Freedom Insurance shares jump 16pc after boss exits amid Royal Commission fallout
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Freedom Insurance, savaged in the financial services royal commission for its telephone sales tactics, is getting a new chairman and CEO.
Investors seem to agree it’s the right move: the shares (ASX:FIG) jumped 16 per cent to 6.4c.
That’s still a long way from the 56c they were fetching a year ago, however.
Pauline Vamos, with 30 years experience in the insurance and financial services industry, will become the new chairman, replacing David Hancock.
Sean Williamson, who spent 10 years in senior leadership at Australia’s largest life insurer TAL, will become CEO.
Mr Williamson is already consulting to Freedom and will continue until the current CEO Craig Orton leaves for “personal reasons” before the end of the year.
Mr Orton, who joined Freedom in in February this year as Chief Operating Officer, took over from company founder and CEO Keith Cohen.
He represented the company at the royal commission where he apologised on behalf of Freedom for selling life and funeral insurance to a intellectually disabled man.
Director Katrina Glendinning has also resigned and another director David Hancock says he will resign after the Annual General Meeting.
In August the company announced a strategic review following a report by corporate regulator ASIC on direct life insurance, saying it intends to restrict outbound sales of life and funeral insurance in order to protect consumers.
Last month Freedom announced the suspension of telephone sales and a restructuring of operations to focus on the maintenance and servicing of existing policy holders while examining options for the business.
Freedom cut its staff to 90 employees from 230, resulting in annual savings of $12 million plus $15 million in annual operating expenses.
Restructuring costs are estimated at $5 million.
Freedom in August reported a 14.3% increase in full year revenue to $61.34 million. Net profit after tax was $13.15 million, down 6.5%.