In this paper, we have compared the structure and the recent experience of the disability income insurance (DII) of the UK, USA, and South Africa with that of Australia. The focus of this paper is the design of the DII products in these markets and whether there are insights that can be of value to Australian insurers.
Our research shows that while the Individual and Group DII products across the world have similar product features, there are also some key differences between the Australian product and the products offered across the other markets researched here.
In general, Australia offers comprehensive cover to a broad target market, but also has very liberal policy terms and conditions on DII products, especially for the Individual DII products, which are not evident in the other markets. There has been a tightening of product features by some insurers in the last two years in Australia. However, the overall products in Australia remain an outlier compared to the other markets due to the breadth of coverage and the level of benefits offered.
The findings from the paper reiterate the need for the whole industry (including insurers, reinsurers, government and regulatory bodies, and professional bodies) to collaborate strategically on the future of DII in Australia, and how it impacts each of the stakeholders as well the broader society in meeting customers’ needs