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Australia's life insurance industry to decline by 2.2% in 2020

Written by Adam Cadle
24/08/2020

Australia’s life insurance industry is expected to decline by 2.2% in 2020, compared to a growth of 5.1% in its pre-COVID-19 forecasts.

According to GlobalData, it will return to growth in 2021, but only 0.2%, compared to 5.1% previously. It expects growth to remain around the 2% mark to the end of its forecast period in 2024. This means the industry will be 22.4% smaller in 2024.

GDP is expected to fall by 3.75% in 2020 and consumer spending has been hit by rising unemployment.

Deblina Mitra, insurance analyst at GlobalData, commented: “A decline in consumer demand and increased impact on investment income due to financial volatility are key factors. As of July 2020, nearly one in five policyholders of superannuation pension products reduced or stopped superannuation contributions due to the COVID-19 outbreak.”

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