MetLife Australia supports APRA changes to IDII

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

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