{"id":72121,"date":"2024-06-27T14:31:06","date_gmt":"2024-06-27T04:31:06","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=72121"},"modified":"2024-07-12T12:42:26","modified_gmt":"2024-07-12T02:42:26","slug":"mapping-united-path-to-500-million-risk-new-business","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2024\/06\/27\/mapping-united-path-to-500-million-risk-new-business\/","title":{"rendered":"Mapping United Path to $500 Million Risk New Business"},"content":{"rendered":"

There is a foreseeable path back to at least $500 million in new life insurance business, according to Adviser Ratings<\/a>‘ comprehensive 2<\/em>024 Australia<\/em>n Financial Advice Landscape <\/em><\/a>report, which challenges insurers and advisers to take a collaborative approach to achieve this goal.<\/p>\n

In a dedicated chapter on life insurance the research firm says that while the Australian life insurance sector has faced a significant decline in new business, experiencing a 44% drop from 2018 to 2023 \u201c\u2026recent data shows potential for recovery, with a 10% increase between 2022 and 2023.\u201d<\/p>\n

The firm says there is a foreseeable path back to at least $500 million in new business, volumes that were being written only six years ago, noting this was just before the Life Insurance Framework commission caps began to have an impact and the risk adviser exodus commenced.<\/p>\n

… insurers have had to realise they needed to reset and adjust to the new paradigm…<\/p><\/blockquote>\n

The report notes that with life insurers and the advice profession temporarily paralysed by what was playing out, and the number of new lives insured decreasing from 103,000 in 2018 to 44,000 in 2023, insurers have had to realise they needed to reset and adjust to the new paradigm.<\/p>\n

Within this new paradigm, the report reveals that in the last two years adviser satisfaction levels with insurers have rebounded “…creating a conducive environment for growth.\u201d<\/p>\n

The report says the stabilisation of financial adviser numbers presents a critical opportunity to strengthen support systems further:<\/p>\n

\u201cEnhancing adviser relationships and technology efficiencies can improve product penetration and customer satisfaction, essential for achieving new business growth targets.\u201d<\/p>\n

…the path back to at least 100,000 new lives insured through retail requires a collaborative approach across the industry…<\/p><\/blockquote>\n

Pointing to a 57% decrease in the number of new lives insured in the past five years, Adviser Ratings says the path back to at least 100,000 new lives insured through the retail advice sector requires a collaborative approach across the industry.<\/p>\n

“If the life insurance industry and the advice profession can unite around a single target, strategies and investments can be made whereby a policyholder is profitable for both the adviser and the insurer.”<\/p>\n

It notes this is predicated on an underlying assumption the regulatory environment stays within the parameters that are currently in play.<\/p>\n

Adviser Ratings sees this as being driven by several key factors, including:<\/p>\n

    \n
  1. Utilising data analytics and personalisation for advisers and their clients<\/li>\n
  2. Improving service levels, underwriting processes, and adviser satisfaction<\/li>\n
  3. Leveraging rapid advancements in technology, including AI<\/li>\n
  4. Enhancing referral programs between risk specialists and holistic advisers, with the assurance the risk specialists have the capability and capacity to scale<\/li>\n
  5. Uniting the insurance industry behind education initiatives for the Australian public, not dissimilar to the success achieved by industry super funds<\/li>\n
  6. Expanding health and wellness programs<\/li>\n
  7. Capitalising on opportunities presented by the Quality Advice Review<\/li>\n<\/ol>\n

    MBS Insurance co-founder, Kris<\/strong> Mason<\/strong>, states in the report that \u201c\u2026constantly working with insurers to enhance our new business processes has really helped us write larger quantities of profitable risk business, all whilst making the\u00a0 process far more seamless for our clients. The key is working closer with the insurers to gain these efficiencies that benefit all stakeholders, advisers, insurers and clients.\u201d<\/p>\n

    \"\"<\/a>
    The $500 million target is just shy of the new business reached in 2018. Graph courtesy of Adviser Ratings’ 2024 Australian Financial Advice Landscape<\/em> report.<\/figcaption><\/figure>\n

    The Life Insurance chapter of the report also lays out in more detail how the path back to $500 million in life insurance new business levels might be achieved:<\/p>\n

    Embracing Adviser\/ Practice Growth<\/strong><\/p>\n