Insurers are failing their social responsibility by lacking tailored products for the poorer members of society, according to a top IAG executive.

Designing products for lower socio-economic groups is vital for insurers to foster a "more prosperous and inclusive society", the group's Head of Government and International Relations, Nola Watson, told the Insurance Council of Australia conference in Melbourne.

"Insurance really is a community product and I don't think we shouldn't forget that and we shouldn't shy away from it," Ms Watson said.

"There is a responsibility and an opportunity for insurers to look at this area of more tailored insurance products for those who have less financial means."

Last month Fiona Guthrie from the Banking and Financial Services Ombudsman service accused the insurance industry of not taking its "social responsibility" seriously.

"Insurers haven't thought about offering general products that might suit low-income consumers, for example," Ms Guthrie said. "Where are the basic insurance products like basic bank accounts?"

Ms Watson agrees insurers have lagged on tailored products. "We as insurers are sometimes not targeting specific enough products to people that have low incomes.

"You can't take a standard product and say, here it is. It's actually much more complicated than that."