AIA Australia Limited
(ABN 79 004 837 861 AFSL 230043)
PO Box 6111
St Kilda Road Central VIC 8008
Phone : 1800 333 613
Fax
: 1800 832 266
AIA.COM.AU
Media Release
Ageing population and consumer ambivalence to insurance revealed as ‘greatest challenge’
for life insurers
Survey of superannuation and insurance professionals at AIA Australia’s Group Insurance Summit
reveals new challenges facing industry
Melbourne, 16 September 2013 – Australia’s ‘greying’ population combined with continuing lack of
awareness about the importance of insurance have been identified as the two greatest challenges for the life
insurance industry, according to a new survey.
Superannuation and insurance professionals at the recent AIA Australia Group Insurance Summit were asked
for their views on current and future issues in life insurance, and what role the insurer should play in
addressing these. 70 per cent said that consumer uncertainty about the need for life insurance and the impact
of an ageing population on the level of claims would be critical challenges to be overcome. A further 15 per
cent of respondents said members inadvertently losing cover by consolidating accounts or switching to SMSFs
would be the third biggest concern for the industry.
AIA Australia General Manager, Life Insurance, Damien Mu said the results show that life insurers must work
as a collective to address these issues.
“According to the United Nations, life expectancy in Australia is the fourth highest in the world, and by 2036 it
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is predicted that around 1.1 million Australians will be aged 85 years or over . This is a huge demographic shift.
We must continue to promote the value proposition that’s at the heart of life insurance – protecting the lives of
Australians – if we are to respond to this challenge, but it cannot be done in isolation. We have to work
together to ensure that Australians not only have life insurance, but that it is at an adequate level for their
future needs”, he said.
More immediate challenges revealed by the survey were the sustainability of premium prices (33 per cent),
increasing claims (28 per cent) and poor consumer perception (24 per cent). In addressing these issues,
delegates believe improving the claims process and innovating products to provide better value for consumers
are paramount, polling 42 per cent and 23 per cent respectively.
Lack of awareness of Occupational Rehabilitation among employers
While 72 per cent of respondents confirmed their insurer operates a rehabilitation program for claimants, major
barriers in the implementation of such programs remain. 52 per cent think there is a lack of awareness of
occupational rehabilitation from employers, while an additional 18 per cent believe the cost of implementing it
is too high.
“Rehabilitation and return to work programs are vitally important for group insurers, employers and employees.
When done correctly, getting a claimant back to work is good medicine and a win for everyone involved,” Mr.
Mu added.
Mr. Mu pointed to the launch of a research paper ‘A critical equation: balancing Australian worker health and
company wealth’, which draws on data compiled by AIA Australia’s rehabilitation team and addresses some of
the challenges faced by businesses in implementing return to work programs. Evidence suggests the key to
successful rehabilitation and returning members to work is early intervention - after just 20 days of an
employee ceasing work, their chance of returning to work is 70 per cent and after 45 days off work, the chance
of returning is 50 per cent.
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(AIHW 2007: 5‐6; ABS Population Projections, Australia, 2006 to 2101 3222.0).
Delegates at the Summit were also surveyed on the best means for insurers to demonstrate their value to
super fund members. 35 per cent said that simplifying product wording to increase understanding of insurance
products, while 20 per cent believed that communicating a stronger message on the importance of insurance
was needed. Conversely, just seven per cent said providing more comprehensive cover to offset premium
rises was important.
“The Group Insurance Summit gives us the chance to take a pulse on the main issues and challenges facing
our industry. Clearly, indifference to life insurance is still front of mind for many, so we’ve got to start thinking
differently about how we engage with consumers to create long-term behaviour change. If we can do this
successfully, a larger proportion of Australians will have access to affordable, adequate levels of cover, and
that has to be our ultimate objective”, Mu concluded.
For more information on this year’s Group Insurance Summit, visit
http://groupinsurancesummit.aia.com.au/GIS_Homepage
<ENDS>
Media enquiries:
Judith Buchan
Honner Media
02 8248 3745/ 0411 597 326
judith@honnermedia.com.au
About AIA Australia
AIA Australia Limited is an independent life insurance specialist with over 40 years of experience building
successful partnerships. One of the country’s leading life insurers, AIA Australia offers a range of products that
protect the financial health and welfare of more than two and a half million Australians.
AIA Australia is the country’s largest group life insurer by market share and works closely with major financial
institutions and corporate partners.
In addition, AIA Australia offers retail insurance products through financial advisers and a valued network of
affinity partners.
By having a partnership philosophy at the core of its business, AIA Australia is focused on building sustainable
relationships that add true value to its business partners. Numerous industry awards over the past year,
including the AFR’s Blue Ribbon award win for best term life/TPD insurance product and ANZIIF’s Life
Company of the Year (2013 and 2012), and 2012 Smart Investor Life Insurer of the Year, stand as testament
to our commitment to productive partnerships.
AIA Australia is part of the AIA Group, a market leader in life insurance across the Asia Pacific region with over
90 years experience.
About the AIA Group
AIA Group Limited and its subsidiaries (collectively “AIA” or “the Group”) comprise the largest independent
publicly listed pan-Asian life insurance group. It has operations in 16 markets in Asia-Pacific – wholly-owned
branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines,
Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, a 92 per cent subsidiary in Sri Lanka and
a 26 per cent joint-venture in India.
The business that is now AIA was first established in Shanghai over 90 years ago. It is a market leader in the
Asia-Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the
majority of its markets. It had total assets of US$134,439 million as of 30 November 2012.
AIA meets the savings and protection needs of individuals by offering a range of products and services
including retirement savings plans, life insurance and accident and health insurance. The Group also provides
employee benefits, credit life and pension services to corporate clients. Through an extensive network of
agents and employees across Asia-Pacific, AIA serves the holders of more than 25 million individual policies
and over 13 million participating members of group insurance schemes.
AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock
code “1299” with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker
symbol:“AAGIY”).