It will take a number of years for Australia’s income protection business to return to stability, according to Beazley Head of Life, Accident and Health Christian Tolle.

“There has been a lot of turmoil… and it will take a bit longer for it to settle down,” he told insuranceNEWS.com.au.

“The problems are more than just mental illness claims. There is additional coverage, and benefits become wider and wider.”

Mr Tolle says wording has grown more ambiguous, meaning insurers pay out over longer periods than in the past.

“We know mental illness is a difficult area, but we need to develop a solution that allows a long-term approach to these claims,’ he said.

“At the moment we want to cover everything in a policy regardless of the impact on the business.”

Mr Tolle says there is a misconception that income protection should be a substitute for unemployment benefits.

“I have no problems with a policy providing redundancy cover, as long as the area of coverage is matched in the pricing. Pricing has to be sustainable in the long-term.

“We are a professional industry and we should be able to deal with the problems in income protection.”

Mr Tolle says although insurers have created problems, consumers’ lack of awareness on what income protection provides is exacerbating matters.

“But people are starting to become aware, and that is why there are more claims.”