Financial services need sensible reform: ClearView CEO Swanson

ClearView’s Simon Swanson says there is a ‘need for sensible reform to better protect consumers’ in the industry.

ClearView CEO Simon Swanson. Picture: Hollie Adams

Independent life insurance and wealth management group ClearView Wealth says the banking royal commission and a litany of other government inquiries have proved there is a “need for sensible reform to better protect consumers” in the financial services industry.

The comments from chief executive Simon Swanson came as the company posted an annual net profit of $32.4 million, a rise of 7 per cent year on year.

The royal commission is poised to put the life insurance industry in the witness box at its upcoming round of hearings next month. Although ClearView has been fielding requests for information from commissioner Kenneth Hayne, it will not know if it is required to give evidence publicly until just days before the hearings start.

The commission is expected to grill group insurers, who provide large pooled contracts for superannuation funds, on the sale of policies that members are unable to claim on, and put the “direct” insurance model under the torch. Direct sales are made by outbound call centres and through television advertising and have notoriously adverse claims results.

“The financial services industry is at a 20-year inflection point,” Mr Swanson said. “As the subject of ongoing reform for many decades, the industry has almost become numb to regulatory change, but the current level of scrutiny is not normal. It is extremely unusual.”

ClearView has a unique opportunity to come out on top of the rubble, according to Mr Swanson who said a “strong, positive culture that champions the client and strives for continuous improvement” would serve the company well.

“Poor culture destroys brands, relationships and businesses. As a relatively young company, ClearView has had a unique opportunity to build and nurture a dynamic, innovative culture,” he said.

“The ‘big four’ inquiries have been a public relations disaster for the banking and financial services sector, showing the need for sensible reform to better protect consumers. It has also highlighted the importance of culture.”

The life insurance industry is undergoing significant change, even without the government endorsing all of the 49 recommendations made by a recent parliamentary joint committee inquiry into the sector.

ClearView recently closed down its direct sales business after the corporate watchdog found a number of recordings of insurance sales staff who were walking indigenous customers through the process of buying a policy where it appeared they did not want to buy the product.

As part of a wider investigation by ASIC, last year ClearView was found to have sold more than 16,000 policies unfairly over a three-year period through call centres.

ASIC alleged more than 1000 of the sales were to customers at indigenous centres who were unlikely to speak English as a first language.

ClearView moved to remediate customers and shut down the direct business.

ASIC is to release the results of the sector-wide investigation into direct life insurance over coming weeks.