Australian CEOs identify longevity insurance barriers

The meeting brought together 21 life insurers in the country.

The Australian Prudential Regulation Authority’s (APRA) recent life insurance CEO roundtable on 17 July calls for more longevity solutions in Australia.

Participants agreed that increased demand is necessary for insurers to justify investment and accurately price risks. Limited awareness, misconceptions, and a preference for preserving account balances were identified as barriers to demand. 

The meeting, led by APRA Member Suzanne Smith, Executive Director Sean Carmody, and General Manager Nancy Ma, brought together 21 life insurance CEOs, executives, and representatives from Treasury, ASIC, and the Council of Australian Life Insurers.

APRA noted that life insurers are key players in the retirement ecosystem and can help address these challenges. International examples showed higher take-up rates in countries with government compulsion or incentives.

Participants highlighted the need for better product design and distribution to meet retirees' needs. ASIC emphasised the importance of member research and protection against unsuitable products. 

The idea of a "soft default option" with longevity protection for certain retiree cohorts was discussed, though concerns about appropriate engagement and advice were raised.