The challenges facing the life/risk sector have been laid bare in the latest data from specialist research house Dexx&r revealing a 22.1% decline in total risk new business for the year to the end of September.
What is more lower sales through advice channels has played a role.
The data, released today, revealed that total risk new business fell from $2.6 billion a year ago, to just $2 billion in September 2019 with total risk in-force having fallen 5.6% over the year to September to $15.4 billion.
The Dexx&r analysis also reinforced the fact that concentration within the Australian life/risk market had reached a new high – something which would be even more the case once AIA Australia Limited completed its acquisition of CommInsure.
It said that once the acquisition transaction was complete, the five largest life insurers would account for 85% of the Australian life insurance market measured by in-force premiums.
The data revealed that the industry wrote $1.02 billion of lump sum new business in the 12 months ending September 2019, down 16.4% on the $1.22 billion recorded in the prior corresponding period, with this being the lowest value of new sales recorded in the past five years.
It found that only three of the tope ten life companies recorded an increase in lump sum new business – MLC with a $24.6 million increase, Zurich with an $18.2 million increase and Westpac to a $0.24 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.