Why insurance has changed, and what it means for your cover

The personal insurance market has been through a significant period of repricing. Life, total and permanent disability, trauma, and income protection policies have all been affected, and the movement has not been uniform. Insurers restructured product terms following APRA-mandated reforms to income protection that began in 2021 and continued through to 2024. The effect of those reforms is still being felt: some older policies have better terms than anything available today, while others are more expensive than they need to be given current market alternatives.

Life insurance and TPD premiums inside superannuation funds also moved in 2026. AustralianSuper, one of the largest funds in the country, increased premiums on death and TPD cover from May 2026, citing a rise in claims paid over the prior year. The increase applies broadly across its membership base. If you hold insurance through your super fund and have not checked your cover levels recently, it is worth knowing what you are paying and whether the benefit amount has kept pace with your actual needs.

Income protection premiums outside super have also been climbing, driven by higher claims experience and rising reinsurance costs globally. Smokers are particularly affected, with income protection loadings of 30 to 50 per cent above standard rates at most insurers. Anyone who has stopped smoking since taking out their policy may be paying more than they need to, and many insurers will reclassify a non-smoker after 12 months of not smoking.

We are offering all clients an insurance review

We are reaching out to all clients this month, particularly those with insurance-only arrangements, to offer an insurance review. Whether you hold a policy we arranged for you, a policy you organised independently, or cover through your superannuation fund, we are happy to sit down and work through it with you.

A review like this gives us the opportunity to confirm that your current cover is appropriate for your circumstances, identify any gaps or overlaps, and discuss whether any changes in your life, your income, your family, or the market itself warrant a closer look at what you hold.

What the review covers

Current cover levels. We will look at your existing life, TPD, trauma, and income protection cover (where held) and assess whether the benefit amounts still reflect your income, debts, and dependants.

Premium and value assessment. We will look at what you are paying and whether the current structure (stepped vs level premiums, inside vs outside super) still makes sense given where you are in life.

Policy terms and definitions. Insurance policies are not all equal. The definitions used for TPD and income protection in particular can vary significantly between products and can determine whether a claim is paid. We will check what your policy actually covers.

Changed circumstances. If your income, family situation, debts, or health status have changed since your policy was last reviewed, we will factor that in and discuss what it means for your cover.

A note on how we work with insurance clients

For clients whose arrangement with us is limited to insurance, we want to be clear about what that relationship involves and what you can expect from us.

We operate under an obligation to act in your best interests when providing personal advice on life insurance products. That includes being satisfied that any recommendation we make is appropriate to your circumstances, which is why we ask about your financial situation, health, income, and objectives before making any suggestion about your cover. It also means we are not in the business of recommending change for its own sake. If your existing cover is appropriate and the terms are competitive, we will tell you that.

Where we do make a recommendation, we are required to provide it in writing in the form of a Statement of Advice (SOA) or Record of Advice (ROA), depending on the circumstances. You are entitled to a copy of that document and we encourage you to read it carefully. If anything in it is unclear, ask us to explain it.

We also receive commissions from insurers on the placement of life insurance policies, as is standard practice in this industry under the ASIC life insurance commission framework. From 9 July 2025, we are required to disclose the details of those commissions to you and obtain your informed consent before they are paid. We will walk through this with you as part of the review process. If you have any questions about how we are remunerated before then, please ask.

The ceasefire is off. Inflation is sticky. Rates are not moving yet.

July has been a turbulent month. The fragile ceasefire between the US and Iran, signed under the Islamabad Memorandum in mid-June, effectively collapsed in the first week of July after Iran struck three commercial vessels transiting the Strait of Hormuz. Trump declared the deal “over” at the NATO summit in Ankara on 9 July. The US responded with strikes on Iranian military assets near the Bushehr nuclear power plant, Iran fired back with missile and drone attacks on US bases in Bahrain and Kuwait, and oil markets moved sharply in both directions as the situation evolved. As at the date of this newsletter, both sides have paused attacks for a second consecutive day, with fresh diplomatic efforts underway involving Iran, Saudi Arabia, and Oman, but no new agreement is in place and the outlook remains genuinely uncertain.

Fresh inflation data: the headline has eased, but the underlying picture is stubborn

The ABS released June quarter inflation data yesterday, 29 July. The headline CPI fell to 3.8 per cent annually, down from 4.0 per cent in May, which sounds encouraging. On a monthly basis, the CPI actually fell 0.1 per cent in June, driven largely by automotive fuel prices dropping as oil markets stabilised briefly following the MOU. That fuel effect has now partially reversed.

The more important number for the RBA is the trimmed mean, which strips out volatile items like fuel to give a cleaner read of underlying inflation. It held at 3.6 per cent annually for the second consecutive month, unchanged from May and still materially above the RBA’s 2 to 3 per cent target band. The quarterly trimmed mean came in at 0.8 per cent for the June quarter, which annualises to a pace well above target. Services inflation rose to 4.0 per cent, up from 3.7 per cent in May, and housing costs climbed 6.8 per cent annually driven by electricity, rents, and new dwelling construction costs. These are not transitory or energy-linked categories. They reflect entrenched domestic cost pressures that the RBA cannot simply wait out.

Iran: the ceasefire that was not

The timeline is worth understanding. The Islamabad MOU was signed on 18 June, which brought Brent crude back down from its wartime highs toward pre-conflict levels near $70 per barrel by early July. Then on 9 July Iran struck commercial shipping in the Strait of Hormuz, Trump declared the deal dead at NATO in Ankara, and US strikes on Iranian military infrastructure resumed. Brent climbed back above $85 before easing slightly on fresh diplomatic signals from Oman and Saudi Arabia. As of this morning, both sides have paused for a second day, but there is no framework for a new agreement and the IRGC, which the previous ceasefire’s signatories had no authority over, remains the key variable.

For Australian households and investors, the practical implications are renewed upward pressure on fuel prices, which had been falling, and continued elevation in global reinsurance costs. The ABS data already captures the June period when oil prices had eased. If the Strait disruption persists into the September quarter, the fuel relief embedded in the June numbers unwinds and the headline CPI figure for September will look different.

What this means for portfolios

Rate-sensitive assets remain under pressure. Australian listed property, consumer discretionary stocks, and growth companies with longer-duration earnings profiles are all affected by the prospect of rates staying higher for longer. Fixed income offers reasonable income but bond prices face headwinds if the market begins pricing in further hikes. Cash and short-duration term deposits continue to offer competitive returns and low volatility, which is not nothing in this environment.

Globally, US equity markets have continued to outperform the ASX meaningfully, driven by technology and AI-related earnings. That gap reflects genuine differences in sector composition rather than any structural problem with Australian markets, but it does mean that portfolios with broader international diversification have generally had a better twelve months than those concentrated in domestic equities and defensives.