Former CBA CEO Ian Narev ignored insurance worries, Matt Comyn claims

CBA’s Matt Comyn told his former boss about his concerns over the sale of consumer credit insurance products.

Commonwealth Bank CEO Matt Comyn gives evidence before the royal commission into financial services.

Commonwealth Bank chief executive Matt Comyn says he started to develop concerns about the sale of consumer credit insurance products from about 2014 and raised these concerns with former chief executive Ian Narev at least three times.

Giving evidence at the financial services royal commission, Mr Comyn said he had concerns as to the value of the products, the eligibility criteria, whether the bank was meeting a genuine need, the claim payout ratio, and whether some elements of the product provided appropriate value and benefits for the customer.

Mr Comyn, who replaced Mr Narev as chief executive in April this year, conceded the type of insurance — which has triggered billions of dollars of payouts among UK banks — was a “lower value” product.

“Certainly as it related to other insurance products and life insurance products, yes, I think they are lower value,” he told the royal commission, adding he did have concerns that customers didn’t understand the products.

Under questioning, Mr Comyn, who was the head of Commonwealth Bank’s retail banking business, admitted there were poor sales practices around the ­products.

“In the period of 2015, I discussed my concerns with the chief executive. I discussed my concerns again in 2016 with the chief executive, and on at least three occasions raised those concerns.

“When I had the decision rights in March of 2018, I ceased the sale of two of the three products that you are referring to — Creditcard Plus and personal loan protection insurance,” Mr Comyn said.

When asked by counsel assisting, Rowena Orr, about Mr Narev’s reaction Mr Comyn said: “I raised the concerns; he had a differing view.”

“I raised it at various points in time, and certainly suggested a decision to suspend those sales. There was generally indecision around that and I took that indecision to be the decision,” Mr Comyn said.

His concerns over the products had their origin in discussions with British bankers over the scandal-plagued Personal Protection Insurance products, which had similar characteristics to those CBA was selling.

Those discussions included conversations with his predecessor Ross McEwan, who by that stage was the chief executive of the Royal Bank of Scotland.

Mr Comyn conceded the bank’s Creditcard Plus product should not have been sold to 64,000 customers as identified in a review in April 2015, and failed to implement changes to sales scripts recommended by corporate watchdog, the Australian Securities & Investments Commission in 2011.