New research has revealed that the advisory market is driving up life insurance sales and delivering planners considerable benefits in the process.
According to industry researcher Plan for Life, life insurance risk market inflows rose 13.3 per cent between December 2004 and December 2005, from $4.5 billion to $5.1 billion.
Plan for Life managing director Simon Solomon said this rise was due to a number of factors that were being driven by the advisory market.
“The Australian Securities and Investment Commission is making a few waves about insurance so that every time a person wants to switch funds, it is critical that the adviser explains the life insurance available,” Solomon said.
He added that the retail and housing markets were also significant contributors to life insurance sale increases.
“When people with small businesses have extra cash in hand they spend it on insurance,” he said.
“The housing market boom is another reason for high sales, as the banks are saying people should talk to financial advisers about life insurance as a way of protecting their mortgage.
“If that market starts to fade, you will probably see drops in life insurance sales.”
Of the life insurance providers, PrefSure, which was recently acquired by competitor Tower, was the big winner, experiencing a 48 per cent rise in inflows, followed by AIG Life, Tower, AMP, CommInsure, MLC and ING.
In dollar terms, CommInsure got the most new business, experiencing inflows of $683 million.
