Sales of individual Death, TPD and Trauma insurance have bucked a long-running trend of decreases with an increase 2.2% per annum for the year to the end of March 2017, according to the latest Life Analysis Report released by DEXX&R.
The report stated the life insurance sector wrote $1.33 billion of lump sum new business in the 12 months to the March 2017, up from the $1.3 billion recorded for the year to the end of March 2016.
The growth trend continued during the March 2017 quarter where new individual lump sum business was $307 million, an increase of $29 million, or 10.4%, on the March 2016 quarter of $278 million in new business.
DEXX&R stated this growth came despite the March quarter traditionally being the lowest recorded in a year and the increase provides a strong basis for continued growth in lump sum business during 2017.
“The continued fall in Lump Sum and Disability discontinuance rates…indicates that the industry is improving retention with a commensurate improvement in profitability.”
Individual lump sum discontinuances also continued to fall away after peaking during March 2013 at 15.9%, dropping to 13.6% at the end of the March 2017 quarter.
Disability Income new business also increased, up 5.9 per cent to $518 million over the year to March 2017 compared to the $489 million recorded in the twelve months to March 2016, however, it fell to $111 million, or by 18.9%, in the March 2017 quarter compared to the $137 million recorded in the December 2016 quarter.
Disability income discontinuances also dropped off from its March 2013 peak of 16% continuing a four year trend and moving from 13.9% at March 2016 to 13.6% at March 2017.
“The continued fall in Lump Sum and Disability discontinuance rates during both periods of growth and flat or falling sales indicates that the industry is improving retention with a commensurate improvement in profitability. The current attrition rate is now similar to that last recorded March 2009,” DEXX&R stated.
