The fundamental characteristics of the Australian life insurance market remain attractive and the sector is growing at 10 per cent per year, according to Tower Australia Group chief executive James Raymond Minto.
“Life insurance, through group or workplace schemes, remains a growth area and [Tower] is a keen competitor in the area, based around strong capability, partnerships and technology,” Minto said.
“Australia still has very significant levels of underinsurance and we endorse research views that the life market is likely to treble in size through to 2017, having already trebled in the prior ten years.”
Minto cited DEXX&R research, which showed the $5 billion life insurance market may reach the $10 billion mark in 2011 and advance to $22 billion by 2017.
Minto said risk insurance is becoming more popular with financial planners, life insurance is becoming a bigger focus and that there was also potential for industry consolidation.
Minto’s comments came after Tower reported net profit after tax for the year to September 30 had soared 69 per cent, to $68.7 million.
Tower generated 36 per cent of its new business through financial advisers, 33 per cent from group insurance and 31 per cent from alliance distribution.
The company raised its dividend by 13 per cent to 4.5 cents and stated its solvency stood 2.5 times above regulatory requirements.
Tower acquired the remaining 85 per cent of InsuranceLine in October for $127.4 million, to tap into the simple, no-advice products market.
