Brett Clark

Australia’s largest life insurer TAL yesterday announced the appointment of a new Group CEO from April 2015.

TAL Chairman Duncan Boyle said: “It is with great pleasure that we announce the appointment of Brett Clark as TAL Group CEO effective from 1 April 2015. This coincides with the planned retirement of current TAL Group CEO Jim Minto. Jim will remain with TAL until the year end process is completed in the first half of 2015.”

“The TAL Board has been planning for TAL Group CEO succession transition for a considerable period of time and we are pleased to announce the appointment of a very strong internal candidate in Brett following a comprehensive assessment process which included a worldwide benchmarking exercise using external consultants.”

“Brett has been a senior executive with TAL for six years and is currently CEO of the TAL Life business division. Brett has made a significant contribution to TAL and we believe he will be a very successful leader of the TAL Group.”

Since joining TAL, Brett has been a key member of a senior team that has seen the company treble in size and become the largest life insurer in Australia.

Brett’s current role as CEO TAL Life includes accountability for the Retail Life and Investments adviser business, TAL’s Group insurance and wholesale business and also TAL’s customer facing advice businesses of Affinia and Lifebroker.

Brett Clark said: “I am excited to be given the opportunity to lead TAL.  It is a privilege to be able to work with all the people at TAL.  We believe sincerely in the work we do to help millions of Australians when they need us most. TAL insures 1 in every 4 working Australians. ”

Brett is an experienced financial services executive with 25 years’ experience across a broad range of functions including strategy, finance, sales and distribution, product and marketing and operations in both the Australian and international insurance markets.

Effective 1 October 2014, Brett is appointed Deputy Group CEO and will be working on our strategy and positioning TAL for the next phase of its evolution.

TAL (formerly TOWER Australia Ltd and rebranded to TAL in 2011) is part of the global Dai-ichi Life Group.

The post TAL appoints new Group CEO appeared first on AdviserVoice.

Jim Minto

Australia’s largest life insurer TAL recommends in a new submission to the Financial System Inquiry a range of measures to improve consumer outcomes for life insurance products and services.

TAL Group CEO Jim Minto said: “We are seeking changes to allow consumers to have greater flexibility and ease to both obtain and maintain financial protection, and to enhance their confidence by improving various standards.

“While the FSI Interim Report noted that the Inquiry would investigate further Australia’s life-underinsurance problem, what TAL is seeking are changes to help address underinsurance so that people can have the right amount of financial protection they need.”

Mr Minto said life insurance plays an important role in society by helping people financially when they are unable to work due to sickness and injury as well as the families and beneficiaries of those who die.

“Life insurance not only protects the lives people have already created but it protects the future they imagine. To do this we are seeking strong consumer protection and regulatory oversight, enhanced advice delivery and effectiveness, and to give consumers access to more innovative and contemporary products that better meet their needs via the technology they are using today and in the future.”

Key fact sheet

TAL is seeking a requirement for a “key fact sheet” (KFS) to be provided to each prospective customer of life insurance. The fact sheet would be a standard format to be used by all life insurers so all prospective customers would be provided with concise, relevant information about the type/s of life insurance they are seeking. A requirement to provide a KFS has already been introduced for home loans and credit cards as well as home and contents insurance policies.

A key fact sheet enables consumers to compare products simply and helps to make it easy to understand what can sometimes be complex products. For life insurance in particular, these fact sheets should compare stepped and level premiums so consumers better understand the costs involved over the longer term.

Enhance ASIC powers

TAL supports providing ASIC with additional product intervention powers to improve consumer confidence where necessary. An example is eliminating stepped premiums from funeral insurance products where the customer has income-tested government benefits or fixed incomes. The reason TAL is calling for this is because stepped premiums – which rise over time unlike level premiums – can eat into fixed income and over time become less affordable. This has been an ongoing issue for consumer action groups.

Higher advice standards

TAL believes strongly in the value and importance of advice for Australians. Life insurance is often provided via advisers who can ensure that Australians have appropriate levels of cover to meet their individual needs. TAL strongly supports measures to lift adviser standards, via mandatory certification, minimum university education qualifications, a national register and ongoing training. Until standards improve and financial planning becomes a profession, planners will continue to be viewed poorly by the public. TAL continues to promote increasing standards of the advice industry, and has actively promoted this view through its own advice group Affinia Financial Advisers.

