Zurich has maintained sustainable pricing on its individual life business by avoiding the “volatility and wafer-thin margins” of the group market, according to Australia Life and Investments CEO Colin Morgan.

“Instead we have focused on the small to medium-size sector, where we can price appropriately for the risk,” he said.

Some insurers have reported losses in the group market, and regulators have expressed concern companies are chasing business at the expense of appropriate pricing.

Mr Morgan says the fight for accounts that add millions of dollars to the books has led to price-cutting, despite morbidity and mortality rates staying the same.

“Unfortunately, not long after the celebratory champagne has lost its fizz, the ‘winners’ of such accounts are often left to face the realisation that, from a claims perspective, they may be taking a big leap into the unknown,” he said.

“Happily, as a result, we are not experiencing the same issues seen in the larger segment of the market.”

It is thought insurers losing money on group accounts may try to recoup their losses from the individual life market.

“From a Zurich perspective, it’s worth noting that we are, I believe, in a different position to many of our competitors,” Mr Morgan said.

“Not only are we free from the pressures facing those insurers with a large group exposure, but we are also benefitting from our overarching philosophy on the sustainability of our pricing.”

He says Zurich will not close books and raise prices while starting new ones with lower premiums for new customers.

“We don’t believe this is fair to customers and we don’t believe it’s sustainable. It’s why our Wealth Protection product is one of the longest continually open products on the market, having been launched in 1998.”

Mr Morgan says Zurich’s claims experience is “at or better than expectations”, despite the company offering extensive benefits.

Zurich is not the only insurer to avoid group life. Clearview MD Simon Swanson says his company’s decision had been justified by recent poor results in the segment.

He says pressure on pricing from trustees has led to contracts being priced too low, resulting in losses when claims mount.