According to DEXX&R, only one of the top 10 life companies, AIA Australia, recorded an increase in individual lump sum new business with the firm seeing a 40 per cent increase from $75 million in March 2018 to $105 million.
Individual life risk covers death, trauma, disability income and business expense products sold through advice channels or direct.
The current largest life company was TAL which has a 19 per cent market share but this would be replaced by AIA once its acquisition of CommInsure was completed, with TAL dropping into second place, notwithstanding its acquisition of Suncorp’s Life business.
Looking at quarterly business, new business fell by 11.4 per cent from $274 million to $239 million.
The fall in overall business was cited as being the result of lower sales through advice channels and the suspension or cessation of sales of direct lump sum products by several major life companies. This included AMP, which is closed to new business, and Asteron which was being acquired by TAL.
DEXX&R said there was “little prospect” of a short-term turnaround in risk product sales as there was a dislocation caused by the sale or restructuring of bank-owned dealer groups who had previously played a significant role in the distribution of risk products.
Comments
Life risk sales will only continue to drop. I do a lot of risk work and the amount of compliance now required to prepare advice for even a straightforward mum and dad client means that if their premiums don't total $5k per annum, they're not profitable to bring on as a client. Especially once we go to 60% commission next year.
Note to the FSC and Life company execs. Expect it to continue dropping. Good work idiots!
They force all the old risk advisers into retirement due to FOFA. Ban or discourage direct risk sales. Decrease commissions for advised sales. Increase the costs to do business with rubbish like TPB fees etc. Increase compliance and time wasted on paperwork which is never read.
What did they think was going to happen. Oh thats right. They will get the computers and robots to do it all.
Insurance is sold and people need a qualified and experinced human to walk them through the process and explain things to them in ways they relate to.
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