A comparison of average advised premiums and average direct premiums across a number of providers and sellers demonstrated that for life cover, advised premiums are reducing while direct premiums have been relatively stable over the years, according to a new report.
Plan for Life’s State of the Direct Life Insurance Market 2020 also found that for trauma cover, advised premiums have been stable over the years while direct premiums have shown a slight downward trend.
For IP cover, premiums are increasing for both advised and direct with a trend towards widening the gap between them, the actuary and research company says in a media release.
Plan for Life says that in terms of market changes during the year it has seen consolidation in the direct life insurance market, down to 129 products (155 were offered in 2019).
“Most markedly is the reduced number of term life products (six fewer) and accidental benefit products (11 fewer). There has also been a significant drop in CCI products on offer.”
It notes that new premiums in the direct space are dominated by funeral cover (34 percent) and term life (38 percent) followed by IP (19 percent). Accidental death, trauma and TPD together account for less than nine percent of new premiums to December 2019.
… Australian Life Insurance market total sales of Lump Sum and IP products in 2019 have fallen across the distribution channels…
The company states that the Australian life insurance market total sales of Lump Sum and IP products in 2019 have fallen across the distribution channels from $1,792m in 2018 to $1,457m in 2019. The direct life channel, comprising 21 percent of the total market, also followed this trend with sales falling from $438 million in 2018 to $301 million in 2019.
“Whilst March quarter data was not available at the time of reporting, we expect to see further declines in new annual premiums and an increase in lapse rates as a result of the economic impact of Covid-19,” the company says.
The leading companies as at 31 Dec 2019 with the greatest portion of Lump Sum Risk Inflows at $374m (23 percent market share) include Greenstone, followed by TAL at $299m (18 percent market share).
In the Individual Risk Income Protection market, TAL has the greatest portion at $60m (36 percent market share) followed by Greenstone at $42m (25 percent market share), the statement adds.
Read whatever you wish into this ! The overall story is people are “bailing out” of insurance cover particularly IP as the cost has simply skyrocketed out of control
Required to save the industry or not people simply have decided to take the gamble rather than have no social lifestyle at all due to paying the insurance
It will get worse when you look at the impact of corona virus virtually zero in wages growth and other world wide economic downturns
The outcome is obvious less people insured the harder the hit on our social security system and medical services
How do we stop it ?? Certainly not the way we are going ! Would luv to hear some ideas ?
The solution has been in clear view for years and no-one has listened.
Australia is now a Country where theory is more important than reality and experience accounts for little.
Consecutive Governments have allowed entire Industries to be torn apart and the Public Service sector, go along for the ride.
It is only when total chaos is raining down, does the Government begin to act, not even realising that they were the cause.
This report is a complete lie and no amount of spin will prove LIF reform worked. The industry is completely ruined and insurance for the client will continue to sky rocket, advisers will leave the industry with nothing and the only winner is the insurer at the end of the day. profits will just continue to rise as they wont have to pay the risk writer as there will be none…
FPA AND AFA have dropped the ball and advisers have zero voice for them to government..
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