Sustainability and Client Health Checks

Do you support the concept of client health checks to help ongoing insurance affordability?

  • Yes (47%)
  • No (33%)
  • Not sure (20%)

The suggestion that insurers may consider performing health checks on aging lives forms the basis of our latest poll, where we ask:

Do you support the concept of client health checks to help ongoing insurance affordability?

AMP’s CEO, Craig Dunn, floated the idea of customer health checks earlier this week, in an article appearing in the Financial Review.   Mr Dunn suggested that, in reassessing the health of the insured person, life companies would be able to better determine the relationship between premium pricing and associated risk – the desired outcome being the ability to minimise premium increases on aging lives, thereby contributing to future policy affordability and greater retention rates.

Mr Dunn’s suggestion is positioned within a broader conversation about ongoing industry sustainability.  Specifically, Credit Suisse Australia, in releasing its seventh ‘Life Insurance Annual’ late last year, highlighted three key factors that were combining to raise concerns about ongoing industry sustainability:

  1. A statistically significant increase in lapse rates in recent years
  2. An increase in ‘experience losses’, particularly in income protection product claims
  3. Little evidence of price adjustments in the market in order to address these two factors

Neither Mr Dunn nor anyone else is advocating that health checks on ageing clients is the answer to the question of industry sustainability, but perhaps it may be part of the solution.  But are there any adverse implications that may accompany such an initiative, such as the potential for increased pricing elsewhere within an insurer’s book of business?

This idea is worthy of further discussion and we are keen to hear your views…

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