What’s Really Behind Recent Rises in Life Insurance Premiums?

Published 27 Oct 2015

Author: Gerard Malouf

Though the primary focus of Gerard Malouf & Partners is as personal injury lawyers, we are also fully equipped to handle life insurance disputes. Handling these claims successfully for our clients has given us a front row seat at what has been a difficult time for the life insurance industry over the last number of years.

Along with many ordinary Australians, we’ve noted the recent rises in life insurance premiums with concern as the industry struggles to bounce back from some relatively lean years.

Isolating the factors behind the recent premium rises is a tricky business however. Insurance companies themselves are naturally quick to point to increased costs in the face of what they maintain are rising levels of claims – particularly in the areas of mental health and disability claims.

To be fair, the last decade has seen two parallel developments that have certainly had an impact claim levels.

On the one hand, the ongoing effects of the Global Financial Crisis have increased the prevalence of stress and mental health issues among white-collar workers, leading to an increase in claims from that sector.

On the other hand, changing clinical and societal attitudes towards mental health have also led to people being increasingly willing to acknowledge their own illnesses and seek appropriate assistance. This has naturally resulted in more mental health claims.

There is no denying that the combination of those two factors represents a significant challenge for the life insurance industry. It’s far from the only element at play however.

Claims are also rising as a result of the 75% of Australians who are insured through their superannuation becoming more informed about what they are actually covered for. Concerns over policy churning by financial advisers are another sore point for the industry; along with the failure of existing actuarial models to accurately predict the extent of losses.

Put all of that together and the situation looks less than rosy for the life insurance industry. As some informed commentators have pointed out however, the overall picture bears many of the hallmarks of a classic insurance cycle – a road the industry has been down many times before and should be mature enough to deal with.

The jury is still out on whether the premium rises will continue with some taking a positive view that the situation is set to ease in 2015.

Whether premium rates rise or stagnate, what the recent history of the Australian life insurance industry makes abundantly clear is that companies will ultimately act in their own interests in order to address their own concerns. This is as true in the case of how aggressively a life insurance dispute is contested by the policy provider as it is in how much premiums are raised.

At Gerard Malouf & Partners Compensation Lawyers, our focus is always on the individual rather than the various corporate forces at play in any insurance dispute. We have decades of experience helping people successfully fight their case in insurance disputes, medical negligence claims and worker’s compensation claims.

As no win no fee lawyers, you can be 100% sure that your initial consultation via phone or in person is absolutely free of charge.

If you find yourself in a life insurance dispute, please do not hesitate to contact us today. Our team of dedicated compensation specialists is ready to talk you through your options.

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