APRA’s Suzanne Smith: "think bigger" to propel life insurance sector
APRA’s Suzanne Smith: “think bigger” to propel life insurance sector | Insurance Business Australia
Life & Health
APRA’s Suzanne Smith: “think bigger” to propel life insurance sector
Sector’s role in community resilience emphasised
Life & Health
By
Roxanne Libatique
The Australian Prudential Regulation Authority (APRA) has released a speech by executive board member Suzanne Smith at the All Actuaries Summit on the Gold Coast, emphasising the need for the life insurance sector to support societal wellbeing and address contemporary challenges.
In her talk titled “Think Bigger: The Power of a Thriving Insurance Industry,” Smith outlined how a robust insurance industry benefits individuals and the economy.
“For individuals, insurance protection translates to a life with fewer worries. It provides financial support in times of accidents or disasters and safeguards us from unforeseen events. Insurance offers the confidence to embark on adventurous travels, pursue entrepreneurial dreams, and find peace of mind knowing that loved ones are protected,” she said.
Life insurance sector’s role in community resilience
Smith cited industry statistics from 2022, highlighting that life insurers paid out over $11 billion in claims to approximately 85,000 Australians, illustrating the industry’s role in community resilience.
A significant drop in new retail insurance sales, with lapses now outnumbering new policies;
complex products and a 43% decline in financial advisors, making it harder for consumers to understand their coverage
questions about the industry’s sustainability due to pricing practices and legacy products;
a lack of product innovation that reflects societal changes, such as mental health concerns and demographic shifts
a decline in consumer trust due to factors like fluctuating premiums, poor claims experiences, and product confusion
external pressures from rising interest rates and cost-of-living concerns, which led some to forgo insurance
How can the life insurance sector transform challenges into opportunities?
Smith said these challenges present opportunities for the industry to rebuild trust and relevance. She encouraged insurers to innovate by:
creating products tailored to current demographics and risks, such as retirement solutions and coverage for mental health
taking a holistic approach to insurance offerings, aligning them with social security provisions to simplify consumer navigation
enhancing transparency in risk assessment, product design, pricing, and claims processing to rebuild consumer trust
using data and technology to better understand consumer needs and improve outcomes
Smith also called for collaboration between insurers, industry bodies, government, advisors, and consumer groups to address structural deficiencies and build a thriving insurance sector.
“Through collaboration, we can identify root causes, address structural deficiencies, and design solutions that meet the evolving needs of the community. In an industry where new business is falling and parts of society are already underinsured, it is time to ‘Think Bigger’ and work together to grow the pie, not merely fight over a shrinking slice,” she said.
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