Life exec calls for adoption of Trowbridge hybrid model
A major life insurance executive has called for the life insurance sector to adopt the hybrid commission model outlined in the Trowbridge Report stating rapid action would allow the sector to set the agenda for change.
AIA chief executive, Damien Mu, said the sector should move to a hybrid commission model as it would answer the most pressing criticism levelled at the sector by Government and regulators.
Speaking at the Money Management Thought Leadership breakfast on the Trowbridge Report in Sydney yesterday, Mu said a rapid response would also give the sector time to consider more wide reaching changes.
"If really want to respond quickly to the biggest issues raised by ASIC, which were around upfront commissions, we can deal with that and can make the move quickly," Mu said.
"We can make some fast changes in moving to a hybrid model or a level commission with an IAP around 60 per cent."
"If we are to talk about leadership on these matters, and comments made from various sources make clear that action is absolutely needed, this shift is an area of common ground across the industry from my discussions with advisers and other insurers."
Mu also stated that any discussion on change needs to go past the current focus on remuneration and include the wider package of recommendations made in report.
"We need to agree the discussion is around the package but people tend to focus more on remuneration. I believe we also need to focus on education, training, efficiency, partnering to serve community and protecting our industry," Mu said.
"If we talk about customers and the alignment of interests with them what is best for them is a robust market that supports choice, access to quality advice, independence, innovation and competition and value and anything we do that destroys that is not in the best interests of customers."
Mu stated that the reluctance of insurers to comment on Trowbridge to date has not been from an unwillingness but rather a desire to seek
"We do understand the leadership position we are in and the significance of what is at stake. We need consensus to make such fundamental change successful and sustainable for all stakeholders and a public debate on our various positions is not helpful when we need to reach common ground."
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