ClearView rules out ever returning to direct insurance

ClearView has declared that it has no intention of ever re-entering the direct life/risk insurance business.

In a submission responding to insurance hearings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, ClearView has reinforced the timing of its exit from its direct business well before the Royal Commission and its intention never to re-engage.

Instead it said it would be focusing on its strengths in providing insurance by way of advisers.

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“Clearview accepts that the cultures and practices that had developed in ClearView Direct were unacceptable and were not in the best interests of customers,” it said.

However, it said, “the cessation of the Direct business (with no intention to re-enter it) together with the customer remediation programme demonstrate a commitment to the best interests of the public and a culture of compliance and improvement”.

“It has also allowed Clearview to focus upon its core business and strengths, providing insurance and ‘in the advice space’,” the submission said.

Elsewhere in its submission, ClearView reinforced that it had been cooperative in dealing with the Australian Securities and Investments Commission and suggestions that it had breached the anti-hawking provisions over 300,000 times did not take account of cases where third parties had gained consent.

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Clearly like all life companies pursuing the direct market route, Clearview have wanted more market share,.... but at what cost ?
Reputational risk is only a problem if you are caught out not doing the right thing by your policy holders.
Unfortunately fewer players now participating in the life insurance industry offer inferior contracts both in the Direct market and the advisor channel. This doesn't quarantine the policy holder from being cynical and skeptical about buying life insurance.
You get what you pay for. Buying cheap and restricted contracts will leave many policy holders "wanting".
Unfortunately the aim of the FSC via the LIF legislation and the jaundiced view of the Royal Commission on how advisers should be remunerated in the future will leave only the Direct insurance option available.
No adviser is going to be able to survive on the proposed future predicted 20.0% commission offering unless, they write cases in excess of $10,000 of premium.

Those bureaucrats who think they know best and deciding the fate of all advisers working in the industry don't either understand or don't care what is involved to get a case on the books.
At a minimum, it takes 9 hours from start to finish. Even at a charge out rate of $100 per hour, asking a client to foot a bill for $900 on top of their premium, just doesn't happen.
Asking a client at the time of a claim which may take up to 20 hours of an advisers time to pay $2,000, just won't happen.
Those who think otherwise, have no idea.
The industry will not survive long term if this is the future of the life insurance industry.

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