Australia’s life insurance industry is in a strong position going into next year, with ratings agency Standards & Poor’s predicting further profitability.

Its latest industry report card, “Australian Life Insurance: More To Life in 2007”, considers 13 individual life insurers operating in the Australian market.

Of these, it gave 10 a “stable” outlook. Two received a “negative” assessment, and the last is on creditwatch after a group merger.

Credit analyst Michael Vine says the Australian market is a mature and stable one but still has attractive features for international insurers.

“The strength of the industry reflects solid consumer demand for superannuation and financial protection products,” he said. “(The demand is) underpinned by government regulations that encourage retirement savings, as well as strong investment markets.”

But there are some issues to watch out for. Countering these positives is heightened competition among insurers and competition from alternative savings vehicles, causing some erosion of business in the life industry.