Life offices have heralded a $600 million increase in risk market inflows over 2006 as a step towards plugging Australia’s underinsurance gap.
Inflows swelled from $5.1 billion to $5.7 billion – an increase of 12.7 per cent, according to Plan for Life actuaries and researchers. Overall new premium sales were up 15.8 per cent.
“It’s starting to plug the gap. Good healthy growth and if we could say that we could grow at least 13 per cent in the years to come, that’s pretty good,” Tower retail insurance chief executive officer David Callander said.
“My view is that we could grow even faster. We’re beginning to pick up momentum. What I see is a lot of activity in the market that is likely to lead to further growth rate in the future.”
Tower grew 11.7 per cent in its inflows in term life, total and permanent disablement and trauma insurance and 20 per cent in premiums.
Aviva marketing and public relations general manager Tim Cobb said: “I agree that 12.7 per cent and $600 million growth is significant, but the market as a whole is not getting close to addressing the real issue. We think that some of the technological things that are coming out, like straight-through processing, will make a big difference.”
Aviva grew 16.2 per cent in inflows and 20.5 per cent in premiums during 2006, according to Plan for Life.
CommInsure inflows grew at a rate of 20.1 per cent. CommInsure Managing Director Simon Swanson attributed much of this to the business’ group risk insurance results – with a 111 per cent increase in sales – as well as industry fund wins, the largest of which was AustralianSuper.
“We are now focusing more efforts on the retail risk area which has kept some of our growth and success in check. Recently CommInsure made a range of innovative product enhancements to its retail risk insurance range, along with more competitive premiums and new technical and underwriting services,” Swanson said.