Enhancing access to low-cost advice

TAL supports the use of scaled advice – or limited advice – as an appropriate middle-ground option to help consumers receive the level of advice they both want and need. To help consumers navigate through the different forms of advice that is available, advice labels should be renamed to provide greater clarity. Specifically, general advice should be renamed Product Information, scaled advice renamed Product Advice while Personal Advice (or full advice) should remain unchanged.

Allow life insurers to give consumers products and services they want

The regulation of all insurers should be aligned to the greatest extent possible and regulations should be changed to allow life insurers to provide ancillary benefits or ‘riders’ to consumers where only general or health insurers can currently provide those benefits. An example is life insurers currently cannot pay for the medical treatment of a customer. In short, life insurers are prohibited from offering benefits that resemble general insurance or private health insurance. TAL believes underinsurance can be improved if flexibility in the regulatory framework is improved to allow insurers to develop innovative products and offer a greater range of benefits to consumers.

Mr Minto said: “TAL would like to thank the FSI for the opportunity to contribute in helping to reshape the financial system so that it can be more sustainable and deliver better outcomes for consumers and our society. As Australia’s biggest provider of life insurance in all its forms, TAL is determined to focus on the needs of our customers and consumers because we are passionate about the role that life insurance plays in society.”

The TAL submission will be published on the TAL website.

The post TAL seeks better life insurance outcomes for consumers appeared first on AdviserVoice.

Jim Minto

Younger Australians would spend extra income on shopping for clothes and new mobile devices before considering using the money to get financial protection for the first time or increase their life insurance cover.

And while clothes and mobiles are less of a priority for older Australians, all generations would first use extra income to build savings and pay down debt as their main priorities, according to consumer research by Australia’s largest life insurer TAL.

As part of TAL’s ongoing research into consumer attitudes and behaviours, Australians were asked what they would spend an extra 10% increase in income on, and they said overwhelmingly they would use the money to ‘deleverage’.

The research found that 87% of Australians would choose to deleverage across four areas: building up savings which was the highest individual response category at 59%, followed by putting towards the mortgage (38%), paying off credit card/personal loan (30%) and paying off bills (28%).

After these immediate financial needs, Australians would next put the extra income towards paying for a holiday (38%).

And while taking out life insurance/increasing life cover scored very low across all demographic areas, more Generation Xers would prefer to spend extra income shopping, going out to dinner and new technology than their older generations.

TAL Group CEO Jim Minto said: “This survey reveals the very low priority people place in thinking about using extra income to ensure they have adequate financial protection. It is a massive challenge but we need to change this mindset.

“The global financial crisis marked a turning point in consumer attitudes towards savings and debt, and deleveraging became an important priority. What we are seeing from this research is that this trend continues.”

“And with interest rates having been low for some time now, it seems people are paying down their mortgages while they feel they can.”

After ‘deleveraging’ and using extra income for a holiday, the areas people were least likely to spend extra income on were upgrading the car (15%), increasing spending on shopping for items such as clothes (10%) and going out for dinner more often (9%). Life insurance and ‘other insurance’ spending each came out last at 4% each.

“We undertook the poll because we want to understand the relative importance of life insurance versus other areas of spending priority,” Mr Minto said.

“People have expressed a desire to increase their financial buffer by building savings and reducing their outgoing payments on debt, but life insurance remains a low priority for many.

“This is a concern because in the event that a primary earner is no longer able to provide for his or her family, life insurance, income protection, critical illness and disability cover can help ensure that outgoings are still met without having to dip into savings.

“And for many people, a 10% increase in household income would more than pay for a policy or ensure adequate cover that gives this peace of mind.”

Mr Minto said life insurance not only protects what people have created in life and their immediate obligations, but it can also help achieve what they dream of for the future.

What would Australians spend a 10% increase in income on? 

The post Extra money goes to savings and holidays appeared first on AdviserVoice.

Jim Minto

The growing number of people who lodge ‘late notified’ claims against disability policies many years after their cover has ceased force upwards pressure on the price of premiums.

