MetLife Australia supports APRA changes to IDII
Sydney September 04, 2020
MetLife Australia supports APRA’s efforts in helping establish a sustainable insurance market, including the recent and further proposed changes to Individual Disability Income Insurance (IDII). Over the 5 years to September 2019, APRA reported that the Australian IDII industry lost $3 billion, including $1 billion over the 9 months to September 2019.
With this concerning trend, APRA has actively encouraged the life insurance industry to address the issue and develop possible solutions to assist with sustainability. This included APRA proposing ten measures in December 2019 in relation to IDII that are intended to help the market remain viable over both the short and long term, and will help minimise participants withdrawing from the market. These measures are intended to ensure the retail insurance market remains viable for current and future generations.
MetLife acknowledges and supports APRA’s concerns that certain practices have led to unprofitable and unsustainable IDII products. An example of which includes product features that place the claimant in a better financial position than what would otherwise have been the case prior to the event. Product design features like these, may encourage claimants to remain on the claim longer than is necessary through the course of rehabilitation due to the associated financial incentive. MetLife agrees with APRA that industry intervention is required in these circumstances to ensure IDII continues to serve its purpose, and to necessitate appropriate and affordable income protection cover within the industry.
Every participant in the IDII industry wants to ensure customers continue to have appropriate income protection cover that they can afford throughout their working life, thus protecting their biggest asset, the ability to generate an income.
Meray El-Khoury, Chief Retail Insurance Officer said, “As a relatively new entrant to the Retail insurance market, we have focused on designing products and processes that are both fit for purpose for customers and able to be sustainably maintained over the longer term. We were pleased to see in APRA’s proposals for IDII from July 2021 that there were measures to limit replacement incomes, which aligns to our own product design. In this way, we are well placed to produce products that comply with the proposed changes from APRA”.
Richard Nunn, Chief Executive Officer, further commented, “To help the industry move forward in a positive manner, we are working collaboratively with APRA and the FSC to provide an insurer’s perspective and insights into product design. We are also actively working with our advisers to help them understand and navigate these changes on behalf of their clients. We look forward to continuing to work with APRA and other stakeholders on the sustainability of the entire industry, including IDII cover”.
Media Contact
Sarah Kelly
MetLife Australia
+61 (0)411 893 890
About MetLife Foundation
At MetLife Foundation, we are committed to expanding opportunities for low- and moderate-income people around the world. We partner with nonprofit organizations and social enterprises to create financial health solutions and build stronger communities, while engaging MetLife employee volunteers to help drive impact. MetLife Foundation was established in 1976 to continue MetLife’s long tradition of corporate contributions and community involvement. From its founding through the end of 2019, MetLife Foundation provided more than $860 million in grants and $85 million in program-related investments to make a positive impact in the communities where MetLife operates. Our financial health work has reached more than 13.4 million low- and moderate-income individuals in 42 countries. To learn more about MetLife Foundation, visit metlife.org.
About MetLife
MetLife Insurance Limited (MetLife), an affiliate of MetLife, Inc., is a specialist provider of life insurance to affinity partners, superannuation trustees and employers in Australia. MetLife has expertise in designing and executing direct insurance programs for partners’ customers and insurance solutions to meet the needs of specific member groups. MetLife has been a specialist provider of life risk insurance products in Australia since 2005. For more information, visit metlife.com.au.
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates, is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit metlife.com.