Rise in super balances to hinder life policies

insurance/research-and-ratings/life-insurance/investment-advice/chairman/

20 April 2011
| By Milana Pokrajac |
image
image
expand image

The predicted rise in voluntary savings and superannuation in Australian households will come at the expense of life insurance policies, according to IBISWorld chairman Phil Ruthven.

Ruthven said that if investors thought their superannuation balances were sufficient to fund them through retirement, they would be less inclined to take out life insurance policies to bolster that.

“People will put more money into savings [and will not] continue to get more life insurance as such,” Ruthven said.

His comments followed the release of the latest IBISWorld report, which examined the average household’s expenditure and how much Australians were spending on particular services over the years.

The report found that almost 9 per cent of the total household income went towards financial and insurance services, which included investment advice and tax planning.

This figure had been growing at a steady pace from 2 per cent in the 1950s, but Ruthven said he did not believe further significant growth would occur in this field.

“Most of the growth has come through already, particularly over the last 20 years,” he said. “It may edge up a little bit further, but I don’t see it going beyond 10 per cent of household incomes any time in the foreseeable future.”

However, savings, which currently hold a significantly smaller percentage of total household income than in the 1950s, were predicted to grow significantly, according to IBISWorld. Ruthven said investor complacency about their financial situation could hinder the life insurance market.

Homepage

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 4 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

5 months ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

2 weeks 1 day ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 6 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 4 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND