Advisers have written substantially more risk insurance inside superannuation during the last year.
According to Rice Warner Actuaries in its 2009 Superannuation Market Projections Report, ‘adviser sold’ life insurance premiums inside superannuation jumped to over $1.2 billion over the 12 months to June 2009. This represents a rise of 15% over the previous year.
Superannuation funds are now a major source of life insurance in Australia
Rice Warner says that Superannuation funds are now a major source of life insurance in Australia, and reports that all life insurance premiums within superannuation grew by 19% over the last year to $3.64 billion.
Life insurance premiums inside superannuation now account for 44% of all risk business, an increase of 1% over the previous year.
Overall, Rice Warner forecasts the total superannuation (investment) market will grow by 8.0% pa in real terms to reach $1.583 trillion by 30th June 2014 (currently totals just over $1 trillion).
Commenting on the insurance component of the Report, Rice Warner Director, Richard Weatherhead, said “that the overall risk insurance market has grown, in premium terms, by 16.4% over the year to 30th June 2009:
“Risk insurance has received increased focus amongst advisers during the GFC which had led to a greater awareness of personal financial risk as well as market risk,” said Mr Weatherhead, adding:
“The industry fund segment has continued to benefit from increases in default levels of cover by many funds, including a growing trend towards providing income protection as a default benefit.”
Mr Weatherhead also observed that the corporate funds segment has declined over the year, as the trend towards outsourcing of superannuation continues. “In these cases the insurance cover shifts, primarily to the employer master trusts and industry fund segments.”
Details of life insurance premiums inside and outside superannuation are set out in the following table:
