Editorial: Renewed Focus for Life Insurance Industry
Chief Editor Trang Duncanson reflects on the 2016 FSC Life Insurance conference and the need to work together to sustainably restore confidence and trust in the industry.
I don’t watch much TV. So I don’t have one. But only in the last fortnight did I suddenly lament the lack of one. Four Corners was doing an expose on claims handling practices of life insurers. I am not sure life insurance has ever been such an interesting party discussion topic – or, maybe not? Let me know your experience.
Deanne Stewart (CEO, MetLife Insurance) at the FSC Life Insurance Conference today said this was a ‘check mate’ moment for the life insurance industry. However unlike chess playing, she advised that the industry not react just for this moment, but really consider how we could sustainably restore confidence and trust.
Alexis George (CEO, ANZ Wealth) admitted that we are clearly being challenged on our core promises. She encouraged the whole industry to work together to help restore confidence.
ASIC will shortly commence a wide review of life insurance claims handling practices to assess for systemic issues. They are taking a more active stance to monitor life insurance companies’ progress with simplifying the Statement of Advice (SOA).
The FSC started work on the Life Insurance Code of Practice as at August 2015, responding to the Trowbridge review recommendations. Initial consultation has occurred, but another set of consultation is about to start at the end of March 2016. This is a fundamental start to the restoration of consumer confidence. It was always seen as important to have this, but it is now even more imperative to make this useful and embrace the customer voice.
“There is a prioritised license now to focus on the customer, and actually walk the talk.”
The risk appetite of companies always has this “low” tolerance for reputation and brand damage (reputation risk). This feels to me like a good way to test how well embedded and defined this is within the workings of the organisation. It is a good time to question the integration of risk management framework into the business and what they are trying to achieve, as Mike Thornton does in his recent article.
There was a strong sense of collaboration and respect for each other amongst the panellists – these tended to be CEO of Life Insurance companies and the regulatory leads of APRA and ASIC. That is a great sign, because this is a time of disruption, and no one company can do this alone. Disruption is a challenge, but it is also a period of great opportunity. There is a prioritised license now to focus on the customer, and actually walk the talk.
It was reiterated that we have great people within this industry, doing great work as well. As actuaries, we have an intrinsic understanding of the end to end value chain of life insurance – so we have a critical role to play in assisting the life insurance industry to build this customer confidence and trust, whether this be in providing actionable advice on product features and definitions, simplifying statements of advice/PDS, claims handling reviews/practices, review of risk management practices, and/or contributing to the development of the Code of Practice. Most importantly we need to help to articulate and embed this change. This is the time to have our voices heard, at the highest levels within the organisation and the industry, and contribute to this turning point.
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