Asteron Life will freeze premiums on all new business written from next July 1, to help advisers through the Life Insurance Framework transition.

However, the guaranteed premiums will not apply to “any increases due to age on stepped premiums, CPI or any alterations to a policy, which will continue as per normal”.

insuranceNEWS.com.au understands more than 90% of Asteron sales are stepped-premium products.

Asteron EM Mark Vilo says the promise is a response to adviser feedback.

“We’re offering this commitment not to increase premium rates for new policies, [but] to help assist with retention of customers in their initial years,” he said.

“We’re promising today not to reprice a new customer during the clawback period of a policy.

“We know affordability can often be a key driver for lapses, and by making this commitment advisers can give their clients certainty without the concern of trying to manage a premium increase that wasn’t anticipated.”

Mr Vilo says Asteron data shows about 5% of policies lapse in the first year, with 12.6% in year two and 12.3% in year three.

“The top reason cited for lapses is price increases. In simplistic terms, if you had 100 policies inforce today, at the end of year five you would only have about 56 policies left.

“That’s a sustainability challenge we have to work hard to improve.”