TheRisk Store and the Investmentand Financial Services Association(IFSA) are both in the process of compiling the first set of comprehensive statistics regarding the total amount of retail risk insurance claims that were paid out across the industry.
This data will provide financial advisers with a more tangible tool to help overcome the ongoing problem of under-insurance and highlight the importance of risk cover for their clients.
According to the Risk Store managing director Sue Laing, the initiative has also been undertaken to provide some positive aspects of risk cover in order to counteract the negative sentiment consistently generated within certain media circles.
“There’s no reason why we shouldn’t be telling the good news about the amount of money we pour back into the economy as an industry, and the effect it has on saving families and businesses from ruin,” Laing said.
Both organisations will be compiling their statistics as total figures for 2006, with the dollar amount of claims paid out broken down across the four main types of risk insurance cover: term, total and permanent disability, trauma and income protection.
When both sets of figures have been finalised a reconciliation will be performed by the two entities to ensure the statistics presented do not conflict with one another.
The Risk Store intends to publish its statistics on its website for advisers to access, with progressive figures being made available to begin with.
IFSA too will be carrying its information on the Internet and will support this with a series of press releases and fact sheets sent to advisers to notify them of the data. The industry association expects to update its numbers on a six-monthly basis.
One undeniable aim of both parties in providing this information is to help address the underinsurance problem faced by the majority of Australians.
“I do believe the public nature of these statistics will have the capacity to improve public image and that must translate into more acceptance of the concept [of taking out risk cover], and that then in turn should translate into acceptance of advice and recommendations,” Laing said.
“It’s not so much a direct effect but it certainly will be a somewhat subliminal effect, and that’s the whole idea of it,” she explained.
The Association ofFinancial Advisers chief executive Richard Klipin felt advisers would gain great benefits from the information.
“What it does is make visible what it is that insurance companies and products do for different consumers and the key role that advisers play in that process,” he said.
“By raising the issue and making the numbers transparent, hopefully the message that comprehensive protection is a critical part of everybody’s financial plan will come through,” Klipin said.
