Mixed picture for risk new business in Q1
Disability income new business continued to increase in the year to March 2023 but lump sum new business declined, contributing to a slight increase in risk new business overall across the industry, according to the latest data from research firm DEXX&R.1
DEXX&R’s Life Analysis Report, based on data for the 12 months ending March 2023, revealed that total individual risk new premiums increased by 0.4 per cent over the year, to $1.4 billion.
Total risk in-force premium also increased by 3 per cent in the 12 months to March, from $16 billion to $16.5 billion.
The positive movements in the market were driven by solid sales results in disability income, where new business increased 5.6 per cent to $419 million in the year to March, up from $396 million in the 12 months to March 2022.
However, disability income new business was down 13.9 per cent to $95 million in the March 2023 quarter, compared to $111 million in the December 2022 quarter.
Disability income sales were also down 1.3 per cent in the March 2023 quarter compared to the March 2022 quarter.
Things looked less positive in lump sum new business sales, including death, TPD and trauma benefits, which were down 1.7 per cent in the year to March 2023.
In the March 2023 quarter, individual lump sum new premium decreased by 9.9 per cent to $221 million, compared to $245 million in the December 2022 quarter.
The sales figures were also 0.7 per cent lower than the $222 million recorded in the March 2022 quarter.
DEXX&R’s attrition rate, which looks at discontinuances as a percentage of in-force premiums, was slightly higher for individual lump sum in the March 2023 quarter compared to March 2022, at 9.6 per cent versus 9.3 per cent.
The attrition rate for disability income was also up more significantly to 10.1 per cent in March 2023, compared with 9.4 per cent in March 2022.
Total risk in-force business written by life companies, including both group and individual, increased 3 per cent in the year to March, to $16.5 billion.
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