38.3 million) for legal and investigative fees tied to the breach. On top of those costs, Equifax has also paid US$45.7 million (about AU$60.5 million) for the quarter on IT and data security, as well as US$4.1 million (about AU$5.4 million) in product liability expenses.

In total, Equifax spent US$78.7 million (pre-tax) responding to the data breach and for legal costs for the quarter, before insurance reco...

30 Apr 2018

The future of the Cunningham Lindsey brand in Australia is unclear following completion of claims manager Sedgwick’s acquisition of the loss adjuster.

An official statement says the merger of the two US-based global companies will operate – with “select exceptions” – under the Sedgwick name.

Cunningham Lindsey regional CEO Damon Bennett told insuranceNEWS.com.au he cannot comment, and a US spokesman declined to confirm whether the Australian operation will switch to the Sedgwick brand.

Asked about the merger’s impact on staffing, the spokesman said: “There will be no changes in the Australian business.”

The acquisition brings the Sedgwick group’s headcount...

26 Apr 2018

IAG has risen two places on S&P’s “top 20” list of insurers for the Asia-Pacific, becoming the biggest Australian insurer and 15th-largest in the region in the first quarter.

The ratings agency’s Global Market Intelligence Top 20 is based on market capitalisation, and says IAG’s $US13.59 billion ($17.48 billion) value was up 3.3% on the preceding quarter, pushing it above Suncorp on the list.

Suncorp, valued at $US13.27 billion ($17.06 billion), dropped to 16th from 14th place, while QBE slipped out of the Top 20 after ranking 19th at the end of last year.

Life insurer AMP remained in 18th position with a value of $US11.05 billion ($14.21 billion) at Marc...

25 Apr 2018

icare has said that no patient will be left out of pocket by planned changes to accreditation and fees surrounding X-ray and imaging technologies.

Responding to an article published by Insurance Business earlier this month, John Nagle, interim CEO and managing director, refuted claims raised by the Australian Diagnostic Imaging Association (ADIA) that icare was set to cut fees and change rules surrounding radiology and imaging services.

“Our primary focus is the care and support we provide our customers,” Nagle told Insurance Business.

“No patient will be disadvantaged or out of pocket by the changes and we will continue to cover all reasonably necessary...

24 Apr 2018

Reform forces builders to fix cladding ‘defects’
NSW has changed home building laws to classify unsafe external wall cladding as a major defect, requiring builders to pay for rectification work.

Anyone who buys a unit or townhouse with unsafe external cladding can now make the responsible builder repair it for up to six years after the building is completed.

The state’s home building laws provide safeguards to owners of new properties with major defects.

Minister for Innovation and Better Regulation Matt Kean says this is the latest in a series of reforms regarding the use of cladding.

NSW Fair Trading Commissioner Rose Webb recently called for public submi...

24 Apr 2018

Consumer advocates have called for an end to the sale of some add-on insurance products.

They say the Productivity Commission’s proposal for a deferred sales model is an important first step towards improving consumer outcomes but does not go far enough.

The joint submission from the Consumer Action Law Centre, Financial Counselling Australia and the Financial Rights Legal Centre says it’s not clear that a deferred sales model “would resolve the widespread problems of add-on insurance mis-selling in every case”.

“In many instances, withdrawal of this product from sale would be the preferable approach.

“It is low-value, sold to many people who are ineligibl...

23 Apr 2018

Australia's biggest general insurer by market share is planning to sell its four Southeast Asian businesses, under a review of its Asian operations, three people with knowledge of the matter have revealed.

The Asian market has proven to be a challenge for IAG despite its years of investments, with the insurance giant reporting a $6m underwriting loss in the region in its fiscal half of 2018 – a slight improvement from the $9m loss it posted in the second half of 2017.

Asia's overall earnings contribution also dropped to $10m in 2017 from $26m the previous year.

The sale of IAG's businesses in Malaysia, Thailand, Vietnam, and Indonesia, in deals that coul...

22 Apr 2018

New Zealand SMEs are relying less on brokers for their insurance needs, mirroring trends in Australia and other developed markets, according to Vero.

About half of SMEs bought business insurance via brokers last year, down from 61% in 2016. The percentage that purchased direct increased to 49% from 39%.

Significantly, almost half use a broker for some but not all policies.

Vero says the second New Zealand edition of its SME Insurance Index spells trouble for the broker model, which has previously been businesses’ go-to channel.

“This suggests a number of SMEs are considering alternatives for their insurance,” the index report says. “There are a range of re...

11 Apr 2018

Swiss catastrophe data company Perils has upgraded its final loss estimate for Cyclone Debbie to $1.74 billion.

Its previous estimate for total losses was $1.66 billion, issued six months ago.

Debbie hit Queensland and NSW from March 28 into early April last year.

Perils says this is the first time a market-loss footprint for an Australian catastrophe has been made available at a postcode level, and by property line of business.

The data is divided into cyclone and flood losses, allowing insurers to derive damage-degree functions as a percentage of total sums insured in both categories.
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9 Apr 2018

Lloyd’s wrote $2.3 billion of premium in Australia last year, making it the fifth-largest player in the local market, according to General Representative Chris Mackinnon.

In a LinkedIn post celebrating Lloyd’s success since setting up here two decades ago, he says Australia is now its fourth-largest territory.

Lloyd’s wrote about $500 million of premium in 1998, its first year here.

“It has been a pleasure to work with our loyal network of coverholders and brokers, and it has been immensely gratifying to slowly see the growth and success of the Lloyd’s Australia business,” Mr Mackinnon said.

“As we look to the future, we see it is very clear that the techn...

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