Integrity Life scraps new life insurance in retail advised channel
Integrity Life Australia will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels.
The firm, part of Integrity Group, attributed the “difficult decision” to a substantial reduction in financial advisers providing risk advice over the last five years and a declining market.
Per APRA statistics on claims and disputes, there has been a decline in retail lives insured from some 5 million in June 2018 to 4.1 million in June 2022.
Eric Dodd, chairman of Integrity Group, explained: “The board and the Integrity leadership team have been actively reviewing the strategic direction of Integrity Group and have considered and progressed a range of options.
“Protection of policyholders is critical and as such the board has taken the difficult decision to close to new business in the retail advised and corporate group channels.”
Chief executive and managing director, Sean McCormack, said it was a necessary decision to make given significant challenges in the Australian life market coupled with the realities of growing a business from the ground up.
In its 2023 Life Insurance Study, Adviser Ratings found that there were 15,833 advisers in the industry as at 1 January 2023. Of those, 150 only provided advice on life insurance and 949 were largely specialised in providing life insurance advice (together 1,099 or 7 per cent of total advisers), and a further 2,372 (15 per cent) provided some advice on life insurance.
“With the support and confidence of our partners, and despite the challenges, we have achieved very strong growth since March 2021 – for this we’re very grateful. Unfortunately, the retail advised channel has seen a substantial reduction in the number of financial advisers providing risk advice over the last five years,” McCormack said.
“The number of lives insured across all channels has substantially reduced and the market decline means that scale is critical. Achieving scale requires significant ongoing investment, and we have reached a point where it is not in either the policyholder or shareholder interests to continue to write new retail advised policies.”
The change will take effect from 29 September 2023.
To maintain capital for the benefit and protection of existing policyholders, Integrity Life will also cease quoting for new corporate group insurance business, effective immediately.
“Our commitment to claims is unchanged. We remain focused on supporting our existing policyholders and we are committed to looking after them in their time of need,” McCormack added.
The firm confirmed there will be no change to existing insurance policy terms or conditions in accordance with the relevant Product Disclosure Documents (PDS) and Policy Documents for all retail advised and corporate group policyholders.
Claims processes will remain unchanged, and Integrity will continue to meet Life Insurance Code of Practice obligations.
As at June 2023, the group had around $140.3 million in premiums in force with over 185,000 lives insured. In comparison, the figures stood at $22.2 million and over 59,000 in March 2021.
AUTHOR
Rhea Nath
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