Advisers and insurers need to become more transparent in order to rebuild both consumer and regulator trust in the industry, ANZ Wealth has argued.
In its Life insurance: the case for change white paper, ANZ Wealth said that public confidence in the life insurance sector has been “eroding” in the wake of numerous media investigations and public inquiries, and insurers must respond to this and the subsequent “intensifying” of regulatory activity in a positive manner.
The company said that increased transparency in product design “may become more important” for insurers looking to follow “not just the letter, but the spirit of regulatory concerns” around their products.
“Such an approach will also go some way to re-establishing trust and positioning insurance and insurers in a more positive light to the market and authorities,” the white paper said.
Similarly, ANZ Wealth said that advisers need to embrace transparency to restore trust in the industry.
“Increased adviser transparency, including transparency on fee structures, as well as product choice, will provide much-needed clarity and reassure consumers [that] their best interests are being recognized,” it said.
Insurers should also look to increase the range of products available for advisers to recommend to their clients, the white paper said, noting that advisers “play an important role” in reducing confusion around complex product design.
“[Advisers] are a very significant partnership channel for life insurers and act as a relatable interface between what are sometimes necessarily complex products and customers in need.
“The packaging of advice with an insurance product is already an effective solution for customer confusion, but room remains for insurers to expand the range of products advisers can offer clients, especially those who may struggle with cost and are looking for straightforward cover.”
The white paper comes as ANZ finalizes the sale of its life insurance and wealth arm, the outcome of which Risk Adviser sister site InvestorDaily recently reported will be announced within a month.
Both Metlife and Zurich have made bids for ANZ’s wealth and life insurance assets, the report said.