Underinsurance in Australia provides a significant growth opportunity for the life industry, according to UK-based researcher Timetric.

A report from the company’s Insurance Intelligence Centre says life insurance penetration rates in Australia were 3.67% last year, compared with 15.35% in Taiwan and 13.79% in Hong Kong.

Timetric analyst Jerome Walcott says the Australian group life insurance market’s strength “discourages the working-age population from buying other life products that would give them the appropriate amount of coverage for the multitude of risks they face or should insure against”.

“The growth opportunity for life insurers will likely depend upon more consumer education of the benefits of life products.”

Mr Walcott says changes to the commission structure will improve the distribution of life insurance.

“The reforms aim to provide significant benefits to consumers in terms of improved quality of advice, more product choice and greater competition. Their success will be significant for the overall growth of the life segment up until 2020.”

Careers in the Australian life industry are not attractive to university graduates, the report says.

“Australia’s [life] insurance industry is short of skilled workers [due to] lack of concentration and investment in attracting graduates and entry-level staff,” Timetric says.

“Individuals are reluctant to take jobs in the industry, where career growth prospects are seen as only moderate.”

The report says while there are vacancies for account executives, underwriters and loss assessors, positions are not being filled.

“With high demand for key roles, it will be difficult for insurers to hire qualified candidates during the forecast period [to 2020]. This will impact industry growth.”