Mapping United Path to $500 Million Risk New Business


There is a foreseeable path back to at least $500 million in new life insurance business, according to Adviser Ratings‘ comprehensive 2024 Australian Financial Advice Landscape report, which challenges insurers and advisers to take a collaborative approach to achieve this goal.

In a dedicated chapter on life insurance the research firm says that while the Australian life insurance sector has faced a significant decline in new business, experiencing a 44% drop from 2018 to 2023 “…recent data shows potential for recovery, with a 10% increase between 2022 and 2023.”

The firm says there is a foreseeable path back to at least $500 million in new business, volumes that were being written only six years ago, noting this was just before the Life Insurance Framework commission caps began to have an impact and the risk adviser exodus commenced.

… insurers have had to realise they needed to reset and adjust to the new paradigm…

The report notes that with life insurers and the advice profession temporarily paralysed by what was playing out, and the number of new lives insured decreasing from 103,000 in 2018 to 44,000 in 2023, insurers have had to realise they needed to reset and adjust to the new paradigm.

Within this new paradigm, the report reveals that in the last two years adviser satisfaction levels with insurers have rebounded “…creating a conducive environment for growth.”

The report says the stabilisation of financial adviser numbers presents a critical opportunity to strengthen support systems further:

“Enhancing adviser relationships and technology efficiencies can improve product penetration and customer satisfaction, essential for achieving new business growth targets.”

…the path back to at least 100,000 new lives insured through retail requires a collaborative approach across the industry…

Pointing to a 57% decrease in the number of new lives insured in the past five years, Adviser Ratings says the path back to at least 100,000 new lives insured through the retail advice sector requires a collaborative approach across the industry.

“If the life insurance industry and the advice profession can unite around a single target, strategies and investments can be made whereby a policyholder is profitable for both the adviser and the insurer.”

It notes this is predicated on an underlying assumption the regulatory environment stays within the parameters that are currently in play.

Adviser Ratings sees this as being driven by several key factors, including:

  1. Utilising data analytics and personalisation for advisers and their clients
  2. Improving service levels, underwriting processes, and adviser satisfaction
  3. Leveraging rapid advancements in technology, including AI
  4. Enhancing referral programs between risk specialists and holistic advisers, with the assurance the risk specialists have the capability and capacity to scale
  5. Uniting the insurance industry behind education initiatives for the Australian public, not dissimilar to the success achieved by industry super funds
  6. Expanding health and wellness programs
  7. Capitalising on opportunities presented by the Quality Advice Review

MBS Insurance co-founder, Kris Mason, states in the report that “…constantly working with insurers to enhance our new business processes has really helped us write larger quantities of profitable risk business, all whilst making the  process far more seamless for our clients. The key is working closer with the insurers to gain these efficiencies that benefit all stakeholders, advisers, insurers and clients.”

The $500 million target is just shy of the new business reached in 2018. Graph courtesy of Adviser Ratings’ 2024 Australian Financial Advice Landscape report.

The Life Insurance chapter of the report also lays out in more detail how the path back to $500 million in life insurance new business levels might be achieved:

Embracing Adviser/ Practice Growth

  • Risk practices can increase referral rates to scaled risk advice specialists and insurers with multiple solutions under one roof
  • With up to 15% of advisers exiting or considering exiting, there is a pipeline of risk books containing up to $1.4 billion of in-force premiums available for acquisition

Insurer Support

  • Life insurers can support their largest risk writers to recruit advisers or assist in referral partnerships, regardless of insurer preference
  • Universal collaboration on education initiatives
  • Reducing insurer underwriting and service costs through ongoing technology and process improvements
  • Introducing active risk advice practices to acquisition opportunities and potentially, assist in funding access for these practices

Driving Efficiencies Through Technology Adoption

  • 64% of advisory practices are already utilising digital applications to enhance efficiency or reduce costs
  • The adviser survey revealed that practices focused on delivering risk advice are significantly more invested in technology. While only 13% of practices not involved in life insurance expect the biggest change in the coming year to be related to IT solutions, this figure rises to 20% among risk specialists
  • Risk specialists are also leading the way in leveraging AI to boost business efficiency. They are 53% more likely to experiment with AI compared to holistic advisers
  • Technologically savvy advisers are operating at profit margins of 20% or higher, compared to 18% for those less savvy. The most advanced users of technology are achieving margins of 29%, with highest performing practices at 40%

Other key areas covered in the life insurance section of the report include: Net Promoter Scores for insurers; the retail life insurance market landscape; policy lapses; premium changes; mental health and life insurance and the size of the Australian retail life insurance opportunity for advisers.

Over the coming weeks Riskinfo will report on further details within the report. Click here to see the full report.

While the volume of advisers has reduced since 2019 it’s of interest that the proportion of registered risk advisers overall has climbed to 82%. Graph courtesy of Adviser Ratings’ 2024 Australian Financial Advice Landscape report.


  1. One of the “efficiencies” that Adviser Ratings seems to be hanging its hat on, in predicting a “boom” in life insurance sales, is an improvement in underwriting efficiency. The promise being made, or at least hinted at, is that AI may be able to decrease the time the insurers take to underwrite and obtain doctor’s reports. There is even silly talk of talking to doctors on the phone rather than requesting a report. Does anyone realise how busy a GPs life is?

    In typical fashion of course, in response to that 44% lowering of life new business, the life insurers, as usual, have acted precipitously and would appear to have already put measures in train that would impede the introduction of such technology, if it exists. You will need some staff!

    Right now, most of the life insurers are engaging in reducing real live underwriters and reducing real live new business processing staff. All in the interests of course of the mighty shareholder value and the CEOs bonuses

    A little bit of cart before the horse. But then that’s typical of what passes for life insurance management in this country. Short-term thinking wins, traditional long term life insurance thinking is definitely out.

    Historically, of course, that 44% reduction was self-inflicted, when the non-bank life insurers saw an advantage in siding with those banks in the FSC who owned insurance companies, but needed to sell them to overseas buyers to recoup costs.
    In the wonderfully supportive shadow of Report 413, the banks proposed, and received, government approval to halving life risk commissions by 50%. It was called LIF, and LIF is still extant folks, throbbing like an old infected boil.

    Right now, most life insurance advisors are seriously considering selling up their businesses to larger concerns and leaving to avoid paying $30,000 on an unlimited liability called the Dixon Levy. As noted today by the FAAA, that levy could go on for years and $30,000 could look like chicken feed.

    The predictable side effect is that the traditional individual risk advisor business will disappear. Risk will be bought from large operations fielding Mr Jones’s Qualified Advisers with signoffs from one licensed adviser. The Qualified Advisers won’t have to be licensed and therefore won’t pay the Dixon levy. Furthermore, they will not be subject to FASEA as individuals, nor the ASIC levy. Predictably the FAA a takes lots of qualified advisers and an advice business is a good idea, but somehow is ignoring the fact that the resultant poor advice could impact on consumer outcomes, one of the other FAAA constituencies
    Welcome back banks!! The lesson is always thus: those who donate to political parties at election time will always get bang for buck, no matter which political party is the recipient.

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