Economy

The Australian Securities and Investments Commission (ASIC) said in a statement on Wednesday that QBE Insurance (Australia), a member of the ASX-listed insurer, used a certain pricing model to calculate premiums which reduced discounts customers should have received. Shares of QBE Insurance fell as much as 1.1% to A$16.97, hitting their lowest level since Oct. 17.”Where insurers make discount promises to renewing customers, they need to have robust systems and controls in place to make sure their customers receive the discounts they were promised,” ASIC deputy chair Sarah Court said. The watchdog has lodged its claim with the Federal Court alleging that between July 2017 and September 2022, the insurance firm sent more than 500,000 renewal notices to retirees, loyal customers, QBE shareholders, those holding multiple QBE policies, and those with QBE policies who had made no claims. The lawsuit marks the latest problem about discounts for the Australian insurance industry, and casts another spotlight on risk management at insurance firms.ASIC is seeking civil penalties, declarations and adverse publicity orders. The move by ASIC comes after the watchdog issued a letter in March to the country’s general insurance firms asking for improvement in claim-handling practices, especially in response to severe weather events. In August 2023, ASIC filed a lawsuit against a couple of units of Insurance Australia Group, alleging they misled customers about loyalty discounts available for certain types of home insurance policies. QBE said in a statement it had self-reported the failures to ASIC in October 2022, adding that it had taken steps to address the issues following an external review of pricing practices. More

LONDON (Reuters) – Nearly half of Africa’s citizens live in a country where governance has worsened over the past decade, as deteriorating security erodes progress, according to a new report.The annual Ibrahim Index of African Governance report found that despite positive progress in 33 countries, overall governance was worse in 2023 in 21 countries, accounting for just under half of Africa’s population, compared with 2014.For several countries, including densely populated Nigeria and Uganda, the deterioration in overall governance had worsened over the second part of the decade, according to the report released by Sudanese-British billionaire businessman Mo Ibrahim’s foundation. “We can see really a huge arc of instability and conflicts and this deterioration, and security and safety of our people, is the biggest driver of deterioration and governance…putting everything down in general,” Ibrahim told Reuters in an interview. Ibrahim pointed to the coups in West Africa and war in Sudan, but said poor governance also fostered violence and instability. “If there is deterioration on governance, if there is corruption, if there is marginalization…people are going to pick up arms,” he said. The report found that infrastructure – from mobile phone access to energy – and women’s equality, were better in 2023 for roughly 95% of Africans. Health, education and business environment metrics had also improved continent-wide.But the report found that public perceptions on progress were grim, even when the corresponding governance dimensions showed progress; all public perception indicators, apart from those tracking women’s leadership, declined. The worst drops were in perceptions of economic opportunities and of safety and security.The foundation said this could be due to higher expectations in countries that were making progress, and also a tendency to focus on what is not working. But Ibrahim said it was a serious problem. “If public dissatisfaction is high, that obviously can lead to unrest, it can lead to increased migration, conflicts,” he said. More

(Reuters) -Starbucks Corp suspended its forecast through the next fiscal year as new CEO Brian Niccol looks to turn around the coffee giant struggling with falling demand for its pricey drinks.The coffee chain also reported preliminary fourth-quarter results, saying same-store sales, net revenue, and profit declined, weighed down by weak demand in the U.S. Its shares fell about 4% in after-hours trading. The stock has gained nearly 28% since the company named Niccol as CEO in early August. Niccol, who was named to the top job in a surprise move, said, “It’s clear we need to fundamentally change our strategy so we can get back to growth and that’s exactly what we are doing with our ‘Back to Starbucks (NASDAQ:SBUX)’ plan.”He said Starbucks would simplify its “overly complex menu, fix our pricing architecture.”The company now expects comparable sales to decline 6% in the U.S. and 14% in China for the fourth quarter ended Sept. 29. It suspended annual outlook for the fiscal year that will end in September 2025. “Despite our heightened investments, we were unable to change the trajectory of our traffic decline,” said Chief Financial Officer Rachel Ruggeri. “We are developing a plan to turn around our business, but it will take time.”Still, Starbucks increased its quarterly dividend to 61 cents from 57 cents per share, to boost investor confidence in the turnaround plan, Ruggeri said.The company’s rewards program did not help improve customer traffic. As part of the turnaround plan, Niccol said the company aimed to change its marketing efforts, and shift focus to all customers and not just “Starbucks Rewards” members.”While we remain optimistic that Starbucks can return to positive comparable sale as fiscal 2025 progresses under Niccol’s leadership, we suspect a reality check is needed on the timeline to reinvigorate profitability,” William Blair analyst Sharon Zackfia said. “We suspect multiple avenues of attack (by Niccol) are likely, including increasing labor hours at stores and reducing the frequency of limited-time promotions.”Before taking the helm at Starbucks, Niccol was CEO of Chipotle Mexican Grill (NYSE:CMG), where he owned the burrito maker’s problems, agreed with critics, and revitalized sales. At Starbucks, Niccol took over from Laxman Narasimhan, inheriting several challenges at the coffee giant that has been under pressure from an activist investor to improve its business.The coffee chain is also suffering from increased competition and weak demand in two of its top markets, the U.S. and China. Niccol, in his first address as CEO, said last month he would look to “reestablish the brand as the community coffeehouse” in the U.S. as he laid out his plan for the next 100 days.Niccol’s strategy to start with a clean slate echoes that of new Nike (NYSE:NKE) CEO Elliott Hill, a company veteran. The sportswear giant had also been grappling with declining sales under former boss John Donahoe. Starbucks still plans to hold its scheduled fourth-quarter earnings conference call on Oct. 30. More

