Life Insurance Participation Drops By Nearly One-Fifth in Five Years
Life Insurance Participation Drops By Nearly One-Fifth in Five Years
2
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Last year, research from a major insurance provider signaled a significant shift in the life insurance landscape within Australia, showing a marked decrease in the percentage of insured non-dependent adults of working age.
Only 77% now carry some form of life insurance, a stark contrast to the 94% coverage rate recorded in 2017.
Industries evolve, yet the dip in these figures marks a noteworthy trend within the life insurance sector.
This downward trend is believed to be partially due to legislative changes, specifically citing the Protecting Your Super package, which significantly reduced the instances of automatic coverage in certain superannuation accounts. These regulations were aimed at safeguarding the super funds of Australians from unnecessary erosion due to fees and insurance premiums, particularly in cases of low balance and inactive super accounts.
Data gleaned from industry body Council of Australian Life Insurers (CALI) shines a light on the residual under-insurance issue, suggesting that approximately 3.4 million citizens fail to maintain adequate income protection coverage for basic livelihood necessities, suggesting an undercurrent of financial vulnerability in the populace.
The landscape of the life insurance sector has also undergone significant consolidation in recent years. The current market comprises 24 life insurers, seven of which are onshore reinsurers, and 10 friendly societies. This is a reduction from the 29 insurers and 12 friendly societies active in 2018, leading to a more concentrated market environment.
Although the industry has faced challenges, there have been positive shifts making the market more appealing for insurers and insureds alike. The Australian Prudential Regulation Authority (APRA) instigated crucial capital modifications, changes were implemented regarding income protection products, and a substantial surge in the price of current income protection products was observed. Adding to this landscape, there was noteworthy industry data suggesting stabilization in the migration away from financial advisement as adviser numbers began to level out.
Encouragingly, due to industry adaptation and increased adviser productivity, there has been an upswing in new business acquisitions over three consecutive quarters. This rejuvenation brings renewed optimism as what some are calling an "inflection point", hinting at a trajectory of growth and recovery for the life insurance market moving forward.
As financial landscapes evolve, the coming years will be critical in assessing whether these trends will continue to affect the levels of life and income protection insurance coverage across Australia, and whether current industry adaptations will suffice to close the gap in under-insurance among Australians.
In a significant development for Australia's agricultural sector, Insurance Australia Group (IAG) has announced a strategic partnership with Ag Guard, a specialist rural underwriting agency. This collaboration will see Ag Guard managing the underwriting for IAG-owned CGU and WFI's crop insurance portfolios starting June next year. - read more
In a move to promote sustainable agriculture, WFI Insurance has partnered with AgCarE, a certification program developed by AgForce, to offer premium reductions to farmers who achieve AgCarE certification. This collaboration aims to enhance financial, environmental, and social outcomes for Australian farmers and rural communities. - read more
The landscape of Australian agriculture is undergoing a significant transformation as small commercial farms increasingly diversify their operations to enhance income and sustainability. This shift presents both challenges and opportunities for insurance brokers, as new ventures introduce complex risk management needs. - read more
The Insurance Council of Australia (ICA) has unveiled a comprehensive report titled 'Motor Insurance Policy Paper - A Roadmap for Reducing Rising Premiums,' addressing the significant 42% increase in comprehensive motor insurance premiums since 2019. This surge has brought the average annual premium to $1,052 in 2024, prompting the need for coordinated action to alleviate the financial burden on consumers. - read more
The National Truck Accident Research Centre (NTARC) has released its 2025 Major Incident Investigation Report, shedding light on the primary human factors contributing to significant truck crashes across Australia. The findings emphasise the critical roles of inattention, distraction, and inappropriate speed in these incidents, underscoring the necessity for targeted safety interventions within the transport industry. - read more
Choosing the right life insurance policy is one of the most important decisions for Australians, especially for those who are middle-aged or older. Life insurance provides financial security for your loved ones in the event of your passing, ensuring that they are not burdened with financial hardships. - read more
Life insurance is a crucial part of any comprehensive financial plan, providing peace of mind that your loved ones will be financially secure in the event of your passing. - read more
Life insurance is a cornerstone of financial planning, offering peace of mind to you and security for your loved ones. It's a contract between you and an insurance company: in exchange for regular premiums, the insurer agrees to pay a sum of money to designated beneficiaries upon your passing. This vital tool ensures that your family's financial needs can be met during an incredibly difficult time. - read more
Life insurance is an essential safety net for families, providing financial security when it's needed the most. As your family grows, the importance of having a well-structured life insurance policy becomes even more critical. In the busy lives we lead today, it’s easy to overlook this crucial aspect of financial planning. However, ensuring your coverage meets your family's evolving needs is vital. - read more
Life insurance can seem complex at first, but understanding the basics can help demystify this important financial product. At its core, life insurance is a contract between you and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon your passing, in exchange for premium payments. - read more
Start Here !
Apply now for your free Insurance assessment and price comparisons!
Knowledgebase
Grace Period: A set amount of time after the premium is due during which a policyholder can make a payment without the insurance coverage lapsing.
