POWERED BY MOMENTUM MEDIA
Industry funds creating market distortions
The larger industry funds are creating an inefficient life insurance market, according to Australian Prudential Regulation Authority executive John Trowbridge.
In his speech to the Institute of Actuaries in Sydney, Trowbridge said the larger industry funds are currently creating a “form of indigestion within the life industry”.
“Because of the large scale and limited period of [the larger industry funds’] insurance contracts, we now have an inefficient market operating,” Trowbridge said.
This was evidenced by “many of the larger life insurers not participating in industry fund tenders because of the upheaval that occurs at each renewal, usually every three years”, Trowbridge said.
He predicted there would likely be a “restructuring of this market, perhaps along the lines of the coinsurance practices managed by general insurance brokers on behalf of large corporates when they buy their insurances”.
AUTHOR
Mike Taylor
Recommended for you
A major super fund has defended its use of private markets in a submission to ASIC, asserting that appropriate governance and information-sharing practices are present in both public and private markets.
A member body representing some prominent wealth managers is concerned super funds’ dominance is sidelining small companies in capital markets.
Earlier this month, several Australian superannuation funds fell victim to credential stuffing attacks, which saw a small number of members lose more than $500,000.
Small- to medium-sized funds have become collateral damage in an "imperfect" model for super industry levies, a financial institution has said.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
36.96 3 y p.a(%)
3
GAM LSA Private Shares AU I
34.22 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
VanEck Video Gaming and eSports ETF (AU)
28.89 3 y p.a(%)
