Last year’s decision by Swiss Re to stop writing TPD in Australia has prompted renewed scrutiny of product design and the role advisers can play in shaping demand of revised products.
During the third Zurich Sustainability Round Table, David Creaven, Head of Client Partnerships at SCOR Australia & New Zealand, suggested Swiss Re’s decision should not be viewed as an isolated outlier.
“This issue of sustainability across TPD, both across the retail and the group space, is something that a number of reinsurers and direct insurers have been agitating for,” he said.
…there’s enough insurers so that they’ll figure it out…
Eugene Ardino, CEO, Lifespan, took a more sanguine approach.
During the debate he said: “The market will sort itself out because it’s a competitive marketplace.
“It’s not doing it in the best possible way because it’s jacking up premiums to quite high levels, but that’s the way the market’s currently sorting it out.
“It doesn’t mean you can’t collaborate, and I get that there’s anti-competitive rules, but there’s enough insurers so that they’ll figure it out.
“I’ve seen a lot of this in the PI market for financial planning. Insurers come in and out of the market all the time.”
Ioana Logan, Product Owner, Zurich Propositions, said changes such as reductions in maximum TPD cover and lower caps are already in-hand at the firm, but need advisers to get behind new products.
Tim Kane, Zurich’s Head of Retail, agreed it was down to advisers to demonstrate the value of “revised offerings” to their clients.
While competition law constrains collaboration on product design, Keely O’Brien of CALI said the industry body is “working at pace” on claims assessment frameworks in a manner that is within regulatory and competition laws.
