Make it relevant. That’s the message to life insurers in the wake of the Investment and Financial Services Association (IFSA) inaugural Life Insurance Conference held in Sydney last week.

Speakers at the conference generally agreed that life insurers must work harder to simplify insurance choices and make products relevant to the majority of people whose needs are straightforward.

Shadow Treasurer Joe Hockey was unequivocal in his keynote opening address.

“The life insurance industry needs to make itself relevant again,” he told delegates. “It has a big education role going forward.”

Fortunately, the industry appears to agree.

Tower Australia MD Jim Minto took a moment to underline the value of appropriate life insurance, saying covers such as death and disability provide “dignity and choice in times of illness and bereavement”.

He says life insurance is not yet a consumer commodity and buying is not consumer-driven, with superannuation funds accounting for much of the business. However, underinsurance remains prevalent and the industry must do what it can.

“Life insurance has often been poorly understood, and complex,” Mr Minto said. “Now we are trying to make it real and understandable.

“We must not repeat the errors of the past with mind-boggling solutions that are incomprehensible to people. The core products have not changed, and we need to make them more relevant.”

REST Superannuation CEO Damian Hill oversees a fund that caters to 1.8 million retail employees. He told delegates there is “no concept” among many of his members of the coverage required in the event of death or disability.

Retail workers are hardly alone on that score. An insuranceNEWS.com.au report in the wake of the Victorian bushfires revealed just 30 life insurance claims from the disaster, in which 173 people died.

To its credit, the life industry is attempting to walk the talk through initiatives such as Lifewise, a comprehensive public awareness campaign that carries the tagline “Get wise on life insurance”.

Resources such as a comprehensive and informative website are just one way the life insurance sector is attempting to lift public awareness.

It’s straightforward and sensible stuff, and has won the respect of many, including Hong Kong-based Swiss Re Life & Health MD David Gott.

“In many senses Australia is leading the game on this,” he told delegates. “I would encourage the industry to carry on the fantastic steps it is taking and show others the way forward.”

Colonial First State GM Distribution Marianna Perkovic put things in perspective by indicating how far the industry has had to travel, at least in the intermediary space.

“It has been a great frustration to advisers that while there is often a great menu choice for investments, for insurance it has often appeared ‘last century’,” she said.

That’s not to say the life industry isn’t making ground in the new millennium, with the life market’s premium income growing from $4.5 billion to $7.7 billion in the space of five years.

Direct products are a rising force, with Allianz just one example of a company trying to improve the middle market offering through Allianz Life, which it established in 2006.

The company saw a gap between two extremes in the market, with complex, comprehensive cover for affluent individuals contrasting with basic, minimalist cover carrying blanket exclusions for pre-existing medical conditions.

Allianz Chief GM Broker & Agency Jonathan Poole says the company “identified what we saw as a gap in the life insurance market between the products offered by investment advisers and the products available direct to market”.

Targeting an offering at the vast middle ground appears to be a sound strategy, but the bulk of the forecast growth in life is expected to continue to accrue through super funds.

Super fund trustees can therefore play their part by publicising the availability of top-up cover to their members, with technology, in-house advisers and call centres available to add to that message.

Industry leaders have thus staked out a viable path forward.

To meet ambitious projections of a $20 billion life insurance market by 2020, the rest of the sector would be wise to fall into line.