Risk insurance takes hits across the board as new premiums drop 16%

DEXX&R’s latest Life Analysis Report has revealed that total new individual risk premiums have decreased by 16.3 per cent in the year to September 2024, hitting $1.16 billion.

Total risk in-force premiums saw a smaller decrease of 1.2 per cent for the period, dropping from $16.5 billion at September 2023 to $16.3 billion at September 2024.

Individual lump sum for death, total and permanent disability (TPD), and trauma new business also took a hit, dropping 12.9 per cent to $820 million from $941 million in the previous 12-month period following two consecutive years of relative stability.

The September 2024 quarter saw new individual lump-sum premiums fall by $8 million (5.7 per cent) to hit $200 million, reversing the June 2024 growth of 5.7 per cent. Meanwhile, the quarter also saw considerable decreases in sales, coming in 15.6 per cent lower than the $237 million recorded in the September 2023 quarter.

The lump-sum attrition rate continued its steady climb, rising to 10.5 per cent for the 12 months to September 2023, compared with 10.0 per cent in the previous year.

The attrition rate for disability income has likewise continued to rise, hitting 11.4 per cent for the period, up from 10.8 per cent in the previous period and its 2021 low of 9.0 per cent.

New disability income business took a rather steep dive, dropping 23.5 per cent to $343 million from the $448 million recorded in the previous period.

Data for the September quarter showed similarly negative results, with new disability business dropping by 21.4 per cent from $78 million in the June 2024 quarter to $60 million, and more than halving in comparison with the September 2023 quarter, dropping 52.9 per cent.

Total in-force group risk premiums saw a margin decrease of just 0.1 per cent in the year to September 2024, coming in at $7.0 billion.

Meanwhile, TAL holds the largest market share among Australian insurers, currently sitting at 31.6 per cent valued at $5.15 billion, followed by AIA with 21.0 per cent, and Zurich with 14.9 per cent.

Rounding out the top five is MLC Life Insurance with 11.3 per cent and Resolution Life with 7.9 per cent market share.

In December, Nippon Life Insurance Company acquired 100 per cent of Resolution Life Australasia and the remaining 20 per cent of MLC Life from the National Australian Bank to merge the two insurers.

Operating under the name Acenda, the combined business would hold 19.2 per cent of the market, making them the third largest insurer in Australia.