It said the exception was Individual Advised Accident insurance which had an unusually low admittance rate.
The APRA analysis said that, in general, individual products had higher acquisition costs associated with the policy compared to group products.
“As this is reflected in the premium charged, the claims payments for these products will generally be of a lower percentage of the premium income.
It said disability income insurance (DII) business had the highest claims paid ratio for all distribution channels.
“While a ratio of over 100% suggests good value for policyholders, this is not sustainable and will threaten the ongoing availability of IDII for the Australia community in the future,” APRA said.
What is more, the SCA answer suggested that Australian Prudential Regulation Authority (APRA) data probably failed to fully reveal the level of investment fees.
“For the financial year ending June 2020, approximately $3.6 billion in administration fees were paid to large APRA regulated funds. By comparison $2.9 billion was paid in investment fees and total fees paid equalled $8.5 billion,” the SCA told the committee.
“The remaining fees paid consisted of insurance fees, advice fees and activity fees. However, we note that this APRA data significantly under-reports investment fees as highlighted by the Productivity Commission,” it said.
“The median disclosed administration fee for a MySuper product member with a representative balance of $50,000 in December 2020 is 0.325%. The median investment fee was found to be 0.725%.”
Mortgage Business
Examine role of leverage in house prices: Westpac By Malavika Santhebennur 21 April 2021
The major bank’s CEO pointed to “much lower” levels of leverage in the housing market compared with previous price peaks when questioned on macro-prudential tightening of lending standards.
The head of Westpac, Peter King, made the observation at the House of Representatives’ standing committee on economics hearing last week when he was asked by committee chair Tim Wilson about whether macro-prudential tightening of lending standards could be applied in a manner that does not pose a barrier to first home buyers attempting to enter the property market while preventing “excessive borrowing”.
What is more, the SCA answer suggested that Australian Prudential Regulation Authority (APRA) data probably failed to fully reveal the level of investment fees.
“For the financial year ending June 2020, approximately $3.6 billion in administration fees were paid to large APRA regulated funds. By comparison $2.9 billion was paid in investment fees and total fees paid equalled $8.5 billion,” the SCA told the committee.
“The remaining fees paid consisted of insurance fees, advice fees and activity fees. However, we note that this APRA data significantly under-reports investment fees as highlighted by the Productivity Commission,” it said.
“The median disclosed administration fee for a MySuper product member with a representative balance of $50,000 in December 2020 is 0.325%. The median investment fee was found to be 0.725%.”
A house at Marsfield, Sydney surged in price by 56 per cent in just five months
Sold for $2.74million in April after being sold for $1.76million in November 2020
Ryde council had issued a permit allowing house to be demolish for new duplex
Belle Property Ryde said new owner planned to live on one side of the new home
Janus Henderson Investors is tipping slower house price growth pace in 2022