Browsing articles in "Insurance"
Tuesday 28th October 2014 - 1:41 pm
Comments Off on Home insurance:are you really covered?

Home insurance:are you really covered?

by Alan Thornhill

Does your home insurance policy really fit your family’s needs?

It must, because the worst can happen.

Problems can arise.

The industry watchdog, the Australian Securities and Investments Commission, discusses some in two reports it published today.

The first looks as how home insurance policies are sold.

And it found some faults.

It said these could involve misconduct in relation to the advertising of home insurance products.

The Commission’s Deputy Chairman Peter Kell said ASIC is now talking to some insurers and is thinking of taking further regulatory action with others, on these matters.

Mr Kell also said some insurers aren’t answering their customers’ questions properly.

His observation was damning.

“…most insurers have adopted a ‘no advice’ or ‘factual information’ business model which means they are unable to provide consumers with the information and or the advice they need,” Mr Kell said.

So its a jungle out there.

But what can you do to make sure that your situation is OK in this critical area?

Mr Kell says ASIC’s MoneySmart website has more information on home and contents insurance.

So you might start there.

Go to

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Monday 27th October 2014 - 5:44 pm
Comments Off on Medibank Private Shares go on sale

Medibank Private Shares go on sale

by Alan Thornhill

Australian retail investors will be able to apply to buy shares in Medibank Private from tomorrow.

That’s when the retail component of the Medibank Private Share Offer opens.

In a statement today the Federal government said: “The Retail Offer will run from Tuesday, 28 October through to Friday, 14 November 2014.”

It said this would give retail investors two and a half weeks to apply to buy shares.

The government also said the indicative price range for Medibank Private shares had been set at $1.55 to $2.00 per share.

It said retail investors would not pay more than $2.00 per share, even if the final price paid by institutional investors is higher.

“The final price per share will be determined following an institutional book build process, which allows the final price per share to be set based on the market’s view of fair value,” the government said.

It said retail investors would be required to apply for a dollar amount of shares.

“In the event the offer is oversubscribed, applications may be scaled back,” it added.

The government said refunds would be paid to applicants who apply and pay for more shares than they are allocated.

It said retail Offer applications can be made in three ways:

1. Apply and pay online at;

2. Apply by post using the paper application form and reply paid envelope in the prospectus; or

3. Apply through your broker.

The government also said Australian residents who pre-registered their interest in receiving a prospectus and now apply for shares in the General Public Offer can be allocated an amount of shares up to 15 per cent higher than General Public Offer applicants who did not pre-register.

Saturday 30th August 2014 - 6:30 am
Comments Off on Medibank Private sale to proceed

Medibank Private sale to proceed

by Alan Thornhill

The Federal government is planning to proceed with the sale of Medibank Private this year, subject to market conditions.

The Finance Minister, Mathias Cormann, confirmed that in a statement he issued today.

He said the Government is satisfied that this timing best meets our objectives for a sale, which are:

• to contribute to an efficient, competitive and viable private health insurance industry;
• to maintain service and quality levels for Medibank Private customers, including in regional and rural Australia;
• to ensure the sale process treats Medibank Private employees in a fair manner, including through the preservation of accrued entitlements;
• to minimise any post sale residual risk and liabilities to the Government; and
• having regard to the above objectives, to maximise the net sale proceeds from the sale.

Senator Cormann said the government would offer shares to retail investors and domestic and international institutions.

“All Australians will be given the opportunity to pre-register for a Medibank Private Share Offer prospectus towards the end of September 2014,” he said.

Details of the offer structure will be provided in that Medibank Private Share Offer prospectus.

The Government expects to lodge the Medibank Private Share Offer prospectus with the Australian Securities and Investments Commission in late October.

Wednesday 4th June 2014 - 11:49 am
Comments Off on Services sector gathers strength

Services sector gathers strength

by Alan Thornhill

Australia’s services sector is edging closer to growth.

The Australian Industry Group’s Performance of Services Index rose 1.3 points in May to 49.9.

Readings below 50 indicate a contraction in activity.

May’s result was a combination of an increase in new orders (52.0), sales (50.5), supplier deliveries (50.4) and stock levels (52.3).

These results stood against a drop in employment (45.8) and renewed weakness in selling prices (42.1).

Only three of the nine sub-sectors expanded in May with finance & insurance services the strongest performer (62.7). Retail trade recorded its lowest level in eight months at 44.7.

The Group’s Chief Executive, Innes Willox, said: “After sliding for successive months, the stabilisation of the services sector indicated by the May Australian PSI® is welcome.

Nevertheless, with consumer sentiment and business confidence showing considerable volatility, a more decisive turnaround over the next couple of months is far from assured,” Mr Willox added.

Sunday 11th May 2014 - 6:22 pm
Comments Off on Shorten warns on health care

Shorten warns on health care

by Alan Thornhill

Bill Shorten says many Australians will be discouraged from seeing their doctors, when they need to, once a co-payment is introduced in this week’s budget.

Addressing reporters in Moonee Ponds, the Opposition Leader said doctors had told him this “unequivocally.”

“ If Australians have got to pay an extra tax to go to the doctor, sick people and people caring for sick people will defer going to the doctor because of the cost of living impact.”

Mr Shorten said the proposed co-payment “…won’t save the Australian taxpayer a single cent.

“In fact it will cost them because what will happen is sick people will defer going to the doctor in Australia until they are sicker and that will mean a greater cost for all Australians down the road.”

Mr Shorten said: “In Australia, the quality of your healthcare should not depend upon your credit card but your Medicare card.

“ You should go to the doctor if you are sick and you should not avoid going to the doctor because you are poor.”

The Opposition Leader said universal Medicare is one of the things that distinguishes Australia from America.

