Why do I say this? In two of our most recent Good Returns TV episodes two of the big players in life insurance have talked about the falling volumes of new business being written.

For as long as I can remember the industry has talked about the underinsurance problem in New Zealand. No one argues it is real. But if current trends continue the problem is only going to be exacerbated.

Here are three exhibits to argue my case.

The first is AIA launching its "Starter Plans". This is a move away from adviser distribution to direct distribution specifically aimed at getting people on the "insurance ladder".

I thought advisers may have pushed back against this move, but I was wrong (thankfully). The move to direct distribution appears to have been accepted by the industry.

This is a sign that it is a good move, but also a sign the advice sector has matured and these so-called channel conflict issues are more a perception than a reality.

In our GRTV piece with Sam Tremethick and Sharron Botica they talk about declining levels of new business.

Our newest GRTV interview with Partners Life founder and chief executive Naomi Ballantyne is also focussed on this issue. She too talks about the declining levels of new business. Importantly, she also discusses a developing trend for insurance advisers to pack up their shingle.

We have talked about this before and seeing, almost daily, advisers deciding it's time to retire. It is a very real trend. New people are taking over but are the numbers sufficient and how to you replace the experience being lost?

The third piece is Russell Hutchinson's opinion piece, The new-client conveyor-belt is broken.

In it Russell talks about this very issue.

What's to blame? Clearly regulation has a significant role to play. To understand this go back and read some of the articles we have done with long-time advisers who have left the business. These pieces only scratch the surface as there are many other similar stories out there.

Last week the FMA out out some guidance around record keeping. Clearly it has this high on its list after the latest Financial Advisers Disciplinary Committee hearing which as nothing more than making an example of an adviser over record keeping.

Good record keeping is pretty critical to any business, however it seems the regulator is being quite prescriptive when other professions don't get the same level of scrutiny. 

While many advisers are looking to exit, Ballantyne says, on GRTV, this is the wrong time to try and sell an advisory business. She urges advisers to do their Level Five papers and protecting the value that has been built up in a business.

There are other factors at play too which mean business volumes are down. Included in this is a move by banks to sell their life insurance operations. It's reasonable to assume the dip in business here is transitory.

Another factor is fewer leads from mortgage advisers as the volume of house sales fall. 

Across the ditch Australia is seeing a mass exodus of advisers and this is not something we want to see in New Zealand.