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Insurance growth continues

Monday 6 Sep 10 9:27pm
MEDIA RELEASE
Latest statistics released by the Investment Savings and Insurance Association (ISI) show the life insurance industry continues to grow, with in-force premiums rising 7.6% in the year ended 30 June 2010.

Total in-force premiums for life insurance rose $121.1m in the year ended 30 June 2010 (to $1.72bn), an annual increase of 7.6%.  Strong growth during the latest June quarter meant the annual result was higher than for the year ended 31 March 2010 ($105m at 6.7%).

The trend of conventional (i.e. whole of life, endowment) in-force premiums falling continued, down 6.9% for the year, while niche products such as accidental death and credit insurance also reported annual falls.

In contrast, the biggest in-force premium growth was reported in more mainstream products such as trauma (13.7%) and term life insurance (11.2%).

Trauma insurance is the 3rd largest insurance category in New Zealand with total in-force premiums of $205.8m, and is quickly gaining ground on the 2nd largest category, replacement income insurance ($238.6m).  Meanwhile, term life insurance remains the largest insurance category with in-force premiums of $813.9m, representing 47.3% of the total life insurance market.

With total in-force premiums higher overall, annual claims and maturity payments also continued to rise, up 7.9% for the year to $972m and keeping the industry on track to reach the $1 billion milestone by the end of the year.

ISI Chairman Sean Carroll says the latest results are excellent, especially given the economic environment in which ISI members have been operating.  “Given everything that’s been happening with global financial markets over the last 1-2 years, it’s pleasing that New Zealanders are increasingly seeing the value of insurance protection for themselves and their loved ones and becoming increasingly aware of the important role that insurance plays in securing their financial wellbeing.”

“In times of uncertainty people tend to be more circumspect about their spending and often look to reduce financial stress and risk, so it’s great to see that insurance is seen as a key part of managing this risk.”

However, Mr Carroll is quick to highlight that New Zealanders in general continue to be under-insured.  “So while the latest results are promising, there is still a lot of work to do in raising public awareness around how insurance works, and why it’s important to protect yourself, your family and your business.”

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The Financial Services Council (FSC) represents investment and life insurance companies in New Zealand.

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