Australia’s largest life insurer TAL, through its initial the Financial System Inquiry submission, is calling for a time limit to be placed on when claims can be made for ‘living benefit’ policies.

TAL Group CEO Jim Minto said: “A big problem facing life insurers is that a claim can be made for a disability benefit many years after the customer has first stopped work and even ceased to have cover.

“This means life insurers are forced to assess ‘total and permanent’ disability (TPD) claims for when someone was once covered and may even currently be working at the time of the late claim.”

A big problem of the current open-ended disability claims arrangement is that the greater the distance between a claimable incident and the time a claim is made, the harder it becomes for both the insurer and the claimant to successfully process the claim.

This is partly because insurers often have to form a view using extremely patchy and inconclusive evidence to determine what a former or current customer’s condition was at a much earlier date.

Mr Minto said: “As well as being difficult to determine due to insufficient evidence, late notified claims could also have potentially harmful implications for life insurers costing models.

“That’s because these unaccounted for long dated claims make it harder for insurers to adequately calculate their ‘incurred but not received’ reserves and capital needs.”

Consumers end up paying higher premiums for disability cover because insurers are legally required to set aside money for the ‘incurred but not received’ costs expected for such claims and therefore need to recover those extra costs.

Section 54 of the Insurance Contracts Act – which encompasses life insurance as well as general insurance policies – currently prevents the denial of a claim merely because it is notified late.

Far better for both customer and insurer is for the claims to be made as close to the claimable event as possible, not up to over 10 years later.

To help minimise the impact of late notified claims, and maximise the chances of claims being successful, TAL urges customers planning to lodge a claim against their life insurance to get it into the system as early as possible.

Five tips to help consumers achieve a successful claim:

• Do get the claim in early because any delay in lodging the claim could delay the outcome.
• Do disclose previous conditions and correctly answer questions because incorrect responses may compromise future claims.
• Do claim directly or via your adviser if you have one. There is no need to use a lawyer to make claims; it does not change the result which in most cases is to accept and pay a claim.
• Do ensure you keep your life cover current. Letting your policy lapse leaves you unprotected. Protecting your ability to earn an income and your life is a necessity not a luxury.
• Do update the amount of your cover as your and your family’s needs change. Remember that for many people their income improves over time so income protection insurance coverage amounts should be updated.

The post The need for timely life insurance claims appeared first on AdviserVoice.

Jim Minto

In the wake of the interim Financial System Inquiry report, Australia’s largest life insurer TAL is calling for greater recognition of the “affordable” level premium pricing method.

TAL Group CEO Jim Minto said: “Consumers are continuing to voice concerns about rising costs and pressures of manage their home budget. We have found that while most people choose stepped premiums for their life insurance which rise with age, they are overlooking level premiums which stay the same.

“Although level premiums initially start higher than stepped premiums, they can provide households price certainty for the future because families don’t have to find extra funds each year.”

Mr Minto said the reason most people opt for stepped premiums over level is because they are initially much cheaper.

“But one of the problems with stepped premiums is that people can discontinue their valuable cover as the price increases more in later life, and they may even stop paying for their cover at a stage in life when they actually most need it.”

“Stepped premiums are in many cases suitable, particularly where the need is shorter term, but level premiums provide pricing certainty and predictability over the long term.”

Mr Minto said level premiums are comparable to fixing mortgage rates, which allow for better household budgeting and planning.

“Australians are familiar with fixing their mortgage rates and locking in utility rates to manage costs, but are more reluctant to fix their life insurance premiums which, in the long run, usually end up cheaper overall.”

TAL has recommended in its initial submission (pages 13 and 14) to the Financial System Inquiry (FSI) some minor changes to the regulation of premiums to help life insurance companies make level premiums more attractive to consumers.

The submission also recommends that policies sold to people on benefits or fixed incomes such as a pension should preferably be level premiums only.

A recent example of a level premium innovation was with TAL’s new InsuranceLine funeral insurance product which now only offers level premiums.

“While over half of our funeral insurance customers were already on level premiums, we found that many on stepped premiums would give up their policies as they aged and their premiums went up, at the very time when they needed it most, so we decided to only offer level premiums to overcome affordability concerns,” Mr Minto said.

He said the life insurance industry needs to communicate better to consumers around the pricing models for each forms of life insurance: income protection, disability, life and critical illness.

