Insurance that matters to Millennials

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When the Royal Commission report into Australia’s financial sector was submitted in February 2019, it provided insights and recommendations on improving how insurance companies cater to their customers.

Eighteen months later and the recommendations have started to come into fruition, with reforms going live across the industry.

With many of the provisions now in effect, the onus is on both insurance providers and distributors to ensure they abide with the revised regulations, particularly in relation to how insurance products are sold to customers. In this new regulatory environment, it’s important that dealerships work with reputable providers that understand the requirements of the new legislation – and can support them to adapt their businesses.

Major insurance providers such as Allianz have thrown their weight behind the financial industry reforms and are committed to providing their customers with the best possible outcomes and experiences.

Even before the passage of the Royal Commission recommendations through Parliament, Allianz and other insurance firms took positive steps to introduce compliance training for its staff and simplify their product range to reflect changing consumer expectations. Now they are responding quickly to the new regulatory environment and are helping their insurance distributor partners remain in step with the latest reforms.

Impact of the report on car dealers

The Royal Commission report contained several recommendations relating to the insurance sector that are aimed at providing better support for customers during the sale of insurance products. Three, in particular, have a specific impact on how insurance is sold on vehicle purchases:

    1. Add-on insurance products

    The reforms include a deferred sales model for add-on insurance products. What this means is that add-on insurance products must be untethered from negotiations relating to the purchase of a car.

    Although comprehensive insurance for vehicles is exempt from the changes, the reforms require dealers and insurers to re-think the sales model applicable for add-on insurance products, including products such as warranty, consumer credit insurance and GAP insurance. Providers must ensure customers have a deferral period of four days before they can sell add-on insurance policies.1

    2. Anti-hawking legislation

    Amendments to the Corporations Act include stronger anti-hawking rules following the determination that the current laws did not effectively protect consumers from harm.

    The changes, which take effect in October 2021, introduce new requirements for confirming customers’ consent to receive a phone call discussing financial products. The changes, which require the consent to be collected no longer than six weeks prior to the call, present a new opportunity for dealers to engage with customers.

    3.Design and distribution obligations

    Another piece of financial reform set to be enacted in October this year are the design and distribution obligations. This legislation is aimed at both designers (insurance issuers) and distributors (dealerships) and has been formulated to ensure insurance products being sold to consumers are fit for purpose.

    Allianz has prepared conditions for the sale of each of its insurance products (called a ‘Target Market Determination’) that will include a description of the product, information about the target market, distribution conditions and the distribution information it needs from its dealer partners. Allianz’s partners will be required to abide by the distribution conditions for the product, as well as the distribution arrangements they have in place with Allianz.


Insurance issuers such as Allianz continue to address regulatory reforms – those enacted recently and those due to come into effect – with the aim of delivering positive outcomes and experiences for its customers.

As research by Allianz has shown, customers value having conversations about insurance early on in the car-buying journey. With the introduction of reforms designed to safeguard consumer choice, it’s never been more important to have the insurance conversation with customers early on so they have the time they need to assess their options. 2


1 https://www.finity.com.au/2020/12/11/deferred-sales-model-add-on-insurance

2The statistics provided here are sourced from an Allianz survey conducted in 2020 on customers’ car-buying journeys and their experience of purchasing insurance. (Sample size – Qualitative: 21 indepth interviews conducted / Quantitative: 4000+ survey responses.)https://bit.ly/3Bg9Q7A


This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 (“Allianz”). Information contained in this article is accurate as at 30 August 2021 and may be subject to change. In some cases information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way. Any opinions expressed constitute our views at the time of the issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.