Life insurance premiums edge lower

Annual premiums from active life insurance policies fell 1.7% to $16.2 billion in the year to December 2024 - a $300 million decline from the previous year - according to DEXX&R.

The market research firm's latest Life Analysis report showed total new individual risk premiums dropped 18.5% over the year, falling to $1.11 billion. This includes policies covering death, total and permanent disability (TPD), trauma, and income protection.

Within that segment, lump sum new business fell 11.2% year-on-year to $809 million.

However, new lump sum sales edged up 1.3% in the December quarter to $203 million.

This was up slightly from the September quarter, but still down 5.3% from the same quarter a year earlier.

The attrition rate for individual lump sum policies rose to 10.5% in December, up from 10.1% a year earlier.

Disability income insurance new business slumped 33.3% over the year to $301 million, down from $451 million recorded in the year to December 2023. New business in the December quarter, however, rose 16.9% from $61 million in the September quarter.

Nevertheless, it remained 37.2% lower than the $113 million recorded a year earlier.

The attrition rate for disability income policies rose to 11.4% in December, up from 10.9% a year earlier.

"Discontinuances continue to climb from the 9.1% low recorded in December 2020 immediately prior to the release of a new range of disability income products following the APRA intervention and release of conforming products in 2021," DEXX&R said.

Group risk premiums ticked up 0.3% to $7 billion in the year to December, prompted by a re-pricing existing benefits, despite fewer super fund members holding default cover under Protecting Your Super reforms.

DEXX&R also flagged that Australia's five largest life insurance groups by in-force premiums at December were TAL ($5.06 billion, 31.3% market share, AIA ($3.45 billion, 21.3% share), Zurich/OnePath ($2.41 billion, 14.9% share), MLC Life ($1.83 billion, 11.3% share), and Resolution Life - the AMP legacy book now in run-off - with $1.26 billion or a 7.8% share.