AUS­TRALIA: LIFE IN­SUR­ANCE IN­DUS­TRY NEEDS MORE EX­PE­RI­ENCED HANDS

Insurance - - INDUSTRY UPDATES - Source: Asia In­sur­ance Re­view web­site, 4th April

The life in­sur­ance in­dus­try needs more "wise old heads" to pro­vide an his­tor­i­cal per­spec­tive and avoid fall­ing into the same traps, ac­cord­ing to a se­nior of­fi­cial of the fi­nan­cial ser­vices reg­u­la­tor, the Aus­tralian Pru­den­tial Reg­u­la­tion Author­ity (APRA). The drop in the aver­age age of man­age­ment means rel­a­tively re­cent crises and blun­ders in the in­sur­ance in­dus­try are for­got­ten, re­ported the Fi­nan­cial Stan­dard, cit­ing Mr Ian Laughlin, APRA deputy chair­man. Re­fer­ring to other dif­fi­cul­ties, he said: "If the fo­cus is on the short term, and re­mu­ner­a­tion en­cour­ages that, then the wise old heads won't be lis­tened to." Fo­cus­ing on the claims cri­sis cur­rently fac­ing the group in­sur­ance in­dus­try, Mr Laughlin ex­plored a num­ber of causes, in­clud­ing com­pe­ti­tion driv­ing pre­mi­ums too low, chang­ing so­cial at­ti­tudes to­ward men­tal health, and the role of lawyers.

Last year, the af­ter-tax net profit of the life in­sur­ance sec­tor fell to A$2.1 bil­lion (US$1.94 bil­lion), a de­crease of 31.3 per­cent from the pre­vi­ous year's profit of A$3 bil­lion, ac­cord­ing to fig­ures from APRA. In­sur­ers' gross pol­icy ex­penses in­creased from A$6.5 bil­lion in 2012 to A$7.1 bil­lion in 2013, with death and disability claims rep­re­sent­ing A$5.4 bil­lion in 2012 and A$6.2 bil­lion in 2013

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