Some of the biggest names in Australia's life insurance sector have shared their biggest concerns for the future of the industry.
Appearing on a panel at the 2019 Association of Financial Advisers National Conference, Zurich chief distribution officer Kristine Brooks, TAL group chief executive and managing director Brett Clark, MLC chief executive David Hackett and AIA chief executive Damien Mu discussed the future affordability of life insurance for consumers in the context of the current regulatory environment.
Brooks argued that the affordability of financial advice is also under deep threat as regulatory changes drive up the price of financial advice.
"Advice will be provided to people who can afford it," Brooks said.
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She explained that the Protecting Your Super changes mean those same consumers who won't be able to afford advice in the new climate also won't have default insurance cover.
Touching on the potential removal of life risk commissions, Brooks said research shows commissions have their place and have value in the life insurance industry.
Hackett added: "We need to have a sensible conversation about life insurance commissions. Ignorant people see them as evil."
The sustainability of the life insurance industry as a whole was also discussed, with Clark saying: "We absolutely need to change. Guess what the loss was for income protection for the whole year? Over a billion dollars. This is broken."
"It's broken for customers. They get the pricing increase. It's broken for advisers because they're dealing with difficult conversations around prices and it's broken for insurers as well. Something must change and I believe it will."
He added that with APRA currently undertaking a review, if the industry doesn't change the regulator will make it.
Amid all this regulatory pressure, the panelists all pointed out that it was significant that the competing insurers were all sitting together showing a united front at the conference.
Mu said: "The life insurance industry is more united than it ever has been."
He argued that the industry uniting was important and that the industry had to take leadership in the conversation.
"The most important thing we can do is go on a massive love offensive and get Australians to tell us how we do help them," Mu concluded.