Sales of life insurance through direct channels are accelerating as insurers sidestep intermediaries and superannuation funds to reach customers online.

Driven by savvy insurers using web channels, direct life insurance sales increased by 26% in the past 12 months, increasing its slice of the risk insurance pie by 0.7%.

The latest report from actuaries Rice Warner says the direct life insurance market now accounts for 13.8% of total risk insurance sales and 10% of in-force business.

The report says the online risk market has “developed strongly over the past year, with many new sites and products being launched and this has started to translate to sales”.

While the majority of life insurance is still sold via intermediaries and superannuation funds, Rice Warner says online sales may overtake both in coming years.

“Competition in both these markets… will lead to direct distribution being a key growth area for life companies over the next few years,” the report says.

The biggest increase in risk insurance sales has come from term insurance, which has been heavily reliant on the internet as a primer for growth.

Rice Warner says there are now 138 different life insurance products in Australia – a 26% increase since 2008 – being sold by 27 companies.

Despite the popularity of direct insurance, the report says customers are not always receiving a cheaper premium by purchasing online.

While the difference between direct and intermediated prices vary – Rice Warner estimates direct is 80% to 125% the price of intermediated cover – buying life insurance from an industry superannuation fund is considerably cheaper.

In some cases, Rice Warner found direct life insurance up to 400% more expensive than obtaining cover through the personal section of a super fund.