A life insurance comparator has questioned premium increases by the major companies following a good financial reporting season.

Life Insurance Direct CEO Russell Cain cites AMP’s 33% rise in profits, TAL’s 21% increase and ClearView’s more modest 4%.

“Consumers should rightfully be asking how life insurers can say they are increasing... premiums because their businesses are not sustainable, when their own evidence clearly shows they continue to make substantial profits,” Mr Cain said.

“If life insurers do have a sustainability problem, then the onus should be on them to solve that problem.”

He says if life insurers are so concerned about sustainability, they can do more than simply raising premiums and cutting adviser commissions.

“Among other things, they could be innovating on product design and lobbying the Government to ensure things like stamp duty are removed from life insurance to make it more affordable,” Mr Cain said.

He claims insurers have put up premiums to force less healthy people to cancel policies.

“We know of one large insurer that increased its premiums by 43%,” Mr Cain said.

“We believe this is an attempt to force people to cancel their policies – also known as ‘anti-selection’.”

He says other reasons for higher premiums include attempts to recoup group life losses through retail clients.

Poor product design offers another opportunity improve sustainability. “We believe products with stepped premiums are flawed, and it is time for insurers to design new products that meet the needs of the 21st-century consumer,” Mr Cain said.