Risk insurance sales have bounced back after two consecutive quarters of falling sales ,with Individual Risk Business sales increasing by 18.4 per cent since the March quarter and Group Risk total in-force business increasing by 15 per since June 2012.
Individual Risk Business sales were up $69 million since March to $445 million while Group Risk in-force business increased by $500 million from June 2012 to $3.9 billion at June 2013, according to data released today by insurance researcher Dexx&r.
The strongest performing insurers were Zurich which increased sales by 33 per cent to $11.2 million, followed by Macquarie which grew sales by 30 per cent to $11.4 million.
The five largest insurance companies all increased their sales by about 25 per cent, with Westpac reporting a 28 per cent increase to $48 million in sales, followed by OnePath with a 26 per cent jump to $64 million in sales and CommInsure with a 24 per cent increase to $67 million in sales.
Dexx&r stated this rebound in the June quarter was likely to continue, with several of the insurers reporting ongoing strong sales two months into the current quarter.
The strong sales growth was reflected in the areas of death, total and permanent disability (TPD) and trauma insurance with total sale of these products increasing 13.5 per cent to $1.3 billion for the year ending June 2013.
Strong performers were Westpac which reported a 30 per cent increase in the sale of Death, TPD and Trauma products in the June 2013 quarter to $36 million, while OnePath reported a sales increase of 23 per cent to $44 million.
Disability Income Business sales were flat for the year and increased only 0.3 per cent to $435 million for the 12 months to June 2013, but spiked in the last quarter with CommInsure increasing sales by 46 per cent to $11.4 million, and OnePath increasing sales by 32 per cent to $19.4 million.
Dexx&r also stated that Group Risk premiums would increase over the next year as life insurances benefit from premium increases that as being passed on to superannuation fund members.
“The group risk market has been highly competitive over the past 10 years with successive tenders providing lower premiums for equivalent or enhanced cover. These premium savings have been passed on to super fund members in the form of higher benefits for the same premium,” Dexx&r said.
“With premium increases of up to 40 per cent now being passed on to members to cover increased claims cost, life companies are set to record strong premium growth as these increases flow through over the coming year.”
According to Dexx&r AIA and TAL, which provide insurance to a number of large super funds, will benefit from these premium increases with the two groups holding a 50 per cent share of the total group risk market.