Insurer Sales Will Further Concentrate Market Share

The six largest life insurers will increase their market share of inforce premiums from around 75 per cent to nearly 90 per cent after the conclusion of the current round of acquisitions, according to Strategic Insight.

In a recently released 10-year review of the individual risk market, Strategic Insight stated the purchase of Macquarie Life in 2016 by Zurich was set to be followed by ‘landscape-altering’ takeovers of CommInsure by AIA and OnePath Life by Zurich.

“…the six largest insurers…will expand from holding just over 74% of Inforce Premiums to almost 88%…”

“Based on current data the six largest insurers in the Individual Risk market will expand from holding just over 74% of Inforce Premiums to almost 88%…through these two transactions alone,” the review stated.

According to Strategic Insight, Zurich will increase its current market share from seven per cent to 19 per cent while AIA Australia will increase its market share from six per cent to 16 per cent.

AMP (16 per cent), BT Life (10 per cent), MLC Life (14 per cent) and TAL (12 per cent) will retain their current market share but the remaining 10 life insurance providers covered by Strategic Insight in the review would hold only 13 per cent of the market.

Strategic Insight also found that over the past ten years, direct distribution of life insurance has grown to account for 20 per cent of Inforce Annual Premiums but has remained steady at that level since 2012.

Within the advised market, advisers with aligned and non-aligned dealer groups account for about 50 per cent each of the remaining premiums and have held that position despite the level of inforce annual premiums more than doubling in size from $4.26 billion to $9.7 billion since 2007.