Life Insurance Industry Tops $1bn in Benefits Paid
Life Insurance Industry Tops $1bn in Benefits Paid for the First Time
For the first time ever, the life insurance industry has paid out just over $1bn in annual benefits to policyholders in the year to 30 June 2011.
Investment Savings and Insurance Association CEO Peter Neilson says the latest result, for the year ended 30 June 2011, is a clear example of the value the life insurance industry provides to not only individuals and families, but to the wider New Zealand economy as a whole.
“To be able to make such a large contribution to the financial wellbeing of Kiwis is really pleasing,” he says. “While the circumstances surrounding these payments are often extremely sad, our policyholders are able to use the financial support we give them to reduce debt, pay for treatment, cover lost income, and generally make things just a little bit better.”
Mr Neilson says that while the $17m in life, income protection and redundancy insurance claims resulting from the Christchurch earthquake had a significant part to play in the result, the total level of benefits paid had actually increased $100m over the last year.
“This time last year we were celebrating the fact we had broken the $900m barrier for the first time,” he explains. “So to reach the $1bn level only twelve months later is extremely satisfying.”
Mr Neilson says there is anecdotal evidence that more New Zealanders are taking up life cover. “No doubt the experience of the Christchurch earthquake has made more people aware of the need for insurance. The industry has also become very innovative in providing new business models to make life insurance more accessible and affordable, including online distribution.”
The level of benefits paid demonstrates just how large the industry has become, says Mr Neilson. “The life insurance industry is a significant contributor to the New Zealand economy. Total in-force premiums are now at $1.83bn annually, representing around 1% of total GDP,” he explains. “Not only is our industry providing financial support to policyholders, it is also a large employer of Kiwis and a significant investor in New Zealand business.”
And yet, he says there is still a lot more to be done.
“We know that a considerable number of people who lost their lives in the Christchurch earthquake either had no insurance, or not enough. Our aim should be to make sure that everyone who needs cover, has it.”