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Insurance Business | 02 Dec 2015, 08:54 AM Agree 0
An industry taskforce has presented its findings with key recommendations handed down in a bid to help strengthen ties between the insurance industry and consumers.
  • John | 02 Dec 2015, 10:31 AM Agree 0
    PDSs really do need an overhaul. But I', concerned that these sort of taskforces are only ever going to paper over the cracks.

    To be fair, in recent years some insurers have moved away from the unfathomable antiquated Lloyd's style. But they still don't convey information in a way that a normal person understands. There are also too many grey areas in these things.

    There are things that people simply will never understand. For example, the same words falling in a different order meaning a different thing or a condition attaching directly to an insuring clause having more meaning than if both stood alone.

    In fact, I reguarly read wordings & don't know what they mean, underwriters often can't definitively clarify certain points & claims staff reguarly interpret things wrongly.

    It would be worthwhile for the taskforce to think completely outside of the box. For example, consulting psychologists & marketing experts for a different take on effective communication. Obviously this doesn't want to be at the expense of style over substance but I don't think it would hurt to look at things differently.

    Another option could be a prescribed standard wording with set endorsements. This would need to be done carefully & might not work but is worth considering.

  • Rolf Van Dulst | 02 Dec 2015, 10:45 AM Agree 0
    The premise that the role of insurers is to be the principal provider of assistance to ensure Australians get the product they need is totally inaccurate, that is the role of brokers. Insurance brokers spend years developing knowledge and experience in order to provide personal advice to clients. Trying to provide this level of service through call centres, which are often not even in Australia, is fraught with danger for insurance buyers. Insurers are attempting to muddy the waters by stating that "consumers don't want advice, they want guidance." What utter rot. Purchasers of insurance want what all consumers want and that is to be able to make informed decisions given a range of options.
    ASIC has personal advice restrictions in place for a very good reason. A broker providing personal advice to a client has no conflict of interest, they are required by law to consider the clients best interests above all else. Insurers dealing on a direct basis have no such legal requirement. Insurers dealing direct are incapable of providing impartial advice and we only need to look at the problems faced by the Financial Advisor industry to see results of insurers trying to give personal advice.
    This initiative by the ICA is nothing more than an attempt by insurers to strengthen their direct offering at the expense of brokers and consumers. I would encourage ASIC to recognise Recommendation 13 for the cynical attempt it is by direct insurers to control more of the distribution network and grow their profits.
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