Reporting in the AFR highlights the impact of Hayne on different insurance sales models. iSelect has cut staff and outsourced most administrative functions to TAL's Lifebroker. Most banks have exited, or are in the process of exiting, the insurance sector. The fact that these changes are concentrated in the no / low advice portion of the market should be of most interest to us. Similar themes have played out here, whether it was large banks selling life insurance operations (such as CBA and ANZ) or TradeMe selling Lifedirect back to Mark Solomon. Insurance assets are returning to specialist hands - those more likely to see long-term value emerging from them. 

The AFR reports that APRA is so concerned about the crisis in insurance coverage in northern parts of Australia that it wants a new approach to the market: 

"All levels of government must act to save swathes of northern Australia from becoming uninsurable as a result of a climate change-related increase in natural disasters, the prudential regulator has warned. The Australian Prudential Regulation Authority said action should include a major shift of emphasis from disaster recovery to disaster resiliance and mitigation, pointing out the vast majority of disaster funding goes to "clean-up and recovery", with only 3 per cent on prevention and mitigation."

The piece by James Fernyhough is well worth a read, and not just for general insurers. It is also indicative of a wider interest by regulators in spotting medium to longer term issues and creating impetus for solutions where competitive pressure makes it hard for individual participants to act. That sounds a lot like some of the problems the New Zealand life insurance industry is grappling with. 

The AFR has this lengthy piece placing the recent announcement of a cut in adviser business BOLR in the context of AMP's recent history. Including ASIC's investigation into the charging of fees for no service. It is worth a read - a subject I am bound to return to in the upcoming quarterly review in September. Along with the fee strategies of advisers and the recent boost to direct. 

Chanticleer, at the AFR, (in this post, but you'll need a subscription) suggest that this is the case, using AMP's experience as the base, and generalising from that. I disagree. AMP's situation is fundamentally that of a wealth company sharpening its focus on that business, exiting the life sector. Meanwhile, some specialist insurance companies appear to be having a great time. It is true that for others it is more mixed, but the digital revolution is well underway, as is the shift towards living benefits. Riding those trends is probably the key to a successful future - for clients, advisers, and insurers.

Goodreturns piece on criticism of the RBNZ's decision not to extend AMP's exemption to Resolution Life contain some interesting quotes, some of which are hard to swallow. 

The Australian Financial Review had accused RBNZ of making “a change in a 150-year-old regulatory practice for life insurance companies in New Zealand through an out-of-the-blue ASX announcement.”

The RBNZ contends that no law or regulation has changed, rather, what has changed is the nature of the business, which will be in run off. Again quoting from the story: 

The bank [meaning the RBNZ] says exemptions like AMP’s “are granted on the basis that standards applicable to Australian incorporated insurers are broadly equivalent to New Zealand standards. In some circumstances, standards for Australian incorporated insurers favour Australian policyholders over New Zealand policyholders, including during ‘run-off,’” it says.

If you want to read the original AFR article (probably limited to subscribers, but I can't tell, as I am a subscriber) the link is here. 

Chanticleer at the Australian Financial Review has this piece (probably only available to subscribers) that talks up the prospects for AMP - in this case meaning, the AMP that will remain in Australia, and out of the insurance business. It is easy to find negative articles about AMP, (because of conduct problems, and the controversial sale of the wealth protection business) so this provides a welcome change. Chanticleer advances two reasons to be optimistic: the first is straightforward, reckoning that AMP is undervalued, and with the return of capital planned from the sales, plus a projected dividend rate of over 11%, the business is good value. The other is the approach of the new CEO, Francesco De Ferrari, who asked staff to be 'optimistic and agile'. 

Please note, none of the above is financial advice, I am merely reporting the view of a journalist at the AFR.