Direct life insurance sales grew 8.2% to $558.1 million last year while inforce premiums increased 8.8% to $1.45 billion, according to actuary Rice Warner.

Head of Life Insurance Alastair Adamson says the growth was driven by innovative product development and direct insurers’ ability to quickly rationalise non-performing offers.

“During last year we saw a great deal of activity among direct insurers, increasing the range of products and features. Product manufacturers move on quickly should products not meet success criteria, going on to build other products with more successful outcomes.”

However, direct insurers’ share of the life market failed to gain ground, falling slightly to 11.4% at December 31 from 11.6% a year earlier.

“The direct life market is constantly willing to explore new domains and develop new sales partners,” Mr Adamson said.

“This reflects a commitment to innovation that is unique within the insurance market.”

Rice Warner says inforce premium grew in the three main product segments: credit-related life insurance gained 10.6%, funeral cover was up 11.9% and term products increased 6.2%.

“In terms of competitive pricing, direct insurance has maintained strong margins relative to the group and retail sectors, each of which have increased premiums during recent years,” Mr Adamson said.