The changing face of insurance
The pace of change in Australia’s income protection (IP) offering has gathered significant steam in recent years. For advisers who have been in the industry for a while now, you would have witnessed an increase in clients’ awareness of IP and its benefits against a backdrop of significantly more commentary about the industry’s sustainability.
Industry experts, like KPMG, have noted the profitability of the industry has been changing: “Retail disability income reported a loss of $368m (in 2017), making it a fourth consecutive year of losses.”[1]
This view of profitability is also being seen through changes at a pricing level. Rice Warner notes: “The industry has responded by ramping up premium rates by 30% or more”[2].
Both of these experts have acknowledged the importance of a sustainable IP market and, as an adviser, this industry context is important to know. The long term sustainability of the insurance industry is critical to the nation’s health.
Our clients aren’t oblivious to the changes occurring and it’s incumbent on both product providers and advisers to work through these changes with them and improve understanding.
This can happen by first, understanding the broader demographic, economic and social factors in which an IP product is developed and then second, understanding the specific dynamics of IP premium construction.
Over the past 10 or so years, we have seen some significant structural changes to the IP market and even more significant shifts in societal perceptions.
Click here to read the full article.
Recommended for you
Over the years government regulations regarding financial advice delivery has increased complexity, compliance costs and time to deliver advice. As a result, financial advisers have been forced to “orphan” their less affluent clients.
Baron Rothschild famously said the time to buy is “when there’s blood on the streets, even if the blood is your own”. Thanks to high inflation and interest rates, there’s blood on the streets in the US treasury market. But the deep sustained selloff could be creating an opportunity to buy.
The idea of 'permanent blue chips' in Australia is seriously challenged. In his latest insights piece, Dion Hershan, Hea...
Online trading may seem easy, but the sad truth is that it’s not.