Life insurers threatened by online comptetitors
Australia’s life insurance industry has failed to realise the full benefits of e-commerce and risks being swamped by its Internet savvy competitors.
A survey conducted by Deloitte Touche Tohmatsu has found that life insurers are particularly threatened by local and international competitors who provide comprehensive services through their websites while traditional insurers do not.
Deloitte national financial services industry group director Rod Millott says life insurers have largely failed to make effective use of the Internet's capabilities to get an instant sale.
"Customers who are desperate to make a purchase learn quickly what a cooling off period is: they are often shunted off to a call centre or asked to call an agent," he says.
Out of a possible ten points measuring policy information, quotes and the ability to purchase online, the life insurance arms of three of the big four banks rated only four. Online insurers InsuranceMyWay.com and Insurenet unsurprisingly topped the list with ten out of ten, while Royal Sun Alliance came last with only three.
None of the traditional insurance brokers surveyed offered the option of completing an application online.
Insurance giant AMP came in third with seven out of ten, giving full policy details but offering no quotes on its Web site, while AXA Asia Pacific yielded a similar but slightly lower result, coming in fifth behind Insurance Watch.
National Australia Financial Management offered online quotes but only limited policy detail while ANZ, Commonwealth Insurance, Westpac, Tower Life/FAI, MLC-Lend Lease, Colonial and Zurich all received four out of ten, making them equal seventh.
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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.
