IDII policy-holders continue to defy APRA

Mike Taylor

Managing Editor/Publisher, Financial Newswire

24 October 2022

Consumers are continuing to defy the Australian Prudential Regulation Authority’s (APRA’s) regulatory foray into the pricing of individual disability income insurance (IDII) with the latest data revealing that those who had pre-existing policies are sticking with them. 

The latest data from specialist research firm, Dexx&r reveals that those who had the more generous pre-existing policies are refusing to budge, with the only real growth in the sale of IDII products coming from those clients new to the market. 

Dexx&r principal, Mark Kachor said that discontinuances in the IDII arena remained at historically low levels indicating that an increasing number of clients are retaining their existing Disability INcome policies. 

“This trend is expected to continue as the terms and conditions offered by existing products are significantly more favourable than those offered by current onsale products,” he said. 

The Dexx&r data also points towards superannuation fund members generally valuing maintaining insurance cover despite the Government nearly two years’ ago legislating to remove default cover for low balance holders. 

The data points to the value of in-force group risk premiums bouncing back from the initial 2020 slump generated by the Government’s legislation levels higher than those recorded in 2018. 

It showed that total in-force Group risk premium increased by 4.8% from $6.7 billion to $7 billion over the 12 months to June 2022. 

In broad terms, the Dexx&r data suggest life insurers are continuing to struggle with total individual risk sales down 5.2% in the 12 months to June, with individual risk lump sum new business down 7.8%. 

Amongst the top 5 companies TAL recorded an 11.8% increase in individual lump sum business to $158 million and AIA recorded a 5.3% increase to $113 million. 

In terms of market share, TAL/Asteron continues to lead the market in Australia with 28.4%, followed by AIA/Comminsure, with 19.2%, Zurich/Onepath with 14%, MLC Life with 11% and Resolution Life 8.8%.