Life insurance in-force premiums are expected to increase by more than 9% per year over the next 10 years according to market projections released by DEXX&R.
The group stated the individual and Group Risk Markets continued to record year on year growth in in-force premiums despite new sales of risk business having been flat in the past 12 months.
However, the continued growth of in-force premiums was the result of the re-pricing of existing business in both the Retail and Group markets with DEXX&R stating the changes under the Life Insurance Framework were reasonable.
“The recently announced Life Reforms, while subject to further review, strike a reasonable balance in capping up-front commissions, extending minimum adviser responsibility periods and ensuring ongoing viability of personal risk advice compared with the risk of severe disruption to the advice channel combined with increased premiums payable by consumers implicit in the initial industry recommendations,” the group stated in its market projections report.
Across individual market segments DEXX&R stated that individual lump sum in-force premiums were projected to increase by 9.2% p.a. from $6.2 billion at June 2015 to $15.0 billion by June 2025.
Individual Disability Income in-force premiums were projected to increase by 9.6% from $2.4 billion at June 2015 to $5.9 billion by June 2025 while Group Risk in-force premiums are projected to increase by 9.6% from $5.7 billion at June 2015 to reach $14.1 billion by June 2025.
