![\"\"](\"https:\/\/riskinfo.com.au\/news\/files\/2019\/05\/Geoff-Summerhayes.jpg\")
<\/a>The regulator says its concern relates specifically to individually-sold income protection business, rather than group income protection, due to the ongoing poor performance of individual DII.<\/p>\n
In registering its concern, APRA notes the industry has collectively lost $2.5 billion through this product offering over the past five years, with no signs of improvement.<\/p>\n
In its letter<\/a>, APRA details its concerns, which it says were identified by a recent thematic review of individual DII and has issued a series of requirements for life companies to address those concerns.<\/p>\n The review examined the eight largest providers of individual DII, representing more than 90 percent of market share, where APRA says it found shortcomings with insurers\u2019:<\/p>\n APRA also noted it found there was inadequate data and resourcing within the companies dedicated to dealing with DII and its related issues.<\/p>\n In a critical assessment of the current issues surrounding DII product sustainability, APRA Executive Board Member, Geoff Summerhayes<\/strong>, said most life companies have long been aware of the issues, but their efforts to address them have so far been inadequate:<\/p>\n \u201cIn a highly competitive environment, life companies have focused on attracting policyholders through pricing and product features that are not sustainable. The result has been ongoing losses and a failure to deliver a satisfactory customer experience,\u201d he said, adding:<\/p>\n \u201cUnless these adverse trends are reversed, there is a risk some life companies will ultimately exit the market for DII, worsening consumer outcomes through reduced competition, accessibility and affordability.\u201d<\/p>\n APRA has given life companies eight weeks to start taking a range of steps in response to its concerns, including formulating a strategy to address the issues identified by the thematic review, and reviewing DII product design and pricing practices to enhance its sustainability.<\/p>\n In seeking to address a number of factors the regulator says are impeding life companies’ ability to improve the performance and sustainability within the individual DII market, APRA has identified four key themes where it says greater attention and action are needed by insurers:<\/p>\n Strategy and risk governance<\/strong><\/p>\n Pricing and product design<\/strong><\/p>\n Data<\/strong><\/p>\n Resourcing<\/strong><\/p>\n Mr Summerhayes said life companies that failed to promptly and effectively meet APRA\u2019s expectations would face consequences.<\/p>\n Click here<\/a> to access APRA’s open letter to all life insurers and friendly societies.<\/p>\n The Australian Prudential Regulatory Authority has sent letters to insurers in which it calls on them to urgently address concerns it has with the sustainability of individual disability income insurance.<\/p>\n","protected":false},"author":3,"featured_media":44666,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,4],"tags":[4247],"class_list":{"0":"post-44616","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-compliance-regulation","8":"category-products","9":"tag-feature"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/44616","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=44616"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/44616\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/44666"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=44616"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=44616"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=44616"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
…life companies have focused on attracting policyholders through pricing and product features that are not sustainable<\/h6>\n
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Source: APRA DII Thematic Review letter to life insurers<\/em><\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"