Winston Churchill’s words, “Never let a good crisis go to waste”, are echoing in the minds of Australia’s life insurers this year. Yes, the industry is facing a challenging period, but far from packing up our bat and ball and going home, we’re taking the opportunity and making the investment to better understand our customers and how we can better meet their insurance needs going forward.
Addressing rising claims and lapse rates are a given, but to do this, insurers have to not only focus on being sustainably innovative, but perhaps more importantly, ensure they have a deep understanding of their customers. A sustainable solution will only come when these two elements are working in harmony.
We need to get back to basics. Life insurance is all about peace of mind. It’s about customers knowing, indeed feeling confident, that if something awful and unforeseen happens, they’ll still be able to feed their family, have a roof over their head, and ideally maintain as much of their lifestyle as possible.
When you think about it like this, there is no escaping the importance of what we do. The service we’re providing as insurers meets a very real need that is no less important today than it was when AMP was established over 160 years ago.
The reality is, there is no single panacea to the issues we face, but in my view, if there is a key to success, it is simplicity. We need to make insurance easy, so that it simply makes sense to Australians.
Over the years, insurance products have become increasingly complex. This not only creates confusion for our customers, it also creates significant difficulty for insurers in managing claims and in determining those claims that were intended to be covered by the policy and those that were not.
The key to success going forward is for insurers to look more holistically at the levers available to improve sustainability. Yes, we’ll improve claims definitions, enhance benefit structures, build on claims capability and strengthen underwriting. But most importantly, we’ll be focusing on creating greater alignment of interest between AMP and our customers.
It’s a well-established fact, supported by extensive research, that the best thing an injured person can do for their ongoing health is to resume productive work. As an industry, we need to change the conversation between customers and insurers from an adversarial one, to one in which we are both working together for the customer’s best long-term health outcome. That is good for the industry, and good for all Australians.
This article originally appeared in the Professional Planner Intelligence Series Insurance – click here to download the full app.
