Life insurance sales returned mixed results for the first quarter of 2016 with individual Life, Trauma and Total and Permanent Disability (TPD) sales falling while disability and group life sales increased leading to small increase in total in-force business.
Data released by DEXX&R found that individual Death, TPD and Trauma Sales for the March quarter totalled $271 million but was a decrease of 11% compared with December 2015 quarter and a decrease of 3% compared with the March 2015 quarter.
This decrease was also reflected in the year to date numbers with $1.28 billion of lump sum new business written for the 12 months to the end of March 2016, slightly down on the $1.3 billion written in 2015.
DEXX&R stated that while December and March quarters are traditionally the slowest the lower sales recorded for the March 2016 may indicate the remainder of this calendar year may continue to be difficult for sales in the individual lump sum market. However, individual lump sum discontinuances have continued to fall from its peak of 16% in March 2013 reaching 13.9% in March 2016.
“The continued fall in …discontinuance rates…indicates that the industry is improving retention with a commensurate improvement in profitability”
Disability income sales moved upwards with $115 million of new premiums written in the March 2016 quarter representing a 9% increase on sales over the same quarter in 2015 and adding to the 5% increase of sales over the year to March 2016, which finished at $489 million.
Discontinuances also declined in this sector falling from 14.4% at March 2015 to 13.9% at March 2016 and well off its peak at 16% in March 2013.
“As with lump sum business there is now a clear trend of lower levels of discontinuances in the Disability Income market. The continued fall in Lump Sum and Disability discontinuance rates during a period of flat or falling sales indicates that the industry is improving retention with a commensurate improvement in profitability,” DEXX&R stated.
Group Risk also showed increased sales with total in-force business growing by 13% to $6.1 billion over the twelve months to March 2016, boosting the total in-force business written by insurers which increased by 8% to $15 billion over the year to March 2016, up from $13.9 billion at March 2015.
