DEXX&R’s latest Life Analysis Report has revealed that total new individual risk premiums have decreased by 16.3 per cent in the year to September 2024, hitting $1.16 billion.
Total risk in-force premiums saw a smaller decrease of 1.2 per cent for the period, dropping from $16.5 billion at September 2023 to $16.3 billion at September 2024.
Individual lump sum for death, total and permanent disability (TPD), and trauma new business also took a hit, dropping 12.9 per cent to $820 million from $941 million in the previous 12-month period following two consecutive years of relative stability.
The September 2024 quarter saw new individual lump-sum premiums fall by $8 million (5.7 per cent) to hit $200 million, reversing the June 2024 growth of 5.7 per cent. Meanwhile, the quarter also saw considerable decreases in sales, coming in 15.6 per cent lower than the $237 million recorded in the September 2023 quarter.
The lump-sum attrition rate continued its steady climb, rising to 10.5 per cent for the 12 months to September 2023, compared with 10.0 per cent in the previous year.
The attrition rate for disability income has likewise continued to rise, hitting 11.4 per cent for the period, up from 10.8 per cent in the previous period and its 2021 low of 9.0 per cent.
New disability income business took a rather steep dive, dropping 23.5 per cent to $343 million from the $448 million recorded in the previous period.
Data for the September quarter showed similarly negative results, with new disability business dropping by 21.4 per cent from $78 million in the June 2024 quarter to $60 million, and more than halving in comparison with the September 2023 quarter, dropping 52.9 per cent.
Total in-force group risk premiums saw a margin decrease of just 0.1 per cent in the year to September 2024, coming in at $7.0 billion.
Meanwhile, TAL holds the largest market share among Australian insurers, currently sitting at 31.6 per cent valued at $5.15 billion, followed by AIA with 21.0 per cent, and Zurich with 14.9 per cent.
Rounding out the top five is MLC Life Insurance with 11.3 per cent and Resolution Life with 7.9 per cent market share.
In December, Nippon Life Insurance Company acquired 100 per cent of Resolution Life Australasia and the remaining 20 per cent of MLC Life from the National Australian Bank to merge the two insurers.
Operating under the name Acenda, the combined business would hold 19.2 per cent of the market, making them the third largest insurer in Australia.
With LIF the Life companies have seen the biggest Karma slap straight to their own heads.
Now the Life Co’s are begging the Govt and Industry Super Funds to force everyone to buy Lifetime Annuities so they can flog those instead of Life Insurance.
Who would ever trust an Insurance Co ?
I used to love writing insurance premiums averaging c$50,000 p.a. Now, I no longer bother “selling”” insurance – I diligently make the recommendation and ensure I’m compliant, period
My passion is now investment advice and clients love making money and give me lots of referrals. Win-win. No more grudge-purchase insurance. No more dealing with loadings and exclusions and disappointments and premium hikes and no-sales and no-referrals.
Phew.
It’s been obvious for a while that insurers don’t seem interested in insuring – or so it seems.
The insurers pushed for the Trowbridge Report, slashing commissions in half under the pretense of tackling “churn” and improving “profitability,” all while assuming group insurance and direct sales would cover the gap. How’s that gamble playing out?
This entire mess is a self-inflicted wound by CEOs handsomely paid to know better.
Now CALI is backing the NCA—a so-called “new class of adviser”—without realising it’s just another anti-adviser policy. They think it will fix their inflow problem, but it won’t. Anything that hurts advisers will hurt the insurers, because insurance is bought not sold. It seems that younger CEOs don’t know this.
You’d think they’d have learned by now… apparently not.
Insurance is sold not bought
Yes, I think Peter just got it backward by mistake. Pretty sure he knew it was the other way round.
That was meant to say, “insurance is sold not bought.”
What did they expect with life companies slashing commissions to make it unprofitable, increasing claw back to 2 years, govt tying advisers up with red tape so they’ve no time to see clients and making onerous impassable unreasonable education standards for older advisers. Oh, yes, they relented on that last one . . . AFTER most experienced advisers retired! Even after all that a risk adviser is OUT by 2026 if they don’t have a tens of thousands of dollars full financial planning degree that would have wasted hundreds of hours to study for away from client facing time.
Life companies are now paying the piper, governments won’t have any repercussions (voted out? will it make a difference?) and specialist lobby groups that fueled most of this expensive nonsense will go about their happy ways. The consumer – our clients – will bear the full brunt of all this horrid self interest of those entities. Just disgusting behaviour by all of them. This 16% drop is only the beginning. 2026 will see the full death knell of the once thriving specialist risk adviser. A few may survive against the odds but the industry (profession – ha!) will be gone.
Whoops? Should’ve not bitten the risk-advisers’ hands that kept topping up your feed-trough, insurers.
And the industry is by what about this given the way advisers have been treated with reduced commissions and premiums have skyrocketed, dare i say while clients are gouged?
Yes, you may indeed say “while clients are gouged” as there’s no truer statement. Every client is being gouged, the yearly increases in a lot of the IP plans are absolutely disgusting. I can recall the new buzzwords from the 1990s – SUSTAINABILITY. They used this word to describe the new breed of policies with promises of ‘under control premiums’. Typical marketing fluff we are all too familiar with from the life companies. Was it fluff or a brazen lie? How any of these CEOs are allowed to keep bonuses after committing these untruths, gouging and ripoffs against advisers and clients will always disgust and perplex me.