APRA Calls for Sustainable Reforms in Income Protection Insurance

APRA has directed life insurers to address issues related to individual disability income insurance (DII) to enhance the product's viability. Geoff Summerhayes, APRA's Executive Board Member, noted that while insurers have been aware of these challenges, their efforts to resolve them have been insufficient.

In a competitive market, insurers have focused on attracting policyholders through pricing and product features that are not sustainable, leading to ongoing losses and suboptimal customer experiences. APRA's intervention aims to prompt insurers to develop more sustainable practices, ensuring the long-term availability and reliability of income protection insurance for Australians.

For consumers, this development highlights the importance of selecting insurers committed to sustainable practices. Engaging with providers who prioritize long-term stability can offer greater assurance that income protection policies will deliver the intended support when needed.