Our latest poll has resulted in a very close vote on the question of whether standardising TPD definitions will benefit Australian consumers.
In response to our question:
Do you agree that standard TPD definitions would benefit the consumer in the Australian life insurance market?
- 50% of advisers have agreed with the question
- 42% disagree with standardising TPD definitions
- 8% remain undecided
This question has been raised following the recent announcement from the UK that TPD definitions within Critical Illness contracts are to be standardised from next year in order to provide greater clarity to the consumer and reduce the incidence of unsuccessful TPD claims.
Within the Australian market, based on adviser comments, the prevailing objection is that standardising TPD definitions would stifle competition and initiative:
“Standardisation will kill innovation”
“I want competition and innovation between insurers AND advisers”
This position argues that standardising TPD definitions will mean less innovation in definitions from risk manufacturers either across the board or for specific market segments, meaning the consumer will be the ultimate loser by not being able to access and benefit from non-existent future innovations.
But while most comments we have received argue against standardising TPD definitions, more advisers voted for the proposition, supporting the notion that the benefits associated with greater clarity and consumer understanding outweigh the argument against.
We thank Association of British Insurers’ Assistant Director, Health & Protection, Nick Kirwan for his comment in support of the question:
… every consumer survey I’ve ever seen has said PLEASE simplify the products
… here in the UK, every consumer survey I’ve ever seen has said PLEASE simplify the products the industry offers so we have a fighting chance of understanding them. A good starting point is using the same words when we mean the same thing.
Every vote counts, especially when the margin is so close, so if you have yet to do so…
