LMI provider sees 34.7% drop in profits

No surprises with the LMI providers also bearing the brunt of regulatory changes

Http://brokernews.com.au/news/breaking-news/lmi-provider-sees-34-7-drop-in-profits-239475.aspx

 

Croc tears for the poor buggers.

 

It is a proper industry filling a market niche though, and think about the people they employ.

Unfortunate collateral damage by regulatory changes, how would you like to see your job disappear virtually overnight thanks to a regulatory body's decision? If I worked for them and relied on my income it would be prudent to seek alternative employment....

 

Can happen anywhere and to anyone.

CBA has announced the closure of an entire division in Qld and the sacking (called retrenchment) of 100+ staff.......
Marg

 

Losing the bulk of WBC's external LMI as well as Macquarie wouldnt have helped either

 

I don't know what those Qld staff were involved with, but I do know CBA has a big push towards automation, replacing manual processing (no value add) with automated solutions. Which is different to an external regulatory change shrinking your whole business. Still, could happen to other industries though. But this case seems loud and clear in my mind, cause and effect. Regulatory change --> shrinkage of business.

 

CBA can employ some offshore people and process it all on PCs. $5 a hour v's $75 a hour. They would love to close all branches and just have cash machines....So would the bikies.

 

Except CBA is the only major bank that doesn't currently offshore.

 

I think that will definitely change in the near future.

 

The future is a long time, so hard to disagree.
Every other bank has, I'm 100% labour costs are much higher here in Australia.

 

3 things.

I have worked for the full spectrum of employers and self employed & can tell you that many places do not give a bugger if your alive or dead, you are there to perform a task at the companies whim.

Second I was not taking a poke at any employee or staff members, was not on my mind at all, of course I do not want people to lose job/s.

I have donated a lot of money to these grubs over the years, it is totally not needed IMO & if you want to discuss morals, why should say CBA staff get discounts and an advantage, or doctors and solicitors etc not have to pay LMI, can they not lose jobs ? start gambling, become incapacitated etc ? See, I am a practical person and I think they were just getting fat at everyone's expense, they provide no real community service that I see.

 

Not every bank yet - there's a fair few which still plug the '100% local staff' line. One in particular which is in the pockets of the unions - but they're hopeless!

Speaking with a colleague in the commercial side of CBA, he was mentioning when getting training in Syd recently they were showing their new customer service robots they're working on and the facial recognition based marketing - we're going to be living in a very different world in the not too distant future.

 

Don't mind me - I was talking majors
Reckon that might have been the 'innovation lab' that's touring, if so believe it's headed to SA later in the year.
Completely agree, continually changing, more and more automation.

 

Would suggest statistically they're least likely to default, lower risk.

Over time you might see different modelling that see's different customers charged different LMI based on risk profile, which kind of happens already with 'in house insurance' being offer. I agree it would be a decent idea that lower risk clients paid a lower amount of LMI when they're going to use it.

 

Yes. Singapores food courts have robots going around collecting trays of plates etc. they even greet patrons at the food court. I will see it for myself in September.

 

I will agree with bank staff maybe - but not for just the reason that employment is known, but because the companies have a deal, but anyone can have a turn of events, stats are rubbish & in our world those who do not need a leg up get all the advantages ?.

If myself, a surgeon or any solicitor is killed, we all present the same problem, I could probably also argue that my liabilities may be far less, you would have to look on a case by case basis & that was my main point.

The world has gone/going mad

 

No, denying finance to those that can be shown to be non payers or purposely evading etc would be a better idea, otherwise you find nothing wrong, you proceed, just as a LL cannot deny on stats of who may pay or use past race or status as ammo against others.

I think it is a BS industry , why are we all paying now for banks to hold more capital ? That is a better system, banks that can absorb the problems as it is all priced in already & frankly, I think we all feel it is

 

I have issues with the LMI model.
its one of the rare 'services' where the user does not pay.

The LMI companies can charge what ever they like, the banks won't complain as they aren't the ones paying the bill. In fact, they lend the borrower the additional funds, so REALLY don't mind what they charge. The more they lend the more they make, and the LMI (the borrower just paid for) protects them.

If you defaul the bank gets their $$ back. And then LMI & co chase the borrower for their costs. Who losses in this... oh. The borrower.

Why would anyone pay for insurance, which doesn't protect them, and in fact may make it possible to lose even more money?

If you think I'm wrong. Check their profit margins.
Pre APRA changes they had NPAT of 60% (of revenue). Following this 'drastic' crash in profits they are down to a measly 40%.
They then announce a $100mil share buy back.

Tragic.

Blacky.

 

It is kinda like the Govt, selling to the public, say a bank, that the public already owned

The main difference being, your right, as the taker and funder of the insurance product, it is you who will be punished if the insurance is used.

I mean, could anyone devise a more brilliant scheme to take money from people ?

 

It beats the alternative.

Do you have any suggestions?

I think in some other markets banks lend 80% at home loan rates, 30 years. and then 10-15% at personal loan/credit card rates over a 5year term....