Manufacturers of life insurance products need to refine their offerings to ensure customers can seamlessly transition from group insurance within superannuation or direct insurance into an advised retail insurance product and back again, major insurer, AIA has told Association of Financial Advisers (AFA) delegates.
The firm’s chief retail insurance officer, Pina Sciarrone, told a life insurance panel discussion at the 2017 AFA National Adviser Conference at the Gold Coast last week insurers and product manufacturers must work with advisers to be able to provide seamless product and service offerings to clients.
“Work with the offerings rather than work against the offerings,” she said.
Sciarrone said default opt-out group insurance was the right policy setting, with the group insurance market paying out $4.9 billion in claims in 2016. Take this away, and it would cost the government and the economy $5.7 billion, she said.
She also said there needed to be a balance between the appropriate level of default cover and retirement savings, while addressing concerns of over-insurance and under-insurance at various stages of a customer’s life.
“But what is also critical is that the retail advised industry and advisers play a role there in terms of topping up that insurance cover and that voluntary insurance cover to address the individual needs of Australians,” she said.
“There’s a real role for group insurance and retail advised insurance and probably even direct insurance to work together.”
TAL chief operations officer, Justin Delaney told delegates there was an opportunity for advice in group insurance in the future.
“One of the most difficult things for group insurance is it’s incredibly efficient at a macro level in terms of the way it can be distributed (premiums) effectively in terms of claims ratios but that comes with inefficiencies at an individual level,” Delaney said.
“And that’s where I think advice can play a really key role.”