Life insurance risk premium inflows have continued to increase year on year while sales in this market have continued to decrease, according to data released by Plan for Life.
In its most recent overview of inflows and sales for the 12 months to March 2016, Plan for Life reported that inflows increased 6.2% while sales were down 5.9%.
Of the life insurers which recorded growth in that period TAL lead the way with 18.2% growth, followed by AIA (16.4%), BT / Westpac (13.0%), OnePath Australia (9.6%) and Zurich (9.5%).
TAL also led the market in the area of sales, which, across the board, suffered a 5.9% decrease due to a 16.7% fall in new group risk sales, but was partially offset by TAL reporting a large jump in sales of 149.2%, most of it in the group risk sector.
The remaining sales increases came for Zurich (6.3%) and OnePath (6.2%) which recorded higher risk sales year on year while CommInsure (-42.7%), Suncorp (-24.7%), AMP (-22.9%) and National Australia / MLC (-16.5%) all recorded double digit percentage falls in their sales over the same period.
Looking into the market sectors, Plan For Life reported the Individual Risk Lump Sum Market grew by 5.3% with most companies reporting increases in inflows for the year to the end of March 2016, led by AIA (17.1%), Zurich (11.1%) and BT / Westpac (8.3%)
Risk Lump Sum Sales were changed little, down by 1.1% with a number of insurers recording moderate increases including ClearView (14.0%), AIA (13.2%) and Zurich (5.4%).
“CommInsure did not record any positive numbers with a 2.2% decline in inflows and a 14.6% decline in sales for the year to the end of March 2016.”
CommInsure did not record any positive numbers with a 2.2% decline in inflows and a 14.6% decline in sales for the year to the end of March 2016.
In the Individual Risk Income Market inflows were up by 6.8% with a number of insurers reporting double digit percentage increases including BT/Westpac (17.7%), AIA (16.5%), Zurich (16.4%), Macquarie (15.6%), TAL (12.6%) and OnePath (10.5%).
Sales in this sector were up by 3.5% with Clearview reporting a 40.9% increase in sales, followed by AIA (29.5%), OnePath (15.9%), TAL (15.3%), Zurich (11.5%) and National Australia / MLC (10.3%), while AMP (-26.3%) and Suncorp (-17.7%) saw drastic falls in their sales.
Group Risk Market inflows were similar to the individual market at 6.9% with BT/Westpac reporting 130.4% growth, which Plan For Life attributed to coming of a lower bases compared to TAL which reported a 24.8% growth and AIA with 16.3% growth.
As indicated earlier sales in this sector dropped by 16.7%, continuing a trend which Plan For Life stated that been going for two years and had led to a total fall in Group Risk Sales over that time of around a third.
Despite this TAL recorded a large percentage increase (8108%) to both overturn its lack of group risk sales in the previous 12 months and to return its sales to a normal level, something which did not occur for a number of insurers which experience large double digit decreases in sales, including CommInsure (-68.3%), AMP (-64.1%), National Australia / MLC (-46.1%), MetLife (-40.9%) and AIA (-10.4%).
Maybe the extra ordinary rise in cost has something to do with it ?? But these people don’t look at their statements ? Do they ? Or at least that’s what some insurers think
Why wouldn’t TAL lead the way in increased premiums. In July 2015, they increased their Group Life rates by 85.0% on one platform provider and on a Nil commission basis to advisers.
You could rewrite the client direct with the TAL retail product for 40.0% less than their Group Life offering,…. and by the way as an adviser, receive 50.0%. of the first years premium as commission.
Now, I might be conflicted but it seems to me I actually did replace the Group Life cover in the client interest !!
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