The Evolution of Solvency and Disclosure Standards in the Australian Life Insurance Industry

The Curious Case of the Occidental and Regal: The Evolution of Solvency and Disclosure Standards in the Australian Life Insurance Industry In 1990 the Australian life insurance industry was rocked by scandal which threatened to destabilise consumer confidence in the ability of insurance providers to meet policy holder liabilities. The incident highlighted the nature of the agency problems which arise when conditions of asymmetric information exist. It revealed systemic weaknesses in accounting, solvency and disclosure standards as they applied to life insurers. This paper uses an evolutionary concept of agency to analyse government and industry responses to this event. It is argued that initial adaptive responses stabilised the industry and averted a more serious crisis. Longer term innovative responses led to the introduction of a new and more rigorous approach to reporting and solvency standards which has improved information flows and agency outcomes.

The dying town syndrome : a survey of urban development in the Western District of Victoria,1890-1930

The experience of urban settlement in the Western District of Victoria suggests that the pattern of growth and decline in small towns is tied to the pattern of land use. This, in turn, is determined by the economic and technological factors which influence farm management and practices. At times, these factors have encouraged urban development and small towns have flourished. For the most part, however, these forces have not been conducive to sustaining long-term growth and prosperity and small towns, have been trapped in a cycle of growth and decline.<br /

Structural adjustment and change in the Australian life insurance industry post demutualization

Deregulation of financial markets has been an important platform for government policy in recent times. It has been a catalyst in the expansion of financial sector. The experience of Australian life insurers during this period represents an interesting case study into the impact of regulatory transition. The lifting of restrictions changed the institutional environment within which life insurers operated. In doing so it precipitated changes in strategies and organizational structures of these financial intermediaries. An information cost framework is used to analyse the consequences of deregulation and its implications for the Australian life insurance industry in emerging global financial markets.<br /

Monitoring and motivating outworkers : the case of the AMP and the sale of industrial life insurance 1905-1940

The development of labor management practices in the financial services sector provides an interesting insight into how problems associated with agency issues were overcome. Within financial institutions and other white collar occupations, the use of internal labor markets emerged as an effective means of both controlling and motivating employees. However such management techniques were only effective in cases where work tasks could be internalized. The business of some types of organizations necessitated a division of work tasks between those undertaken within the office and those undertaken outside the office. The management and sale of insurance products is a case in point. This paper explores the development of processes implemented to resolve a specific type of labor management issue, namely the control of workers under conditions of uncertainty. Using the example of the Australian Mutual Provident (Australia\u27s largest life insurer), it analyses how and why particular work relations procedures were developed. <br /

Consolidation within the Australian real estate investment trust sector : an evaluation of the impact on unitholder returns

Mergers and acquisitions within the Australian-real estate investment trusts (A-REITs) sector have become a noticeable trend in the last decade. Utilisingevent study methodology, 36 successful A-REIT mergers and acquisitionsbetween January 1995 and December 2008 were examined. Both target andbidding shareholders experience positive excess returns of 4.27% and 0.54%respectively over the 41 day event window [&minus;20, +20]. Analysis indicates that thecumulative abnormal returns (CARs) for bidding firms are considerably greaterthan previous research suggests. This study finds higher bidder CARs when scripor a combination of scrip and cash is used to finance the acquisition. We also findthat the relative size or the size of the acquirer have a positive and significantimpact on the excess returns of bidding A-REITs. This suggests that thesynergistic benefits from the acquisition are a result of economies of scale andincreased market power. There is also some evidence that the relative size andmethod of payment influence the CARs of target firms during the event window.<br /

Adaptation and change in the Australian life insurance industry : an historical perspective

In the wake of the deregulation of the financial sector in Australia in the 1980s and 1990s the life insurance industry has undergone a period of rapid change and reorganisation. Part of this adjustment has been the move towards the integration of financial service provision and the rise of bancassurance. This paper investigates the strategies adopted by Australian life insurers as they moved into the increasingly competitive environment triggered by the lifting of government restrictions on banking practices. It compares the approach of life insurers with that adopted in an earlier period of expansion and change. During the 1950s and 1960s an influx of foreign owned insurance companies into the Australian market precipitated the diversification of domestic life insurers into other insurance markets. The catalyst for change in both cases was the change in information costs brought about by the change in the competitive environment. The experience of the Australian life insurance market would suggest that there is a link between changing information costs and changing organisational structures. However this link is circumscribed by the institutional environment.<br /

Social Contagion and the Institutionalisation of GRI-based Sustainability Reporting Practices

Peer reviewedPostprin