The group life insurance market is poised for more growth, according to NMG Financial Services Consulting Executive Director Mark Prichard.

“We expect group life growth to be above the global median growth patterns,” he told the AIA group insurance summit in Sydney recently. “Australia is a large [group insurance] market and is still growing.”

NMG says group life premiums are worth about $4 billion a year, with industry super funds generating $1.8 billion. The second-largest source of premiums is master trusts at $1.2 billion, followed by public sector funds ($300 million) and the corporate super sector ($600 million).

Mr Prichard says profitability will drive future growth.

“When profitability dries up, growth will stop,” he said. “While there are questions on sustainability of the sector we are going to see more innovation and that will create some winners and losers among insurers.”

AIA Group Regional Director Arthur Koo says clients in southeast Asia want medical insurance more than group life.

“This is because people perceive a need,” he said. “In developed countries group insurance is used by employers to attract employees.

“In less-developed countries multinationals are there because of the low [labour] costs so they don’t want to provide benefits that will cost.”

Swiss Re Head of Client Markets Life and Health Helen Troup says the driver for group insurance in Europe is employers providing for employees.

“Employers are now providing flexible benefits so 75% of income protection in the UK is in group insurance,” she said. “European insurers have found they have to get the benefit and pricing mix right.”