The price of group life insurance has continued to fall during the past 12 months, according to actuaries Rice Warner.

Death cover prices during the last 12 months have fallen 5% while death and total and permanent disability (TPD) premiums fell 8%.

Income protection prices in the group market have dropped 10% in a business that is worth $2.6 billion in premiums.

Rice Warner Practice Leader Richard Weatherhead says the price falls are due to group insurance being one of the most competitive in the financial services industry.

“With nine insurers each having a market share of more than 5% and investing significantly in improved processes and insurance services and the huge purchasing power of large superannuation funds, super fund members have been real winners through reduced prices and improved levels of cover,” he said.

According to Mr Weatherhead, death cover premiums comprise 45% of retail products sold through a financial adviser while death and TPD cover make up 39%.

Nearly all group life insurance business (99%) is written by 10 insurers and this segment represents 30% of the overall life risk insurance market.

Technology is also driving prices down as more super fund members are using automated underwriting services, Mr Weatherhead says.

Five insurers compared with three last financial year are now providing automated underwriting.

Members’ use of automated underwriting is also growing, with Rice Warner finding 42% of industry and public sector fund members using online insurance services. 

This compared to only 12% of members using automated services in the last financial year.