Strong Sales Growth in Disability, Individual & Group Risk
According to Dexx&R, a firm providing research services to the financial services sector, including research on life and disability insurance, superannuation, and funds management, individual disability insurance has shown significant strength for the 12 months that ended 31 March 2012.
The Dexx&R report, published by the firm on 13 June 2012, takes note of the continuing strength of the life risk market when compared with the “subdued” markets in super and in investment funds under management.
Pointing to increased sales in September and December 2011, Dexx&R puts annual sales of new disability insurance at $425 million, a 15.5% increase over the past year’s results. Three companies posted increases above the market average: OnePath increased sales 17.5% to $69 million; CommInsure sales rose 15.9% to $54 million; and TAL boosted its sales to $61 million, a noteworthy 59.6% increase. All three companies were counted among the five leading companies in the sector.
In-force policy premiums grew as well, posting a 9.8% increase and premium income of $1.85 billion, a rate of increase equal to the rate for the 12-month period ending 31 March 2011.
Individual lump sum risk, a category that includes term life, trauma and total permanent disability, also fared well. Sales rose to $1.15 billion, a 12.3% increase for the period. Among the leaders were AMP/AXA, with a 10.6% increase to $210 million, CommInsure, with a 9.5% increase to $183 million, OnePath, which increased sales 10.2% to $163 million and TAL, where sales grew 10.4% to $140 million.
Three companies, all among the top five, posted increases in in-force business that exceded the market average. CommInsure grew 9.9% to $698 million, OnePath grew 12.6% to $612 million and TAL grew 11.7% to $526 million.
New group risk sales were reported at $990 million, a remarkable 689.7% increase, but Dexx&R cautions that this exceptional result may be attributed to the fact that group policyholders, especially industry funds, make large premium payments that can lead to “significant fluctuations” in reported new premium income for the sector as a whole.
Results for in-force group risk, however, are less subject to those fluctuations and still showed strength. Business increased to $3.3 billion, a 14.4% increase, and three companies among the top five were able to post increases above the average. AIA Australia, the market leader, saw a 38.7% increase to $871 million. TAL reported a 17.8% increase to $697 million. CommInsure posted an increase of 49.2% to $492 million.