The life insurance industry needs to acknowledge the downturn in financial adviser numbers and better support those who remain as they are a key conduit between client and insurer.
Speaking at the Australian Institute of Superannuation Trustees super insurance symposium, Maria Falas, head of strategy and transformation at ClearView Wealth, said insurers relied on the relationship between advisers and their clients.
“It would be remiss of me not to acknowledge the instability of the financial advice industry. We are seeing the numbers of financial advisers at a five-year low as 9,000 exit the industry and we are seeing advisers’ future business models remain uncertain and the pressure of retraining under FASEA [Financial Adviser Standards and Ethics Authority] is adding to that.
“For retail insurance, our business model relies on the adviser-client relationship. Life insurance is purchased through advisers who guide the customers through their options prior to making the recommendation. And we’ve got COVID that’s also impacted financial advice businesses and how advisers and clients interact with each other and what they expect from their preferred insurer.
“The retail industry can control the products we develop, the service we provide and the ease with which we can do business. We can also better support financial advisers through challenging times.”
She said the launch of new individual disability income (IDI) insurance, which came into force on 1 October, had simultaneously prompted a “massive influx” of applications into the old-style products and insurers would need to balance the needs of both.
“Across the life insurance industry, the traditional life products are closed to new business and leading up to this period of closure on 30 September, a lot of insurers had a massive influx of applications and some of those are still in the process of being underwritten and onboarded,” she said.
“As the dust settles, we need to strike the right balance between ensuring the new IDI products remain fit for purpose but also ensuring we have sustainability and affordability for legacy products. We need to make it easier for advisers.”