Freedom ditches life insurance sales

Freedom Insurance Group announced it will stop selling life insurance products and alerted shareholders of the likelihood it will face a liquidity crisis next year.

The board of the embattled insurer has decided to search for alternative business models after a strategic review headed by Deloitte found new sales of its life products is no longer viable.

Further, in the absence of incoming revenue and repaying commissions, the board flagged a potential liquidity shortfall during calendar 2019, but indicated that the company is still solvent.

Freedom said it informed ASIC that it has commenced an investigation into its past misconduct highlighted by the financial services Royal Commission.

The size and scope of the remediation will be reviewed by an independent expert, Freedom said, adding a provision of up to $4 million has been made.

Freedom was taken to task at the life insurance hearings of the Royal Commission, notably for aggressive sales tactics and selling life insurance to an intellectually disabled man.

A slew of organisational changes took place after then-chief operating officer Craig Orton took the stand.

This included Orton taking over Keith Cohen's job as chief executive and culling its workforce from more than 200 to just 90.

Orton exited in October and former TAL general manger of strategic alliances Sean Williamson took over as chief executive.

Pauline Vamos, who recently became chair of the ASX-listed firm, said her appointment will bring highly relevant experience in life insurance, regulatory, compliance and risk frameworks and governance.

Read more: Freedom Insurance GroupRoyal CommissionASICCraig OrtonDeloitteKeith CohenPauline VamosSean Williamson
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