In a statement this week, Zurich announced the launch of its insurance affordability resource in response to recent research which revealed that almost 8 in 10 Australians have made personal, financial, and lifestyle sacrifices over the past year due to cost-of-living pressures.
The research, based on a survey of over 1,000 individuals across the country, revealed that despite the fact that nine out of 10 respondents experienced the consequences of recent rate increases, a concerning one in five confessed to possessing limited or no understanding of fundamental financial concepts such as insurance.
Moreover, as many as one in four respondents said they have little or no confidence in making financial decisions.
“Despite experiencing financial pressures, many survey respondents had not downgraded or cancelled their life insurance, demonstrating the value Australians place on insurance and their reluctance to lose the peace of mind it provides,” said Jacqui Lennon, head of retail, Zurich Australia and New Zealand.
Ms Lennon stressed that as cost-of-living pressures escalate, “it’s more important than ever that people feel confident and in control of their financial situation”.
“Our new affordability resource is just one way we are supporting customers to gain this confidence so they can ensure their lives and livelihoods remain protected despite the uncertainty of the world around them,” she said.
Last week, insurers pleaded with Financial Services Minister Stephen Jones to allow them to provide limited advice to Australians directly when they ask for it.
Speaking to a small audience of superannuation fund CEOs and senior industry executives last Tuesday morning, Mr Jones revealed the government will accept 14 of the 22 recommendations made by QAR lead Michelle Levy.
But while he accepted in principle Ms Levy’s recommendation to expand the role superannuation funds play in advice, Mr Jones said he would further consult on expanding the provision of advice by other institutions, including insurers.
In response to the announcement, CALI, the recently formed peak body for life insurance, of which Zurich is a member, said it is “important” that government legislation also allows life insurers to provide limited advice to Australians directly when they ask for it.
Referring specifically to Mr Jones’ argument that super funds should be welcomed because they are “already governed by strong obligations to act in the best interests of members”, CALI added that life insurers also have additional legal duties to act in good faith and prioritise the interests of their customers.
“This announcement is a good start but more needs to be done to help solve the unmet financial advice need for working Australians, not just those people approaching retirement. We must address the growing problem of underinsurance that is leaving people unprotected when times get tough,” said CALI chief executive officer Christine Cupitt.
Similarly, CALI member TAL said in a separate statement that it would continue to constructively engage with government and all stakeholders on “important reform” that would also permit life insurers to better meet their customers’ simple advice needs.
“We should not miss this opportunity to better support life insurance outcomes for customers.”
