More doubt thrown on reality of churn

Further doubt has been thrown on the existence of a significant life/risk ‘churn’ problem, with a Parliamentary committee having been told that just under 75 per cent of lapses occur among clients aged over 50.

The Parliamentary Joint Committee (PJC) inquiry into the life insurance industry has received a detailed response to questions on notice from MLC Life Insurance which appears to seriously undermine suggestions that a significant churn problem actually exists.

The MLC response said that the three leading reported causes of lapse across the total MLC Life Insurance book were:

  1. A change in customer need;
  2. Affordability; and
  3. Switching to a competitor product.
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“Together these reasons account for 80 per cent of all lapses,” the answers to the questions on notice said.

The answer follows on from recent regulator testimony to the PJC that not all churn can be deemed to be bad.

According to the MLC Life answers to the questions on notice, across MLC Life Insurance’s total retail insurance book lapse rates are currently running at approximately 15 per cent of premiums in force.

“Of lapsing members approximately 74 per cent are aged over 50. Most often these members lapse their policy as the protection afforded by their policy is no longer required,” the insurance company said.

“Of the remaining 26 per cent of lapsing members, approximately 20 per cent are aged between 40 and 50 and the remaining six per cent is aged under 40,” it said. “For these cohorts the cause of lapse are more likely to be due to affordability, switching to a competitor product or other reasons.”

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We all knew churn was a red herring to start with, you know what causes churn the instos themselves increasing premiums too much too quickly and not worrying about lapses as they is more where that came from. Bunch of fat cats!

WMD's and none were found!
Sensationalist claims thown about to meet the cause and justification to stamp a foot on the industry!
If there isn't a problem, create one and then blame it on the those whom they wish to oppress!
Make it a big deal in the media and claim responsibility for wiping out the scourge of the industry.
Shame on them. And more fool the government for falling in with them. Or did they actually initiate it?

They used Fake News!

Can't wait for Adele Ferguson to jump on this one....(will be waiting a long time)

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