Lifebroker: Life Insurance Market Booming in Australia

What is the state of the Australian insurance industry? According to a report released by Plan for Life, the insurance industry has grown over 10% in the last year. Leading companies include TAL, Zurich, and the AIA group, all of which posted double-digit gains overall.

This growth measurement is based on several factors, including what are known as "inflows." Inflows constitute the bulk of money received by insurance companies. There are several different categories of inflows, including premium inflows and life insurance premium inflows. Premium inflows can consist of both in-force annual and new single premium data, while life insurance inflows measure all total monies received. However, success is not measured purely by the greatest amount of inflow, but by growth rates. Growth rates are measured by their relative increase or decrease to the previous year's postings. Hannover Life Insurance experienced a growth rate of 31.5% over the previous year, with a healthy life insurance inflow of $256 million.

Certain markets, such as the total and permanent disability or TPD insurance, had tremendous inflow gains. The TPD market posted a gain of 9.1%. Group life insurance also had a tremendous gain of 10.2%, for a total of $3.2 billion dollars. The largest single life insurance inflow figure belongs to AMP Group, with a total of nearly $13 billion. The company claims the largest market share in insurance with 34.3% of the market.

New sales are measured separately from inflow figures, but this market showed tremendous growth as well. OnePath reported a 30% annual growth rate, with AIA nipping closely at its heels with an impressive 27.5% growth. TAL didn't do so badly either, managing a 23% growth rate in sales. MLC is the one major company that reported a loss in its new sales division, with a decline of 21.5% when compared to the previous year. The sector of new group life insurance sales also had some outstanding gains. Zurich had an incredible growth rate of 134.7%.

Retirement income has spiked in the last year from $5.4 billion to over $6.5 billion as of June 2011. This is a 19.3% annual growth rate, which has led to a substantial increase in inflows in the risk insurance market. As of June 2011, this market had experienced a 10% increase across the board.

Some companies fared better in certain categories than others. Challenger Financial Group posted a gain of 92.8% in individual superannuation investment inflows, while ClearView Life posted a decline of 34.1% in this same category. On the whole, both individual superannuation and group superannuation investment inflows were down from the previous year. It should be noted that group superannuation investment flows consist of products that are over 40 years old.

However, gains in other categories more than made up for the temporary decline.

When viewed as a whole, the Australian insurance market is experiencing healthy growth in a variety of different sectors. No one company is dominating the field. This healthy competition between major insurers will likely continue to drive growth and innovation for the next fiscal year.