\u201cWe need to look at the whole structure of what we\u2019re doing, and how to make it simpler for the customer so we can get more efficient distribution, and make it more cost effective. We can talk a lot about how we remunerate distribution, but I think it\u2019s only an issue because it actually costs so much for us to have that conversation with the customer,\u201d Ms Blight-Johnston said.<\/p>\n
Even intra-fund advice, provided to super fund members, was not viewed as a \u2018silver bullet\u2019 solution to the complexity issue.<\/p>\n
If we\u2019re fair dinkum about increasing insurance cover, we need to reduce the cost<\/p><\/blockquote>\n
\u201cThere is absolutely a place for insurance in the intra-fund advice model,\u201d said Mercer\u2019s Financial Advice Leader, Jo-Anne Bloch<\/strong>. \u201cI think the challenge, however, is that insurance is a little bit more complicated than some of the other topics that tend to be included in the intra-fund advice framework.<\/p>\n\u201cInsurance isn\u2019t simple. There are categories inside categories, there are different underwriting limits, there are different arrangements in terms of conditions. So it has been a constant challenge for us in terms of bringing insurance into the simple super space, in order to give advice over the phone and to maximise the benefits of intra-fund advice.\u201d<\/p>\n
CommInsure Managing Director, Paul Rayson<\/strong>, suggested insurers needed to embrace technology in order to remove complexity and cost.<\/p>\n\u201cIf we\u2019re fair dinkum about increasing insurance cover, we need to reduce the cost,\u201d he said.<\/p>\n
\u201cWe can use technology to improve the customer experience, lower the cost of issue, lower the cost of advice, and at the same time improve our risk selection. So there is a big case to invest more in technology and analytics, and I think we\u2019re a long way behind.\u201d<\/p>\n
MLC\u2019s Executive General Manager of Insurance, Duncan West<\/strong>, agreed, saying that the industry had so far failed to capitalise on new technologies and changing consumer behaviour.<\/p>\n\u201cWhat we\u2019ve done as an industry is try to digitalise the way we\u2019ve done business for the last 125 years. We\u2019ve taken our old business model, and we\u2019ve tried to digitalise it. What we haven\u2019t done as an industry, yet, is think about how we would create a new model in a digital world, around the consumer, and work backwards into how we design what we do behind the scenes,\u201d Mr West said.<\/p>\n
He said insurers should be looking for ways to keep the complexity away from consumers.<\/p>\n
What we\u2019ve done as an industry is try to digitalise the way we\u2019ve done business for the last 125 years<\/p><\/blockquote>\n
\u201cFor me, the new way of doing business is to allow the consumer to build the product in the way that they want. And you predict what they might need, based on what you know about them. Instead of having a long set of 400 underwriting questions that they have to fill in, what we\u2019re doing is using the information we know about them to predict what that tells us about the risk. So the complexity sits back in our algorithms. They don\u2019t need to know about that.<\/p>\n
\u201cWe can make the buying of insurance really simple, and really matched to their needs. At the moment we put all that complexity at the front end, and we\u2019re boxed in at the back end,\u201d he added.<\/p>\n
The industry also needs to remove the complexity from client conversations, said MetLife\u2019s CEO, Marc Lieberman<\/strong>.<\/p>\n\u201cLife insurance is not something you bring up on the first date. We need to do a better job of explaining the positives of life insurance.<\/p>\n
According to Mr Lieberman, the conversation with consumers needs to deliver a clear understanding of the product category, and how it can benefit families and individuals.<\/p>\n
\u201cWe have to explain it (insurance) so that they understand it isn\u2019t a lottery ticket.\u201d<\/p>\n
As these frank comments illustrate, Australia\u2019s life insurers are well aware of the problems facing the industry. There are also a very large number of passionate individuals committed to increasing the amount of cover held by the general population. Advisers will no doubt be watching closely to see whether these two factors translate into action.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Australia\u2019s life insurers need to remove complexity if they are serious about reducing the underinsurance gap, according to the majority of speakers at this year\u2019s Financial Services Council\u2019s Life Insurance Conference.<\/p>\n","protected":false},"author":1,"featured_media":20254,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,241,3],"tags":[],"class_list":["post-20217","post","type-post","status-publish","format-standard","has-post-thumbnail","category-associations","category-conferences-and-events","category-general","headers-new"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/20217","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=20217"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/20217\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/20254"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=20217"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=20217"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=20217"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}