According to Adviser Ratings’ yet-to-be-released 2025 Advice Landscape Report, the risk sector has continued its slow recovery, with the firm’s founder, Angus Woods, stating on a webinar that they expect new retail business to reach $340 million by the end of 2025.
In comparison, new business hit a low just a few years ago with $297 million reported in 2022, though the research showed there has been a slow but steady climb in the years since.
Looking at who is writing risk, the report found that just 185 – or 1.2 per cent of all financial advisers – wrote 25 per cent of the $315 million of new business in 2024. This group, Woods said, are the “pure risk writers” of the profession.
A further 404 advisers, deemed “high risk writers”, wrote another 25 per cent, meaning that a total of just 589 were writing half of all new business in 2024. However small this number seems, it is a jump of more than 100 from the year prior.
Overall, 6,358 advisers wrote some level of new retail business last year. Notably, this is actually a slight decrease on the year prior, which saw 6,399 advisers active in this space, however, those who are engaging appear to be doing so at a more significant rate.
Even so, Woods said that more practices are actually planning to increase the amount of risk they write, with 720 of the 6,077 practices in Australia indicating as such, which he said is the “first time we’ve seen an uptick in the survey”.
With 32 per cent of advisers saying their clients are asking them about life or income protection (IP) insurance, and so much talk about Australians being under-insured, this is a much needed shift.
Woods suggested it marks a significant turning point from previous years where practices generally wanted to write less risk.
“Previously, those percentages were very, very low. In fact, people wanted to write less risk. As the market, obviously, was finding its feet, underwriting became a little bit more difficult,” he said.
Over the last 12 months, however, insurers have developed greater understanding and systems to manage the major claims areas, such as mental health, by assigning appropriate exclusions and loadings to different diagnoses.
“That has been one area that has held back a lot of advisers from writing risk in terms of the impact that that has on their clients when their clients are being declined or having excessive premiums placed on them, and what that means for their other service,” Woods said.
With more holistic advisers, that middle group of moderate to high risk writers, looking to establish themselves in the sector, Woods said insurers need to be working with them, rather than continuing to put so much effort into trying to get the attention of those category A advisers.
“It’s interesting that risk writers tend to say that they’re over-serviced, and what I mean by that is the 185 risk writers who get umpteen phone calls a day or a week or a month from the same BDMs or every insurer approaching them,” he said.
“And so they’re going, ‘Well, we’re getting over-serviced’ and category B and category C advisers are saying, ‘We’re getting under-serviced’.”
VERY, VERY, VERY well said Ropeable. I haven’t seen it expressed that well in a long time. I humbly submit that I’m one of those advisers of which you speak, retired in early 2021 in disgust of what our once great industry had became, not being given a proper chance to prove beyond doubt we were as professional as ANY. Politicians, life company Napoleons with short-termism and special interest groups with media mouth pieces all combined to ruin such an important Australian community crucial profession.
The disrespect through the late 2010s, from all the above, for older risk advisers was palpable and we we forced out with ridiculous and unnecessary high education requirements and expensive study time that mirrored university qualified full financial planners. Just ludicrous, I don’t know how those ‘FARCE-IA’ goons were taken seriously but it was indeed a serious threat to us at the time as you’d recall.
We just wanted to help families get the best protection they could afford for cryin’ out loud, like we had done successfully and efficiently for decades. The vast majority of our clients never had a complaint – only happy, grateful, safe and protected long term clients who often became friends. Oh yes, eventually the new boy genius lawmaker types gave us an “experience pathway” so we could stay but was generally useless because it was to little far too late as many of us had walked the pathway away and already retired in disgust.
After 35 years in 2021 I’d had enough sold my clients (very difficult emotionally) and tried to concentrate on the positive, at which I’ve been ‘mostly’ successful. I often worry about my clients though in this horrid personal insurance hellscape that passes as an industry now, only 5 short years on. I truly feel for the risk advisers and client who remain. Thank you for your post Ropeable.
Insurance is over. I was a passionate supporter but after enduring 5 years of massive premiums increases on my own policies, I have no faith in insurers and the the govt red tape has killed the industry.
Almost impossible to provide cost efficient risk advice
The average Australian’s attitude toward proactively seeking advice and implementing all necessary aspects of Risk Insurance has always been abysmal at best.
Many of the professional and experienced Risk Advisers who had been educated and skilled in the art of raising the hard and thought provocative questions with existing or new clients have been lost to the current system.
It takes a good Adviser to very clearly paint a picture of the consequences of inaction and the benefit of action.
It takes a good Adviser to raise the uncomfortable issues, to speak from their head both to the client’s head but also their heart.
It is a skill that requires exceptional knowledge, persistence, empathy and confidence in the understanding of human emotion and behaviour.
The loss of so many experienced professionals throughout the last 5-6 years is a tragedy for the Risk Insurance business and the Australian public.
The wealth of knowledge that could have been passed on to the younger Advisers in a structured and progressive exit strategy would have been so valuable.
“With 32 per cent of advisers saying their clients are asking them about life or income protection (IP) insurance”
That is probably because the insurers have been price gouging them for the past 5 years and now they are getting fed up with it.