Life insurance products need to be simplified to compete in the current ‘soft market’, according to Integrity Life.
The life insurer’s general manager for distribution, Suzie Brown, told Super Review the life insurance market was in a soft market meaning there was a reduction in new business being written which was a result of clients not receiving advice and care and attention they needed.
She said this was due to the dramatic changes the industry was going through following the Royal Commission such as advisers focusing on their education requirements, superannuation changes such as the Protecting Your Superannuation Package Act 2019, and advisers struggling to meet targets.
“However, the ripple effect from all these changes is that lots of clients talking to their adviser to understand if they have the correct insurance cover,” Brown said.
Brown said insurers need to simplify the way their products were built, structured, and communicated to allow clients to easily understand what they were covered for. This would also allow advisers to help retain clients and figure out if their clients had the correct cover.
“The other part life insurers need to simplify is the way their tech stack works,” Brown said.
“You’ll see a lot of insurers at the moment scrambling to solve their legacy issues and when they eventually solve it, those outcomes will only benefit the industry as a whole.
“If they simplify that that will flow through to everything that they do. But you can only simplify a product through a system allowing you to simplify it.”
Brown noted that advisers concerned with a client’s ability to pay for premiums needed to look at least a five to 10-year outlook on pricing premiums.
She said if a policy had a lifetime discount it was often cheaper than discounts applied to the first few years of the policy.
“Insurance isn’t a short-term decision – it’s a need for over the next five to 10 years depending on each individual.”