According to APRA, the industry net loss in individual disability income insurance for the September quarter was $173 million, while for the year ending September 2018 it was at $275.7 million. The loss is slightly lower than last year, when it was at $294.2 million.
As for the performance of individual lump sum risk, the product recorded a net profit after tax of $88.5 million for the September quarter.
It recorded a $749.4 million profit for the year ending September 2018, lower than the $800.9 million recorded for the year ending September 2017.
Net policy revenue rose 11.5 per cent in the year ending September 2018, from $16 billion in September 2017 to $17.9 billion.
Net profit after tax declined by 24.1 per cent, from $2.4 billion in September 2017 to $1.8 billion in September 2018.
Other notable changes for the life insurance industry in the year ending September 2018 included a 63.6 per cent increase in effective movement in net policy liabilities, from $10 billion to $16.3 billion, and a 42.1 per cent rise in investment revenue, from $12.3 billion to $17.5 billion.
How can MLC increase all its base premiums, just before Christmas, and just after this RC. They are going to slug all our advised clients, but the group insurance which is the main loss maker, will be untouched? Am I the only one that thinks they are totally greedy buggers that are cutting our noses off to keep the non underwritten group easy money? Im sick of the advised clients taking on all this risk, when the insurance companies just offer cover to group insurance clients that aren’t even seperated into smokers and non smokers risk pools.
I could not agree more. I am simply disgusted by MLC. Last month they cut premiums on new business by 10% and this month (yes just before Christmas!) they are writing to existing customers with a 10% increase on premiums. And MLC are not alone in doing this.
These FSC member grubs are actually trying to encourage a churn issue that was not there in the first place before the LIF with these tactics.
Can IFA ask the FSC to explain what they think of this mongrel practice?
More policies , means more complaints . Lets wait on the TV insurers to come through !!!
I am getting the news, from non-quotable friendly sources in various life insurers, that new business RETAIL risk is down 10-15% since LIF came in. Most of that decrease I suspect is related to the 2 year clawback.
Yep.. very true. When the money hungry State Govts start getting less stamp duty revenue from life insurance sales they might actually sit up an take notice.. just saying
I’ve been told a figure at present of 20% to 25% with a significant drop in the past quarter due to people just stopping new business on the basis it isn’t worth the compliance risk.
Correct, it simply isn’t worth the compliance risk or the time or the piddling coimmission they want to pay us now. After 33 years serving clients I am fully disgusted. I stopped writing new business when the idiocy of a 2 year clawback arrived. Noit only does it contravene corporations law but it shows contempt for advisers. Damn life companies not fighting against that, they had it in their power NOT to allow it – cretins! Self serving corporate cretins all! ‘m serving my clients each day as best I can under the circumstances and waiting until I’m 60 and I’m out.
Try 30-40% Old Risky. A lot of BDMs are trying to play it down but the honest ones are telling the truth and the intelligent ones are worried about their future jobs once it drops further as the commission rates do. Writing new business isn’t profitable anymore.
I think there has already been plenty of job losses. My respective BDM teams/support are a lot leaner across the board..
Based on feedback from numerous BDMs – new retail business down 30% would be closer to the mark Old Risky. With further decreases likely due to LIF kicking in to phase 2 (77/22) on 01/01/2019. IMO unless advisers are writing minimum comm/fees of >$5k per case then the rewards are just not worth the risk esp with 2yr clawback. We have been slowly transitioning our remuneration structure to FFS for insurance advice but the majority of clients have requested comm only. Even those clients who see the value in our work and have the financial means to pay FFS prefer comms. Looks like there will be a large cohort of individuals who will have to make do with non-underwritten cover through industry funds or be under-insured. I don’t see this ending well for the government esp if the well documented under-insurance problem comes to fruition.
Anybody who has worked in life insurance claims in Australia for any length of time knows the financial sustainability of retail income protection policies, GST and TPD are on a slippery slope and deteriorating quickly. Loose products, non-existent underwriting and an over-reliance on claims staff to manage risk at the back end have created poor outcomes for customers (not advisers) and the industry is finally being brought to task for its decades of failings and unwillingness to change.
Wow, seems like they are still building on policies issued. I got the sense that advisers weren’t doing as much new business.
You’re right Tim. I haven’t been mnotivated in any way to write new business since the insane 2 year responsibilkity period came in. I have made ‘some’ exceptions where clients needed current policies altered but took no commission. I simply will not look for new business opportunities any m,more and am biding my time until 2024 when I will give the thumbs down to this industry (what’s left of it) and retire and leave them to their unnecessary idiot exams.
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Why would any thinking business person bother to earn NEW income that can be snatched back from him any time within 2 years from earning it through NO fault of the adviser? No business can operate like that sustainably. I refuse to. Bugger the life companies that didn’t fight back against this. They can use their damn roboadvice machines to get their new business and hasten their demise for all I care now. They know not what they’ve done.