Group life insurance will grow by 10% a year over the next 15 years, according to new research by Rice Warner Actuaries.

Its Risk Insurance Market Projections Report also predicts life insurance sold outside superannuation will grow 9% a year during that period.

Rice Warner Director Richard Weatherhead says the current regulatory reforms will increase sales of life insurance outside superannuation.

But group policies will grow as part of enterprise agreements and the increased use of master trusts for employer superannuation schemes.

“The overall life insurance market will grow at the rate of 8.4% a year during the 15 years to June 30 2026,” he said.

“This represents a slowdown from the growth rates experienced in recent years. Growth in the 12 months to June 30 this year was 9%.”

Mr Weatherhead says growth in the market will be driven by technology and new regulation on scaled advice.

“The continuing influence of technology will make it easier for customers to obtain cover and easier for insurers and distributors to identify insurance needs,” he said.

“There will be a significant increase in the take-up of intra-fund and scaled advice in relation to risk insurance needs.”

Another predicted trend will be a move away from offering standard products to a situation where the adviser focuses more on an individual client’s circumstances and needs.

Rice Warner says the fastest-growing life insurance segment will be income protection. The average level of cover per head of the working age population is currently only 15% of earnings, compared with a “reasonable target” of 85% of earnings.

Mr Weatherhead says the industry is tackling the underinsurance problem and there will be less potential for double-digit growth in the future as cover levels move gradually towards needs.

“But any industry with an 8.4% annual growth trajectory over 10 years or more clearly remains a growth industry,” he said.