Partners Life managing director Naomi Ballantyne says the New Zealand income protection market is pretty stable and it has had some of the crazy underwriting practices that have taken place in Australia.
The problems in Australia have led reinsurer Munich Re to review how it underwrites these policies and how it make the product sustainable. (Full details here)
Ballantyne says she is not hearing any “screams or howls” from life insurers about the product, but she says increasing mental health claims are a concern.
She says the percentage of mental health claims on income protection is higher than the percentage of mental health issues made each year.
This indicates people with policies have some attitudinal issues to work and are using their policy payouts as an alternative income source.
“I’m not sure the policy is the problem,” she says.
Ballantyne says life companies could do more screening at application time and improve their underwriting in this area.
The idea would be to try and screen applicants’ attitude to work.
This could include questions like how many ad hoc sick days had people had off work; how often had they changed jobs and have there been any performance issues at work.
She said these sorts of questions could be asked as life companies already ask personal questions such as where they work and how much they earn.
Ballantyne says if there were major problems like in Australia then premiums would be increasing swiftly.
Earlier this year Partners Life increased its income protection premiums, but this was really in response to claims on trauma policies.
She said the company chose to spread the costs across the two products rather than put them all into trauma premiums.
It is unclear which life companies in New Zealand have reinsurance treaties with Munich Re.
« Churn debate: Sovereign has nothing to add | Churn debate: Australia moves to hybrid remuneration model » |
Special Offers
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved
Or a fixed claim period for mental health claims - say 2 years max?
I'm sure my colleagues out there will have other constructive ideas. I would hate to see Income Protection/Disability cover become ever dearer in the future as it's hard enough to sell now. Your thoughts?