Australia competitive on life insurance premiums
Australian life insurers are offering competitive premium rates compared to the rest of the world, and premiums are often cheaper through advisers, according to a study released by Clearview Wealth yesterday.
The study is based on research conducted by RGA Reinsurance Company of Australia and compares life cover premiums based on a particular scenario across nine countries.
Australia faired well when compared to their overseas counterparts, including the United States, the UK and Canada. The study revealed Australians provide the cheapest life insurance cover, the second cheapest adviser and direct life cover premiums, and the fourth cheapest consumer credit life cover premiums.
Simon Swanson, managing director at Clearview, said the study also revealed that advisers in Australia, Hong Kong, South Africa and the UK could offer cheaper life insurance options than through direct channels.
Consumer credit insurance can cost up to double the cost of products sold by advisers in Australia and the US, and ranked as the most expensive option across all countries.
The UK led overall with the cheapest insurance over the adviser, direct and consumer credit channels and mid-range sums insured in the UK had similar prices whether sold via an adviser or through a direct channel.
UK results illustrated the evolution of the UK market to a point where small sums insured are sold via direct channels with limited underwriting, while large sums insured are sold through advisers with detailed underwriting.
The results were founded on research based on the lowest rate structure available in each market and focused on one price point, with some minor adjustments made to premiums to allow like-for-like comparison.
AUTHOR
Staff Writer
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
