Individual risk new business sales continued their downward spiral in Australia last year, according to latest data released by Plan For Life.
While overall life insurance inflows increased by 2.5% in the year ending December 2022, new premium sales for individual lump sum policies declined by 5.3% compared to 2021, while individual income protection insurance new business sales were down by 4.1%.
Drilling further into the data released by PFL over time reveals ‘genuine’ or actual new business sales are making up an even smaller proportion of the overall new business numbers reported.
…actual new business fell by a further $67m in 2022…
According to PFL, of the combined $1.7bn in individual risk lump sum and IP sales reported for 2022, $1.3bn of this came from in-force policy increases (eg stepped premium and CPI increases), while only $400m was generated by actual new business sales.
This compares with 2021 numbers, where combined individual lump sum and IP sales were almost identical at $1.32bn, but where genuine new policy sales contributed $467m to this number, meaning actual new business fell by a further $67m in 2022.
While individual new business sales continued to head south, overall inflows were up by 2.5%, with PFL noting that as long as combined new annual premiums (including age-based and CPI increases) are larger than total lapses and discontinuances, there will usually emerge a steady increase to overall inflows/inforce business.
