Lapse rates have reached their highest level for the past two decades, according to the latest research from Plan For Life.<\/p>\n
<\/p>\n
In September 2013, risk market discontinuances peaked at 16.7%. The discontinuance rate was the same for both retail lump sum and income sectors, with Plan For Life adding that discontinuances have been increasing over the past several years (both in percentage and dollar terms).<\/p>\n
The lump sum market recorded its highest rate for 20 years. Above average rates were recorded by CommInsure (20.7%), Macquarie (19.1%), AMP (17.3%) and NAB\/MLC (17.2%). In comparison, OnePath (15.6%), Suncorp (13.6%), BT\/Westpac and Zurich (both 14.6%) all recorded below average discontinuance rates.<\/p>\n
Income lapses are at an 11 year high, with most of the major companies experiencing similar discontinuance rates. However, NAB\/MLC recorded a higher than average rate of 20%, while BT\/Westpac was below average at 11.8%.<\/p>\n
In the group risk market, lapses were subdued at a rate of 8.2%, compared with a long-term average of 14%. Plan For Life noted that group risk discontinuances tend to be much more volatile than those of the individual risk markets, particularly at an individual company level. They reflect the turnover in superannuation fund group risk mandates from ongoing remarketing exercises that are regularly carried out every few years. Consequently any resultant individual mandate losses are often relatively large and sudden, resulting in jumps in the corresponding discontinuance rates.<\/p>\n
The figures were contained within Plan For Life\u2019s Risk Market Discontinuances Report. Discontinuances are defined as lapses, surrenders and forfeitures. Discontinuance rates are calculated as a percentage of the average inforce annual premiums for the year.<\/p>\n
Plan For Life Senior Manager, Daniel Morris<\/strong>, confirmed that the individual market figures do include direct-sold products as well as retail (advised) insurance. He added that while there is some speculation that direct business is subject to a higher than average lapse rate, and that the growth of direct sales could have impacted the overall lapse rates, the researcher does not yet have specific data to back this up. Plan For Life is preparing another report that will look at the direct market in more detail, and riskinfo will bring this to you when it is made available.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Lapse rates have reached their highest level for the past two decades, according to the latest research from Plan For Life.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,3],"tags":[],"class_list":{"0":"post-24871","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-company-news","7":"category-general","8":"headers-new"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/24871","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=24871"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/24871\/revisions"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=24871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=24871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=24871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}