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Articles by Gary Markham
Examining COVID-19-Related Insurance Litigation Trends
Almost 1,500 lawsuits have been filed by policyholders against insurers, seeking to resolve disputes around insurance coverage for COVID-19-related business losses. For those unfamiliar with insurance litigation trends, it’s important to put the scale of this into perspective. The average hurricane will result in about 50 to 100 cases being filed in the first year; from April till August 2020 we saw the same quantity of cases being filed each week for COVID-19-related losses.
When predictive analytics meets an unpredictable world
By rethinking predictive analytic models now, insurers can become more resilient to not just the immediate challenge of COVID-19, but also to the much longer-tail impact of climate change and other unforeseen risk-driving events. (Credit: Rymden/Shutterstock.com) No big data sets, predictive analytics or machine learning could have predicted the current state of affairs. COVID-19, of course, captures the imagination.
Three Factors That Will Help Legal Overcome the Black Box Challenge
Commentary Perhaps the biggest barrier to the adoption of advanced decision-making tech is the BlackBox challenge—not knowing how a piece of software arrives at its decision. But as AI and ML technologies begin to mature, we’re beginning to see possible solutions and mitigations.
Viewpoint: How Insurers Can Better Manage Litigation Caseloads During a Crisis
We’re now nine months since lockdowns were first introduced across most of the world and while many countries are flattening the curve of the virus, the same cannot be said of the COVID-19 litigation caseloads hitting insurers. In the US alone, 1,438 COVID-19 related cases have been filed by policyholders. Most of these disputes revolve around Business interruption (BI) claim declinatures. It’s still too early to say whether policyholders or insurers will prevail in the end.
Are insurers prepared for the COVID-19-related litigation avalanche?
Best Practices In the U.S., 1,295 cases are working their way through the court system, and insurers should expect more to come. Many businesses closed due to government orders related to the coronavirus. Featured here is Ziggy’s Burgers on Drumm Street in San Francisco. (Photo: Jason Doiy/ALM) It’s fair to say that the long-anticipated wave of COVID-19-related litigation against insurers is beginning to break.
Spaceship fined for false and misleading conduct
In a statement, ASIC said both Spaceship and Tidswell Financial Services (the trustee for Spaceship’s GrowthX portfolio) have paid a $12,600 penalty over misleading claims made on the funds’ website. ASIC said the ‘fundamental investment philosophy’ of Spaceship’s GrowthX fund “prioritised marketing over accurate disclosure”. "The Infringement Notices were issued following concerns that promotional statements prioritised marketing over accurate disclosure," the ASIC statement said.
FirstWrap launches new SMA portfolios
The three portfolios target different areas of the market, and according to a statement from Colonial First State Global Asset Management (CFSGAM) head of business development Australia and New Zealand Harry Moore, range from high conviction to low turnover passive options. The list of new portfolios includes the CFSGAM Top 20 Index Portfolio, the CFSGAM Concentrated Share Portfolio, and the CFSGAM Ex-20 Australian Share Portfolio.
ASIC accepts enforceable undertaking from ANZ
An ASIC investigation has found that the major bank failed to “provide documented annual reviews to more than 10,000 'Prime Access' customers in the period from 2006 to 2013”, according to a statement. According to the statement, the enforceable undertaking requires ANZ to: Commenting on the enforceable undertaking, ASIC deputy chair Peter Kell said the regulator considered it “critically important” that systems and processes were improved to prevent the reoccurrence of breaches of trust.
Glaucus stands firm on Blue Sky attack
On Thursday, InvestorDaily reported that Glaucus issued a public communication taking Blue Sky to task for allegedly overestimating its funds under management and misreporting the performance of some of its investments. Blue Sky managing director Robert Shand categorically denied the allegations made by Glaucus, describing the American manager’s behaviour as “appalling” and the report as “materially misleading”.
PE, VC funds can shelter portfolios: Crestone
In a statement, Crestone chief executive officer Michael Chisholm pointed to the emerging technology sector as a point of access to returns that were uncorrelated with traditional asset classes. “The challenge for investors is to find opportunities that tick the right boxes as investable assets, plus have the bonus of helping to solve some of the bigger problems in the world today,” he said.
Vanguard unfazed by BetaShares undercut
On Thursday, BetaShares announced the launch of a new Australian shares ETF with management costs of just 0.07 per cent, half that of the 0.14 per cent charged by the Vanguard fund that was previously the lowest cost product in this category globally. Reflecting on the announcement, Vanguard Australia head of corporate affairs Robin Bowerman told InvestorDaily his organisation can demonstrate a widespread commitment to its investment philosophy notwithstanding the activity of market competitors.
Morgan Stanley urges fund managers to automate
In a statement on the Morgan Stanley website, European diversified financials equity analyst Anil Sharma noted the “mounting pressure on firms to cut their management fees”. “For many firms, the lion’s share of AUM growth came from market gains rather than new flows,” Mr Sharma wrote.
BetaShares launches world's lowest cost Aussie ETF
At a ceremony in Sydney tonight celebrating BetaShares raising $5 billion funds under management, the company's founder and CEO Alex Vynokur said the new development would allow an Australian exchange-traded fund participant to be globally competitive. Mr Vynokur announced that BetaShares will launch a new product, the BetaShares Australia 200 ETF.
