{"id":36746,"date":"2017-04-18T19:00:01","date_gmt":"2017-04-18T08:00:01","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=36746"},"modified":"2025-09-02T11:34:01","modified_gmt":"2025-09-02T01:34:01","slug":"mlc-life-reports-majority-of-lapses-driven-by-consumer-changes","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2017\/04\/18\/mlc-life-reports-majority-of-lapses-driven-by-consumer-changes\/","title":{"rendered":"MLC Life Reports Majority of Lapses Driven by Consumer Changes"},"content":{"rendered":"

MLC Life Insurance has flagged customer initiated changes as the key factors in the majority of lapsed policies held by the insurer.<\/p>\n

\"MLC<\/a>
MLC Life Insurance Chief Executive Officer, David Hackett.<\/figcaption><\/figure>\n

In a recently published response to a question on notice received from the Parliamentary Joint Committee (PJC) Inquiry into Life Insurance, MLC Life Insurance indicated that 80% of its lapses across its retail insurance book were due to a change in customer needs, affordability of cover and switching to a competitor\u2019s product.<\/p>\n

The issue of lapses was raised on a number of occasions at the PJC which sought to determine when a policy was considered to have lapsed, when it was considered to have been churned and how life insurers identified and recorded those events.<\/p>\n

The life insurer provided a further breakdown of its lapse statistics stating that 74% of lapsed policies were held by people aged over 50 with the main driver behind lapses being that the cover offered by the policy was no longer required.<\/p>\n

“The reason for lapse is important and we are putting in systems and gathering data to get more understanding around that…”<\/h6>\n

MLC Life Insurance also stated that of the remaining 26% of lapsing members, around 20% were aged between 40 and 50 and the remaining 6% were aged under 40 and for these two groups lapses were more likely to be due to affordability and switching to a competitor product.<\/p>\n

Addressing the PJC during its Canberra hearing last month, MLC Life Insurance Chief Executive, David Hackett<\/strong> said that MLC\u2019s experience was not applicable across the wider life insurance sector given its length of time in the market.<\/p>\n

\u201cWe actually have one of the higher levels of lapse in the industry, but it is a very difficult metric to compare, in that we are a 130\u2010year\u2010old life insurance company and we have one of the largest books of insurance,\u201d Hackett said.<\/p>\n

He added that MLC Life Insurance has found a high number of lapses are related to people who no longer need the levels of protection they previously required when paying off a mortgage and having dependent children.<\/p>\n

\u201cThe reason for lapse is important and we are putting in systems and gathering data to get more understanding around that. But I would say that not all insurers are the same,\u201d Hackett said.<\/p>\n

\u201cSome are relatively new and the risk profile in the book and the demographic profile of the policyholder are very different. So it is a hard thing to compare,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

MLC Life Insurance has flagged customer initiated changes as the key factors in the majority of lapsed policies held by the insurer.<\/p>\n","protected":false},"author":3,"featured_media":36767,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8294,48],"tags":[4247],"class_list":["post-36746","post","type-post","status-publish","format-standard","has-post-thumbnail","category-claims","category-company-news","tag-feature"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/36746","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\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=36746"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/36746\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/36767"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=36746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=36746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=36746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}