State of the Direct Life Insurance Market 2020
/Market Changes
During the year we have seen consolidation in the Direct Life Insurance market, down to 129 products (155 were offered in 2019). Most markedly is the reduced number of Term Life products (6 fewer) and Accidental Benefit products (11 fewer). There has also been a significant drop in CCI products on offer. New Premiums in the Direct space are dominated by Funeral Cover (34%) and Term Life (38%) followed by Income Protection (19%). Accidental Death, Trauma and TPD together account for less than 9% of New Premiums to Dec 2019.
Sales and Inflows
Australian Life Insurance market total sales of Lump Sum and Income Protection products in 2019 have fallen across the distribution channels from $1,792m in 2018 to $1,457m in 2019. The Direct Life channel comprising 21% of the total market, also followed this trend with sales falling from $438m in 2018 to $301m in 2019. Whilst March quarter data was not available at the time of reporting, we expect to see further declines in new annual premiums and an increase in lapse rates as a result of the economic impact of Covid-19.
Leading Companies
The leading companies as at 31 Dec 2019 with the greatest portion of Lump Sum Risk Inflows at $374m (23% market share) include Greenstone, followed by TAL at $299m (18% market share). In the Individual Risk Income Protection market, TAL has the greatest portion at $60m (36% market share) followed by Greenstone at $42m (25% market share).
Premium Rate Comparisons
A comparison of average Advised premiums and average Direct premiums across a number of providers and sellers demonstrated that for Life cover, Advised premiums are getting cheaper while Direct premiums have been relatively stable over the years. For Trauma cover, Advised premiums have been stable over the years while Direct premiums have shown a slight downward trend and for Income Protection Cover, premiums are increasing for both Advised and Direct with a trend towards widening the gap between them.
Three Direct Life research reports now available
1. Direct Life Insurance Report 2020 – Executive Version
For a comprehensive snapshot of the market.
Market Overview (sales by products, channels, providers), Market Trends (changes to ownership, product, regulations, advertising), Affinity Programs (sales splits by all brands), Product Frameworks. Price $295. Purchase online.
2. Direct Life Insurance Report 2020 – Market Share Version
For competitive insight into leading companies and product markets.
As above, plus detailed market share statistics for inflows and sales split by providers/products/channels, number of policies, state splits, age segmentation, channel splits, inflows by premium bands, lapse rates and forecasts to 2029. Price $3500+GST. Request more info.
3. Direct Life Insurance Report 2020 – Technical Version
For detailed analysis of product and premium competitiveness.
As above, plus detailed advised and direct premium comparisons by product type showing historical trends. Detailed product benchmarking and rankings covering: policy conditions, applications, premiums, insurability, discounts, ancillary benefits, exclusions, definitions, offsets, and a comparison matrix of products by feature scoring and average premiums to identify best value products. $6500+GST. Request more info.
