The challenging conditions currently being experienced within Australia’s group life market have led Zurich to announce it will withdraw from the sector.
The insurer said the adverse claims experience reported by many large funds, and the flow-on effect this has had on premiums, reinsurance rates and reserving requirements, meant it was no longer possible for smaller players to offer a competitive proposition in the group market.
Zurich said it would close its book to new mandates immediately, but would continue to provide cover and support to existing clients as part of a phased withdrawal.
Announcing the decision, Zurich’s CEO of Australian Life and Investments, Colin Morgan, said the landscape of the group life market had changed significantly since Zurich’s entry in 2008.
The ongoing challenges have reinforced the need for scale in this highly specialised segment
“The ongoing challenges have reinforced the need for scale in this highly specialised segment, and ultimately we felt we couldn’t participate in the local group life market in a way that was sustainable, either for Zurich or our customers,” said Mr Morgan.
However, Mr Morgan noted that the decision was based on the commercial outlook for a specialised segment, representing a very small part of Zurich’s Australian business, and would not affect other Zurich offerings in the market.
“Zurich remains very much committed to its Australian Life & Investments and General Insurance businesses”, he said, adding that Zurich’s retail life business continued to grow rapidly, reflecting the underlying health of the Australian market.
Zurich advised that the staffing impact of its decision to exit the group market was limited, with only two roles immediately affected.
