Geoff Summerhayes, APRA Executive Board Member, highlighted that in a highly competitive environment, life companies have focused on attracting policyholders through pricing and product features that are not sustainable. This approach has led to ongoing losses and a failure to deliver a satisfactory customer experience.
For Australian professionals and self-employed individuals, this development underscores the importance of carefully selecting income protection insurance policies. It's crucial to choose insurers committed to sustainable practices, as this ensures the long-term reliability of coverage. Policyholders should engage with advisers to understand the financial health and sustainability strategies of their chosen insurers.
APRA's intervention aims to stabilise the income protection insurance market, promoting practices that balance competitive offerings with financial prudence. This move is expected to lead to more transparent and sustainable products, benefiting consumers by providing reliable coverage without the risk of sudden policy changes or premium hikes.
As the industry undergoes these reforms, individuals are encouraged to review their existing policies, stay informed about changes, and consult with financial advisers to ensure their income protection insurance aligns with their long-term financial goals and provides the necessary security in times of need.
