Risk rebounds, but remains subdued

Total risk new business increased by 4.6 per cent to $2.2 billion over the year to December 2020, with the majority of the increase attributable to higher group risk premium inflows, but remained at the “lowest level” recorded in five years.

“Notwithstanding the rebound in sales in the December quarter of lump sum new business sales for the year ending December 2020 were down 5.2 per cent to $954 million from the $1.0 billion recorded in the year to December 2019,” DEXX&R said.

“The continued decrease in business reflects the impact of the COVID lockdown from March 2020 and ongoing disruption in the advice distribution channel, including the restructuring and transfer of ownership of retail bank owned dealer groups and a fall in the number of life risk advisers.”

Disability income new business also fell by 9.3 per cent to a nine-year low of $405 million, reflecting the COVID lockdown and the APRA mandated product intervention from the end of March 2020, but in-force group risk business was up 5.1 per cent in the year to December 2020.

“The group risk market is dominated by premium received for the provision of default cover for super funds. While the Protecting Your Super measures have meant that fewer members have default cover, re-pricing of existing benefits has enabled life companies active in the group market to increase total premium received,” DEXX&R said.