A number of Australia’s major life insurance companies have felt the commercial pain of having to drop or pare back their direct life offerings, according to the latest data released by specialist research house Dexx&r.
What is more, the research house claimed that life companies are becoming increasingly reliant on sales made by aligned and non-aligned advisers providing personal advice to drive new business growth.
Freedom Insurance Group and ClearView were among those companies to cease direct, phone-based sales of life/risk products and according to the Dexx&r data, the industry wrote $1.20 billion of lump sum new business in the 12 months ending December, down 10.4 per cent on the previous corresponding period.
The research house said this was the lowest value of new sales recorded in the last five years.
“Only one of the Top Ten life companies recorded an increase in lump sum new business for the year ending December 2018,” it said. “AIA recorded a 75.9 per cent increase to $108 million from the $62 million recorded in December 2017.”
The Dexx&r analysis said the fall in business could, in part, be attributed to the suspension or cessation of sales of direct lump sum products by several major life companies.
It said that December quarter individual lump sum new business fell by 25.5 per cent to $269 million, $11 million less than the $280 million recorded in the December, 2017 quarter and noted that “with several major retail banks suspending or closing down direct sales of life insurance products, life companies are new becoming increasingly reliant on sales made by aligned and non-aligned advisers providing personal advice for future lump sum new business growth”.