The Australian life insurance has never been so concentrated in the hands of the big five insurers, according to the latest data from specialist research house, Dexx&r.
The report, released today, concluded that the top five life insurers now dominated the Australian market, noting that once AIA Australia’s acquisition of CommInsure was completed the five largest life insurers would account for 85% of the Australian life insurance market as measured by in-form premiums.
The company’s principal, Mark Kachor noted that in June, 2016, the five largest life insurers accounted for 66% of the total market.
The Dexx&r analysis said that for the year to June, 2019, the industry wrote $1.13 billion of lump sum new business, down 12.2% on the $1.29 billion recorded in the previous corresponding period, and the lowest value of sales recorded in the past five years.
It said MLC was the only company in the top 10 life companies to record an increase in lump sum new business with a $7.2 million increase,
The analysis said the continued decrease in business was 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 is the lowest level of sales in any June quarter over the past five years. With both AMP, one of Australia’s largest life company’s, and Asteron following its acquisition by TAL, now closed to new business there are now fewer life companies competing for new business than at any time in the past,” it said.
“Ongoing restructuring of large institutionally owned dealer groups has exacerbated dislocation in the advice channel, and with alternative direct channels now closed or suspended by most major companies there is little prospect of a short-term turn around in risk product sales.”