ASIC’s Latest Levy Estimates Put Insurance Costs Under the Spotlight

For insurance, the headline number is a 35 per cent rise in estimated sector costs to $23.838 million. Insurance product providers, a category that includes life insurers, are expected to contribute $16.879 million, up 22 per cent. Insurance distributors face a smaller dollar amount but a sharper percentage increase, while claims handling and settling service providers are expected to see costs rise to $4.061 million, reflecting stronger regulatory activity around potential consumer harm.

The financial advice sector is also in focus. ASIC estimates $62.624 million in recoverable costs across the sector, up 35 per cent. For licensees providing personal advice to retail clients on relevant financial products, the estimate is $48.724 million, with the levy model moving to a minimum amount plus $3,037 per adviser. ASIC attributes key increases in advice and insurance product provider costs largely to higher enforcement activity and new matters.

For business owners considering key person cover, the practical takeaway is not that premiums will automatically rise tomorrow. Regulatory levies are one part of a much larger pricing picture that also includes age, health, occupation, insured amount, policy structure, claims experience and insurer appetite. However, rising compliance and claims oversight costs can reinforce why it is important to compare options carefully rather than choosing cover on price alone.

Keyman insurance is often used to protect a business if a founder, director, revenue generator or technical specialist dies or becomes seriously ill. In that context, the quality of underwriting, policy definitions, ownership structure and claims support can matter as much as the monthly premium. A lower-cost policy may still be unsuitable if exclusions, benefit triggers or sum insured assumptions do not match the real financial exposure of the business.

The latest ASIC figures also highlight the value of working with licensed brokers who understand both life insurance and business risk. With regulators applying close scrutiny to insurers, distributors, claims handlers and advisers, business owners should expect clear explanations, documented recommendations and transparent comparisons. That is a positive development for clients who want confidence that their cover is robust, affordable and capable of responding when it matters most.