The Australian disability income insurance sector is continuing to struggle in part because the products being used by both superannuation funds and advisers are too generous, according to a new whitepaper analysis produced by major reinsurer, Gen Re.
The whitepaper, released this week, has outlined the key contributors to the problems around disability income insurance (DII) as being:
The whitepaper said that, contrary to some commonly views, the problems were not being caused solely by more mental health claims, economic factors such as lower interest rates or even the manner in which advisers were being remuneration.
It said that, overall, insurers needed to fundamentally redesign their current DII products, align claims management capabilities with new products and fine-tune the underwriting.
The whitepaper said that DII could be more generous in parts but, overall, had to adhere to simple insurance principles.
“… actuaries must adopt a long-term view,” it said. “With few large players in the market, the myth of first-mover disadvantage disappears. It is time to lead the change and benefit from it.”
BlackRock boss Larry Fink praised Australia’s superannuation system in his annual chairman’s letter.
The prudential regulator has announced it will publish new expenditure data of superannuation funds, providing details on expenses like advice, director remuneration, and payments to unions.
Affirming the UK’s growing attractiveness as an investment destination, a number of Australia’s largest investors recently joined the UK Foreign Secretary for an exclusive briefing in Canberra to discuss further opportunities for trade and growth.
The specialist superannuation law advisory practice is set to wind up, with managing partner Jonathan Steffanoni planning to bring a new offering to market.
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