Growth funds see renewed demand
Data collected by Lonsec Connect, a recently launched research platform that draws on both market data and adviser engagement analytics, highlighted a growing interest in growth options among the advice community. “Financial advisers have refocused their recommendations and research on growth strategies following market volatility in February, with property, infrastructure and multi-asset strategies particularly in favour,” Lonsec said in a statement.
Institutional investors back early-stage VC
According to a statement on the Blackbird Ventures website, the venture capital investor received “a fresh $225 million of capital” in its latest round of fundraising. “Our third fund is led by Hostplus and our existing community of 100 individuals (mainly technology founders), along with First State Super,” said Blackbird co-founder Rick Baker.
ASIC resistant to role as ‘competition champion’
In ASIC’s post-draft submission to the Productivity Commission’s Inquiry into competition in the Australian financial system, the corporate regulator said it “support[ed] the Productivity Commission’s recognition of the importance of ASIC having a broad, proactive competition mandate”. “An explicit and broad competition mandate for ASIC would ensure we have a clear basis to consider and promote competition in the financial system,” ASIC’s submission report said.
NGS Super and QIEC Super announce merger
According to a joint statement, the alliance between non-government sector super fund NGS Super and Queensland-based super fund QIEC Super will create a $10.3 billion super fund with around 125,000 members. The merger, which will occur on 1 November 2018, will "ensure the future security and sustainability of benefits to the members of both funds and deliver improved economies of scale", the statement said.
US equities dip an ‘overreaction’: AMP Capital
US stock market indices fell by more than 2 per cent overnight on Tuesday, with the US S&P 500 dropping 2.23 per cent and Nasdaq falling 2.74 per cent. Speaking to InvestorDaily, AMP Capital senior economist Diana Mousina said the fall was attributable to a combination of geopolitical uncertainty as well as a correction in overvalued US tech stocks.
Cbus names new chief operating officer
Joe Youssef, previously Cbus general manager of investment operations, has been selected for the role. In a statement, Cbus chief investment officer Kristian Fok said Mr Youssef’s “proven track record in investment operations” paired with his management abilities made him an ideal candidate for the position. “Joe has been an integral member of our investments team for more than four years and will play a key role in steering the fund for continued success in the years to come,” Mr Fok said.
The psychological pressures of competition
Superannuation and investment professionals report that they are just too busy, trying to do more with less and are increasingly stressed. Rising stress levels are in large part the result of increasing competition from new entrants (like Zuper, Grow, Spaceship, Human Super and others) as well as established organisations. Down the track, global monoliths like Amazon or eBay could expand into superannuation, combined with new technology such as AI and robo advice.
Natixis brings ethical equity fund to Australia
Natixis has announced that its ethical investment subsidiary Mirova will make its Global Sustainable Equity Strategy available to Australian investors though a “locally domiciled unit trust vehicle”. The fund invests in global equities with a focus on eight “sustainable development themes” of consumption, energy, resources, buildings and cities, ICT, health, mobility and finance, the statement said.
CBA mulls sale of offshore insurance arm
The bank has announced that it will undertake a “strategic review” of its Jakarta-based PT Commonwealth Life subsidiary, which contributes $24 million to the bank’s insurance business bottom line. In a statement on its website, CBA announced it has commenced a review and engaged external advisers to assess the prospects of a sale of the PTCL business, of which the bank is an 80 per cent equity holder.
Three technologies revolutionising fund admin
There’s no way around it; the fund administration space is ready for a major shake-up. Whether it’s banks, hedge funds or venture capital organisations, fund and asset managers have traditionally been burdened with manual, antiquated, labour and time intensive processes that result in massive inefficiencies. Thankfully for fund administrators, new technologies are emerging that promise to make things quicker, easier and more cost-efficient for financial institutions of all shapes and sizes.
Government ups penalties for BBSW rigging
The government has legislated amendments to the Corporations Act 2001 that will see increased civil and criminal penalties apply to financial institutions found to have manipulated financial benchmarks, according to a statement from Treasurer Scott Morrison. “The manipulation of any financial benchmark or product used to determine such a benchmark is now a specific offence and subject to civil and criminal penalties,” Mr Morrison said in the statement.
Plenty of risks ahead for equities: GSFM
Global equity markets could still eke out single-digit returns over the next few years, says Grant Samuel Fund Management (GSFM) investment consultant Stephen Miller, but there are plenty of risks to negotiate. Mr Miller, who left BlackRock after a 14-year career as head of Australian fixed income in December 2016, joined GSFM on a part-time basis in February 2018.
China hits the ‘growth brakes’: Nikko AM
In a note to investors communicating insights from a conference trip to Beijing, Nikko Asset Management chief strategist Naoki Kamiyama said that while China looked “set for lower economic growth this year”, it would be for the sake of “creating a cleaner, more efficient economy”. “The consensus among many government officials and private sector economists at the conference was that China will experience a somewhat lower growth rate in 2018,” Mr Kamiyama wrote.
Milliman appoints adviser services director
In the new role, Andrew Whelan will drive development and management of national retail and wholesale partnerships, focusing on financial advisers and dealer groups, according to a statement. Mr Whelan was most recently at adviser software provider CCUBE Integrated Wealth where he was general manager, sales and marketing. Prior to that, he spent four and a half years at Morningstar as head of adviser solutions and head of deal desk. Before that, he was a consultant at Macquarie Group.
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