February 3rd, 2010
Australia’s appetite for life risk products such as death, income protection and mortgage insurance grew strongly in the year to September 30, with premium inflows up 15% to just over $8 billion.
Data just released by Plan For Life actuaries and researchers shows risk was the only bright spot for life insurance categories generally during the period.
Falls in premium inflows for retirement income, individual and group superannuation investment and non-super investment contributed to a 24.1% drop across the board to $33.9 billion.
CommInsure grabbed the lion’s share of life risk business at 15.3%, followed by ING (12.6%), National Australia/MLC (12%), Tower (9.7%) and AMP (9.2%).
Plan For Life MD Simon Solomon says multiple factors drove the market in the period.
He says the downturn in funds and wealth management has seen advisers switch their attention to the risk market, where commissions can be up to 100% of the first year’s premium.
“In the group risk market, industry funds particularly have been very proactive in contacting members, telling them that they offer insurance benefits which are much cheaper than your standard retail product,” he told insuranceNEWS.com.au.
“They have also been adding benefits to these products such as income protection.”
He says many advisers and the bank-driven insurers have taken advantage of the buoyant housing market to sell mortgage insurance to clients.
Also, people nervous about losing their job in hard times are increasingly buying income protection and claiming it as a tax deduction.
“If they can prove they have a justifiable claim they get paid a fairly handy proportion of salary,” Mr Solomon said. “A lot of those c
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