(Adds CEO details, HY guidance, shares rise)
Nov 12 (Reuters) - Australia’s Freedom Insurance Group on Monday named Sean Williamson as incoming chief executive officer as current CEO Craig Orton had decided to leave after only a month in the job, citing personal reasons.
It also said it expected to post an underlying loss of between A$7 million ($5.1 million) and A$8 million for the six months ended Dec. 31 due to higher restructuring costs of about A$5 million.
The company has been struggling since a public inquiry into financial sector wrongdoing heard that it had used questionable direct-sales tactics including selling a complicated insurance policy over the phone to a man with Down Syndrome.
Its predicament underscores investors’ broader concerns about poor governance and unethical behaviour in Australian financial firms, amid calls for tougher regulation and stiffer penalties for wrongdoing.
The insurer’s stock price jumped 9 percent on Monday following the announcement, but it is still down nearly 86 percent since Aug. 28 when it was listed to appear at the ongoing inquiry.
“There’s a bit of a bounce with some bargain hunters thinking that hopefully the worst is over,” said James McGlew, executive director of corporate stockbroking at Argonaut.
“It’s going to take a long time for them to get back to where they were, if they indeed can.”
Freedom announced executive exits and slashed jobs in October as it restructured in preparation for a proposed nationwide ban on life insurers using telephone marketing to pitch policies to people who do not need them.
Orton had decided to leave the company before Dec. 31 for “personal reasons”, the company said in a statement. It gave no further details on his departure and a company spokesman was not available to comment.
The company also said it was considering the sale of its Spectrum Wealth Advisers business.
$1 = 1.3829 Australian dollars Reporting by Devika Syamnath and Chandini Monnappa in Bengaluru; Editing by Stephen Coates