New data has revealed the impact of Australia’s major life insurers ceasing sales of direct product products with industry recording a 14.5 per cent decline in new business for the 12 months ended September, 2018.
The data, compiled by specialist research house Dexx&r revealed the industry wrote $1.20 billion in new business for the period, down 14.5 per cent on the $1.40 billion recorded in the previous corresponding period and the lowest level reached in the past five years.
It found that only one of the top 10 life companies recorded an increase in lump sum new business for the year ending September, with AIA recording a 62.9 per cent increase to $100 million.
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.
The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry heard a range of evidence with respect to direct life insurance sales, with ClearView having ceased the business before the commission began and with TAL and Freedom subsequently suspending their activity.
The Dexx&r data revealed that September quarter lump sum new business fell by 16.8 per cent to $343 million and noted that with the closing down of direct sales of life insurance products, companies were becoming increasingly reliant on sales made by aligned and non-aligned advisers.