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Life market growth expected as premiums passed on to members
Group risk premiums are set to rise over the next 12 months as Life companies reap the benefit of larger premium increases being passed on to super fund members, according to DEXX&R's Life Analysis report for the year to 30 June 2013.
It said successful tenders had provided lower premiums for equivalent or enhanced cover for the past decade in what has been a highly competitive market.
As premium increases of up to 40 per cent are passed on to members to cover increased claims costs, DEXX&R forecasts strong growth in the group risk sector as increases flow through over the next 12 months.
AIA and TAL should benefit from this changed insurance landscape, DEXX&R said, increasing their market share of the total group risk market to 26 per cent and 24 per cent respectively.
The analysis showed total in-force business for the group risk market increased by 15 per cent from $3.4 billion in 2012 to $3.9 billion in 2013.
Three of the top five group risk companies reported in-force business increases that were higher than the market average, according to the report: 12.1 per cent for AIA from $892 million to $1 billion; 26.9 per cent for TAL from $724 million to $918 million; and 16.5 per cent for MLC increasing from $308 million to $358 million.
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