Data confirms life/risk policy churn a distant memory

Mike Taylor

Managing Editor and Publisher

18 January 2023

Life insurance policy churn has been all but eliminated, according to the latest analysis from specialist life/risk research house, Dexx&r.

The data, released this week, confirms decreasing rates of policy change over the past decade, most of which has been influenced by the imposition of the Life Insurance Framework (LIF).

The Dexx&r analysis shows that the attrition rate with respect to lump sum premium premium discontinuances has been in decline since 2015, with the most significant declines between 2015 and 2020.

Dexx&r principal, Mark Kachor told Financial Newswire that the declining attrition rate was substantially attributable to declining rates of churn which had been influenced by client best interests and the imposition of the LIF.

A similar pattern was evident with respect to the attrition rate for disability insurance.

Dexx&r’s attrition rate is derived from a calculation of discontinuances as a percentage of in-force premiums.

The Dexx&r analysis for the 12 months to September 2022 showed that total Individual Risk new premiums decreased by 9.0% to $1.30 billion.

Total risk in-force premium increased by 3.1% at the end of the year to September 2022, up from the $15.8 billion recorded at September 2021 to $16.3 billion at September 2022.

Japanese-owned life insurer, TAL has continued to dominate the Australian life insurance sector, according to the latest Dexx&r analysis.

The analysis reveals that TAL accounted for 32.5% of the Australian life insurance market as at September, last year, with $5.28 billion in in-force annual premium, followed by AIA with 19.9%, Zurich/Onepath with 14.6% and MLC Life with 11.6%.