Collectively life insurance companies have lost close to $3.4 billion over the past five years as a result of the sale of disability income insurance to individuals. The Australian Prudential Regulation Authority is responding to ongoing losses of insurance companies by introducing capital charges, this will require life insurers to look into product design and pricing flaws. It will also require us to do the same, for although our IP experience is nothing like as bad as Australia's, that's no cause for complacency. People and policies are similar - and therefore have similar motivations and incentives.I would hate to see how our in-force IP book responds to an economic downturn. 

Click here to read more