Attention turns to risk products as demand for investment wanes
Financial advisers have turned back to risk insurance products as demand for investment vehicles dwindle in the global economic downturn, according to Fidelity Life's chief executive.
Thursday, June 4th 2009, 5:29AM
by Paul McBeth
Milton Jennings said investment advisers and mortgage brokers who have "dabbled" in investments like KiwiSaver are returning to risk insurance as demand for investment vehicles dries up, helping lift total life insurance premiums which rose 7.9% for the 12 months ended in March 31.
"There are more people selling risk" and that has seen ongoing gains in the sector, Jennings said. "Our risk sales rose 18% on last year - they're going very well."
The latest statistics from the Investment Savings and Insurance Association (ISI) showed an 11% increase in risk products to $1.365 billion for the year ended in March 31. Fidelity Life, the eighth largest seller of life insurance premiums, lifted its market share to 5.2% from 4.6% in the 12 months ended December 31, according to ISI's statistics.
Jennings said insurance policies were more attractive than investments at the moment with global economic uncertainty encouraging consumers to look for more secure offerings and protection.
Like the rest of the industry, Fidelity experienced a spike in discontinued and lapsed policies, but still achieved a net gain in total policies sold, Jennings said.
Paul is a staff writer for Good Returns based in Wellington.
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