Asian News - Australia: Product disclosure reforms to tap technology and consumer tests
Source: Asia Insurance Review | Jan 2016
Technological advances and thorough consumer testing should underpin product disclosure reforms in the general insurance industry. These are part of the recommendations by the Insurance Council of Australia’s (ICA) Effective Disclosure Taskforce on ways to better align the provision of policy information with customers’ needs.
The Taskforce was established in July 2015 in response to long-standing industry concerns about the effectiveness of mandated disclosure. ICA CEO Rob Whelan said insurers recognised the mandated requirements were falling short of helping consumers buy insurance that meets their needs.
“Product disclosure statements (PDS) have become so focused on complying with financial regulations and limiting an insurer’s liability that their value to customers has been greatly diminished,” Mr Whelan said. “The Taskforce found PDS documents are generally regarded as too long and complex, leading many consumers to simply skim them and then file them away until they need to make a claim.”
In its report “Too Long; Didn’t Read”, the Taskforce made 16 recommendations including:
• Exploring new electronic disclosure modes that are more engaging and can better target the information most applicable to individual customers;
• Encouraging the government to create a central portal for the release of natural hazard data to help consumers determine their insurance needs and take steps to mitigate their risk.
ICA will initiate an action plan this year to implement the reform, said Mr Whelan. One of the first steps is conducting consumer research to more precisely identify the best ways to overhaul product disclosure.