Major life insurer, TAL has told a Parliamentary Committee that customer satisfaction with direct insurance models is some of the highest in the industry and that consumers are becoming increasingly self-directed.
In a submission to the Parliamentary Joint Committee reviewing the Life Insurance Industry, TAL has reinforced its support for the provision of financial advice around life insurance but, at the same time, said it was important to note that "the direct insurance landscape is shifting and there is an emergence of distinct ‘new direct' models, driven by changing consumer behaviour and increasing levels of consumer self-direction".
"In the long-term the industry must be able to provide solutions for this type of customer," the submission said.
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It said that, traditionally, the direct channel of life insurance had catered for customers who were not being served by financial advisers and, typically, these customers had more simple insurance needs which are met by simple products such as funeral insurance.
"The most important focus in the traditional direct market is on ensuring that customers understand the cover they have purchased to avoid difficulties at claims time," the submission said. "We are focusing a lot of attention on ensuring that important terms, conditions and exclusions are clearly explained and communicated before a purchase is made and our staff incentive arrangements reflect this."
"Distinct from what we have described as ‘traditional direct', it is important to note that there is also a ‘new direct' model emerging, driven by changing consumer behaviour," it said. "We are seeing a new breed of self-directed insurance buyer who wants to research their options and make a purchase on their own terms and in a way that meets their need for control."
"In the long-term, the life insurance industry must be able to provide solutions for this type of more sophisticated, mass affluent consumer and this has been a key focus for TAL."