Life insurance sales flat, in-force group business increases
While individual death, TPD and trauma sales remained flat over the 12 months to September 2015, total in-force group business increased by 10 per cent, according to researcher DEXX&R.
The latest Life Analysis Report shows total sales for the full year at $1.3 billion in new annual premium. Five of the top 10 life companies recorded a rise in lump sum new business, including Zurich with an 8.0 per cent increase and ClearView with a 41 per cent increase.
However, total in-force group risk business increased to $5.6 billion, up from $5.1 billion in the year to September 2014. Nine of the top 10 companies in the group risk market recorded increases, including AIA Australia with a 7.0 per cent and CommInsure with a 14 per cent increase.
"These increases in in-force premiums are a flow on from the widespread increase in premiums charged to Super Fund trustees for Group Risk benefits provided to members," the report said.
The report also shows that individual lump sum discontinuances have increased each year since 2010 and peaked in September 2013 at 15.2 per cent. In the year to September 2015, the attrition rate fell to 13.8 per cent.
"While individual company experience varies, the industry attrition rate for lump sum individual death, TPD and trauma business has been falling for 8 consecutive quarters," the report said.
The attrition rate for disability income business also decreased from 14.5 per cent in September 2014 to 13.6 per cent at September 2015.
"As with lump sum business there is now a clear trend of decreasing discontinuances in the disability income market," the report said.
"Based on previous cycles we would expect that this downward trend will continue for another 2 to 3 years."
Meanwhile, total new disability income premiums decreased by 1 per cent to $471 million in the same period, down from $476 million the year before.
Six of the top 10 companies recorded hikes in this area. These include OnePath with 13 per cent and Macquarie with 8 per cent, and TAL with 7 per cent.
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