Australia’s major life insurers and adviser associations have joined forces in a new campaign to call for a “reset” of policy settings around insurance advice, releasing a new research paper that reveals underinsurance is worsening due to increasingly restrictive regulatory changes in the space.
The Choice and Access to Life Insurance (CALI) campaign includes representatives from TAL, Zurich, AIA, MLC Life Insurance, the AFA and FPA and has commissioned research from industry consultants NMG Consulting that shows regulatory disruption has restricted access to life insurance for consumers.
“Significant demographic pockets of underinsurance are already emerging, with one in five younger Australians aged 25–35 currently considered underinsured compared to community expectations,” a statement from the campaign group said.
“Similarly, 20 per cent of middle-aged Australians have less life insurance than levels the level the research shows the community believes to be necessary.”
The paper highlights the impact of commission reduction in particular on insurance advice, saying that “most ordinary Australians cannot afford to pay an upfront fee for financial advice, and, if trends continue, may not be able to access a financial adviser to help them identify their life insurance needs”.
“On the current trajectory, within three years, only the wealthiest 15 per cent of Australians will be able to access life insurance with personal advice,” the group said.
CALI group members said they were “calling on the government to take the research findings into account when considering future policy decisions” in the life insurance sector, “to ensure the right life insurance and access to affordable financial advice is available to all Australians, now and in the future”.
AFA chief executive Philip Kewin said the campaign was “about ensuring affordable advice for all Australians”.
“In such uncertain times, people need to ensure they have the right protection for themselves, their families and their businesses. Access to affordable professional advice is critical to ensure people have the right cover at the right time,” Mr Kewin said.
AIA Australia chief executive Damien Mu said the results of the group’s research revealed “how important it is for decision-makers to consider the impact of life insurance regulatory change on everyday Australians”.
“We need to ensure Australians have access to quality advice and choice to meet their protection needs,” Mr Mu said.
Zurich Australia chief executive of life and investments, Justin Delaney, added that the campaign was an “exciting” opportunity to “reset how we as an industry meet the expectations of consumers and the community in a modern context”.
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