TAL dominates life market share
TAL is by far Australia’s largest life insurer commanding 32.8% of the market, according to the latest data from specialist research house, Dexx&r.
The latest Dexx&r analysis shows that TAL’s acquisition of the Westpac Life Insurance business restored its strong dominance of the sector, notwithstanding AIA Australia’s acquisition of Comminsure and Zurich’s acquisition of ANZ’s OnePath.
According to the analysis this is how the market share breaks down.
TAL/Westpac 32.8%
AIA/CommInsure 19.8%
Zurich/Onepath 14.6%
MLC Life 11.5%
Resolution Life (AMP) 8.8%
The latest Dexx&r analysis also reveals how the life insurers have managed to sustain their profitability in the group life insurance space, notwithstanding the former Government’s Protecting Your Super measures which removed younger, low balance superannuation fund members from default group life cover.
The analysis shows that while the life insurers are covering few superannuation fund members, the total premium they are receiving has increased as a result of repricing existing benefits.
It found that total in-force Group Risk Premium increased by 4.2% from $6.8 billion in December 2021 to $7 billion over the 12 months to December, 2022.
The data also confirm that many consumers are continuing to defy the expectations of the Australian Prudential Regulation Authority (APRA) by sticking with their Disability Income Insurance (DII) products.
The Dexx&r analysis show that consumers recognised that their existing products offered better terms and conditions than the new products on offer, meaning policy discontinuances have remained at historically low rates.
The Dexx&r analysis was released at the same time as APRA released its Life insurance claims and disputes statistics for the 12 months to the end of December, last year, which amongst other things revealed a spike in dispute lodgements around IDII.
The regulator attributed this to “the various repricing activities undertaken to address the product’s sustainability issues.
I’m surprised anyone can get an application approved through TAL, I must just attract people with higher BMI’s.
Nah!
Given the exceptionally high increases in premiums since LIF, many clients have opted to self-insure believing the increased premiums to be higher than the risk they present to the companies.
Hence, the insurance companies are left with a higher percentage of clients who are a higher risk medically than before…and they’re aging.
With no new young and healthy lives coming in to balance things out and reduce the levels of risk in the pool – underwriters are doing their best to only accept ‘clean skins’…just another unintended consequence of the greed shown by the members of LIF.
While discontinuances for older DII policies may be at unexpectedly low rates, I suspect this may mask signficant cover downgrades for clients with those policies. Big premium increases are prompting clients to reduce sums insured, remove optional extras, and lengthen waiting periods. Overall there has likely been a much bigger reduction in DII cover than a raw policy count might indicate.