Affordable advice helps close insurance gap

Jim Minto

Tower Australia Group chief executive Jim Minto has used the company’s first annual general meeting since splitting from its New Zealand arm and listing on the Australian Stock Exchange to declare that underinsurance remains a major issue in Australia, creating burdens for both taxpayers and the welfare system.

Minto said improving access to advice and insurance protection as well as some adjustment to the taxation treatment to make it uniform inside and outside superannuation would help the insurance gap.

What is more, he suggested the Government’s move, announced yesterday, to review the complexity in financial services would help in circumstances where onerous disclosure requirements around advice had reduced access for many Australian’s to advice.

“Australians are also restricted by cost and access to advisers for even basic financial advice due to the existing regulations surrounding the industry,” Minto said. “While we need to ensure advice is only provided by properly trained and qualified people, we do not need the same onerous requirements for all clients, regardless of whether they have large or more modest requirements.”

He said Tower welcomed the suggestion that simplified disclosure should be available for people purchasing insurance up to $500,000 in cover because this would lower the cost of advice and therefore improve access.

Minto said life insurance should be seen by the Government as a way of cutting the social welfare bill.