Regulators Scrutinize Life Insurance Premium Hikes Amid Consumer Concerns
Regulators Scrutinize Life Insurance Premium Hikes Amid Consumer Concerns
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The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) have jointly reviewed life insurers' practices concerning premium increases, aiming to ensure they align with policy terms and meet reasonable policyholder expectations.
Initiated in late 2022, the review responded to concerns that repeated premium hikes may not have been applied appropriately, potentially leading to consumer dissatisfaction. Life insurers were urged to assess their re-rating practices, marketing materials, and product governance to address these issues.
Throughout 2023 and 2024, life companies made progress by improving these areas. However, given the recency of these actions, it is still too early to fully assess their effectiveness in reducing the frequency and size of premium increases.
APRA and ASIC will continue engaging with individual life companies where further improvements are needed, emphasizing the importance of transparent and fair premium practices to maintain consumer trust and industry stability.
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Knowledgebase
Professional indemnity: An insurance that provides cover for liability incurred in the course of exercising a profession.
