Individual Risk New Business Trends

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Plan for Life has reaffirmed its quarterly data in relation to individual risk new business growth trends and provided additional clarification around what is included in its data (see:Risk New Business Sales Continue Recovery).

The research firm told Riskinfo it should be kept in mind that the ‘sales’ statistic it reports is a combined measure of increases in Inforce Annual Premiums and new sales of Single Premium policies (such as consumer credit).

It says the former includes both new policy sales and any increases relating to existing policies such as age or CPI Indexation.

The firm also notes that more than 70 percent of the reported ‘sales’ were actually increases on existing policies rather than actual new policies sold.

Plan for Life explains that Individual Risk Sales hit a low point during the March 2020 quarter (as Covid started to spread through Australia) “… and have subsequently recovered somewhat, with much of the growth being driven by smaller players…”

It adds the March 2020 result will continue to impact annual percentage growth rates for the next few quarters “…after which the extent of any turnaround can be more accurately judged.”

There has been a significant drop in the Direct/Non-Advised Risk market since 2017 however this has also shown recent signs of stabilising, the firm says.



3 COMMENTS

  1. Clarity is so important to enable the REAL truth to come to light.

    A problem with including premium increases on existing policies as New Business, where in actual fact, 70% of the increased NB was due to existing clients paying more, is a magicians trick of, “watch what I pull out of my hat now.”

    The Government, the Regulators, Licensees, Advisers and all Australians need accurate data that tells the truth and does not try to hide the issues with false propaganda.

    We can come up with appropriate solutions to any issue so long as we are told the full story.

    It is obvious that continually increasing existing clients premiums will NOT fix the issues and will in actual fact, exacerbate them.

    Advisers can fix the New Business premium issue by being given proper freedoms without fear, or loss of profit that currently hangs over their heads and that is a trend we all need.

  2. “The firm also notes that more than 70 percent of the reported ‘sales’ were actually increases on existing policies rather than actual new policies sold.”

    You don’t say! Fancy that! To me that reveals two things: advisers are avoiding LIF products if at all possible and it would also appear they are avoiding the 1 October income protection product offerings until the dust settles in three years or so.

    Now that should not surprise anyone! But then Apra has never consulted advisers ever. And insurance companies only pay lip service to advisers. If only they’d asked.

    On the subject of increasing premiums on existing policies how’s this for size. I have some accidental death cover with an insurer that has just announced a 4.7% increase. What’s the justification for that increase? Increased claims experience? Have the actuaries sat down and calculated there’s more likelihood of an accidental death claim as an insured gets older.

    That’s just gouging on a recently purchased client base.

    Please explain!!!

    • “I have some accidental death cover with an insurer that has just announced a 4.7% increase. What’s the justification for that increase? Increased claims experience?”
      The rate of claims due to accident can change in a society over time.

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