- Agree (70%)
- Disagree (24%)
- Not sure (5%)
Our latest poll asks you to consider the combination of issues impacting the sustainability of Australia’s life insurance sector.
As pointed out by Lifespan CEO, Eugene Ardino, at the Zurich Sustainability Round Table, reduced new business volumes are a central structural issue, where he suggests the fall in new life insurance sales (which coincided with the introduction of the Life Insurance Framework reforms) has had a significant and detrimental impact on Australia’s life insurance pools.
He offered his perspective during a part of the Sustainability Round Table conversation focussed on how products might be updated to become more fit for purpose. While ‘product’ is an integrally important piece of the puzzle, Ardino advocated that one of the root causes of the currently sustainability malaise can be traced to new life insurance business ‘falling off a cliff’ post the Life Insurance Framework reforms – hence this poll.
Do you agree with Ardino that effectively the most important piece needed to solve the sustainability puzzle is more advisers delivering more life insurance new business – especially introducing much-needed younger lives into the life insurance pools?
Or do you think product and pricing is where the sector should focus its attention and its resources? We already agree that both issues are critically important. The question is which you think is the more critical issue to solve.
For a poll which has no right or wrong answer, tell us what you think and we’ll report back next week…
Product and pricing cannot operate efficiently, or even, "at all" if there is insufficient New Business coming through the pipeline to offset lapses and declines in policies due to people reaching a certain age and declining need for the same levels of cover.
It does not matter what the Business is, every Industry needs new clients to grow the pool.
The Life Insurance Industry reminds me of the suicide warriors in the Life of Brian, who go through great hardship to reach Brian, only to bump themselves off when they get there.
The solution has ALWAYS been in plain sight, yet NO-ONE, ( except Advisers who built up the Life Insurance Industry and for more than a dozen years were calling it out,) came up with anything that resembled common sense solutions, hence the total chaos we have all had to endure.
This will not happen until the LIF reforms are overturned and commission levels return to were it is profitable to write new insurance business. We warned you this would happen but you didn't listen.
Having more risk advisers and more people with insurance would be a good thing. A shrinking industry is not good for anyone and does create broader sustainability issues.
However, the topic of the round-table was around TPD sustainability, and the volume of new business would not make one iota of difference to sustainability from the perspective of the round table.
That is, if more people were taking out insurance, it would not stop the massive increase in claims costs. It would not change the fact that there are more claims at all ages. Insurers already price by age etc without creating cross-subsidise (ie young people do not subsidise old people).
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