{"id":37450,"date":"2017-06-20T16:00:36","date_gmt":"2017-06-20T06:00:36","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=37450"},"modified":"2017-06-21T06:55:46","modified_gmt":"2017-06-20T20:55:46","slug":"vertically-integrated-insurers-overlooking-policy-holders","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2017\/06\/20\/vertically-integrated-insurers-overlooking-policy-holders\/","title":{"rendered":"Vertically Integrated Insurers Overlooking Policy Holders"},"content":{"rendered":"

The mutual life insurance model will continue to attract interest from advisers and consumers who feel they are being overlooked by listed insurers who are more focused on shareholders, the head of PPS Mutual<\/a>\u00a0has claimed.<\/p>\n

\"PPS<\/a>
PPS Mutual, CEO, Michael Pillemer<\/figcaption><\/figure>\n

Michael Pillemer<\/strong>, who took on the role of Chief Executive with PPS Mutual at its launch in February 2016 (see: South African Insurer Enters Australian Market<\/a>), said the Australian life insurance market was dominated by vertically integrated providers who are struggling to maintain share prices as well as restore public trust and confidence in the advice and insurance sectors.<\/p>\n

He said these two factors did not work to the advantage of policyholders who were usually the last to be considered by the listed vertically integrated financial services providers.<\/p>\n

\u201cMarket forces such as a falling share price or narrowing interest-rate margins encourage decision-making that delivers short-term benefits to shareholders over the longer-term needs of policyholders,\u201d Pillemer said.<\/p>\n

“…scandals surrounding the provision of conflicted advice and the denial of claims highlight the tensions…resulting from the misalignment of interests…”<\/h6>\n

He added that recent media coverage has highlighted the large scale of work required to restore public trust in the life insurance sector while questioning the validity of the structure of vertically integrated financial services and insurance businesses.<\/p>\n

\u201cWhilst large insurers play a valuable role in the community, scandals surrounding the provision of conflicted advice and the denial of claims highlight the tensions inherent in stock insurers resulting from the misalignment of interests and the short-term pressures that come with being listed on the stock market,\u201d Pillemer said.<\/p>\n

\u201cThese factors, if not managed very carefully, have the potential to drive behaviors which have an adverse \u2018down the line\u2019 impact on policyholders,\u201d he added, claiming that listed\u00a0insurers usually passed on benefits to shareholders before customers and policy-holders.<\/p>\n

He said recent changes of ownership in the Australian life insurance market indicate a strong interest in the sector and believed \u201c\u2026that a \u2018return to the future\u2019 of mutual insurance might help to restore some much-needed certainty, trust and long-term confidence in the life insurance sector\u201d.<\/p>\n

He also said the launch of PPS Mutual in 2016 was part of a wider global growth trend for mutual insurers which, according to statistics from the International Cooperative and Mutual Insurance Federation, held and grew market share from 23.7% in the wake of the GFC in 2007 to 27% in 2015, and increased premium income by 22%, compared to 8% for the overall global insurance market, during the same period.<\/p>\n","protected":false},"excerpt":{"rendered":"

The mutual life insurance model will continue to attract interest from advisers and consumers who feel they are being overlooked by listed insurers who are more focused on shareholders, the head of PPS Mutual\u00a0has claimed.<\/p>\n","protected":false},"author":3,"featured_media":37470,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,4],"tags":[4247],"class_list":["post-37450","post","type-post","status-publish","format-standard","has-post-thumbnail","category-general","category-products","tag-feature"],"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/37450","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=37450"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/37450\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/37470"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=37450"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=37450"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=37450"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}