Swiss Re has moved to clarify last week’s announcement that it has paused new business activities in Australia, saying it continues to support its existing life insurance partners and that there is no impact on advisers writing business with insurers.
Last week the firm announced it will “not seek to add new clients in the life insurance segment until the market demonstrates a clear shift to sustainable product design” (see: Swiss Re Pauses new Business Activities).
However, it has since stated that while relationships with existing insurers working with the firm will continue, it will not be accepting any new insurers (clients).
There is no impact on advisers writing business with insurers…
“We will support existing insurers to act with urgency in designing and enhancing products that better meet the needs of consumers and lead to more sustainable outcomes. There is no impact on advisers writing business with insurers as a result of this change,” the firm confirmed Monday.
As previously reported, Lloyd Campbell Gibson, Head Life & Health Reinsurance Australia & New Zealand at Swiss Re, said: “Our dedication to the Australia and New Zealand markets remains unwavering, and this decision is necessary to safeguard our portfolio and to advocate for reform regarding product design.
“As an industry, we must transition from the sole focus of claims payment to partnering on an individual’s health journey. Through evidence-based changes, TPD can become a more adaptive and accessible form of protection for future generations.”
AIA CEO and MD Damien Mu said Swiss Re’s announcement is the outcome of the stark reality of claims results in the Australian market.
“It sends a strong message to all stakeholders – the industry first and foremost, but also to regulators and Government – about the work we all need to do to ensure the future sustainability of life insurance in Australia,” he said. “This is a priority for AIA, as it is for the industry as a whole.
The continued acceleration of mental health-related disability claims needs to be considered…
“Important work is being undertaken by the Council of Australian Life Insurers to assist, and like AIA, many individual insurers have programs of work underway.
“To tackle this effectively, we need to think differently about how we design products, how we underwrite and how we manage claims. The continued acceleration of mental health-related disability claims needs to be considered, and sustainable solutions developed.”
He added: “Our disability benefits are an international outlier, in terms of breadth of coverage, the absence of time limits in which to lodge a claim, the inability to pay for treatment prior to acceptance of a claim, subjectiveness of definitions and the need to prove permanence.”
Oh dear, a communications stuff up. Two thoughts come to mind.
Firstly, the Canadian philosopher Marshall McLuhan had a phrase that went "the medium is the message" which should be 101 for every communications "specialist"
Then there's the famous scene in the Paul Newman movie "Cool Hand Luke" where the prison Governer points out to the yet-again-recaptured escapist Newman that "what we have here is a failure to communicate"
So the question remains: was this an attempt by Swiss Re to stop the current insurers on its books from looking elsewhere for more favourable reinsurance terms?
And was it also a not too subtle message to insurers to start tightening up on TPD definitions and claims. For one, I'm still looking for an answer as to why insurers are paying TPD benefits when there is no evidence being providedBy psychiatrists to them that the disability is permanentUnder the current TPD definition.
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