2017 ANNUAL FORUM FRIDAY FEBRUARY 17, 2017 – HILTON SYDNEY
Introduction Mr Michael Pascoe Master of Ceremonies
Welcome address Rob Whelan Executive Director & CEO Insurance Council of Australia
Video address The Hon. Kelly O’Dwyer MP Minister for Revenue and Financial Services
Plenary session 1 Social licence and general insurance Mr Richard Boele Partner, KPMG Banarra
Why am I here?
What is social licence?
MOUNTAIN MOVERS Mining, Sustainability and The Agents of Change Daniel M. Franks
What did mining industry do? Mining, Minerals and Sustainable MMSD Development Project 700 people 175 MMSD research projects in 23 global commissioned 20 countries workshops Companies participating 25 went from 9 founders to 25 9
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? 16% (25 posts) Recent queries submitted to a major Australian insurer’s Facebook and Twitter assets historically from 7 February 2017. 84% (133 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 Morning tea break: Refreshments will be provided in the foyer The next session will start at 10.30am
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
Plenary session 2 Senator Katy Gallagher Shadow Minister for Small Business and Financial Services
Plenary session 3 Australia’s new horizon: Climate change challenges and prudential risk Mr Geoff Summerhayes Member Australian Prudential Regulatory Authority
Plenary session 4 Issues for the year ahead Mr Greg Medcraft Chairman ASIC
Lunch break 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
Coming up 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
Plenary session 5 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
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. •
Dual-process theory of reasoning System 1 System 2 Fast thinking/Automatic Slow thinking/Reflective intuitive, effortless deliberate, analytic 2x2 24x17 Taking your daily Planning a trip overseas commute “It turns out that the environmental effects on behavior are a lot stronger than most people expect” Daniel Kahneman, Nobel Laureate
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 EXPERIENCED AND EXPERIENCED AND LOWER FIRST TIMERS WITH THIS HIGHER RISK CONSUMERS VULNERABLE GROUPS SUCH HIGHER ENGAGEMENT ENGAGEMENT WITH THE PARTICULAR TYPE OF AS ESL, LOWER EDUCATION OR HAZARD PRONE LEVEL AND LOWER SES WITH THE DETAILS DETAILS INSURANCE AREAS n=30 FACE TO FACE, 6 x customers – at some 6 x customers – at some 6 x customers – at some 6 x customers – at some 6 x customers – at some POINT IN TIME point in their decision point in their decision point in their decision point in their decision point in their decision ETHNOGRAPHY n=120 DIGITAL, LONGITUDINAL 24 x ‘full’ experiences 24 x ‘full’ experiences 24 x ‘full’ experiences 24 x ‘full’ experiences 24 x ‘full’ experiences ETHNOGRAPHIES 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…
Although varied, there were common themes that helped to define this variance and ultimately help make sense of the market There is no single pathway to purchase and the use of information in decision-making is highly varied…
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… 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, • The PDS can be reducing the likelihood that it will be used as a pre-purchase document. improved, although Tools that will enable the PDS to be searched and made more digestible are • likely to be beneficial. there are also And not just the detail but the inclusion of examples re: possible claims • scenarios. broader opportunities Beyond the PDS… for engagement… 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
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