New life insurance business dropped in March Qtr
New business in most product categories of life insurance written by Financial Services Council members fell sharply in the March quarter compared with both the previous quarter and the March quarter last year.
Thursday, May 17th 2012, 6:00AM 5 Comments
by Jenny Ruth
Partners Life also experienced a small drop in new business compared with the December quarter but still increased its market share.
The FSC figures show total new business written in the four major categories fell to $33.1 million in the March quarter, down 20% from $41.3 million in December quarter. It was down 10.6% compared with $37 million in the March quarter last year.
Partners Life's new business of $6.3 million in March was down 1.9% from December. However, its market share across the four products rose to 16% from 13.4%. Figures for the company are only available from the June quarter last year when it claimed 4.2% of the market.
The FSC figures show for a second successive quarter, lapses and surrenders in the four major categories exceeded new business - lapses totaled $41.9 million in the March quarter, about the same as in the December quarter and compared with $35.8 million.
FSC chief executive Peter Neilson says it's difficult to interpret exactly what's going on but the weakness may reflect the recessionary environment.
"Some people are not renewing policies or moving down to a lower cost policy," Neilson says.
And regulatory changes have led to a number of advisers leaving the industry, he says.
Neilson says he expects to meet Partners Life people by the end of this quarter to discuss including that company's figures in the FSC data.
"Certainly, we would like to have the statistics as comprehensive as possible," he says.
However, that depends on companies being prepared to provide information and the FSC also needs to ensure the way one company describes their policies is comparable with the categories other companies use.
And there's always a tension between wanting comprehensive information and the amount of information individual companies are prepared to disclose, he says.
Partners Life chief actuary Chris Coon says his company has "an open mind" on jointing the FSC. "We would be supportive of strategies to improve the industry," Coon says.
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