Background on types of life insurance premiums can be found on TAL’s A Voice for Life consumer information portal, including an animated video to help explain, in simple terms, the difference between stepped and level premiums for consumers.

The post TAL calls for “affordable” pricing of life insurance appeared first on AdviserVoice.

Experienced risk manager Scott Mackenzie has this month started in the new role at TAL following an extensive career in financial services in the United States, Latin America and Canada.

TAL Group CEO Jim Minto said the appointment not only boosts TAL’s already strong risk management capability but elevates it to a specific executive management role.

“As a 140 year old life insurer, TAL obtains most of its earnings from effectively taking risk so we have strong risk management capabilities,” he said.

“Enhancing our risk management capability and approach reflects on the continuing growth of the company and helps underpin the promises we make to our customers and partners that we will be there when they need us.”

Mr Minto said creating value through effective risk management was at the heart of being a life insurer, and TAL has a long and proud history of providing peace of mind and financial support when people most need it in life.

Along with the CRO appointment, a dedicated TAL Board Risk Committee has been established along with a framework to share risk management expertise and best practice across the broader Dai-ichi Life Group of companies.

Mr Mackenzie was most recently CEO and founder of a risk consulting practice in Atlanta city in the US where he lived and practiced before taking up the new role at TAL.

Previous to this, the Canadian worked for almost 20 years in a variety of senior executive roles for ING, including as CRO and Chief Financial Officer for ING Latin America, and for ING Americas as Head of Corporate Planning and Secretariat as well as in a life product management senior leadership role.

‎The change at TAL takes place upon the retirement of Chief Corporate Governance Officer Peter Noble who has held the role for seven years.

“Peter has done a great job for TAL and been a part of our growth story over that time and both I and the entire team at TAL wish him the very best in his retirement,” Mr Minto said.

Mr Mackenzie said: “Throughout my over 30 years in the life insurance industry I have witnessed and experienced a great deal of change, both personally and professionally.  But what has never changed is my belief in the importance and the incredible value that our products and services bring to our customers.”

The post TAL boosts risk management capability appeared first on AdviserVoice.

The number of Australians taking out life insurance on the rise.

Motivations for taking out life insurance cover⁽¹⁾ have been revealed in new consumer research findings.

One reason people obtain financial protection is after hearing a story of a friend or family member who has been saved from financial hardship by one or more types of their life cover (including Life – lump sum upon death; Trauma/Illness – lump sum for defined illnesses; Disability – lump sum upon permanent and total disability; and Income Protection – regular income payment upon defined illness/disability).

Australia’s leading specialist life insurer TAL has undertaken research⁽²⁾ to better understand consumer behaviour towards financial protection and planning attitudes.

One in five people (20%) in the national poll said they had heard of a friend or family member who had suffered an injury, illness, disability or even death but their life insurance had saved them and/or their family from financial hardship as a result.

Where people already had life insurance, the number of those who had heard of these safety-net stories rose to one in three (or 33%), indicating the positive experience that life insurance performed can be very motivating to obtain financial protection.

In a separate question about the actual reasons for taking out life insurance, the primary reason given by most respondents at 39% was that they made their own, independent decision, unprompted.

The second main reason was because life cover was already part of their superannuation (32%), followed by being prompted by a family discussion (22%), after a discussion with a financial adviser (19%) and being motivated by a real life story of death, illness or accident (12%).

TAL Group CEO Jim Minto said: “The very high level of unprompted actions being taken by people (39%) is a surprise when so often people talk about low interest or engagement in life insurance. The results also show that stories of how life cover has protected someone they know from financial hardship due to illness or accident can be a real motivator in ensuring they themselves obtain cover.

“I am actually not surprised one in five people have heard of a story how life insurance has saved a family from financial hardship in a time of need.”

While life insurance often only becomes a topic of barbecue conversation when there is a personal connection to a story of someone falling on hard times, financial protection should not be seen as a taboo topic. Life insurance is delivering all time record benefit payments to Australians.

“Let’s face it, life insurance has traditionally been something many people would rather not think about, even though they should. Hearing how life insurance can help financially in a time of need is a compelling reason to ensure protection is in place,” Mr Minto said.

