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Group insurance profitability takes hit
The degree to which the profitability of group insurance has taken a hit over the past 12 months has been confirmed by new analysis released by major consultancy, KPMG.
The KPMG analysis revealed that group lump sum profits fell by $415 million over the period turning into a loss of $353 million while group disability income losses grew by $156 million to a new loss total of $249 million.
According to KPMG’s Insurance lead partner, David Kells there was a 12% fall in group lump sum premium revenue, largely as a result of the Government’s regulatory changes – Putting Members Interest First and Protecting Your Super Package.
The gloomy data around group insurance sat alongside similarly gloomy analysis for the broader life insurance sector, with KPMG reporting that Australia’s life insurance sector recorded an aggregate loss of $1.3 billion over the 12 months to 30 June.
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The $80 billion fund is facing legal action over allegedly signing up new members to income protection insurance by default without active member consent.
In a Senate submission, the Financial Services Council has once again called for further clarification that the government will assess the consumer outcomes of group insurance against the enshrined objective of superannuation.
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