TAL confirmed in a statement on Thursday that an ongoing program of change related to its direct sales business model has been underway for some time.
“That program has resulted in a reduction in staffing requirements in that part of the direct business, which includes Insuranceline, leading to approximately 50 roles recently being made redundant,” the group said.
“The program of change is in line with the strategy for our direct business, and focused on achieving the best possible customer outcomes. It includes reviewing all lead types in our direct business to make adjustments where required, as well as a move away from outbound sales channels, which also aligns with recent recommendations from the ASIC direct review.
“All impacted staff have been provided with full support and a number of options have been made available throughout the process, including redeployment where possible.”
TAL was one of several insurance groups to appear in the sixth round of royal commission hearings last month. It was during these hearings that Australians learned how TAL had paid a private investigator $20,000 to gather information so the group could avoid paying an estimated $792,000 in claims.
The royal commission also revealed that, as of 14 September, TAL was still employing a senior case manager who was found to have acted inappropriately, bullied customers and whose portfolio was raising concerns.
It is unclear weather this person was one of 50 staff fired from the insurance giant this week.
TAL’s decision to review its direct sales business and the mass redundancies follow the release of a scathing report by the corporate regulator, which found “failure by all firms” in direct life insurance sales.
ASIC’s report, released two weeks before TAL representatives gave evidence at the Hayne inquiry, found that one in five of all policies taken out were cancelled in the cooling off period.
One in four of all policies that remained in force beyond the cooling off period were cancelled within 12 months and three in five were cancelled within three years.
ASIC also found that life insurance sold direct compares poorly with other channels when it comes to claims: 15 per cent of claims are declined, with 27 per cent of claims withdrawn.
The regulator identified a “clear link” between sale conduct and poor customer outcomes and has recommended that “pressure selling” be banned.
TAL’s decision to move away from outbound sales comes after ASIC made clear its intentions to restrict the practice for life and funeral insurance.
“We are considering what regulatory tools we will use to implement this reform,” ASIC said.
“In the meantime, the small number of firms who are still engaged in outbound sales will need to move away from this practice.”
I personally worked in the direct space at TAL and knew that this was a ticking time bomb. The reps that sold insurance only cared about $$ and not the customer. They were driven by greed and were encouraged to when they had the opportunity to earn up to $9.5k per fortnight!! I personally ran the commission reports when I managed one of these teams and the whole culture of the Direct division of TAL was despicable and preyed on the vulnerable and pensioners.
Can someone please clarify for me. Is Noble Oak “Direct” – even though some of the insurance is underwritten? Thanks!
Noble Oak is definitely direct business.
Here we have an organisation who built it’s business historically through the adviser channel and group pools and profit share etc which now uses every opportunity to negatively criticise advisers and promote a dark and shady image of advisers through their advertising campaigns.
If anyone has read the deplorable commentary against advisers from their CEO Anthony ” R ” Brown during the lead up to and during the LIF negotiations, they will well know to what I am referring.
Anthony Brown agreed with the findings of the manipulated ASIC Report 413 and the recommendations of the Trowbridge Report, so this should well and truly define where this man and the organisation he represents stands.
So ASIC muppets, maybe LIF was an artificial construct by the dodgy life companies as we planners said from the start.
This is unfortunate for the individual employees who lost their jobs but a big win for consumers. The sooner dodgy direct insurance is eradicated the better.
The article only mentions Insuranceline. Let’s hope it also includes “affinity” programs as well. Affinity is much worse because consumers are seduced into purchasing dodgy insurance products via their trust in the affinity brand (eg Qantas, NIB).
Even if TAL and others continue with their affinity programs, Qantas and co should get out ASAP anyway to minimise the potential brand damage from dodgy direct products and practices provided in their name.
tal biggest player in this space. insuranceline/qantas/nrma/virgin /nib…. list goes on. them and hollard dominated this space for years.now they decide to run away?
Direct should never have been allowed to commence in the first place and now should be banned entirely.
The insurers who have caused reputational damage to the Life Insurance profession through unacceptable direct models and practices should be utterly ashamed of devaluing the process.
It was entirely driven by greed and a desire to compete with the adviser channel in an effort to obtain business at a lower implementation cost, but at the expense of the consumer.
Well done to those Life Insurance companies that have been a part of this profit driven fiasco.
Advisers have been shouting to ASIC that Direct is untrustworthy for years now. It took a Royal Commission to back our concerns.
Advisers also brought Storm to ASIC’s attention pre-GFC, and CBA issues (thank you Jeff Morris). Once again, Advisers ignored and it took other events/other parties to force change.
We are part of the solution. How do we make this happen?
form a new association
Hmm Now it might be a good idea if there were separate claims sections for group, retail and what’s left of direct. The culture clash while that system continues is a serious issue