New business for disability income insurance (DII) has grown 2.5% after reaching a 10-year low last year.
In DEXX&R research, the firm said disability income new business increased by 2.5% to $409 million over the year to March 2022. This followed a 10-year low of $399 million in the year to March 2021 and reversed four years of declining new business.
Three of the top five companies - MLC, TAL and AIA - recorded an increase in disability income new business over the 12 months.
MLC had the largest increase at 45.7% while TAL increased 14.5% and AIA increased 0.8%.
Looking at quarterly figures, new business in the March 2022 quarter was $96 million, 1.1% lower than the previous quarter and 0.4% lower than the figure in March 2021.
This was attributed to mandated product intervention by the Australian Prudential Regulation Authority (APRA) which offered more restrictive terms and conditions on disability income products sold from October 2021.
The attrition rate for disability income business increased for the first time in nine years, up from 8.7% in March 2021 to 9% in March 2022.
“Discontinuances remain at historically low levels indicating that clients are retaining their existing Disability Income policies at a higher rate than has been the case over the past 10 years. This trend is expected to continue as the terms and conditions offered by existing products are significantly more favourable than those offered by current onsale products,” DEXX&R said.