On their return from a life insurance industry fact-finding mission to the UK, Synchron Director, Don Trapnell and Synchron Independent Chair, Michael Harrison have chosen to make public their confidential UK Trip Report which calls on Australian life insurers to step up to the plate.
Background:
The Australian Life Insurance market is subject to scrutiny as a result of four main factors:
– The “churn” debate
– The ASIC review into life insurance
– The Financial System Inquiry
– The Trowbridge Report
Following the release of The Trowbridge Report Michael Harrison and Don Trapnell decided to learn more about the situation in other countries, especially the United Kingdom, which had an industry review following the release of UK Consultation Paper 121 (Reforming Polarisation: Making the market work for consumers) in 2002.
– In particular we sought information regarding the following questions:
– What can we learn from the UK regulation experience?
– How did the insurers respond?
– Were there any new innovations in distribution or products?
– Did any / many IFAs go out of business?
– How did IFAs respond?
– How do IFAs typically charge? Commission / Fees / Other?
– What new products do IFAs sell (if any)?
– How are IFA businesses typically structured?
– Is there an insurance “churn” issue?
We had the opportunity to meet with a number of industry personnel including life insurance company executives, IFAs, regulators and industry association members.
