Australia’s insurance market is under threat from international insurers unless the local market is prepared to innovate, a business development expert says.

CommInsure Executive Manager Business Growth Services Jeffrey Scott says underinsurance and low levels of life insurance cover provide a ready market for potential new entrants.

He told insuranceNEWS.com.au the local insurance market is relatively untapped, with Australians exposed to high levels of underinsurance in life and general insurance.

A recent Newspoll survey found more than 40% of Australians would run out of money within a month if they had to stop work due to sickness or injury.

He says both the life and general insurance industries also need to act to reduce the time taken to process policies.

“Consumer interest is certainly on the increase due to current economic conditions, as people become more cautious about protecting their current financial situation,” Mr Scott said.

“The challenge for the industry is to embed this awareness and behaviour so that in better times they still choose to take out protection rather than absorb the risk.”