Life insurers and advisers must work together to fix the problems besetting the industry, Asteron EGM Jordan Hawke says.

“Our job is to step up and tell people about our industry,” he told a company event in Melbourne last week. “Currently, the regulator and consumers are blaming us for what is wrong with life insurance.”

Mr Hawke says consumers do not understand life products or the advice given on them.

“Let’s draw a line under the past and tell people about the 85,000 claims we paid last year, worth $5 billion,” he said. “We don’t tell our story.”

However, good news stories cannot hide the industry’s serious problems.

“The model we have used for decades is broken,” Mr Hawke said. “In the first year of a policy it costs us $126 for every $100 we insure, so it takes seven to eight years to recover those costs. But we are losing clients much earlier.”

Mr Hawke says the losses prove unattractive to potential shareholders, and this is compounded by reinsurance losses in the sector.

Meanwhile, the regulator is “suffering from anxiety because it has lost trust in the sector”.

The Australian Securities and Investments Commission’s (ASIC) recent report on the industry raises concerns over commissions, product manufacturers’ involvement in payments and the role of licensees.

“ASIC has sent us a very clear message,” Mr Hawke said. “The world in which we operate is challenged and we need to take ownership of it. If we don’t take that accountability, they will make the decisions for us.

“Sometimes I think we are our own worst enemy.”

He says manufacturers cannot keep developing products that sell at losses. “We have to stop the product revolution and talk about product evolution.”