Resolution Life’s Clive Cowdery hits out at government over shackled life insurance industry

Resolution Life founder Sir Clive Cowdery has lashed out at Australian policymakers for creating a ‘very constrained’ life insurance sector.

British philanthropist and Resolution Life founder Sir Clive Cowdery. Picture: James Croucher

Resolution Life’s executive chairman Sir Clive Cowdery has lashed out at Australian policymakers past and present for creating a shackled and “very constrained” life insurance sector, that is unable to serve the population well.

Sir Clive told The Australian a host of regulatory measures in the past six years had created issues of underinsurance in this market, as well as a hollowing out in the number of financial advisers.

“Look at the completely clumsy way in which the previous Coalition government instituted the protect your super action in 2020, which has probably led to hundreds of thousands of uninsured people in Australia, not knowing they don’t have life insurance any more,” he said.

Among reforms to superannuation and life insurance facilitated by the Morrison government were changes in which new super members under age 25 were not automatically provided with insurance cover unless they requested it in writing. That also applied for account balances of less than $6000, although the new rules didn’t apply to employees in dangerous jobs.

“The message to the policymakers, whether they are regulators or government, is they need to free the life insurance industry from its shackles in order to be able to serve the Australian population better,” Sir Clive said, referring to both younger age groups and those at retirement age.

He noted the reforms had led to some younger Australians taking out mortgages without having life insurance.

At the other end of the spectrum, Sir Clive said there were issues for those at retirement age.

“Super is not doing for the economy what it was set up to do by Hawke and Keating … Australians are not spending their money because they are fearful it will run out.”

Resolution – which has just agreed to be acquired by Japan’s Nippon Life – bought AMP’s life insurance business in a transaction that completed in 2020.

In the past eight years, AMP and the four major banks have exited the capital-intensive life insurance market.

Sir Clive said the amount of total premium the Australian life insurance market was writing amounted to just $300m last year, compared with $1.2bn in 2019.

He said the latest proposed reforms to the financial advice market would help to address issues around the affordability of advice and a halving in advisers since the Hayne royal commission.