New data from Roy Morgan has confirmed what many life/risk advisers have been worrying about – an exponential increase in the number of life insurance policies being purchased online.
The Roy Morgan data revealed that as at November 2017, 349,000 current life insurance policies were purchased online, representing a 108 per cent increase over the last five years.
The research analysis said this growth rate represented the highest for all channels used to obtain life insurance.
The Roy Morgan research found that telephone remained the main purchasing channel for life insurance but this was being quickly overtaken by online and employer-related activity.
It said nearly a quarter (24.7 per cent) of life insurance policies had been obtained by telephoning insurance companies directly, closely followed by using an employer with 23.9 per cent.
It said the most rapid growth had been in purchasing from insurance companies online which had grown from 4.6 per cent in 2012 (168,000 policies) to 10.8 per cent in 2017 (349,000), representing a growth of 108 per cent over the period.
The survey analysis said insurance brokers appeared to be the biggest losers over this period, declining from 15.9 per cent in 2012 to 10.8 per cent in 2017, representing a loss of 35 per cent or 202,000 policies.
It said financial planners accounted for 7.3 per cent of current policies, up marginally from 7.0 per cent five years ago, with policy numbers showing no real change.
The sale of direct life insurance is currently being scrutinised by the Australian Securities and Investments Commission (ASIC), while planner organisations have warned about the implications of directly sold insurance policies with underwriting at the time of claim.
Commenting on the survey result, Roy Morgan industry communications director, Norman Morris said it appeared that how life insurance was obtained was facing a major transformation, moving away from traditional insurance broker or life insurance salesmen toward online purchasing.