{"id":25753,"date":"2014-04-01T15:15:23","date_gmt":"2014-04-01T05:15:23","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=25753"},"modified":"2014-04-15T20:52:17","modified_gmt":"2014-04-15T10:52:17","slug":"underinsurance-apathy-the-real-enemy","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2014\/04\/01\/underinsurance-apathy-the-real-enemy\/","title":{"rendered":"Underinsurance – Apathy the Real Enemy"},"content":{"rendered":"

Australia\u2019s underinsurance problem is the result of a lack of action on the part of the consumer, not a lack of awareness, according to research commissioned by the Financial Services Council (FSC).<\/p>\n

<\/p>\n

Produced in partnership with MetLife, the report, entitled \u2018Apathy to Action\u2019, identified that the vast majority of Australian adults recognise the need to protect their assets and income. However, an awareness of the risks is not enough to motivate most consumers to purchase insurance, the research found.<\/p>\n

According to the study, 90% of working-age Australians say they have thought about the financial impact of loss of income for the main income earner due to \u2018life insurance events\u2019 (illness or injury, disability or death). In addition, 71% of those who have thought about the impact of income loss agree that it\u2019s their responsibility to ensure their family can keep living.<\/p>\n

…an awareness of the risks is not enough to motivate most consumers to purchase insurance<\/h6>\n

But despite this consideration, less than half (47%) said they had taken any action to try and plan for a loss of income.<\/p>\n

The researcher, GfK, then investigated what would motivate those consumers without life insurance to take out a policy. GfK found that while the vast majority of existing life insurance messaging focuses on the risk of a negative life event occurring, this type of communication does not resonate with non-policy holders.<\/p>\n

\u2018We asked consumers what they would do if there was a 25%, 50% or 75% chance that in 12 months\u2019 time they would have to stop working for at least six months because they were sick or injured,\u2019 GfK said in its report.<\/p>\n

\u2018For those that already have income protection insurance, an increased chance of having to stop work led to a change in behaviour: at a 25% risk only one in four said they\u2019d look to increase their cover, increasing to tow in five if the risk was 50%, and one in two if the risk was 75%.<\/p>\n

\u2018For those who don\u2019t have income protection insurance there was no difference in behaviour at different levels of risk. At all levels of risk, only one in four of those who do not have income protection insurance said they\u2019d look into getting cover, just as many said they\u2019d start saving and just under half said they\u2019d do absolutely nothing.\u2019<\/p>\n

In contrast, the top three messages that did resonate with non-policy holders, and were most likely to motivate them to take out life cover, related to financial savings:<\/p>\n

    \n
  1. A tax incentive provided by the government<\/li>\n
  2. A tax dis-incentive (ie: a minimum level of cover must be held to avoid paying extra tax)<\/li>\n
  3. Cover provided inside superannuation so that there is no impact on the person\u2019s day to day income<\/li>\n<\/ol>\n

    MetLife CEO, Damien Green<\/strong>, said the report countered the traditional life insurance industry hypothesis that Australians don\u2019t understand risk.<\/p>\n

    \u201cThis report challenges that.\u00a0It says that Australians do understand risk. For example, 19 out of 20 Australians confirm that ensuring that their family has sufficient funds to live, following some sort of life event is a concern. The issue is that they\u2019re not motivated to act on that concern.<\/p>\n

    \"MetLife's<\/a>
    MetLife’s Damien Green<\/figcaption><\/figure>\n

    \u201cThe life insurance industry has focused historically on selling the fear of financial disaster. This body of research actually shows that doesn\u2019t motivate people to act on the risks that they see. So the call to action for the industry is to start positioning and communicating more positively on protecting lifestyle, versus selling death and disaster.\u201d<\/p>\n

    He also pointed to the opportunity that exists for the group insurance market:<\/p>\n

    \u201cGroup insurance through super has copped a flogging in the past 12 months. I think that\u2019s put us on the back foot in terms of the opportunity that we have to solve these issues, via this incredibly efficient and broad distribution platform.<\/p>\n

    \u201cAustralia\u2019s group insurance industry – the platform for taking insurance to people through our superannuation system – is world class. The ability to get to a population, broadly and efficiently, to offer a level of protection is unprecedented. I don\u2019t think it exists anywhere else in the world. This report quite rightly points this out as being a key opportunity, and one of three priorities we (the industry) need to focus on to get more insurance to working Australians.<\/p>\n

    \u201cThe real challenge for the superannuation industry now is to get back on the front foot, in partnership with their insurers, and start engaging individuals.\u201d<\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Australia\u2019s underinsurance problem is the result of a lack of action on the part of the consumer, not a lack of awareness, according to research commissioned by the Financial Services Council (FSC).<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[282,3,5622],"tags":[],"class_list":{"0":"post-25753","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-associations","7":"category-general","8":"category-superannuation"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/25753","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\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=25753"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/25753\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=25753"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=25753"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=25753"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}