Declining lapse rates in individual lump sum life insurance have countered flat new business sales in the market, according to Dexx&r MD Mark Kachor.

Last year’s lapse rate was 13.3%, down from a peak of 15.8% in December 2012.

Lump sum new business in the three months to December 31 fell 10% to $336 million, compared with the corresponding quarter of 2015.

Lapse rates for income protection business continue to decline, down to 13.8% last year from 14% in 2015.

Mr Kachor says improved retention rates are helping the market return to profitability.

New sales for income protection grew 8.7% to $521 million last year.

Research house Dexx&r says the largest life insurance company in Australia is TAL with $2.64 billion of annual inforce premium at December 31, giving the Japanese-owned company a market share of 17.1%.

It is followed by AIA Australia with $2.27 billion inforce premium and a share of 14.7%, then AMP, once the market leader, with $1.96 billion and 12.7%.

MLC – now Japanese-owned and previously second in market share – is fourth with annual premium of $1.9 billion and a 12.3% share.

CommInsure holds an 11.5% share with $1.77 billion of annual premium.