Australian insurers face rising premiums amid $1.3bn loss

Retail income protection bleeds $1.1bn

Adam Saville
clock • 1 min read

Four in 10 life insurers in Australia reported losses during 2020, report by KPMG shows

Australian life insurers reported a total loss of $1.3bn in the 12 months to 30 June, leading market experts to expect a rise in premiums.

Forty percent of life insurers reported a loss during this period, a report by KPMG has found, with retail income protection (IP) showing $1.1bn losses due to overly generous terms being offered in recent times.

The Australian group risk market suffered $353m losses for 2020 financial year - falling dramatically from the $415m profits posted last year, with group income protection losses increasing from $156m to $249m.

The only section of the market to report a profit was retail lump sum, however this fell from $422m to $324m.

The findings come as life insurers faced increased risk of disability and death claims as a result of the Covid-19 pandemic.

IP reform

The problems related to retail income protection are not new. Last month, the Australian Prudential Regulation Authority (APRA) demanded a product overhaul in the face of competitive pricing and rising mental health-related claims.

APRA warned insurers would be hit with fees unless they stopped selling unsustainable disability insurance products.

Australia's Actuaries Institute has also called for retail income protection reform.

More on Individual Protection

Financial resilience is slowly improving for adults: LV=

Financial resilience is slowly improving for adults: LV=

59% of adults described their situation as comfortable

Jaskeet Briah
clock 16 February 2024 • 2 min read
Only 5% of people would speak to an adviser about costs of later-life care

Only 5% of people would speak to an adviser about costs of later-life care

18-34 year-olds were 50% more likely to want cover

Jaskeet Briah
clock 15 February 2024 • 2 min read
Provider satisfaction dropped 8% in 2023

Provider satisfaction dropped 8% in 2023

According to a report by Defaqto

Cameron Roberts
clock 15 February 2024 • 4 min read

Highlights

COVER Survey: Advisers damning of protection insurer service levels

COVER Survey: Advisers damning of protection insurer service levels

"It takes longer than ever to get underwriting terms"

John Brazier
clock 12 October 2023 • 5 min read
Online reviews trump price for young people selecting life and health cover

Online reviews trump price for young people selecting life and health cover

According to latest ReMark report

John Brazier
clock 11 October 2023 • 2 min read
ABI members with staff neurodiversity policy nearly doubles

ABI members with staff neurodiversity policy nearly doubles

Women within executive teams have grown to 32%

Jaskeet Briah
clock 10 October 2023 • 3 min read