July 27, 2020

July 27, 2020 | Media Releases


ACCESS DENIED: regulatory disruption making it harder for Australians to obtain life insurance

New research released today by industry campaign Choice & Access to Life Insurance (CALI) warns that if governments and regulators fail to act, then underinsurance will continue to increase across parts of the community as access to advised life insurance becomes further limited.

New research released today by industry campaign Choice & Access to Life Insurance (CALI) warns that if governments and regulators fail to act, then underinsurance will continue to increase across parts of the community as access to advised life insurance becomes further limited.

Middle to low income earners, who the research shows already to be underinsured, are increasingly unable to access much-needed financial advice during key life moments like buying a home, starting a family, or transitioning to retirement.

The key findings of CALI’s Challenges confronting the Australian Life Insurance market white paper, which is based on independent research conducted by NMG Consulting and Colmar Brunton, reveal that:

  • Most Australians agree life insurance is important. The community views adequate life insurance protection as being enough to secure existing quality of life, enabling people to ‘reset’ after a negative life event.
  • There has been significant regulatory disruption to the life insurance landscape, which has resulted in access to life insurance through banks, direct from insurers, through superannuation funds and financial advisers becoming more limited.
  • Significant demographic pockets of underinsurance are already emerging, with one in five younger Australians aged 25 – 35 currently considered underinsured compared to community expectations.
  • Similarly, 20% of middle-aged Australians (35 – 44) have less life insurance than levels the level the research shows the community believes to be necessary (the community standard).
  • Most ordinary Australians cannot afford to pay an upfront fee for financial advice, and, if trends continue, may not be able to access a financial adviser to help them identify their life insurance needs.
  • The declining number of financial advisers are increasingly focusing on fewer, higher value customers. On the current trajectory, within three years, only the wealthiest 15 per cent of Australians will be able to access life insurance with personal advice.
  • Underinsured people risk leaving their dependants facing severe financial hardship, if they prematurely die or become unable to work.

The research was commissioned by CALI to better understand community expectations about life cover, trends in the Australian market, overseas experience, and the impacts of recent regulatory changes.

Zurich and OnePath are key contributors to CALI alongside a consortium of other life insurers, the AFA, FPA and FSC. 

Justin Delaney, CEO of Zurich Life & Investments said, “The research shows that consumers have very reasonable expectations about insurance – that it’s there to help people get back on their feet and support their families to do the same. COVID-19 has helped us reset our values around security, family, simplicity, and affordability even further. Now is the right time for us to reset how we as an industry meet the expectations of consumers and the community in a modern context. This is exciting.”

The members of CALI are calling on the Australian Government and industry regulators to take the research findings into account when considering future policy decisions, to ensure the right life insurance and access to affordable financial advice is available to all Australians, now and in the future.

For more information, or to download the reports, go to https://www.australianpa.net.au/cali-campaign

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Zurich Financial Services Australia is a life insurance, commercial insurance and investments specialist, that has been participating in the Australian market since 1920.  Since its acquisition of OnePath Life from ANZ in 2019, the company provides life insurance to more than 1.5 million Australian customers under both the Zurich and OnePath Life brands.  This includes insurance sold through financial advisers (retail), through superannuation (Group) and via direct-to-consumer channels. 

Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With about 55,000 employees, it provides a wide range of property and casualty, and life insurance products and services in more than 215 countries and territories. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, as well as multinational corporations. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.

For further information contact:

Caroline Hendra
Head of Communications and Media
Zurich Financial Services Australia

+61 414 532 552