Life and income protection premiums continue to fall

Direct life premiums fell by 7% since 2024.

There was also a significant reduction in direct income protection premiums since 2024, with average premiums for waiting periods of 30 days and 90 days reducing by 12% and 13% respectively, according to the latest Direct Life Insurance Report from Rainmaker Information.

Conversely, direct trauma premiums increased by 7% since 2024, after remaining mostly constant in the prior  two years.

Price reductions were also experienced in the advised life insurance market, being products offered through a financial adviser.

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Advised life premiums decreased by 5% year-on-year, while income premiums also reduced by 7% and 5% for waiting periods of 30 days and 90 days respectively, and advised trauma insurance premiums remained the same.

“As the insurance market grapples with challenges like cost-of-living pressures and rising claims costs, insurers need to continue to prioritise driving value, innovation and efficiency to remain competitive and consumer focused,” said Dr. David Gallagher, executive director of research at Rainmaker Information.

When comparing direct and advised insurance offerings for life insurance, advised offerings are 29% cheaper than through direct channels, and trauma insurance is 13% cheaper through advised channels.

Advised income premiums continue to be cheaper than the direct income premiums as well, however the overall pricing differential between the two channels narrowed from 37% to 33% during the year.

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“The research documents that there are scale benefits that can be achieved by organising insurance through a financial adviser as compared to direct offerings,” said Dr. Gallagher.

For the comparisons, Rainmaker Information compared the average of advised premiums with the average of direct premiums for a male non-smoker across a range of age bands and sums insured in the last five years.

The price differential between direct and advised life insurance increased from a minimum of 10% to a maximum of 45% as the sum insured, and age increased.