The total number of lives insured by a risk product in Australia has climbed by around a third to over seven million in the last ten years, according to data released by Strategic Insight.
As part of a ten-year review of the life insurance market released recently (see:Insurer Sales Will Further Concentrate Market Share), Strategic Insight reported that lives insured by term life, TPD, trauma and income protection products had climbed from 4.41 million in 2007 to 6.61 million in 2017.
This increase represented a compound annual growth rate (CAGR) of 4.13 per cent over the ten years.
Term Life cover accounted for 4.05 million, or 61 per cent, of lives insured but TPD cover, which accounted for 10.2 per cent of lives in 2017 (676,300) was the fastest-growing segment with an 8.1 per cent CAGR over the last ten years and 13.8 per cent over the past year.
“…life insurance was being predominantly bought and held by people aged 55 and over…”
Trauma insurance with 13.9 per cent of lives insured (919,800) and Income Protection with 14.5 per cent of lives insured (959,900), grew at a 5.8 per cent and a 4.8 per cent CAGR respectively over the decade since 2007, while Term Life grew at 3.1 per cent.
Strategic Insight also found that life insurance was being predominantly bought and held by people aged 55 and over, and there had been a decline in inforce annual premiums across most age groups below 45 since 2007.
During that time, inforce premiums in the 25-34 year-old demographic fell from 8 to 5 per cent, and from 12 to 7 per cent in the 35-39 age bracket. A similar decline was seen in the 40-44 age bracket, where inforce premiums fell from 16 to 12 per cent, but stabilised in the 45-49 age bracket where the decline was from 18 to 16 per cent.
Inforce premiums grew over the decade among the 50-54 age bracket, up from 17 to 19 per cent, and increased markedly in the 55-64 and 65 and over demographics which grew from 22 to 32 per cent and 2 to 7 per cent, respectively.
