John is head of the Financial Services practice at TurksLegal and an expert in financial services law, with over 34 years specialising in the sector.
What influence do you think technology is having on the sector? And are you anticipating a further disruption in a particular area of life insurance?
Over the last decade, technology has made it easier for consumers to purchase products and has streamlined a lot of manual processes, so it’s definitely a good news story for the insurance industry. It has also contributed significantly to the way specialised distribution channels have evolved and is continuing to raise the stakes, particularly for players in the group market.
The insurance industry is beginning to take advantage of the various technology platforms available to regularly engage with customers online and via their mobile devices, particularly those in general insurance. Hopefully, technology will present more opportunities for fruitful and rewarding customer relationships in the future.
From a legal perspective, online underwriting presents a whole range of challenges, particularly in relation to non-disclosure and misrepresentation that are worlds away from advice mediated sales.
What are some key industry global learnings that have happened in the last 2 years that you think Australia’s market should be taking notice of?
I’d particularly like to focus on the significant regulatory developments that have occurred over the last 2 years as this is an area that will most certainly impact our clients.
The whole issue of data and privacy is a global one. Developments overseas, particularly in the EU, have driven a lot of change in Australian privacy regulation over the years. Navigating what can and cannot be done with data will be a massive issue for insurers and it will be interesting to see what broader impacts the EU General Data Protection Regulation (GDPR) will have in tightening privacy regulation here.
Another issue that has been pretty much a sleeper here, but has huge potential to be affected by EU law, is the unfair contracts legislation where the EU model has a lot to offer Australian regulators. In my opinion it will be much better for both the insurance industry and its customers than the propositions being put forward by some local proponents of unfair contracts laws whose preferred model will only create widespread uncertainty and new avenues for litigation.
Finally, one of the most interesting discussions I have been part of over the last two years has involved Nick Kirwan talking about how the life industry in the UK has addressed the way it is perceived by the public. I think we have a lot to learn in Australia from the UK’s experience in this regard.
How much of a step forward from the current Life Code is the Consultation Draft of the next iteration? Will the changes be enough to improve consumer perceptions about the industry?
The consultation draft cleans up some difficult issues and certainly takes the platform for customer engagement forward in a very positive way. It actually grapples with some legal anomalies in the 2013 amendments to the Insurance Contracts Act which I think are strategically very smart, and I commend them. I would probably take a different approach to the question of access to medical evidence after decades involved in claims litigation. However, it is up to the industry to understand what the issues of substance are and how to best engage with its customer base. That is the benefit of discussion and consultation.
I think it would be unreasonable to place the whole weight of fixing customer perceptions on the Code 2.0. It is a step forward in an industry wide process that makes customers feel assured they are at the heart of everything the industry does. It will also depend on how the industry, through bodies such as the FSC, collectively seeks to address how it is perceived which is a major (but very worthwhile) undertaking.
What is the one key thing that you think the industry needs to do over the next 3-5 years?
What a good question!
Because I am very much in awe of the talented and dedicated people I have met in the industry over the past 30 years I am tempted to say that empowering them to do their jobs even better through training and career paths is the most practical thing the industry could be doing now.
Taking a broader perspective, it’s important that the industry does not lose sight of how it delivers on its basic value proposition – providing Australians with peace of mind and financial security, and in a way that its customers can engage with and delivering on this without fail.
The next 3 to 5 years is an opportunity to re-build this value proposition with the Australian public. From my perspective smart handling of the big regulatory issues, customer engagement, great intuitive technology and simpler products that resonate with the consumers are critical to this.
John is appearing as a speaker at the March 21 FSC Life Insurance Conference to discuss the FSC's Life Insurance Code of Practice 2.0.
See more about the conference here.