As the life/risk industry seeks to come to terms with the new Life Insurance Framework, specialist research house Dexx&r has pointed to discontinuance rates actually moving through cycles, with the most recent cycle peaking in about September, 2013.
The analysis is contained in Life Analysis Report covering the September quarter, in which Dexx&r pointed to its database on discontinuance rates, dating back to 1985.
It said analysis of this thirty year history of Discontinuance Rates indicated that they moved through a four or five year cycle with the most recent data showing that Individual Lump Sum Discontinuances had increased each year since 2010 and peaked in September 2013 at 15.2 per cent.
The Dexx&r analysis said that in the 12 months to September 2015 the attrition rate fell to 13.8 per cent and that while individual company experience varied, the industry attrition rate for Lump Sum Individual Death, Total and Permanent Disability (TPD) and Trauma business has been falling for eight consecutive quarters.
Looking at the industry more broadly, the Dexx&r September quarter analysis pointed to the industry being fairly flat.
It showed new business in the September quarter was up 18 per cent to $380 million over June with five of the top ten companies recording an increase over the quarter led by AMP Group which rebounded 164 per cent in new premium to $97 million.
However it noted that full year results were flat with total sales of $1.3 billion in new annual premium over the 12 months to September 2015.
It said five of the top ten companies recorded an increase in Lump Sum new business over the year to September 2015 with MLC recording a three per cent increase to $192 million, OnePath a four per cent increase to $178 million, TAL a three per cent increase to $156 million, Zurich an eight per cent increase to $65 million, and Clearview a 41 per cent increase to $31 million.