Human resources data company Brightmine said on Wednesday the expected median pay award in the year ahead was 3%, down from pay awards of 6% in the same period in 2023, reflecting a sharp drop in inflation.It said pay rises held at 4% in the three months to September, the same as in the three months to August although it was lower than a 4.8% increase in the second quarter. “While pay awards are expected to decline in 2025, businesses are continuing to find creative ways to support their workforce, particularly by addressing skills shortages and retaining key talent,” said Sheila Attwood, senior content manager at Brightmine.Wednesday’s figures chimed with Bank of England forecasts of slowing wage growth.The BoE is monitoring the outlook for wages as it considers further interest rate cuts. The central bank is expected to reduce borrowing costs again on Nov. 7 after cutting rates for the first time in more than four years in August.Governor Andrew Bailey earlier this month said that the central bank could move more aggressively to reduce borrowing costs if inflation pressures continued to weaken. But BoE policymaker Megan Greene on Tuesday this week said she still believed the central bank should take a cautious approach due to the risk of longer-term inflation pressures.Official data showed British inflation fell to a three-year low of 1.7% in September while pay grew at its slowest pace in more than two years in the three months to August.Brightmine said the median pay award in the public sector for the year to September stood at 5.5%, the same as in August.The September data was based on 64 pay awards covering 433,000 employees, while the year-ahead forecast was based on views from 289 organisations that represent nearly half a million employees. More

(Reuters) -The top U.S. consumer finance watchdog on Tuesday unveiled long-awaited rules that would make it easier for consumers to switch between financial services providers, a move the agency said was aimed at boosting competition. The Consumer Financial Protection Bureau’s “open banking” rule governs data sharing between fintech firms and traditional banks, allowing consumers to easily transfer their personal data between providers free of charge. Banks, which stand to lose out, were quick to criticize the rule, saying it could jeopardize consumer data security and exceeded the agency’s legal powers, while fintech groups praised it, saying it would promote the safe transfer of consumer data.A pair of U.S. banking groups, the Bank Policy Institute and the Kentucky Bankers Association, filed a lawsuit in U.S. District Court late Tuesday challenging the rule, arguing the regulator overstepped its authority. The groups asked the court to halt the rule from taking effect. CFPB Director Rohit Chopra compared the new rule to regulations that now allow mobile phone users to switch providers while keeping the same number, and said the change should help bring U.S. payments systems more in line with advances in other developed countries.He also said the rule incorporates strong privacy protections and consumer choices.”A company that ingests a consumer’s data can use the data to provide the product or service the consumer asked for, but not for unrelated purposes the consumer doesn’t want,” he said in a speech at a financial technology event held by the Federal Reserve Bank of Philadelphia.First proposed a year ago, the new rules were 14 years in the making, having been called for in the 2010 Wall Street reforms enacted following the 2008 financial crisis.According to the CFPB, the rules would also allow consumers to borrow on better terms, for example by allowing lenders to issue loans using data held by other financial institutions, and to make payments directly from their bank accounts rather than by card.Consumers will also be able to revoke access to their data immediately, the CFPB said.Ahead of the announcement, CFPB officials said the agency had made some changes to the version originally proposed in response to concerns from industry and public comment, sparing banks with less than $850 million in assets from having to provide data, for example.Companies will also have more time than originally proposed to come into compliance. Larger financial technology companies will have until 2026, while the smallest will have until 2030.Republican chair of the U.S. House Financial Services Committee Patrick McHenry welcomed the announcement, calling for Congress to codify the new rule’s protections into law.”This is progress for American innovation and consumers but we can’t stop here,” he said in a statement.Data aggregators, such as Plaid and Akoya, which provide connections among banks and financial tech services, and the Financial Technology Association, whose members include aggregators and payments companies like PayPal (NASDAQ:PYPL), praised the rule, saying it would promote the secure transfer of consumer data. But other trade groups said they were not happy.Lindsey Johnson, head of the Consumer Bankers Association, said in a statement the CFPB had “contorted” the congressional statute authorizing the rule to enable “thousands of third parties’ to access consumers’ data.”The American Fintech Council (AFC), on the other hand, complained the consumer data provisions were too restrictive, including by improperly barring the “secondary use” of consumer data for cross-selling services and targeted advertising. More

