The Australian life insurance market is expected to grow by 5.1% a year over the next 15 years, according to Rice Warner.

And life insurance sold through personal super will grow at 6.7% a year in real terms, the actuary says in a report.

This is faster than anticipated in previous research and reflects the growth of bank-developed “low-cost” super products that compete directly with non-profit funds, Rice Warner Principal Richard Weatherhead says.

“As a result, industry fund, public sector fund and employer master trust insurance will grow more slowly than other segments.

“The relatively strong anticipated growth of retail super life insurance reflects the growth of products sold in conjunction with new, low-cost personal super products.”

Mr Weatherhead says last year’s prediction of pricing convergence in different segments was correct, especially between industry and other employer-based super funds.

“This has certainly occurred, with several super funds announcing price increases in excess of 50% and in some cases more than 80%.”