Life insurers are becoming increasingly reliant on sales made by aligned and non-aligned advisers, according to new data released by research house, Dexx&r.
The research, released today, has pointed to new sales of lump sum business having fallen to their lowest level in five years, with only three of the top 10 life companies recording an increase.
It said that with several major retail banks suspending or closing down direct sales of life insurance products, the life companies were now becoming increasingly reliant on sales made by aligned and non-aligned advisers providing personal advice for future lump sum new business growth.
“Only three of the top ten life companies recorded an increase in lump sum new business for the year ending June 2018,” the Dexx&r analysis said. “AIA recorded a 32.0 per cent increase to $88 million, AMP recorded a 3.5 per cent increase to $190.1 million, and ClearView recorded a 2.9 per cent increase to $38.8 million. New sales are now at their lowest level in five years.”
It said that in the disability income market, where virtually all new business flowed from planners providing personal advice, sales were up in the June quarter and discontinuances continued to fall indicating that as direct “without advice” lump sum made an increasingly smaller contribution to lump sum new business, lump sales would return to a growth phase, albeit from a lower base.