Insurers mull over affordability of risk premiums
Several insurers are considering the best way to address adviser and client concerns about insurance premium affordability.
Recently, Suncorp-owned life insurer Asteron announced it will hold off on premium increases on any new business written when the clawback policy comes into effect on 1 July 2016.
However, a number of other insurers have said they are considering alternative directions to ensure insurance premiums remain affordable and beneficial for clients.
Speaking to Risk Adviser, TAL Group chief executive Brett Clark said the insurer is “not considering premium freezes” at the moment. However, the business is continuously reviewing and updating its proposition to ensure it is “optimal for customers and advisers”, he said.
“Our goal is always that premiums are fair and represent good value for customers reflecting claims experience and the risks we cover.
“It is important to note most policies are written on stepped premium, so regardless of any notional freeze, customer premiums will still go up and this causes most consumers to review policies,” Mr Clark said.
General manager for Zurich’s life and investment business, Philip Kewin, told Risk Adviser he supports initiatives by insurers that will provide “affordable and sustainable protection for customers” as well as more certainty in what he describes as a “very dynamic pricing environment”.
"As part of our ongoing strategy development and execution, including dialogue with advisers around LIF, we are exploring many product and service innovations,” Mr Kewin said.
“While we are looking at various options, our overarching focus is on maximising the affordability of cover over the entire life of the policy.
"Sustainable product design and pricing is key to this, and our soon-to-be refreshed product range will reflect this," Mr Kewin said.
"Pricing and underwriting appropriately will allow more stability in pricing, breaking the cycle of regular increases seen across the industry in recent times and thus making it easier for customers to keep their cover longer.”
Speaking previously to Risk Adviser, AIA chief retail insurance officer Pina Sciarrone said the insurer had received significant feedback from advisers regarding the future of premiums and product design.
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