Direct life insurance premiums are more expensive than those on cover obtained through an adviser, according to a new report.

“The gap between advised and direct has continued to increase,” the Strategic Insights report says.

Figures supplied to insuranceNEWS.com.au show the average direct premium for a non-smoker with term life cover is $408, compared with $306 for an adviser-sourced product.

Last year the premium difference between direct and advised was 14%. In the past five years it has varied between 13.6% in 2013 and 17% in 2015.

The premium difference for trauma cover was about 9% last year. In income protection it was 30%, but it has been higher. The report attributes this to the small income protection book in direct and the difficulty of writing the cover profitably with so many unknowns.

Income protection accounts for only 12% of direct life premium inflow.

Direct life insurance inflows totalled $1.4 billion last year, according to the report.

Most inflows were for term life products, at $562 million, followed by funeral insurance at $334 million.

The report says direct inflows have remained steady during the past three years, despite a significant spend on marketing by insurers.

The channel accounts for about 30% of the total life insurance market.

“This is despite a significant amount of activity in the sector by insurers creating and innovating new products both under their own brand and affinity brands,” the report says.

“While inforce business has continued to grow very slowly, a very large part of new premiums are being offset by lapses and policy closures.”

TAL dominates the direct market with a 22% share, followed by CommInsure on 15%.

Greenstone and Hannover Re hold an 8% share, equal with OnePath, and MLC follows on 7%.