Consumers continue to defy APRA’s IDII intervention
Demand for disability income insurance has increased but existing clients are sticking with products which pre-date the Australian Prudential Regulation Authority’s (APRA’s) intervention in the IDII market.
The latest analysis from specialist life/risk research and ratings house Dexx&r reveals that disability income new business was up 17.3% in the September quarter but, at the same time, confirmed that consumers were holding fast to their pre-APRA intervention products.
The Dexx&r analysis said that the attrition rate for Disability Income business increased for a second year, up from 9.3% recorded in June 2022, to 10.8& in September 2023.
It said discontinuances remained at historically low levels indicating that notwithstanding the small increase during the year to September 2023 “retention remains at a higher level than applicable over most of the past 10 years”.
“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,” it said.
The Dexx&r analysis also confirmed why the superannuation-focused group insurance market remained lucrative for the major life insurance companies noting that while the Protecting Your Super measures had meant that fewer super fund members had default cover, total premium received had continued to increase as the result of re-pricing existing benefits.
The Dexx&r analysis confirmed TAL continued to dominate market share, followed by AIA and Zurich.
MLC Life 11.4%
Resolution Life 8.3%