According to the study, reforms within the life insurance industry are the driving force behind advisers’ improved perception of insurers, with provisional results from the Advice Landscape study showing a relatively strong net promoter score.
The study, which Adviser Ratings said is still underway but has so far received responses from more than 1,000 advisers, showed that insurers have a positive perception among advisers for the first time since the Life Insurance Framework (LIF) was implemented.
“This change follows the implementation of LIF and widespread repricing in the industry, particularly impacting income protection products. Advisers are increasingly acknowledging the life insurers’ foundational reset efforts and their invitation to engage in writing new business,” Adviser Ratings said.
“To date, approximately 2,000 insurer reviews from these advisers have resulted in the industry achieving a positive net promoter score (NPS) for the first time since the full implementation of LIF.”
The current NPS for insurers in the 2024 Advice Landscape survey is 3.6, which represents a massive turnaround from the -5.4 in the 2023 study, -7.2 in 2022, and -9.09 in 2021.
“Over the past year, there’s been a marked increase in the urgency displayed by both regulators and insurers in addressing the chronic underinsurance issue and the consistently low levels of new business,” Adviser Ratings said.
It also cited the formation of the Council of Australian Life Insurers (CALI), investment in new technologies like LifeBid to enhance operational efficiencies, and APRA’s December initiative to open a data transformation consultation project as among the initiatives from the industry and government to improve the life insurance sector.
“These efforts aim to gather more detailed data to help regulators, policymakers, and insurers better understand and manage industry risks,” Adviser Ratings said.
“This comes in the wake of APRA’s reminder to insurers about their commitments regarding premium increases and the transparency thereof, addressing a key challenge for advisers in persuading clients to renew policies amidst inflationary pressures.”
The company added that while the improvements are a positive, as reflected through adviser attitudes, there are still a lot of challenges within the sector.
“Having engaged with almost every insurer over the last three months, it’s clear that awareness of these challenges is at an all-time high, and concerted efforts are underway,” Adviser Ratings said.
“However, questions remain about the patience of many insurers’ international parents and the potential role of the government. Is there a need for a fundamental reassessment in this sector?
“The critical value and necessity of life insurance become profoundly evident in times of need.”
I personally completed one insurer only on the basis that they don’t care so it didn’t make sense to actually record what I thought. Not surprisingly I completed the insurer I do the most business with and which is the one I like
Interesting survey results. I participate in these surveys but my comments do not match these findings. Right now service has gone out of the window with most life insurers. As a result of the downturn of nearly 60% in new business, underwriters have been sacked, admin staff reduced and tele-underwriters hard to get. You HG, the folks who chase up medical requests are apparently downsizing
At the same time insurers are bureaucratizing what used to be a service orientated business, always working on the principal if you keep advisers happy with could new business service, you keep new business coming in.
No new business equals business failure, except obviously when you have the opportunity, as most insurers are seizing at the moment, to gouge existing faithful policyholders with 25% plus increases in existing policy premiums to make up for the lack of new business (Plan for Life June 2023)