Most Australians are still significantly under-insured

Under-insurance remains a significant problem in Australia, according to the latest AXA/DEXXR Under-insurance Report. This is the third consecutive year that AXA has produced the Under-insurance Report. This year, the AXA Under-insurance Report included additional consumer research and input, which revealed that consumer attitudes to insurance and financial advice are contributing to the problem. The research revealed that only 22% of Australians have life insurance to protect and supplement their investment, wealth creation, retirement and lifestyle objectives, said AXAs General Sales and Marketing, Mr. Adrian Emery. This ratio is particularly disturbing as the average Australian only has cover sufficient to meet a mere 30% of their protection requirements with the protection gap calculated to be nearly $.5m per individual . AXAs report also revealed that only 6% of Australians have income insurance, with 24% of insurable income protected. As a result, the average Australian would receive an income insurance benefit that is $29,000 per annum less than they need. Mr. Emery continued, With national savings in Australia at an all-time low and household debt passing a staggering $750 billion at the end of 2004, the need for financial protection has never been more important or crucial. Most disturbing, the AXA Report revealed that Australian Consumers felt that they were bullet-proof, and as a consequence, tended to see insurance as not important. This is an attitude that has arisen in tandem with the recent housing boom, strong economy and low levels of unemployment. We also found a widespread misunderstanding amongst consumers that we surveyed about the benefits of insurance protection cover and how it works and as a result they did not see the need to effect insurance cover, said Mr. Emery. Even a rudimentary or vague knowledge and appreciation of the issue can be a problem as Australians tended to put insurance in the too hard basket and this led many people to dismissing value and worth of protection. Another insight the AXA Report revealed was the general lack of confidence in insurance and financial advice. But when it comes to gaining trust, the attitudes of men and women were quite different. The gender difference required financial advisers to engage and interact with men and women in different ways in order to secure their trust.Mr. Emery said, Men demand an emphasis on results whilst for women, results were also important, but a much higher value was placed on the relationship with their financial adviser. Approachability, a people person, supportive, a listener and tact were the traits that women appreciated and sought from their financial adviser. Men on the other hand, had a narrower focus and valued their financial advisers ability to provide defined financial outcomes. The traits the men required in their financial adviser were: licensed, certified, proven, knowledgeable and experienced. The findings of the AXA Under-insurance Report have been incorporated into the new insurance offer that AXA has just launched via a series of National Briefings in all capital cities and regional centres from July 25 to August 11. As part of the National Launch, AXA is introducing new tools and new insurance products that have been developed to assist financial advisers address many of the attitudinal issues that were identified in the AXA Under-insurance Report. The response to our invitation to attend the National Briefings has exceeded our expectations and over 2000 financial advisers have registered to attend. We look forward to sharing the insights that have been gained by the AXA Under-insurance Report and to providing financial advisers with details of our new and exciting product range, concluded Mr. Emery.