Table 1: Most common reasons for taking out life insurance

Interestingly, Generation Y (specifically those Australians under the age of 25 years) is far more likely to be independently initiating the decision at 48% of that cohort, compared to the average of 39% across all generations.

The research found that while almost one in five (19%) were prompted by an adviser or financial planner to consider their life cover requirements, that figure rises to 26% among Gen Y, compared to just 14% for Gen X and 17% for baby boomers.

“These results reveal that more of our youngest adults are ‘making their own decision’ to take out life insurance at a higher rate than older generations, which shows they are more engaged in their financial affairs than they have been given credit for in the past,” Mr Minto said.

“Younger generations are using technology to take matters into their own hands to seek out services and products to meet their needs, and it appears that their own research is them into seeking out financial products and advice.”

The research continues to show there are the many ways people choose to obtain life insurance solutions, such as via super funds, financial advisers or directly with life companies, which supports TAL’s multi-distribution approach to ensure consumers obtain life insurance products and services in ways they prefer.

——-

1. Life cover is a collective description for the four main forms of life insurance: Life – lump sum upon death; Trauma/Illness – lump sum for defined illnesses; Disability – lump sum upon permanent and total disability; and Income Protection – regular income payment upon defined illness/disability.

2. This survey was undertaken online by Galaxy Research with 1,260 Australians, from the ages of 18–69 years old. Age, gender and region quotas were applied to the same and the dataset was weighted to national proportions.

The post Gen Y motivated around life insurance appeared first on AdviserVoice.

Women driving insurance decisions

Women are more likely to take out home, car and health insurance whereas men are more likely to hold life1 and pet cover, according to financial protection research2 by Australia’s leading specialist life insurer, TAL.

The research found that 41% of men hold a life policy compared to 33% of women. This includes the various forms of life cover: disability, income protection, critical illness/trauma/crisis, and end-of-life insurance.

The poll of more than 1200 people asked men and women which insurance policies they currently hold and found that both genders are more likely to cover their home and car rather than their most important asset of all, their life and income earning ability.

According to TAL Group CEO and Managing Director Jim Minto these results reflect the long term trend for primary earners to have more life cover than secondary earners and stay at home carers.

“Life cover has long been considered the domain of the primary earner, and historically this has been men but the need for life cover for secondary income earners and stay at home carers is just as high as for the primary earner,” Mr Minto said.

“While the gender pay gap remains an issue despite recent improvements, so too the disparity between the sexes in terms of life cover continues. This is despite a gradual bridging of the life cover gap being aided by greater accessibility through more direct channels, a greater number of female advisers and default cover through superannuation.”

The latest underinsurance figures for Australia by independent actuaries Rice Warner show total underinsurance at $10.6 trillion, with the disability gap increasing 10% in 2012 to $7.9 trillion, the income protection gap up 30% to $589 billion and the end-of-life insurance difference down 30% to $2.166 trillion.

The TAL financial protection research found that women are more likely than men to have made decisions around home and car insurance. Women are more likely to hold full car insurance (79% versus 71% of men), home building insurance (55% versus 49% of men) and home contents (70% versus 61% of men).

Table 1: Insurances held by gender

Analysing the research across the different age groups, baby boomers were most likely to hold full car insurance (83%) compared to their Gen X and Gen Y counterparts (77% and 65% respectively).  The same trend was observed for life cover, home buildings and home contents insurance.

Reflecting a likely higher take-up of technology amongst the young, the research found that younger people were more likely to have insurance cover for their phone, tablet or other portable device.

Mr Minto concluded: “We undertook this survey work to try to better understand the priorities of different demographics. We can see that young people who are healthy and often with no dependents may not see the value in insurance products such as life and disability insurance and income protection.

“People need to understand that life insurance not only protects the value they have created in their lives already, but protects the future they imagine and aspire to. It protects one’s way of life.

“The challenge for the industry is to change people’s mindset so that they better understand the importance of these products and view them as being as essential as home or car. The Government has made life and disability insurance mandatory through its MySuper reforms to help reduce the huge underinsurance gap in Australia but more needs to be done to incentivise people to have adequate financial protection.”

Table 2: Insurances by generations

The post Women driving insurance decisions on car, home and health cover… appeared first on AdviserVoice.