Group life insurance premiums increased 20-30% in the fourth quarter of last year, according to a report by Marsh.

The Pacific Insurance Market Report says rises occurred in all areas of group life cover.

“Increases of 20-40% are not uncommon for disability insurance, particularly total and permanent disablement (TPD) and group salary TPD and long-term spinal cord injury.”

The report says premiums grew 70-100% in group life policies with poor claims records.

“Higher premiums can be attributed to a number of factors, including insurers and reinsurers experiencing sizable losses from large industry super schemes.”

Life insurers’ capital requirements also put pressure on premiums.

“Last year saw the exit of Zurich from the group life market, as well as a reduction in reinsurance capacity and appetite in Australia. This market correction in group life is expected to continue throughout this year.”

Marsh says funds and insurers are targeting early intervention in cases, to reduce claim costs.