Lapse rates in the life insurance sector are not a serious issue but life insurers should work together to prevent financial advisers from engaging in the process, according to the ANZ Group Executive Wealth Australia, Alexis George.
Speaking on a life insurer’s panel at the AFA National Adviser Conference on the Gold Coast, George said the insurance and advice sectors should move on from Report 413 and that she did not consider lapse rates a significant problem across the industry.
“I don’t believe, and I don’t think anyone in this room believes, that lapsing is a serious issue in this industry. I genuinely believe 99.9 percent of advisers come to work to do the right thing for their customers, every day every time,” George said.
Adding that no one insurer could be aware of the behaviour of all insurers, George endorse a mandatory reference checking scheme for people who moving within the advice sector and called for it to be administered by a third party.
“I don’t believe, and I don’t think anyone in this room believes, that lapsing is a serious issue in this industry.”
“The idea for mandatory reference checking for people that move around…is one step forward,” George said, adding “It has to be carried out by some independent body and the AFA can play a role in that because we don’t all know the bad guys.”
George also called for a collective effort to tackle the lack of consumer trust and said the actions of one insurer had an impact on all insurers.
“I think our industry is like a big ball of rubber bands and we each try to differentiate ourselves, which is great, but we are in a serious trust deficit as an industry,” George said.
“We can all move a little bit and one rubber band goes from the ball a little bit – but ping, as soon as something is on the front page of any paper we’re all back together in this big rubber band ball,” she added.
“We’ve got to genuinely attack the problems in our industry because trust is not earned in one day and it is going to take years to rebuild from where we are today.”
