Integrity Group, the parent company of Integrity Life, has confirmed that the life insurer will cease writing policies in its retail advised and corporate group insurance channels.
Integrity Life has exited the corporate group channel effective immediately. It will scrap the retail advised channel on September 29, according to a notice on its website.
“For existing policyholders and lives insured, we remain committed to your needs,” Integrity Life said in the notice. “There will be no change to existing insurance Policy terms and conditions in accordance with the relevant Product Disclosure Documents (PDS) and Policy Documents.”
A Financial Standard report said the decline in risk advisers compelled Integrity Life to cease writing new retail policies, with a recent Rainmaker analysis in June 2023 revealing only 16,038 risk advisers in Australia, a concerning drop from 26,500 in 2019. The Australian Prudential Regulation Authority (APRA) also revealed a decline in retail lives insured from around 5 million in 2018 to only 4.1 million in 2022.
Sean McCormack, chief executive and managing director of Integrity Life, said the insurer's decision to leave the risk advice space is crucial to continue protecting and supporting policyholders and their loved ones.
“This is not the news we'd hoped to share. However, the significant challenges of the Australian life market coupled with the realities of growing a business from the ground up mean that it is necessary,” McCormack said, as reported by the Financial Standard. “Unfortunately, the retail advised channel has seen a substantial reduction in the number of financial advisers providing risk advice over the last five years.”
“The number of lives insured across all channels has substantially reduced and the market decline means that scale is critical,” McCormack said. “Achieving scale requires significant ongoing investment, and we have reached a point where it is not in either the policyholder or shareholder interests to continue to write new retail advised policies.”
Integrity Group chair Eric Dodd told the Financial Standard: “Protection of policyholders is critical, and as such, the board has taken the difficult decision to close to new business in the retail advised and corporate group channels.”
