Life insurers clawed back a small amount of ground on sales revenues as group insurance premiums continued to soar in the 12 months to September, according to new data from Dexx&R.
The research house’s Life Analysis Report for the year ending September 2020 showed that total risk new business increased by 4.5 per cent over the 12 months to $2.5 billion.
Dexx&R stated the primary reason for this rebound was higher group risk business premium inflows.
Total risk in-force business increased by 1.1 per cent over the year to September, up from $15.4 billion in September 2019 to $15.6 billion in September 2020.
While individual lump sum new business rebounded by 5.8 per cent to $249 million from the June quarter this year, it was still 2.1 per cent down on new business written in the September quarter of 2019, the data showed.
Individual risk sales continued to plummet over the year, with the industry writing $950 million of lump sum new business in the 12 months to September, the lowest sales result recorded in five years.
Just three insurers recorded a positive increase in individual risk lump sum new business - Zurich, with a 7.4 per cent increase; TAL, which increased 3.3 per cent; and AIA with a 2.1 per cent increase.
“The continued decrease in business reflects the impact of ongoing disruption in the advice distribution channel including the restructuring and transfer of ownership of retail bank owned dealer groups and a fall in the number of life risk advisers,” Dexx&R stated.
Disability income new business in the September quarter was also down 7.5 per cent from the June quarter, and 11.9 per cent from the prior corresponding period in 2019.
Overall new business in this category decreased 11.5 per cent over the 12 months to September to $401 million, the lowest sales result for nine years, as new APRA restrictions on income protection products had a severe impact.
In the group category, total in-force group risk premiums increased by 2.1 per cent to $6.2 billion over the 12 months to September, while TAL saw a 31 per cent rise over the year due to its mandate win from REST.
“While the Protecting Your Super measures have meant fewer members have default cover, re-pricing existing benefits has enabled life companies active in the group market to increase total premium received,” Dexx&R noted.
Total in-force business across both individual and group markets increased by 1.1 per cent over the year, the statistics revealed.
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