The group insurance market continues to grow, and is expected to grow further, according to Rice Warner Actuaries.
Based on the most recent data contained in its Group Insurance Market Report 2010, Rice Warner reports that the group risk insurance market in Australia represents 30% of the overall risk insurance market in terms of revenue and 50% in terms of the amount of cover provided.
The report says 99% of group insurance business is written by ten insurers and 82% by the top seven insurers.
Other key findings in the report include:
- The group insurance market has grown by 13% pa over the last 15 years and is expected to grow by 11.7% pa over the next 15 years
- Over 80% of contributing members of employer superannuation funds have death cover provided automatically by their fund
- 32% of contributing members of industry and public sector superannuation fund members and 23% of employer master trust members have income protection cover provided automatically by their fund
only 5% to 10% of contributing superannuation fund members have arranged additional death or TPD cover in excess of automatic cover.
The report also states that only 5% to 10% of contributing superannuation fund members have arranged additional death or TPD cover in excess of automatic cover.
Given automatic cover is typically set at levels well below the perceived insurance needs of many members or employees, the actuaries say there remains significant scope for increased risk insurance sales, both through superannuation funds and other channels.
Other points of interest include:
- Automated underwriting for group insurance is now provided by five insurers compared with three last year. 42% of industry and public sector fund members and 32% of employer master trust members have access to online application and automated underwriting services, representing a significant increase on last year, when these services were available to only 12% of industry and public sector fund members and few employer master trust members.
- Group Insurance prices have continued to fall over the past twelve months, and remain amongst the cheapest in the market.
super fund members have been real winners through reduced prices and improved levels of cover
Commenting on the report, Rice Warner Director, Richard Weatherhead, said “The Group Insurance market in Australia is one of the most competitive across the financial services industry. With nine insurers each having a market share of more than 5% and investing significantly in improved processes and insurance
services and the huge purchasing power of large superannuation funds, super fund members have been real winners through reduced prices and improved levels of cover”.
