Life premiums in Oceania, including Australia, are expected to register moderate growth in 2017, supported by savings products as yields have improved slightly, says Swiss Re Institute’s sigma report, “World Insurance in 2016”.
In Australia, life insurers are likely to further increase premium rates of disability income (DI) products, and some have made substantial revisions to their claims assumptions. In the group market, some superannuation funds are tightening up the definition of total and permanent disability.
In New Zealand, trauma and income protection-type products will continue to drive premium growth.
Meanwhile, regulations are increasingly focused on consumer protection. In Australia, the life industry’s first mandatory code of practice has come into full effect since 1 July 2017.
Last year, life premiums in Oceania contracted by a further 13% in 2016 after falling 7.7% in 2015, due to a 14% contraction in Australia reflecting continued weakness in saving products due to low investment returns.
In New Zealand, life premiums growth eased to 3.4% in 2016 (2015: 4.2%). Trauma and income protection-type products reported sound premium growth, but this was partly offset by a decline in sales of whole life, endowment and unbundled traditional products.
Non-life premium growth in Oceania is expected to remain low in 2017. The outlook for personal lines is more positive and commercial lines remain soft. Meanwhile, regulators are increasing their focus on technology-driven needs/risks.
Non-life premiums in Oceania increased by 2.8% in 2016, up from 1.5% in 2015.
In 2016, in Australia, premiums grew by 2.3% (2015: 2.0%), supported by solid business in personal lines, but partially offset by a decline in commercial line premiums. In New Zealand, non-life insurance premiums are estimated to have grown by 5.1% after a weak 2015 (–1.1%). A