Confusion about insurance a threat to industry
Confusion or ambivalence about life insurance could be putting the industry at risk, a survey conducted by AIA Australia suggests.
When asked about the challenges facing the life insurance industry, 70 per cent of surveyed superannuation and insurance professionals listed uncertainty about the need for life insurance as one of their prime concerns.
Another key fear (70 per cent) was how the life insurance industry would cope with a spike in client claims for Australia's ageing population.
However, professionals were less worried about members losing cover by consolidating accounts of switching self-managed superannuation funds (SMSFs), with just 15 per cent citing this as a concern.
The sustainability of premium prices was a challenge for a third of survey participants (33 per cent), followed by the rising volume of claims (28 per cent) and poor consumer perception of life insurance (24 per cent).
Many respondents believed simplifying the claims process (42 per cent) and offering new, innovative products (23 per cent) could be the answer to reducing life insurance uncertainty.
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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.