He said many Australians fear that Mr Abbott is taking the nation’s healthcare system down the path of the two-class American healthcare system.

Under that system how much money you have determines what sort of healthcare you get, Mr Shorten said.

Monday 28th April 2014 - 5:30 pm
Comments Off on What will those super fees cost you, in retirement?

What will those super fees cost you, in retirement?

by Alan Thornhill

A new report says the high fees charged by Australian superannuation funds could cost a 50 year old fund member almost $80,000 at retirement.

The Grattan Institute, which prepared the report, also estimated that a 30-year old would lose more than $250,000.

That is about a quarter of the member’s total balance.

It said that under a fairer fee structure, at least half that money could be saved.

The Institute reported that – on average – Australians pay fees of 1.2 per cent on their superannuation account balances.

It said that is more than three times the median OECD rate.

However the funds said fees should be seen as just one part of the equation when it comes to making decisions on super.

The Association of Superannuation Funds of Australia, urged fund members to spend time checking the features and fees of their superannuation account to make sure it suits their needs, and will deliver the best outcomes for their retirement.

Its CEO, Pauline Vamos, said: “”Making choices about the level of assistance a person wants from the system will influence how much they pay in fees.

“For example, choosing an account with less features, a simpler investment option or lowering the level of insurance cover you have within your fund are all ways you might choose to reduce costs.”

Ms Vamos also said people should consider a fund’s performance, investment options and its insurance and service features, as well as its fees, when making a choice.

But the Grattan Institute said the high fees charged by Australian superannuation funds are not justified by high returns.

Indeed, it said, the Australian funds which charge the highest fees consistently deliver lower returns than other funds once their fees are taken out.

“Costs are too high because the system wrongly assumes that choice in the market will drive enough account holders to choose low-price funds, thereby forcing others to lower their fees,” the Institute said.

“But this approach has not worked in Australia or anywhere in the world,” it added.

“ Superannuation is inherently opaque and most people do not make an informed choice, instead paying into a default fund chosen by their employer,” it warned.

Thursday 3rd April 2014 - 2:58 pm
Comments Off on Change your thinking:Reserve Bank chief

Change your thinking:Reserve Bank chief

by Alan Thornhill

Glenn Stevens is urging Australians to re-assess the way they debate the economy.

The Reserve Bank Governor challenged several popular shibboleths in a speech he gave to the American Chamber of Commerce in Brisbane today.

These included the “growth versus austerity” conundrum and – perhaps most surprisingly – public worries about job losses, with people asking where jobs would “come from” in future.

Mr Stevens said Australia had gained “nearly 4 million jobs” since the low point of the last recession in 1991.

“It’s worth noting that none of those additional net jobs came from manufacturing,” he added.

Mr Stevens said Australia’s future jobs would come from “areas we don’t see yet.”

“We are trying to shift the conversation away from the ‘growth versus austerity’ framing of recent years,” Mr Stevens said.

That was: “ultimately a rather sterile discussion.”

“ No-one has ever achieved growth simply by austerity,” he declared.

“But equally the approach of simply ignoring the gaping hole in public finances in many countries has reached the limits of its credibility,” he added.

“ We need a refocused conversation, around doing things that spur growth potential, which would mean, among other things, that the accommodative policies of central banks could get more traction,” Mr Stevens declared.

“The debate here has, I would have to say, been overly- focused on budget outcomes in particular years,” he said.

His speech reinforces messages contained in what he called “an important speech” given by the Treasury Secretary, Dr Martin Parkinson, on Tuesday.

Mr Stevens noted that world leaders would “come to town” in Brisbane in November, to discuss ways of spurring global economic growth.

“Australia can host this meeting with a strong reputation for economic performance,” he said.

“ While you might not know it from the tone of much domestic discussion, most – if not all – of the G20 membership looks at our relative growth, financial stability, banking soundness and public finances with a good deal of admiration.

“This has given Australia, at the margin, just a little bit of additional credibility in putting forward our agenda,” Mr Stevens said.

So where to from here?

Mr Stevens said Australia is more likely to face a shortage of workers, than a shortage of jobs, in future.

“….the more likely problem in the medium-term future won’t be one of not enough jobs, but instead, not enough workers.

“At present the number of new entrants to the labour force after finishing education each year exceeds the number retiring.

“Ten years from now those numbers could be roughly equal, absent a further rise in labour participation in the older cohorts,” Mr Stevens said.

He said Australia, now, must look for growth opportunities.

Thursday 3rd April 2014 - 9:33 am
Comments Off on Service sector slips back

Service sector slips back

by Alan Thornhill

Australia’s increasingly important service industries went backwards last month.

The Performance of Services Index, produced by the Australian Industries Group was 6.2 points weaker in March at 48.9.

Readings below 50 indicate a contraction in activity.

Concerns over the economy and uncertainly around spending cuts in state and Federal budgets were cited as impacting demand for services in March.

“The disappointing turn down in services activity in March is a sober reminder of the fragility of the broader economy,” Ai Group Chief Executive, Innes Willox, said.

The services sector had lifted strongly in the previous month following a gradual buildup of momentum from the last quarter of 2013.

The latest Australian PSI – and the mixed results for employment and new orders – is a further reminder of the risk that excessive spending cuts in the upcoming budget could slow down domestic activity rather than encourage the private sector investment and employment creation that the economy requires,” Mr Willox warned.

These are already affecting job prospects in Australia’s service industries.

The employment sub-index contracted this month to 45.3 indicating that employers are cautious about the near-term outlook.

The study also showed that:-

• The large retail trade sub-sector declined by 1.8 points to 47.7 points (3 month moving averages).
• Input prices remained high (63.7) while selling prices continue to lag (45.6).


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Alan Thornhill

Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.

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