It said the exception was Individual Advised Accident insurance which had an unusually low admittance rate.
The APRA analysis said that, in general, individual products had higher acquisition costs associated with the policy compared to group products.
“As this is reflected in the premium charged, the claims payments for these products will generally be of a lower percentage of the premium income.
It said disability income insurance (DII) business had the highest claims paid ratio for all distribution channels.
“While a ratio of over 100% suggests good value for policyholders, this is not sustainable and will threaten the ongoing availability of IDII for the Australia community in the future,” APRA said.
This core attribute has forever characterised the heart of the best of Australia’s advice community. Moving forward, it will stand the test of time as the most enduring quality trait of committed, professional advisers operating in the world’s most stringently monitored and regulated advice environment.
My following comments were written with risk-specialist advisers in mind, but also largely apply to financial planners.
THE PAST 50 YEARS AND MORE
It is instructive to look back to the ‘beginning’ to understand the root cause of the reputation issues that have fallen at the feet of financial advisers, often without due cause.