Individual risk sales up 2.4%

Last financial year saw a rebound in individual risk sales, with the recent DEXX&R Life Analysis Report, which is based on data for the 12 months ending June 2023, finding that total individual risk new premiums hit $1.4 billion – an increase of 2.4 per cent on the prior year.

Total risk in-force premium was also up, increasing 2.2 per cent over the same period from the $16.1 billion recorded at June 2022 to $16.4 billion at June 2023.

Looking at individual lump sum for death, TPD, and trauma, new business was down 0.7 per cent from $961.6 billion in the year to June 2022 to $955.3 million to June 2023.

However, the June quarter saw a significant bump, increasing 7.6 per cent to $238 million, or $17 million more than the $221 million recorded in March 2023 quarter. This was still down 2.2 per cent on the $243 million recorded in the June 2022 quarter.

The attrition rate for the period was 10.0 per cent in June 2023, up from the 9.1 per cent attrition rate at June 2022.

New disability income business was up 9.6 per cent for the year, increasing from $398 million recorded in the 12 months to June 2022 to $436 million over the year to June 2023.

The June quarter was even stronger, with new business hitting $118 million, an increase of 23.5 per cent over the $95 million recorded in the March 2023 quarter and 17.1 per cent higher than the $101 million recorded in the June 2022 quarter.

The attrition rate for disability income business increased for the second year, up from the 9.3 per cent recorded in June 2022 to 10.6 per cent in June 2023.

“Discontinuances remain at historically low levels indicating that notwithstanding the small increase during the year to March 2022, retention remains at a higher level than that applicable over most of the past 10 years,” DEXX&R said.

“This trend is expected to continue as the terms and conditions offered by pre-APRA intervention products are significantly more favourable than those offered by current on sale products.”

Total in-force group risk premium was up from $6.89 billion at June 2022 to $6.93 billion over the 12 months to June 2023.

“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, total premium received has continued to increase as the result of repricing of existing benefits,” DEXX&R added.

Total in-force business (individual and group) written by life companies increased 2.2 per cent over the year to $16.5 billion.