Tech-driven practices spurring life insurance turnaround

According to Adviser Ratings, the retail life insurance sector experienced a 21 per cent surge from the second quarter of 2025 to $19.1 million. Adviser Ratings highlighted that this represents an 11 per cent rise on Q2 2024.

“Annual new business volumes hit a record four-year record high of $331 million, still 42 per cent below pre–royal commission and LIF volumes of $568 million.”

However, it is important to note that while this growth is real, it is not universal. Adviser Ratings noted the “winners” of the last quarter share many similar traits, including “technology investment, strategic adviser engagement, and a deep understanding of how advice models have evolved”.

Technology is the “real differentiator”, it added. Though it may be tiresome for some the hear the constant praises of technology integration, results don’t lie.

“The Landscape Report reveals that risk-focused practices are 53 per cent more likely to experiment with AI than their holistic counterparts,” Adviser Ratings states.

“And the most technologically advanced practices achieve profit margins of 20 per cent or more – nearly double those of their less tech-savvy peers.”

While much talk about AI and new technology integration is about increasing efficiencies, “it's also reshaping how advisers interact with insurers”.

In the aforementioned report, it is highlighted that 64 per cent of advice practices now use “digital applications beyond core CRM functions, with 41 per cent believing AI will support SOA/ROA production”. Practices that continue to integrate new technologies will be the ones that continue to thrive into the future.

Being able to engage with advisers strategically is also important, as the profession continues to undergo change. Though adviser numbers keep falling (15,540 to 15,251 advisers in 2024-25 FY), and the profession struggles to attract fresh talent, productivity and specialisation continue to rise.

“The data reveals a fascinating paradox: despite fewer advisers overall, the percentage registered to provide life insurance advice has increased from 72 per cent in 2019 to 83 per cent in 2024,” Adviser Ratings said.

The vast majority (83 per cent) of advisers have life insurance integrated within their broader financial planning strategies, with 6 per cent focusing solely on this area, and according to Adviser Ratings.

“The collaborative models between holistic and specialist advisers are becoming more sophisticated.”

The report identifies two key revenue streams from this trend:

“High-volume advisers averaging $2,786 in fees per client while leveraging commission efficiency, and low-volume practitioners charging $4,721 – nearly 70 per cent more – through premium free-based approaches.”

Adviser Ratings added that ”both models can succeed, but they require different insurer support strategies”.

“Meeting advisers where they are” is Adviser Ratings’ final piece of advice, with the report showing that 15 per cent higher revenue per client and “significantly” improved retention rates can be achieved when “leveraging data analytics for client segmentation”.

Managing risk through strategic partnerships is also indicated as key to this avenue of growth for insurers, recognising that recent scandals such as the Shield and First Guardian collapses have done reputational damage to the industry.

“The path forward requires investment in adviser segmentation, real-time behavioural data, and quality-of-advice metrics,” Adviser Ratings added, with lead insurers already well ahead in this department.