August 29, 2017
Should there be more severity-based trauma product solutions made available in the Australian market?
- Yes (66%)
- No (24%)
- Not sure (10%)
Last week’s launch of ANZ Wealth’s OneCare Severity Trauma product option places a renewed focus on the merits and value associated with severity-based critical illness contracts. Our latest poll is asking whether you want to see more of these products introduced into the Australian market.
Severity-based trauma products have proven to be a significant success in South Africa, where the product was first offered. When Macquarie Life Active was launched into the Australian market in 2010, the insurer noted that it took only three years for every insurer in South Africa to offer severity-based trauma solutions after the first product was launched.
In Australia, however, the take-up has been slower. Seven years since the launch of Macquarie Life (now Zurich) Active, the market now has access to OneCare Severity Trauma, while CommInsure offers an ‘evidence of severity’ option where, for a reduced premium, the qualifying hurdle to make a successful claim is raised.
…the Australian market as a whole has yet to embrace severity-based trauma insurance
At least one direct-to-consumer product offers a tiered structure of trauma insurance benefits based on severity, but the Australian market as a whole has yet to embrace severity-based trauma insurance.
Some industry contributors have previously suggested the demographic of the Australian market is not as well suited to this insurance product solution, while others have pointed to a greater need – a greater imperative, for insurers to deliver appropriate life insurance product solutions linked to rollover and superannuation products.
Add to this the general upheaval in the Australian life insurance sector as a result of the fallout from the Global Financial Crisis leading to the implementation of the Future of Financial Advice and Life Insurance Framework reforms which, together with the introduction of the Australian Life Insurance Code of Practice, appear to have curbed the momentum within life companies that is needed to research, develop and launch new risk product solutions.
Have you implemented a severity-based trauma product solution for your clients as yet? Do you hold that these products can offer a more tailored solution for the client if their circumstances dictate? Do your preferred providers offer this product option? Should more life companies include severity-based trauma products in their menu of solutions?
Let us know what you think and we’ll report back next week…