Life sales received a “pandemic boost” but total risk new business decreased by almost 5 per cent during a “very poor start” to 2020 in the March quarter, according to DEXX&R’s latest analysis of the industry.
Individual lump sum risk new business increased by 10.4 per cent to $236 million through the June quarter – $22 million more than in March – but was still down 9.5 per cent compared with the $260 million written in June 2019.
Lump sum new business was down 15.5 per cent over the year to June 2020, with the industry writing $955 million compared with the $1.1 billion recorded in the year to June 2019.
“The continued decrease in business reflects the ongoing disruption in the advice distribution channel as the result of dealer group restructuring and adviser exits and the suspension or cessation of sales of direct lump sum products by some life companies," DEXX&R said.
Zurich was the only one of the top 10 life companies recording an increase in new business over the year – 10.6 per cent ($12 million).
Disability income new business also received a boost of 22.6 per cent in the June quarter to hit $108 million, but was still down 10 per cent on the $120 million recorded in the same quarter for 2019.
Group business was also down 12.6 per cent in the year to June 2020, with the strong growth in premium inflows reversed by the implementation of the Protecting Your Super measures.
"Total in-force group risk premium decreased by 12.6 per cent from $6.8 billion at June 2019 to $6.0 billion over the 12 months to June 2020," DEXX&R said.
"Premium rates for members cover have been increasing over the past three years, however these increases have not offset the decline in total premiums attributable to the PYS (Protecting Your Super) opt-in requirements."
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