{"id":55932,"date":"2021-05-25T16:03:26","date_gmt":"2021-05-25T06:03:26","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=55932"},"modified":"2024-10-30T08:44:48","modified_gmt":"2024-10-29T22:44:48","slug":"ip-market-real-momentum-for-change","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2021\/05\/25\/ip-market-real-momentum-for-change\/","title":{"rendered":"Future of IP Market &#8211; &#8216;Real Momentum For Change&#8217;"},"content":{"rendered":"<p>The Actuaries Institute&#8217;s Disability Insurance Taskforce released its <a href=\"https:\/\/actuaries.asn.au\/Library\/Reports\/2021\/IDIIA2.pdf\" target=\"_blank\" rel=\"noopener\">final report<\/a> this week into the plight of individual income protection insurance sector, sending a positive message to the industry that &#8220;&#8230;real momentum for change&#8221; is unfolding.<\/p>\n<p>While cautioning that the individual disability income insurance (IDII) market continues to face significant financial stress, the institute&#8217;s Disability Insurance Taskforce nonetheless holds that it has developed a path forward for the industry, which will &#8220;&#8230;involve change and contribution by the many participants in the IDII ecosystem.&#8221;<\/p>\n<p>Led by senior actuary and former APRA deputy chairman <strong>Ian Laughlin<\/strong>, the Taskforce\u2019s recommendations are intended to reflect consultation it has undertaken and feedback received from industry stakeholders including:<\/p>\n<ul>\n<li>Policy makers and regulators<\/li>\n<li>Insurers<\/li>\n<li>Consumer advocates<\/li>\n<li>Ratings houses<\/li>\n<li>Industry representative bodies such as the Financial Services Council<\/li>\n<\/ul>\n<blockquote><p>&#8230;the Taskforce set out to have a customer-centric view<\/p><\/blockquote>\n<p>Laughlin said the Taskforce set out to have a customer-centric view and to commit to tackling issues from a professional and objective standpoint. \u201cThe Institute established the Taskforce to analytically assess the many factors at play in the retail disability insurance market and to manage a process where all parties tried to understand the issues and how to improve outcomes for customers,\u201d he said.<\/p>\n<p><strong>The Recommendations<\/strong><\/p>\n<p>The main report details a large number of recommendations spread across nine different categories, namely:<\/p>\n<ol>\n<li>Customer and Community Interests<\/li>\n<li>Consumer Protection and Advocacy<\/li>\n<li>Product Features<\/li>\n<li>Governance<\/li>\n<li>Regulation and the Law<\/li>\n<li>Financial Advice<\/li>\n<li>Underwriting and Claims Management<\/li>\n<li>Risk Management<\/li>\n<\/ol>\n<p>By way of example, the Product Features category includes the following recommendations:<\/p>\n<ul>\n<li>Introduce simpler and cheaper product alternatives<\/li>\n<li>Develop simpler explanations around what is and is not covered<\/li>\n<li>Improve communication, understanding and management of risks and uncertainty<\/li>\n<li>Impose strong controls on level of benefits and income replacement ratios<\/li>\n<li>Improve Guaranteed Contract Term management<\/li>\n<li>Embed Loss Minimisation Principle in policy contracts<\/li>\n<li>Improve data quality<\/li>\n<li>Improve communication of pricing philosophy<\/li>\n<li>Improve understanding of Level Premium business<\/li>\n<\/ul>\n<p><strong>Reference Product and Sustainability Guide<\/strong><\/p>\n<p>To help address its recommendations, the Taskforce developed a reference product which it says should be used by insurers and their Boards and executives &#8220;&#8230;to assess risk and uncertainty for both customers and the company.&#8221;<\/p>\n<p>In addition to the reference product, the Taskforce also developed a sustainability guide intended to help insurers consider critical aspects of:<\/p>\n<ul>\n<li>Product design<\/li>\n<li>Operational practices<\/li>\n<li>Pricing uncertainty<\/li>\n<li>Risk management<\/li>\n<li>Risk appetite<\/li>\n<\/ul>\n<p>The Taskforce said insurers should use this sustainability guide &#8220;&#8230;to continually improve their frameworks, policies and day-to-day practices to mitigate risks and improve long term IDII sustainability for consumers and insurers.&#8221;<\/p>\n<p>The following links will take advisers and other interested industry colleagues to the Taskforce&#8217;s final report, the sustainability guide and the reference product documents:<\/p>\n<p><a href=\"https:\/\/actuaries.asn.au\/Library\/Reports\/2021\/IDIIA2.pdf\" target=\"_blank\" rel=\"noopener\">Findings and Recommended Actions for Individual Disability Income Insurance<\/a><\/p>\n<p><a href=\"https:\/\/actuaries.asn.au\/Library\/Reports\/2021\/IDIIB2.pdf\" target=\"_blank\" rel=\"noopener\">Individual Disability Income Insurance Sustainability Guide<\/a><\/p>\n<p><a href=\"https:\/\/actuaries.asn.au\/Library\/Reports\/2021\/IDIIDocumentC2.pdf\" target=\"_blank\" rel=\"noopener\">Reference Product &#8211; Individual Disability Income Insurance<\/a><\/p>\n<figure id=\"attachment_55937\" aria-describedby=\"caption-attachment-55937\" style=\"width: 741px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/actuaries.asn.au\/Library\/Reports\/2021\/IDIIA2.pdf\" target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-55937 size-full\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/05\/210525-Actuaries-Institute-IDII-Ecosyatem.png\" alt=\"\" width=\"741\" height=\"881\" srcset=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/05\/210525-Actuaries-Institute-IDII-Ecosyatem.png 741w, https:\/\/riskinfo.com.au\/news\/files\/2021\/05\/210525-Actuaries-Institute-IDII-Ecosyatem-252x300.png 252w, https:\/\/riskinfo.com.au\/news\/files\/2021\/05\/210525-Actuaries-Institute-IDII-Ecosyatem-696x827.png 696w, https:\/\/riskinfo.com.au\/news\/files\/2021\/05\/210525-Actuaries-Institute-IDII-Ecosyatem-353x420.png 353w\" sizes=\"auto, (max-width: 741px) 100vw, 741px\" \/><\/a><figcaption id=\"caption-attachment-55937\" class=\"wp-caption-text\">Australia&#8217;s Individual Disability Income Insurance Participants Ecosystem infographic, provided by the Institute of Actuaries of Australia<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>The Actuaries Institute&#8217;s Disability Insurance Taskforce released its final report this week into the plight of individual income protection insurance sector, sending a positive message to the industry that &#8220;&#8230;real momentum for change&#8221; is unfolding. While cautioning that the individual disability income insurance (IDII) market continues to face significant financial stress, the institute&#8217;s Disability Insurance [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":55935,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8,4],"tags":[],"class_list":{"0":"post-55932","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-compliance-regulation","8":"category-products"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/55932","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=55932"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/55932\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/55935"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=55932"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=55932"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=55932"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}