Customers driving policy lapses, says TAL Life boss
Australian consumers are more engaged with life insurance than ever before, which could be the cause of increased lapse rates, according to chief executive officer of TAL Life, Brett Clark.
Clark said lapse rates had often been talked about in the context of financial advisers and churn, ignoring a significant consumer dynamic at play.
"Consumers are price-checking and asking their advisers to find them better deals every year," he said.
"We're seeing some of that, there's no doubt there's evidence of that happening."
Furthermore, Clark added the so-called churn debate needed to involve all industry participants, including life insurance companies, advisers and adviser bodies.
"This cannot be a conversation which is confined just to the FSC, it needs to bring the advisers and the adviser bodies into the room as well — the Financial Planning Association and the Association of Financial Advisers," he said.
The complexity of the issue highlights the importance of finding the right solution, rather than getting a quick fix.
"It's important that we have the right discussions, take the time for those discussions and take the time to really understand the issue and come up with the solution that works in the long term for the benefit of everyone in the industry," Clark said.
"I would much rather see all of us take the time to do that then rush to a solution just to get something out the door and move on to the next thing."
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