Consumers need to be at the heart of any decisions made by the life insurance sector, the Financial Services Council has advised.
Responding to the release of John Trowbridge’s report into retail life insurance advice, the FSC issued a statement welcoming the findings but acknowledging further work was required by the sector.
“We welcome the Trowbridge report and will now take the time to consider these independent findings in consultation with our members. The industry needs to absorb Mr Trowbridge’s recommendations and consider the complex, interrelated issues,” said FSC CEO, Sally Loane.
“Consumers must be at the centre of these considerations. Our aim is to ensure more Australians have access to quality advice and are covered for their most valuable assets – their lives and their quality of life.”
The FSC, which together with the Association of Financial Advisers co-convened the Life Insurance Advice Working Group (LIAWG), chaired by Mr Trowbridge. Ms Loane said the LIAWG was designed to help the advice and life insurance industries to find a way to solve the structural issues that were undermining consumer trust and confidence.
“Bringing the life and advice industries together to undergo an open and independent process in search of reform solutions – including changes in the culture of the industry as a whole − was a groundbreaking approach.”
Ms Loane hosted a panel session with Mr Trowbridge at the FSC’s annual Life Insurance Conference, held in Sydney last week. Introducing the session, Ms Loane acknowledged the review process had been challenging.
“It’s not been easy… Our sector is extremely complex and diverse, with many moving parts and many business models. There have been some very difficult moments during these past four to five months of self-examination…
“However, there have been some breakthrough moments too, where knowledge and understanding has been shared between advisers, licensees and life insurers. I think it’s fair to say that a greater understanding of the varying perspectives of these parties has occurred during this process.”
Ms Loane described the Final Report as comprehensive and covering a range of issues that stretched beyond the Australian Securities and Investments Commission’s review of retail life insurance advice and the Financial System Inquiry.
“John Trowbridge has conducted an extensive, thorough review that is of the highest quality. This has involved countless hours of consultation with a wide range of stakeholders including regulators, government, industry and consumer groups.
“Members of the FSC have also provided a significant contribution through information and consultation to the process.
“This has been a meticulous process, which has retained the integrity of independence,” Ms Loane said.
this is great news, so now I guess premiums will drop massively -in line with the commission decreases? Think not, the best way to get more Aussies covered is to reduce red tape and make premiums more affordable. Simple. Have two licences-one for professionally advised policies set up and with a compelling service offering paid at hybrid and a separate licence for non advised or direct with a 20% commission maximum.
yes, its all about the consuers……… What rot!
If that were the case the witch hunt would be against direct insurers, selling non-underwrtten policies at twice the cost as proper life insurance.
So Sally, get your head around what is REALLY going on here. The banks now running insurance companies & are looking to increase profits by reducing commissions. SIMPLE.
They will continue to offer advice through advisers selling only their own product. And right there is one of the greatest disservice to your consumer. (min. 6 co’s on APL dont mean jack)
Hi Risk Advisers, I cordially invite Sally Loane to my risk practice to see what we do and yours. Also the claims experience my clients have. I have never had a widow complain when her house is paid off and 1 mil in the back pocket to educate her 3 kids. I have FSCG that advises I could charge $4,400 for the claims service have not (soft yes) as yet but, at this proposed rate I will. We do a great service at claim time for families – 7 billion paid out in 2014. My personal stat sheet is 27 claims for 4 mil plus paid out. I just think we need to get Sally and other FSC members in our offices to get the real picture what is going on. This first draft is not final. Not a Collingwood supporter but, we need to stand side by side and stick together on this ladies and gents. SO important for the future of our industry. The life companies do not realise that sales will slump as you will have disengaged risk insurance sales force.
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