Premium Inflows Continue to Post Modest Growth

Overall life insurance risk premium inflows have grown at an annual rate of 2.6 per cent and continue to remain below the double digit growth average experienced over the previous two decades, while overall risk sales were flat at 0.7 per cent due, according to data released by Strategic Insight.

In its quarterly update of premium inflows and sales, Strategic Insight reported that total Annual Risk Premium Inflows increased slightly by 2.6 per cent to $16.3 billion led by Metlife which posted inflow growth of 16.4 per cent, followed by AIA (9.5 per cent), TAL (8.4 per cent) and Zurich (2.6 per cent) for the 12 months to December 2017.

MLC Life (1.6 per cent) and Suncorp (0.9 per cent) both posted marginal growth rates results while OnePath (-1.3 per cent), AMP (-2.7 per cent) and CommInsure (-10.2 per cent) were down on total risk premium inflows.

In its market overview of inflows and sales for the 12 months to the end of December 2017, Strategic Insight reported that while Total Risk Premium Sales were relatively flat at 0.7 per cent over the calendar year MetLife, TAL and Zurich recorded increases in sales of 126.6 per cent, 65.5 per cent and 20 per cent respectively.

Many other insurers reported declines in sales for the period led by MLC Life (-26.4 per cent) and then OnePath (-14.3 per cent), CommInsure (-13.1 per cent) and AIA (-9.5 per cent).

In the Individual Risk Lump Sum market premium inflows grew at 2.5 per cent led by ClearView (16.4 per cent), AIA Australia (11.5 per cent) and TAL (6.5 per cent). Most other insurers posted growth rates between 1.7 and 2.9 per cent except for CommInsure which posted negative growth of -2.3 per cent.

Individual Risk Lump Sum sales fell by 3.3 per cent year on year but Zurich recorded increases of 26.7 per cent off the back of the takeover of the Macquare life insurance business while Suncorp (-13.1 per cent), OnePath (-8.4 per cent) and CommInsure (-6.8 per cent) all declined.

Individual Risk Income Market inflows were up 3.5 per cent over the past year while overall Individual Risk Income Sales decreased by 5.0 per cent over the last twelve months. ClearView (41.1 per cent), TAL (12.5 per cent) and AIA (8.2 per cent) all led the market for inflows while AMP (37.8 per cent), ClearView (32.3 per cent) and CommInsure (8.6 per cent) led the market for risk income sales.

Group Risk Inflows were up slightly by 2.4 per cent for the year, led by BT/Westpac with a 21 per cent increase in flows ahead of MetLife (17.9 per cent) and AIA Australia (9.1 per cent) while CommInsure, AMP and OnePath posted a decline in inflows of -20.3 per cent, -15 per cent and -9 per cent, respectively.

Group Risk sales grew by 14.2 per cent, after they had dropped by a third in 2016 with Strategic Insight stating the main driver for the movement has been TAL whose sales shrank dramatically in 2016 but have now bounced back, by 2820.6 per cent, after it captured some new Group Life mandates.

Other than TAL, MetLife (132.8per cent), BT / Westpac (66.9per cent) and AMP (14.0per cent) grew their group risk sales off relatively low bases while AIA (-14.0per cent) along with MLC (-63.8per cent), CommInsure (-28.3per cent) and OnePath (-13.6per cent) saw sales fall away as a result of movement from one company to another due as part of the ongoing remarketing exercises that are a feature of the group risk market.

Risk Inflows for 12 Months to December 2017. Source: Strategic Insights