ING overhauls risk insurance

ING Australia has repackaged its entire life insurance range into a single product, introduced two new types of cover and is offering clients access to family discounts, as part of a wholesale revamp of its risk division.

The move is part of a bid by ING to remove red tape associated with risk insurance in the hope of boosting sales through financial advisers.

The group is also exploring ways to make the new single, umbrella product available through its platforms.

If the changes are embraced, they could help to bridge the $1.3 trillion underinsurance gap identified by the Investment and Financial Services Association in a recent report, ING Australia chief executive Paul Bedbrook said.

The group’s existing risk products - life insurance, total and permanent disability, trauma, income protection and business cover - will all be available as options within the single product, OneCare.

Two new types of insurance - child cover, to insure against child specific-trauma conditions, and living expense cover - will also be available as options under the new product.

The living expense option will allow those who typically do not qualify for income protection insurance - such as non-working spouses, casual and contract workers, those over 60 years of age and people in high-risk occupations - to cover their living costs to a maximum of $3,000 a month.

The cover signalled a shift in the group’s approach to risk insurance to meet the expectations of a new demographic of clients, according to ING executive director of life risk Helen Troup.

“It is not about death any more. Fifty five per cent of our claims now have a living benefits component to them. The developments in insurance have to be more focussed on living,” Troup said.

Because clients who opt for more than one type of insurance under the product would only have to fill in a single form, and go through one underwriting and medical review process, Troup said the workload for advisers could be significantly reduced.

“If you were to be critical of the life insurance industry, we are probably one of the industries that has been slow to embrace consumerism,” she said.

Consumers who sign up to the new product will receive discounts ranging from 5-10 per cent, depending on the number of their direct family members who are also insured by ING.

The discounts will also apply to same sex couples.

In a bid to ween advisers off up-front commissions, ING will offer planners the option to take as little as 32 per cent of the first year’s premium upfront, in exchange for higher commissions in later years.

Advisers can still choose the upfront option, where they will be paid 115 per cent of the first year’s premium, and then 11 per cent every year there-after.

“Insurance is sold not bought. You don’t wake up in the morning thinking I need life insurance. The predominant avenue for distributing OneCare is through advisers,” Troup said.

In other news at ING Australia, which is a joint venture between ING and the ANZ Bank, the group announced today that it had spun-off its operations across the Tasman into a separate business, ING New Zealand.

The business would be 51 per cent owned by ING and 49 per cent by ANZ, and include the funds management and life insurance business of ANZ’s trans-Tasman subsidiary, National Bank of New Zealand.