New data released by Plan for Life indicated risk market inflows were down 4.5 per cent year-on-year in the 12 months to December 2019, compared to annual growth of 2.5 per cent for the 12 months to December 2018. The research firm said this result “[broke] what was a decades-long history of increases”.
The decline was led by a 29 per cent fall in inflows for AIA, as well as a 7.8 per cent decline for AMP and a 4.3 per cent decrease at MLC.
BT and Zurich also saw inflow declines of 4 per cent and 3.5 per cent respectively during the year.
However, a number of insurers did record positive numbers in 2019, including TAL who saw an 18.8 per cent increase in inflows; ClearView, with an 8.3 per cent increase; and MetLife, which saw a 5.8 per cent rise.
Total new premium sales declined 3.9 per cent across the industry during the year, with the winding up of AMP’s life insurance business seeing a 77.5 per cent decrease in sales for the wealth manager.
BT also saw a 60.4 per cent decrease in premium sales, while AIA’s sales dropped by 39.2 per cent.
Just two insurers saw sales increases in 2019, with TAL’s premium sales jumping by 202.1 per cent and MLC increasing sales by 7.3 per cent.
TAL became the market leader in the overall risk market in 2019, with 28.6 per cent market share, up from 23 per cent last year. AIA had the second-highest market share at 17.5 per cent, down from 23.6 per cent the previous year.
strangely I started in this industry with training that you cut your teeth on risk advice because it was less technical (mum n dad stuff) and you progress up to investment and retirement advice…risk advice is now far less economic to give and more risky if done wrong so all these comments are spot on…not worth the risk for the reward so it will slowly just diminish…well done to all the d*ckheads involved in that piece of genius
This is the start of the results and impact that so many informed individuals and working groups all attempted so hard to fight against prior to and during the LIF negotiation process.
It is no surprise to those who knew.
The tragedy is many calls were ignored because the decision making process was manipulated and it was not politically acceptable to actually listen to the reason that was being put forward at the time.
This was a case of all the ethical and professional risk insurance advisers being penalised for the actions of only a few when those who were doing the wrong thing could have been controlled and monitored.
To punish those who were doing the right thing is unjust and unfair.
What is happening is that now is many of those very advisers who were experienced, ethical and professional are now leaving the industry because they have been victimised for actions they did not perpetrate and the profitability of practice has been removed through over regulation and reduced remuneration.
This has been a mistake.
And they can’t blame COVID-19 for this. It’s happened before the shut down.
What they can blame and is to blame is the LIF and its that simple. Where is Sally Loane and the FSC suddenly? Gone into hiding? The FSC brought the LIF in with simple corruption and hiding the truth from the regulators and government. They are to blame and this is the result.
The LIF has been a disaster for customers, advisers and now insurers and they still can’t see it. When the Life insurance review happens in 2021 I hope the FSC are held fully accountable.
when you make the compliance more expensive than the income , why would anyone bother selling (yes it is sold, not advised) life insurance, the ridiculous LIF legislation is primarily responsible, and remember this is what the life offices wanted (in spite of stating the opposite) . If life insurance is to get any chance of improvement then thee following needs to apply 1. commissions need to increase to at least 80% up front, 2. responsibility periods need better / clearer definitions. 3. there needs to be a return to the sensible policy design and underwriting we were used to before the Banks got involved and screwed everything up. Then Maybe, Just maybe the life industry can be saved from itself.
I echo the concerns about rubbish group life increases, it failed before, and it will fail again. the answer is properly researched, professionally advised individually tailored life insurance solutions, the one size fits all life and IP policy is a fallacy.
The Life Insurance industry is dead in the water has been for a few years now
“TAL’s premium sales jumping by 202.1 per cent” . . . quite incredible when you think of the negative numbers of the others. I wonder what TAL is doing differently? Would very much like to know. Funny they’re not trumpeting this little stat all over the place!
The main thing TAL is doing differently is a much bigger focus on dodgy direct junk insurance. I suspect that’s where their growth is coming from.
REST has moved their group cover from AIA to TAL.
Group business is ‘lumpier’ where an insurer could win (or lose) a large mandate leading to a large increase in sales in one year (or a large reduction in inflows for a Group loss). It’s much more likely that TAL’s figures are due to the Group sector rather than Direct.
I wonder when ASIC will ‘crack down’ on the insurers for this poor result and offer some new regulation to help solve the problem. Best start with doing away with commissions all together because the reductions so far have not worked as hoped. Making SoA longer would probably help as well. How I long for the life of the bureaucrat, ‘always immune from the ramifications of his own ideology’.
And they still don’t get why, The Life Insurance Industry is dying, and all because the powers to be don’t want to acknowledge that you can have all the education in the world, and be as ethical as you want, but Insurance is SOLD and if you don’t get reward for effort then its just not worth the trouble.
Mmm, exactly right! Having to go around the world when all you want to do is visit your next door neighbour (thanks Bests Interest Duty – what an absolute crock of shit that is), diminishing commissions, 2 year responsibility periods, ridiculous further education requirements for experienced advisers – all on top of already huge monthly running costs. Imagine how you’d also feel if your licensee suddenly slugged you with an extra $3,120 annual ‘admin fee’ on top of all this too.
“YEAH, I’M MOTIVATED TO GO OUT AND HELP MY CLIENTS WITH ALL THEIR INSURANCE NEEDS NOW.”
(I’m really not anymore. I’ve absolutely had it so no wonder the figures above are so low.)