Right now, the life insurance industry is concentrating on the wrong topic of discussion.
Phil Hay, BTFG head of Life Insurance, says that the industry needs to focus on the things that “can be done right, should be done right, and are being done right”.
“I’m watching the debates that are going on and even the use of the word churn and how much it’s being used now is just so wrong in terms of perception to reality,” says Hay.
“I’ve been in the industry for 20 years and there are things that come up regularly over a 20 year period, but I’ve never seen as much that is hitting the life industry in terms of regulatory change and reviews etc. as now.”
Hay’s main concern is that if the life industry starts concentrating too much on the topics of lapse and churn, it will take away from other real issues facing the sector, like Australia’s massive underinsurance problem.
He says that the industry needs to collaboratively show consumers that it is an adviser’s role to tailor products to their individual needs, rather than putting pressure on advisers to combat churn.
“When you look at financial advisers and the ones that I’ve dealt with over 20 years, and do work with, they’re always looking for the best solution for their clients’ personal needs. So if they see that there is a product that better suits their client’s personal needs – and it’s never just about dollars, it’s about the price, it’s about the definitions, the benefits, it’s about making sure that it really caters to their individual client’s needs – It will mean that there are times when the adviser has to move that business. That’s what they’re there for, that’s what best interest does.
“I would hate to see it where there is pressure to the point where an adviser starts questioning whether to move something, which could be contrary to the best interests.”
Hay says that BT hasn’t experienced the same issues that the rest of the industry is talking about, “to the same sort of magnitude”.
In fact, BT’s life insurance business hit a significant milestone today, with one million policies now in-force.
“The milestone of one million policies and excellent customer service performance don’t come about by chance,” says Hay. “It has been the direct result of focusing on advisers and their clients, to deliver what we think are the best products and services in the market.”