Significantly, the report highlights that some insurers, troubled by poor claims experiences, have withdrawn from markets such as law firms and insurance companies. This has led businesses to reconsider their employee benefit strategies, leading to potential reductions in group life insurance coverage. Cost-cutting measures such as these may result in individuals being left underinsured.
The causes of claims have stayed consistent, with cancer still the leading factor in life claims and mental illness prominently impacting income protection claims. Of particular concern are mental health claims, which tend to persist longer and contribute substantially to rising claims costs for insurers.
On a positive note, a significant player has reentered the corporate life insurance arena outside of superannuation, presenting much-needed capacity after recent exits by other providers.
According to the Marsh report, these trends observed in the first half of the year are expected to continue for the remainder of the year.