The robust activity in several international markets have helped oilfield services companies offset some of the declines in North America. “We remain confident in achieving our full-year EBITDA guidance midpoint,” CEO Lorenzo Simonelli said in a statement.Houston-based Baker Hughes has benefited from several liquefied natural gas projects as energy firms rush to build new LNG producing facilities betting on long-term demand for the super-cooled commodity. Revenue from its industrial and energy technology segment rose 9% to $2.95 billion, from a year earlier. Baker Hughes, which makes power generating turbines, has also inked several contracts for non-LNG projects this year in the Middle East with the likes of Saudi Aramco (TADAWUL:2222).Larger rival SLB last week said natural gas projects in Asia, the Middle East and the North Sea are expected to grow regardless of decisions on oil production curbs by the OPEC+ producers’ alliance. Baker Hughes said revenue in its bigger oilfield services and equipment segment rose 4% in international markets, helped by a 34% growth in Europe and Sub-Saharan Africa.However, the company said that oilfield services revenue declined by 6% in Middle East and Asia, a region which has seen increased drilling demand post-pandemic.North America revenue at the unit fell 9%.Total third-quarter revenue of $6.91 billion missed estimates of $7.22 billion. Baker Hughes posted an adjusted profit of 67 cents per share for the three months ended Sept. 30, compared with the average analyst expectation of 61 cents, according to data compiled by LSEG. More

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(Reuters) – A look at the day ahead in Asian markets. If the prospect of a soft landing for the U.S. economy had boosted investor sentiment and global risk appetite recently, it is giving way to a deepening sense of caution as investors grapple with spiking U.S. bond yields and a stronger dollar.It’s not that yields and the dollar are rising solely on the back of increased optimism about the U.S. growth outlook. Worries about Washington’s huge spending and deficits, and the upcoming U.S. election, are also on the rise.So much so, that the U.S. “term premium” – the extra compensation investors demand for lending to the government over the long term instead of rolling over shorter-term loans – is back. It is the highest in a year.Add to that the ongoing doubt surrounding China’s economic outlook and the effectiveness of Beijing’s raft of support measures, and Asian investors’ glass right now is looking half empty rather than half full.If Wall Street is beginning to feel a little heat from the spike in yields, Asian and emerging markets definitely are. Asian stocks are now down five of the last six sessions.The 10-year U.S. Treasury yield broke above 4.20% on Tuesday for the first time in three months, and the dollar index also climbed to highs last seen on Aug. 2.If it’s rate and yield differentials fueling the dollar’s gains, the path of least resistance is against the ultra-low yielding Japanese yen. The dollar on Tuesday rose above 151.00 yen for the first time in three months, and the yen is back to being the worst-performing main Asian currency this year.The weaker yen isn’t offering much support for Japanese equities, though. Foreigners have been buyers in recent weeks but the Nikkei is at a three-week low, suggesting domestic investors are putting their cash overseas.The Asian calendar on Wednesday is light, with only inflation from Singapore and industrial production figures from Taiwan on deck, leaving investors to focus on global market-moving drivers.They include the BRICS summit in Kazan, Russia, and IMF and World Bank annual meetings in Washington. Investors can expect headlines from several policymakers in Washington to hit the tape on Wednesday, including from European Central Bank President Christine Lagarde, Bank of England Governor Andrew Bailey, Bank of Japan Governor Kazuo Ueda and Reserve Bank of New Zealand Governor Adrian Orr.The International Monetary Fund on Tuesday published its World Economic Outlook, in which it cut its GDP forecasts for China and Japan. The change in Japan’s outlook, to 0.3% growth from 0.7%, was the biggest downgrade of all major economies, and second only to Mexico’s 0.7 percentage point fall.Here are key developments that could provide more direction to markets on Wednesday:- Singapore inflation (September)- Taiwan industrial production- BOJ Governor Ueda speaks in Washington  More