Growth in the risk insurance industry is set to slow over the next 15 years, according to research from Rice Warner.
Rice Warner’s Risk Insurance Market Projections Report 2012 said that while the risk insurance market is expected to more than double in value, growth will decrease from the high figures seen in previous years.
“Risk insurance is now a $11.3 billion market that will more than double (in today’s dollars) in the next 15 years,” the report stated.
“However, the growth rate after inflation of 5.0 per cent per annum will be much more subdued than the 9.8 per cent per annum achieved over the last 15 years.”
Rice Warner’s projections suggest that in the next 15 years retail business will comprise 53 per cent of the risk insurance market compared with 44 per cent as of 30 June 2012.
Risk insurance sold through personal superannuation will grow 5.5 per cent per annum in real terms, which is a reflection of the growth in low-cost superannuation products designed to compete with not-for-profit funds.
Public sector and employer master trust superannuation, however, will grow more slowly than other segments.
“For employer master trusts this reflects the shift to personal superannuation as a direct consequence of changing super legislation,” the report said.
“Overall, the quality of advice and superior customer service will be the keys to success.”
