Australia’s life insurers are following their international counterparts on a gradual downward drift, according to Standard & Poor’s. Releasing S&P’s annual review of the Australian and New Zealand life industries yesterday, Financial Services Ratings Director Natalie Wells said Australasian life insurers are increasingly “influenced by the insatiable demands of shareholders”.

“While shareholders may benefit from product innovation, easier access and more professional and informed sales processes, they have experienced some diminution in security as life companies seek optimal balance sheet efficiency and strive for improved performance in an increasingly challenging operating environment.”

Ms Wells said the financial strength of life companies will continue to be mildly eroded. “Those most likely to be affected include companies who cannot achieve appropriate scale, strong market position and supportive operating performance.”