Asian News - Australian life insurers' profits under pressure through to 2016 - Moody's
Source: Asia Insurance Review | Jul 2015
The profitability of Australian life insurers will be under pressure throughout 2015 and 2016, due to the policy lapses and rising claims seen for their risk products, said Moody’s Investors Service.
“The higher number of policy lapses and claims for risk products largely reflects a combination of fundamental issues, including product mispricing and premium and commission structures. These issues will take time to address,” said Mr Francesco Mirenzi, a Moody’s Vice President and Senior Analyst.
“The insurers that are most at risk of profit erosion will be those that are large providers of risk insurance products or those insurers which have been growing their risk insurance business significantly in the last few years,” Mr Mirenzi added.
Moody’s analysis is contained in its just-released report titled “Higher Claims and Policy Lapses Challenge Australian Life Insurers’ Profitability”, and is authored by Mr Mirenzi.