News

Australian Bankers Association Launches Website for Homeowners

BANKS have taken the unprecedented step of launching a website calling on financially stressed homeowners to negotiate “hardship” packages to avoid default on their mortgages.

The Australian Bankers Association’s launch in recent days of the site shows the Big Four banks are on high alert for a rocky 2012 with a sharp rise in defaults.

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Credit Cards

Aussies turn their backs on credit cards

AUSTRALIAN  households are turning their backs on credit cards, wiping

debt racked up on plastic by more than 10 per cent and cutting the number of cards they own.

The average household slashed credit card debt by 14 per cent and trimmed their cards from 2.1 in the third quarter of 2010 to 1.9 in the fourth quarter.

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Banking

Two Sides of Rising Currency

IT’S the agony and the ecstasy of the surging Aussie dollar.

In one corner, excited young travellers are booking and paying in full for their holidays months in advance to take advantage of the extraordinary rise of our currency.

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Investing

Australian Bankers Association Launches Website for Homeowners

BANKS have taken the unprecedented step of launching a website calling on financially stressed homeowners to negotiate “hardship” packages to avoid default on their mortgages.

The Australian Bankers Association’s launch in recent days of the site shows the Big Four banks are on high alert for a rocky 2012 with a sharp rise in defaults.

Read more »

Insurance

Insurance Sector Vulnerable after Japanese Catastrophe

* QBE exposed in Japan
* IAG, Suncorp face rising costs
* Insurers heading for broker downgrades

SHARES in the insurance sector are vulnerable to further sell-offs as the massive earthquake and tsunami in Japan raise fears of soaring reinsurance costs.

QBE Insurance Group, Australia’s biggest insurer and the most exposed to Japan, yesterday warned that its preliminary assessment was that it would suffer net claims of $US125 million ($123.8m). QBE’s shares fell 18c, or 1 per cent, to $16.99, The Australian reports.

Shares in other insurers were also hit.

Insurance Australia Group was down 9c, or 2.6 per cent to $3.38, and Suncorp fell 11c, or 1.3 per cent, to $8.08. The two companies have no exposure in Japan, but there are concerns the insurers face rising costs thanks to the reinsurance market.

Southern Cross equities director Charlie Aitken warned that Australian insurers were headed for broker downgrades.

“This large-scale disaster may well prove the straw that breaks the reinsurance camel’s back.

What’s bad for reinsurers is worse for insurers, with reinsurance rates likely to go through the roof and crush margins,” Mr Aitken said.

QBE said in a statement yesterday the total net cost from all large individual and catastrophe claims to date this year would be about $US550m — well within its allowance of $US1.65bn after aggregate reinsurance protection.

“The majority of our estimated net claims from the devastating Japanese earthquake will come from the relatively low exposure in our reinsurance, marine and energy operations in Europe,” chief executive Frank O’Halloran said.

But analyst Ryan Fisher of Goldman Sachs questioned whether the allowance of $US1.65bn was “no longer looking as large or comfortable as it usually would” given that the US hurricane season usually happens in the second half of the year.

He added the first three months of this year had been hit with so many natural disasters including the Queensland floods, Cyclone Yasi and New Zealand’s Christchurch earthquake.

QBE is one of the few Australian insurers that has exposure to Japan’s horrific earthquake and tsunami. IAG has no operations in Japan but is in Thailand and Malaysia. Suncorp is focused on Australia and New Zealand markets, with minimal exposure in Asia.

Source : www.news.com.au

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