The total risk insurance market in Australia will grow by 9.5 per cent over the next 15 years, with the increasing take up of intra-fund advice to be one of the main factors driving this growth.
That is one of the findings in Rice Warner Actuaries’ annual ‘Risk Insurance Market Projections Report’, which predicted the sector would reach $35.5 million per annum in terms of premiums.
Rice Warner found the average level of death cover provided per head of the working age population was $246,000, which represented around 3.6 years of earnings. This will increase to $464,000 by 2025, the report said.
Rice Warner Actuaries director Richard Weatherhead said further increases in default levels of risk insurance by superannuation funds over the next three years and continuing competition in the market would also contribute to its growth.
“Recent growth across all the broad market segments of group risk, adviser risk and direct risk insurance has gone some way to alleviating underinsurance, with the average level of death cover across the working age population increasing from 2.9 years of average earnings in 2008 to 3.6 years of average earnings in 2010,” Weatherhead said.
However, Weatherhead believes there is still a long way to go before all Australians are adequately covered.
