Damien Mu

Many Australians place greater emphasis on home insurance than health or life insurance, according to a comprehensive report on the insurance market by life insurer AIA Australia.

This insight comes from AIA Australia’s latest tracking study (conducted by the independent research firm Nature, in December 2017) of a representative sample of 1,000 Australians aged over 18. The research sample covered a diverse range of Australians across all age groups, location, income, employment status and household structures. The gender split was 50:50.

The report shows that although health and life insurance are seen by life insurance holders as being a “primary” insurance product, they don’t rank them as high a priority as house insurance. The figures show that house insurance tops the list with 26% ranking it as the most important, followed by health at 22% and life at 20%. Car insurance comes in fourth at 13%.

In the “secondary” category are income and disability insurance, which are ranked 9% and 5%, respectively. Crisis, funeral and business expenses insurance are characterised as “tertiary” insurance, ranking at 2%, 1%, and 2%, respectively.

AIA Australia and New Zealand Chief Executive Officer Damien Mu says the figures are an important reminder to the industry that more needs to be done to address negative perceptions that still surround private health and life insurance.

“AIA Australia does regular research to identify people’s needs so we can serve them even better. When you consider that even those people who do hold a life insurance policy rank their house insurance as a higher priority than health or life insurance, which is essentially about protecting their family, then the industry still has some questions to answer.”

Mu says the report shows that 2 in 5 (39%) Australians have either a “slightly negative” or “very negative” view of life insurance (this negative perception decreases slightly to 26% amongst policy holders), another 36% are neutral, and only 14% are “very positive” or “slightly positive”.

“The fact that the number of people with policies are less inclined to have a “slightly negative” or “very negative” view about life insurance shows the industry is improving in how it relates to customers. But there is much more we need to do to earn, and in some cases rebuild, people’s trust in the industry.”

He adds that it’s important to note that the industry is addressing these issues via a range of measures, including improved communications with customers, better education of the market about the benefits of life and private health insurance, and greater flexibility and speed in how it responds to claims.

“We understand that the industry needs to be seen as competent and reliable, as well as acting with integrity and humanity. To achieve this goal, we must be affordable, flexible and reliable,” Mu says.

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