2017 ANNUAL FORUM FRIDAY FEBRUARY 17, 2017 HILTON SYDNEY - - PowerPoint PPT Presentation

2017 ANNUAL FORUM

FRIDAY FEBRUARY 17, 2017 – HILTON SYDNEY

Mr Michael Pascoe Master of Ceremonies

Introduction

Rob Whelan Executive Director & CEO Insurance Council of Australia

Welcome address

The Hon. Kelly O’Dwyer MP Minister for Revenue and Financial Services

Video address

Social licence and general insurance Mr Richard Boele Partner, KPMG Banarra

Plenary session 1

Why am I here?

What is social licence?

Mining, Sustainability and The Agents of Change

Daniel M. Franks

MOUNTAIN MOVERS

What did mining industry do?

MMSD

Mining, Minerals and Sustainable Development Project

MMSD

20 countries

700 people

in 23 global workshops 175

research projects commissioned

Companies participating went from 9 founders to 25

9

25

Where is general insurance?

The potential for erosion of trust is a threat that must be dealt with and the industry should be more proactive in responding to this…

GEOFF SUMMERHAYES APRA Member

Where is general insurance?

Recent queries submitted to a major Australian insurer’s Facebook and Twitter assets historically from 7 February 2017.

84% (133 posts) 16% (25 posts)

Policy-related queries (incl. customer service) Other queries*

Where is general insurance?

88% of queries submitted to the insurer’s Facebook page were about policy matters (incl. customer service). 58% of these posts were negative.

LISTEN, UNDERSTAND, RESPOND

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Morning tea break: Refreshments will be provided in the foyer The next session will start at 10.30am

Morning tea break

Coming up

10.30am: Plenary Session 2 ─ Senator Katy Gallagher Shadow Minister for Small Business and Financial Services 11am: Plenary Session 3 ─ Mr Geoff Summerhayes Member, APRA 11.45am: Plenary Session 4 ─ Mr Greg Medcraft Chairman, ASIC

Senator Katy Gallagher Shadow Minister for Small Business and Financial Services

Plenary session 2

Australia’s new horizon: Climate change challenges and prudential risk Mr Geoff Summerhayes Member Australian Prudential Regulatory Authority

Plenary session 3

Issues for the year ahead Mr Greg Medcraft Chairman ASIC

Plenary session 4

Lunch break address by Mr Mark Textor: Current domestic and international political trends Please move to Level 4 for a sit-down lunch Plenary Session 5 will commence at 2pm sharp in Ballroom A

Lunch break

2pm: Ballroom A: Plenary Session 5 – Effective Disclosure: Release of findings of the ICA Research Project 3pm: Ballroom A: Breakout session 1 – Self-regulation in action: The general insurance industry 2014 Code of Practice and its 2017 review 3pm: Ballroom B: Breakout session 2 – How the ICA’s DataGlobe and resilience tools are improving community outcomes 4.05pm: Ballroom A: Breakout session 3 – General insurance and mental health: The need to improve outcomes 4.05pm: Ballroom B: Breakout session 4 – Insurtech projects All sessions from 3pm will be closed to media

Coming up

Effective Disclosure: Release of findings of the ICA Research Project

Chair: Mr Michael Gill, Insurance Council Effective Disclosure Taskforce Mr Richard Enthoven, CEO, The Hollard Australia Group Ms Karen Cox, Coordinator, Financial Rights Law Centre Mr Matt Sandwell, The Lab

Plenary session 5

Effective Disclosure Taskforce

• Independent Taskforce established by ICA Board in 2015 to review

the effectiveness of, and recommend initiatives to enhance, disclosure.

• Taskforce chaired by Michael Gill, and comprised of experts from

industry, consumer movement, academia and behavioural sciences.

• Taskforce report, Too Long; Didn’t Read. Enhancing General

Insurance Disclosure, submitted to the Board in October 2015.

• ICA Board endorsed all 16 recommendations by the Taskforce.

System 1

Fast thinking/Automatic intuitive, effortless 2x2 Taking your daily commute

System 2

Slow thinking/Reflective deliberate, analytic 24x17 Planning a trip overseas

“It turns out that the environmental effects on behavior are a lot stronger than most people expect” Daniel Kahneman, Nobel Laureate

Dual-process theory of reasoning

Key research-related recommendations

• The ICA should establish a disclosure performance benchmark by

commissioning research on current consumer knowledge and understanding of commonly purchased general insurance.

• The ICA should commission research to determine pre-purchase

consumer behaviours and how disclosure can be used to nudge appropriate decision-making.

• The ICA should research consumer behaviours in relation to

decision-making about the sum insured for home building insurance.

Role of foundational research

Consumer Research on General Insurance Product Disclosures

KEY FINDINGS

Who we spoke to… 150 customers at key moments of truth

n=30 FACE TO FACE, POINT IN TIME ETHNOGRAPHY n=120 DIGITAL, LONGITUDINAL ETHNOGRAPHIES EXPERIENCED AND HIGHER ENGAGEMENT WITH THE DETAILS EXPERIENCED AND LOWER ENGAGEMENT WITH THE DETAILS FIRST TIMERS WITH THIS PARTICULAR TYPE OF INSURANCE

VULNERABLE GROUPS SUCH AS ESL, LOWER EDUCATION LEVEL AND LOWER SES

HIGHER RISK CONSUMERS OR HAZARD PRONE AREAS 6 x customers – at some point in their decision 6 x customers – at some point in their decision 6 x customers – at some point in their decision 6 x customers – at some point in their decision 6 x customers – at some point in their decision 24 x ‘full’ experiences 24 x ‘full’ experiences 24 x ‘full’ experiences 24 x ‘full’ experiences 24 x ‘full’ experiences

• Across a prioritsed range of the following: Home Building, Motor Vehicle, Travel, Home Contents, Personal Sickness and Accident, and Pet Insurance products
• Broadly representative sample across demographic (age, gender, lifestage) socioeconomic (education, income) and geographic (States, City vs. Regional)
• All to be the main or joint decision maker for insurance products, and to be currently in the process of making a decision re: insurance products

What we asked them… Understanding their journey in their words

SO WHAT DID WE FIND…

There is no single pathway to purchase and the use of information in decision-making is highly varied…

Although varied, there were common themes that helped to define this variance and ultimately help make sense of the market

While most consumers report they have evaluated the details of their policy, most do not access the PDS, or the KFS…

So what are they using…

And why…

While most consumers are confident in their understanding…

Comprehension appears to be poor

For some, it appears that the best ‘education’ is to have made a claim, those who have claimed are more likely to read and understand

The end result… Many consumers simply do not consider the specific risks relevant to them, when purchasing cover, until its too late…

SO WHAT DOES IT MEAN FOR THE PDS?

The PDS can be improved, although there are also broader opportunities for engagement…

The PDS…

• The depth and detail of the information contained in the PDS is a key positive
• However conversely, the PDS is seen as too detailed and inaccessible,

reducing the likelihood that it will be used as a pre-purchase document.

• Tools that will enable the PDS to be searched and made more digestible are

likely to be beneficial.

• And not just the detail but the inclusion of examples re: possible claims

scenarios.

Beyond the PDS…

• The renewal letter is the most commonly used and highly rated source of

information, and presents opportunities to provide targeted information.

• There are opportunities to target information provided through online quotes,

which are commonly used by new to market consumers and who have the lowest understanding of general insurance concepts.

• Increased trust in sum insured calculators is important to encourage more

informed decision-making.

Thank you…

2017 ANNUAL FORUM

FRIDAY FEBRUARY 17, 2017 – HILTON SYDNEY