Lump sum risk sales down 20%
The sale of lump sum risk products in the December 2015 quarter totalled $303 million, a decrease of 20 per cent on the September 2015 quarter, an industry review by DEXX&R has found.
According to the researcher, the sale of individual death, TPD and trauma sales totalled $303 million for the period, a decrease of 20 per cent from the previous quarter.
When compared with the December 2014 quarter, however, sales were only down by 1 per cent.
Of the top 10 life companies, only MLC, OnePath, TAL, Zurich and AIA recorded an increase in lump sum sales during 2015, DEXX&R said
DEXX&R added that new annual premiums of $1.28 billion for the 12 months ending December 2015 were down on the $1.3 billion recorded during 2014 and were at a similar level to new annual premiums recorded for the 12 months ending December 2012.
Individual lump sum discontinuances have increased each year since 2010, and peaked in December 2012 at 16 per cent, the researcher said.
However, in the 12 months to December 2015, the attrition rate fell to 14 per cent, DEXX&R said.
"The attrition rate for disability income business decreased from 14.5 per cent at December 2014 to 14 per cent at December 2015. As with lump sum business there is now a clear trend of decreasing discontinuances in the Disability Income market," a statement from DEXX&R said.
"The continued fall in lump sum and disability discontinuance rates during a period of flat sales growth indicates the industry is moving into a period of higher profitability when compared to the past four years."
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