Recession fails to dent demand for risk products

Risk insurance products, the most popular sector of life insurance, rose 11% to $1.365 billion for the 12 months ended in March 31, outstripping a total increase of 7.9% to $1.548 billion, the ISI said in its latest update on the sector.

Risk products such as income protection and trauma policies were more attractive in a downturn as people want more security in uncertain times, said Ian Whitehead, head of marketing and product development at Sovereign, the largest life insurer with 31.8% of the total premiums.

"There's certainly still healthy appetites from consumers and advisers in risk products," he said.

Whitehead said the economic downturn added pressure on households struggling to pay their bills, and that this could lead to the increase in discontinuances and lapsed policies.