Andres Webersinke is Head of Life/Health Region Australia/New Zealand for General Reinsurance Life Australia Limited. Andres identifies the issues facing disability income insurance, which are many. Briefly, they are:
- Over-insurance - on an individual case basis. Usually the replacement ratio is too high, caused by a failure to offset some income during the claim.
- Benefits paid without tax deducted - and claimants may not pay tax for a variety of reasons
- Employers failing to support a person through either work changes or rehabilitation opportunities
- Rating / research houses encouraging broader or more generous policy definitions
- Reinsurance and cross-subsidisation
- Product design
- Claims philosophy
Andres also makes suggestions to tackle some of these issues. With a little creativity there are more opportunities beyond these too. Drilling down into individual segments that have particularly poor outcomes would yield more opportunities to tackle some of the knottiest issues. Examining product combinations - particularly those with mortgage protection, but not only them - could also help a lot. Two concepts of the insurtech world could also unlock solutions for a large part of the market parametric cover and claims automation. You can obtain your copy of the report by contacting Gen Re.