This downward trend is believed to be partially due to legislative changes, specifically citing the Protecting Your Super package, which significantly reduced the instances of automatic coverage in certain superannuation accounts. These regulations were aimed at safeguarding the super funds of Australians from unnecessary erosion due to fees and insurance premiums, particularly in cases of low balance and inactive super accounts.
Data gleaned from industry body Council of Australian Life Insurers (CALI) shines a light on the residual under-insurance issue, suggesting that approximately 3.4 million citizens fail to maintain adequate income protection coverage for basic livelihood necessities, suggesting an undercurrent of financial vulnerability in the populace.
The landscape of the life insurance sector has also undergone significant consolidation in recent years. The current market comprises 24 life insurers, seven of which are onshore reinsurers, and 10 friendly societies. This is a reduction from the 29 insurers and 12 friendly societies active in 2018, leading to a more concentrated market environment.
Although the industry has faced challenges, there have been positive shifts making the market more appealing for insurers and insureds alike. The Australian Prudential Regulation Authority (APRA) instigated crucial capital modifications, changes were implemented regarding income protection products, and a substantial surge in the price of current income protection products was observed. Adding to this landscape, there was noteworthy industry data suggesting stabilization in the migration away from financial advisement as adviser numbers began to level out.
Encouragingly, due to industry adaptation and increased adviser productivity, there has been an upswing in new business acquisitions over three consecutive quarters. This rejuvenation brings renewed optimism as what some are calling an "inflection point", hinting at a trajectory of growth and recovery for the life insurance market moving forward.
As financial landscapes evolve, the coming years will be critical in assessing whether these trends will continue to affect the levels of life and income protection insurance coverage across Australia, and whether current industry adaptations will suffice to close the gap in under-insurance among Australians.
Published:Friday, 19th Apr 2024
Source: Paige Estritori
Insurance Claim Denied Due to Undisclosed Conviction 02 May 2024: .Paige Estritori An insurance policyholder recently experienced the repercussions of non-disclosure after his claim was rejected by an insurer upon the discovery of an undisclosed traffic conviction. The undisclosed criminal traffic offense led to repercussions from both the insurer and a financial authority, serving as a cautionary example for transparency in insurance agreements. - read more |
Call for Equitable Cyclone Insurance Subsidies Grows 01 May 2024: .Paige Estritori A notable Australian consumer group insists for a revision of the cyclone insurance framework to achieve better parity among affected regions. Before its scheduled review, the proposed recalibration looks to distribute fiscal pressures more evenly among Australians, possibly extending the burden of cost to regions historically less affected by cyclones, such as Sydney. - read more |
Victorian Flood Inquiry Calls for Faster Insurance Responses 30 Apr 2024: .Paige Estritori An investigation into Victoria’s extreme flood impact reveals prolonged distress due to insurance obstacles. The Legislative Assembly's examination brings forth issues with claim resolutions and coverage gaps as critical barriers in recuperation after the devastation of October 2022. - read more |
Antique Car Claim Hits the Brakes: Home Insurance Does Not Cover Vehicle Damage 24 Apr 2024: .Paige Estritori In an intriguing turn of events, a dedicated car enthusiast's claim for damages to his vintage vehicle under home insurance has been denied after a careful review by the Australian Financial Complaints Authority (AFCA). The individual's relic, a 1970 Mercedes-Benz 280e sedan, which was being lovingly restored and was far from operational, rolled into an adjacent van following the snap of a winch cable. - read more |
Communities Laud Insurance Improvements Post-Flood Events 23 Apr 2024: .Paige Estritori Residents and officials from regions affected by flooding have observed a discernable shift in insurers' handling of claims following natural catastrophes, with recent proceedings reflecting a more positive trajectory. This outlook emerged during a federal inquiry session that gave a voice to flood-impacted communities in Heathcote, Victoria. - read more |
Trauma Cover: Calculating Adequate Protection for Life's Unexpected Moments The financial fabric of our lives consists of both planning and safeguarding against the unforeseen. Trauma cover, a lesser-known but crucial aspect of personal insurance, provides this protection by offering a lump sum payment upon diagnosis of specific serious illnesses or injuries. In the tapestry of financial planning, it acts as a vital safety net, ensuring that unexpected health crises do not lead to monetary distress. - read more
|
Life Events That Should Trigger a Life Insurance Review for Aussie Families Life insurance is a cornerstone of financial planning for Aussie families, offering protection and peace of mind. But what happens when the bustling flow of life brings changes? This is where a life insurance review comes into play. A life insurance review is a thorough analysis of your existing policy to ensure it aligns with your current life circumstances and financial goals. - read more
|
The Impact of Parenthood on Your Life Insurance Choices Life insurance, a contract between an insurer and a policyholder, is designed to provide financial protection to loved ones in the event of the policyholder's death. For parents, this protection takes on a new level of significance. The birth of a child heralds a profound shift in priorities, with a focus on safeguarding the future of one's family. Hence, understanding life insurance options becomes a crucial aspect of responsible parenting. - read more
|
A Millennial's Guide to Life Insurance For many millennials, navigating the complexities of personal finance and future planning can feel like a bewildering journey. Among these financial responsibilities, life insurance emerges as a paramount consideration. More than just a safety net, life insurance can be the cornerstone of a sound financial strategy, providing peace of mind for both the policyholder and their loved ones. - read more
|
Maximize Your Safety Net: Top Tips for Optimizing Income Protection Benefits Welcome to a pivotal guide dedicated to empowering you with the essentials of income protection insurance in Australia. As we navigate through times of uncertainty, safeguarding your financial wellbeing becomes not just a priority, but a necessity. Income protection insurance stands as one of the key pillars of financial security, ensuring a steady flow of income during periods when you're unable to work due to illness or injury. - read more
|