While disability income new business jumped by nearly 10% in the year to June 2023, individual risk lump sum new business was static, according to new analysis.
DEXX&R’s latest Life Analysis Report for the 12 months ending June 2023 found that disability income new business rose by 9.6% to $436 million, up from the $398 million recorded in the 12 months to June 2022.
In the June 2023 quarter, disability income new business was $118 million, 17.1% higher than the $101 million recorded in the June 2022 quarter (see: Mixed Results for Risk New Business).
However individual risk lump sum new business slipped just 0.7% to $955.3 million from the $961.6 million recorded in the year to June 2022.
The research firm says that during the June quarter individual lump sum sales of $238 million were 2.2% lower than the $243 million recorded in the June 2022 quarter.
Individual Lump Sum Discontinuances
The DEXX&R Attrition Rate calculates discontinuances as a percentage of in-force premiums and the the firm says the attrition rate for individual lump sum was higher at 10% in June 2023 when compared to the 9.1% attrition rate at June 2022.
The Attrition Rate for disability income business increased for the second year, up from the 9.3% recorded in June 2022 to 10.6% in June 2023.
The firm notes that disability income discontinuances remain at historically low levels “…indicating that notwithstanding the small increase during the year to March 2022 retention remains at a higher level than that applicable over most of the past 10 years.”
The firm says this trend is expected to continue “…as the terms and conditions offered by pre-APRA intervention products are significantly more favourable than those offered by current on sale products.”
Total Risk In-Force Premium
DEXX&R notes that total risk in-force premium increased by 2.2%, up from the $16.1 billion recorded at June 2022 to reach $16.4 billion at June 2023.
Total individual risk new premiums increased by 2.4% in the year to June 2023 to $1.4 billion.
