The Australian risk insurance industry, like most areas of financial services, has a few obstacles to face in the next few years – churning, increasing premiums and underinsurance to name a few.
However, the two greatest challenges have been pinpointed at the recent AIA Australia Group Insurance Summit, where superannuation and insurance professionals were asked for their views on current and future life insurance issues.
Perhaps unsurprisingly, 70% said that consumer uncertainty about the need for life insurance and the impact of an ageing population on the level of claims would be critical challenges to overcome.
“The Group Insurance Summit gives us the chance to take a pulse on the main issues and challenges facing our industry,” says AIA Australia general manager, Life Insurance, Damien Mu. “Clearly, indifference to life insurance is still front of mind for many, so we’ve got to start thinking differently about how we engage with consumers to create long-term behaviour change.”
Delegates at the Summit said that consumer awareness and engagement could be raised by simplifying product wording to increase understanding of insurance products. They also said that the industry needed to send a stronger message on the importance of insurance. Only seven per cent said that providing more comprehensive cover to offset premium rises was important.
Fifteen percent of respondents said members inadvertently losing cover by consolidating accounts or switching to SMSFs would be the third biggest concern for the industry.
More immediate challenges revealed by the survey were the sustainability of premium prices, increasing claims and poor consumer perception. In addressing these issues, delegates believe improving the claims process and innovating products to provide better value for consumers are vital.
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