“The market currently offers more products than customers and distributors can digest”
Each year more insurance products are being developed. These new insurance products are being sold through diverse channels and are increasingly coming from newly created bespoke brands or as ancillary products distributed via traditional well know brands.
The business logic is clear. With challenging economic conditions, there is a battle for companies to drive more revenue and offering insurance is seen as a lucrative category where the value of their existing distribution capabilities can be leveraged creating new revenue.
This has led to us now having supermarkets offering landlord insurance.
Into the fray is stepping realestate business Domain with its recently announced Domain Insure insurance offering.
So what do customers typically consider when buying insurance*?
The Insurance Council of Australia submissions to the Federal Governments enquiry into Insurance found that when buying Car Insurance, the top three consumer considerations where:
1: The price of the premium – 52%
2: Value for money – 41%
3: What’s covered / not covered in the policy – 31%
So if those are the three key considerations that customers use to make their purchasing decisions, then maybe new non-traditional insurance brands can create viable models that deliver value for customers and for themselves.
What we are seeing is a period or rapid experimentation and iteration. Where companies are trying various insurance lines and sticking with the ones that work. Coles, for example, has stopped selling Life Insurance, whilst retaining its Coles Car, Home & Contents and Landlord Insurance lines.
So what would encourage Customers to try these new entrants?
Is it purely price driven? Or does the connection between the brand and the insurance line need to make sense eg Domain selling home insurance.
Either way, one thing we can be sure of is that whilst it is desirable for a simpler, more transparent insurance market, the future seems to becoming more fragmented and complex.
Source: Insurance Council of Australia, Top 3 Policy drivers by Product,
In this Advisr Experts Opinion, Greg Dobrin, of Sureserve Financial Services, provides knowledge on the difference between workers compensation & income protection insurance. The general thing to know is that income protection insurance provides a more comprehensive cover yielding a number of additional advantages.
The Difference between Workers Compensation & Income Protection Insurance
Workers compensation and Income Protection Insurance are similar but not the same. Both insurances cover the costs of a person’s wages in the event of injury or illness. The main difference is the cause of the illness and the location of the injury.
Workers compensation covers a person whilst at work, where it used to cover workers:
- on their way to work
- whilst at work
- on their way home from work
As seen by the trend, the cover is applicable only for work related injuries & illnesses.
Income protection insurance covers the insured person for 24 hours a day, 365 days per year, regardless of whether the person is working or not (subject to any specific exclusions the insurer may request).
If a person has a workers compensation claim, future premiums will reflect prior claims. Previous claims do not affect the premium of income protection policies.
Workers compensation is payable by the employing entity and the premiums are tax deductible. Income protection insurance may be paid by either:
- the insured
- another policy owner
- a company (as agreed)
- a superannuation fund
Premiums for income protection may either be tax deductible at the policy owner’s marginal tax rate or tax deductible to the company (they may be subject to fringe benefits tax). Another advantage is that insurance holders may be covered till they turn 70 (subject to their policy).
In summary, income protection insurance provides more comprehensive cover, as the insured is covered 24/7, 365 days a year. The circumstances surrounding the illness & injury do not need to be work related whilst workers compensation claims do.
Want to understand more? Get in touch with Greg Dobrin
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Have you ever had a declined insurance claim? When things are handled badly, it can be a pretty frustrating experience for all involved.
Dealing with the insurance industry has its ups and downs.
Sometimes a claims are straightforward and a breeze to run through. Other times, insurance claims are declined for reasons you were never aware of. You’re probably reading this because you are or have thought about “How to Deal with Declined Claims”. Read on to find out!
Every insurer has a different approach and philosophy regarding the treatment of claims. As a result, this affects the customer’s experience with each individual insurer.
Likewise, claims assessors often have different approaches to the same issue. Medical practitioners who provide information about claims may also have a different point of view regarding the same issue. This is to say that every insurer deals with claims differently and these differences should be expected when lodging for one.
In addition, claims can take a while to finalise and this can be due to a few reasons. The variety of factors to be considered that may impact the time taken in processing claims.
For example, some of the reasons for complexity of each claim is that all claims have differences:
- For each claim the insured person is always different.
- The circumstances of the incident is usually different.
- As such, there are many grounds for review when a claim is denied in the first instance.
If it occurs, the declined insurance claim is not the end of the matter. Each insurer has a mechanism to undertake a review of a declined insurance claim, and the insurance industry itself has more formal process for review. Think of it as an appeal like the court systems if you do not think justice has been dealt. If circumstances become dire, litigation (often as a last resort) is also an option.
So whilst having a denied insurance claim can be a frustrating experience, there are still other options for you to consider. So, now that the tables have turned, take advantage of this newfound knowledge and stay in control of your claim.
You’re newly pregnant. You’ve got a toothache. You’re headed off in an ambulance after a collision at soccer.
What do all these moments have in common?
They certainly don’t all have the same emotions attached to them, but soon enough, you may end up with one emotion in common, frustration. After all this time paying for your health insurance, you’re not covered for what you need. Or if you are, you might still find your out of pocket expenses much higher than you expected.
This is the concern of the President of the Australian Medical Association (AMA), Michael Gannon, who, earlier this week expressed his concern about the “proliferation of junk policies” that are in the health insurance market. Gannon is calling for the Government to put new laws in place stipulating a minimum level of cover and identifying policies as either gold, silver or bronze.
NIB CEO Mark Fitzgibbon has responded confirming that minimum levels of cover are already in place. However, he adds little comfort in his comment that “We took the view, so long as it’s transparent, caveat emptor [the legal principle of buyer beware] applies”.
We all have our Product Disclosure Statements (PDSs) handed to us when we take out a policy, so is Fitzgibbon right?
The real problem is, however, that with the number of insurance policies we might have and with our constantly changing circumstances, it can be hard to keep track of what we are covered for, and if our cover is still appropriate. Which is the exact problem that Advisr is here to address.
Advisr allows you to keep all your PDS documents in the one place, accessible any time. Simple.
We are also working toward implementing AI to help make sure that the cover you have is right for you. In the mean time you can even engage an insurance expert through Advisr to help you make the best decision for you and your family.
So, is it buyer beware? Not with Advisr to hand.