Latest Rainmaker group insurance research shows the share of superannuation fund members associated with a bank-aligned group insurer has halved in the last four years.
The number of not-for-profit (NFP) superannuation members linked to a bank-aligned group insurer has dropped from 33% to 15% between 2015 and 2018, according to Rainmaker data, with CommInsure suffering the greatest loss of market share.
Non-bank group insurers on the other hand represented more than 85% of all NFP members.
Within the retail superannuation segment, as larger wealth groups move away from owning and providing capital for life insurance offerings, this will likely lead to the next market share shake up, Rainmaker noted.
Large insurers such as MLC and OnePath are pursuing different growth strategies in the group insurance market under new ownership, while AIA Group's acquisition of CommInsure will potentially rationalise and sharpen the combined entity in the group insurance space.
In September last year, AIA Group agreed to buy 100% of CBA's Australian and New Zealand life insurance businesses for $3.8 billion.
In early May, NAB announced to exit the majority of its wealth management operations, including divestment of Australia's largest retail MySuper product.
While the bank will continue to service high-net-worth clients via JBWere, it is shedding the rest of its wealth operations so as to become "focused on core banking." NAB said options for the sale include a demerger or an initial public offering, and that it is targeting listing for MLC by the end of 2019.
Rainmaker added the small number of insurers with an increased concentration of members in larger super funds underpins the competitive nature of the market.
In the NFP segment, AIA, TAL and MetLife are the dominant life insurance providers, which collectively represent nearly 80% of all NFP members. (See Figure 1).
In the retail segment AMP, CommInsure, OnePath and Westpac are the insurers for about two-thirds of all members in retail superannuation funds - largely as default insurers.