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Australia's life insurance industry, which forked out $9.3bn in death and disability claims last year, will stay relevant to consumers if it addresses the needs of an increasingly diverse, informed, and tech-savvy demographic, according to a recently released dialogue paper by the Actuaries Institute.
Ilan Leas, managing director at consultancy Retender and author of the paper, said insurers must “make it easier for consumers to buy simplified ‘light touch’ policies that they understand, make the claims process painless, and remove legal barriers to modernising policies.”
“As part of this delivery, community expectations are that life insurance provided by insurers is trusted, fair value, flexible, understood, and sustainable,” Leas said, noting, however, the occasional disconnect between the products being sold in the market and what consumers expect. For example, premiums may rise after the early diagnosis of an illness.
Leas also urged insurers to take advantage of the increased availability of data and analysis to deliver better products for consumers.
To enhance consumer outcomes and sustain an efficient, safe, and stable industry, Leas said the industry, government, and consumer groups should work together to:
“It is easy to call for change, but the cost of reform needs to be balanced against the consumer benefits,” Leas said, adding that “although the industry has begun this journey, more can be done.”
The paper, titled The Future of Life Insurance, was launched at the Actuaries Institute’s annual two-day Financial Services Forum in Sydney, May 21 and 22.
