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Insurance and Retirees

Insurance and Seniors in Australia

The last 5 to 10 years have seen insurance providers seeking to target the retirement market, broadly the over 50s market, with specific offerings. Just as in certain markets risk and therefore premiums increase with age, such as with travel insurance, there are also products where age brings decreased risk - and that includes certain general insurance classes, such as motor vehicle insurance, in certain age ranges.

Generally speaking, we are not a fan of the insurance market in Australia - along with many other industry segments, it is just too concentrated and dominated by two or three companies in each sector. All majors operate through a range of brands giving the impression the market is more dynamic than is actually the case. See the table below:

Insurer Brands
Suncorp AAMI, GIO, Bingle, Apia, Shannons, TerriScheer, CIL, Vero, Essentials by AAI
IAG Buzz, CGU, NRMA, RACV, SGIO, SGIC, WFI, Swann Insurance and Lumley Insurance

Premium increases also seem to be generated by algorithms which try to determine your "ability to pay" as much as any claims experience or any assessment of risk.

Our general advice is as follows:

Review all insurance premiums closely every year. The insurer is not your friend and will not necessarily reward good behaviour in terms of claims or loyalty - indeed, they will often offer new entry customers lower premiums than long term customers. Additionally, do not presume that firms focussed on the Seniors market are necessarily the best provider.
Insurers will rely upon customer inertia, in terms of pricing annual renewals. You will absolutely pay a "lazy or loyalty tax" if you do not contact an insurer and ask them to explain any unreasonable increase in your premium levels. It is not unusual for insurers to simply apply 15% or 20% increases in premiums every year, in the hope and expectation that clients either don't notice or simply get tired of contesting premium levels. Indeed, research from the NSW government’s Insurance Monitor, which is charged with ensuring that insurance companies do not charge unreasonably high prices or mislead policy holders, shows that, on average, customers renewing their insurance policy paid 27% more than new customers.
Retain complete records of premiums paid, understand the extent of your cover in detail and be in a position to quickly and effectively change your insurer where appropriate. Reward loyalty if your insurer treats you fairly but otherwise remain objective.

We have prepared separate pages in relation to health, life, travel and funeral expenses because they raise specific issues relevant to seniors. Also, while we are a fan of the internet when it comes to comparing prices and services, there is certainly room to use (human) brokers when your needs are complex or significant in size - no additional cost normally applies and they can have significant leverage with insurance companies when it comes to premium levels and processing claims.

 

If you would like to arrange professional advice in relation to the above matters, please complete the Inquiry form below providing details and you will be contacted accordingly. You will receive a fee quotation in advance of any advice or services being provided.