Clients hanging on to old DII cover
The lockdown associated with the Covid-19 pandemic and other factor, not least regulatory intervention, have contributed to the woes of the life insurance industry with new data revealing that disability income insurance new business has fallen to a 10-year low.
The latest data released by specialist research house Dexx&r revealed that disability income new business decreased by 8% to $382 million over the year to June 2021, down from the $415 million recorded in the 12 months to June 2020.
It said this was the lowest level of new business recorded since 2011 and was attributable to the impact of the COVID lockdown and disruption in advice and the APRA-mandated product intervention effective from the end of March, last year.
Dexx&r said that one of the top five insurers recorded an increase in Disability Income new business over the 12 months to March, being AIA Australia which recorded an increase of 7.7% to $58 million in disability new business.
The research also noted that the attrition rate of Disability Income business decreased for the eighth consecutive year down from the June 2013 high of 16.1% to 8.6% in June, this year.
It said that this low level of discontinuances indicated that clients were retaining their existing Disability Income policies at a higher rate than had been the case over the past decade.