While new sales of risk business across the individual and group insurance markets have been flat in the past 12 months, the sector has continued to experience year-on-year growth in in-force premiums, according to research house DEXX&R.
According to the research house’s DEXX&R Market Projections Report released today, the continued growth in in-force premiums is due to the repricing of existing business.
“Individual lump sum in-force premiums are projected to increase by 9.2 per cent per annum from $6.2 billion at June 2015 to $15.0 billion by June 2025,” a statement from DEXX&R said.
“Individual disability income in-force premiums are projected to increase by 9.6 per cent from $2.4 billion at June 2015 to $5.9 billion by June 2025.
“Group risk in-force premiums are projected to increase by 9.6 per cent from $5.7 billion at June 2015 to reach $14.1 billion by June 2025,” the statement said.
The research house added that the advice channel has long been the “single largest source” of new business in the retail market.
“The recently announced life reforms, while subject to further review, strike a reasonable balance in capping up-front commissions, extending minimum adviser responsibility periods and ensuring ongoing viability of personal risk advice compared with the risk of severe disruption to the advice channel combined with increased premiums payable by consumers implicit in the initial industry recommendations,” the statement said.