Life insurers say lead generation “plays an important role” for consumers who need information, as the federal government considers a clampdown on unsolicited marketing.

Lead generation provides a “safe and quick way” for potential customers to find out about products that might suit their needs, the Council of Australian Life Insurers says.

Pressure to curb lead generation has increased after the collapse of investment schemes Shield and First Guardian, and the government flagged reforms during a consultation last month.

“Lead generation is a marketing activity designed to create consumer interest in a product or service, with the goal of persuading consumers to purchase the product or service,” a consultation paper said.

The paper says the collapse of Shield and First Guardian highlighted the role lead generation can play in shaping consumer engagement with financial products, and the potential for harm.

“The conduct that led to consumer losses involved a chain of entities. While investigations and enforcement action in relation to Shield and First Guardian are ongoing, the alleged practices employed in these cases have highlighted the need for reform.”

CALI CEO Christine Cupitt says a blanket ban would reduce customer choice and restrict access to life cover.

“Life insurance lead generation plays an important role in helping customers access information, compare products and obtain life insurance protection,” she said.

“A blanket ban for life insurance risks limiting legitimate information and connections that support customers to build their financial safety net.”