Insurance lacks unity across value chain
The debate surrounding life insurance over the last few years has been fractured and the industry needs to think pragmatically to collaborate across the value chain, Association of Financial Advisers (AFA) delegates heard.
TAL chief operations officer, Justin Delaney, told a panel discussion at the 2017 AFA National Adviser Conference at the Gold Coast last week that there was a risk that the industry and customers would ultimately “get hooked” by the lowest common denominator.
“A lot of the debate over the last few years has been fractured in terms of channels, advice, manufacturers, etc. and I think we need to work together,” Delaney said.
“If there’s a bad headline about life insurance the reality is the customer doesn’t see if it’s an advice issue, manufacturing issue, or a channel issue. They just see that life insurance is bad.”
Delaney said the industry could adopt a more proactive approach to the market for the story of the industry to be more consistent.
ANZ chief executive, Alexis George pointed to life insurance statistics from the Australian Prudential Regulation Authority (APRA) to illustrate the life insurance industry had not generated substantial profits for the last three years.
“I think we all know constantly increasing premiums is not a solution for customers. It’s certainly not obviously a solution for the life insurance industry given those statistics.
“So we do have to think more creatively about product solutions in my mind and I think we also need to push some of the initiatives that we started on a couple of years ago,” she said, adding she was pleased to see TAL pushing some of the legislation around rehabilitation given the importance of encouraging injured clients to return to work.
“And at the moment, we’re prevented from directly paying for medical costs because of private health regulations. So I think as an industry we’ve got to get back on board with that.”
BTL Life head of insurance operations, Scott Moffit said life insurers had not engaged enough with technology and believed technology could assist with enhancing consumer trust in the industry.
“I don’t think anyone yet in the industry has really adopted the technology. We can accelerate the trust if we actually start to adopt the technology, we start to actually use it as a positive vehicle to reinforce what we do well rather than just send out the bill once a year with a couple of lines on it,” Moffit said.
AUTHOR
Malavika Santhebennur
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
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.
