News Life and Health06 Jun 2018

Australia:Super members shun bank-aligned group insurers

06 Jun 2018

The share of superannuation fund members associated with a bank-aligned group insurer has halved in the last four years, according to the latest Rainmaker group insurance research.

The number of not-for-profit (NFP) superannuation members linked to a bank-aligned group insurer dropped from 33% to 15% between 2015 and 2018,  with CommInsure suffering the greatest loss of market share.

Non-bank group insurers on the other hand represented more than 85% of all NFP members, reports Financial Standard citing the data.

Within the retail superannuation segment, as larger wealth groups move away from owning and providing capital for life insurance offerings, this will likely lead to the next market share shake-up, the financial services information company noted.

Large insurers such as MLC and OnePath are pursuing different growth strategies in the group insurance market under new ownership, while AIA Group's acquisition of CommInsure will potentially rationalise and sharpen the combined entity in the group insurance space.

In September last year, AIA Group agreed to buy 100% of CBA's Australian and New Zealand life insurance businesses for A$3.8 billion ($2.9 billion). In early May, NAB announced that it was exiting the majority of its wealth management operations, including divestment of Australia's largest retail MySuper product.

Nature of market

Rainmaker added the small number of insurers with an increased concentration of members in larger super funds underpins the competitive nature of the market.

In the NFP segment, AIA, TAL and MetLife are the dominant life insurance providers, which collectively represent nearly 80% of all NFP members.

In the retail segment, AMP, CommInsure, OnePath and Westpac are the insurers for about two-thirds of all members in retail superannuation funds -- largely as default insurers.

 


 

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