Australia’s GDP is expected to fall by 3.75% in 2020 and consumer spending has been hit by rising unemployment. As a result, the life insurance segment in the country is projected to be adversely impacted by the negative outlook of the country’s economy, according to GlobalData, a leading data and analytics company.

GlobalData forecasts the total GWP of the Australian life insurance industry to decline by 2.2% in 2020, compared to a growth of 5.1% in its pre-COVID-19 forecasts. It will return to growth in 2021, but only 0.2%, compared to 5.1% previously.

GlobalData 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 that GlobalData expected prior to the pandemic.

Deblina Mitra, Insurance Analyst at GlobalData, comments: “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.”

The COVID-19 pandemic has led to a rise in the number of cyber-attacks and scams in Australia, as working from home models increased post-lockdown.

Ms Mitra concludes: “The frequency of attacks on government, health and education services and various industries have increased in 2020. This may be one positive for the insurance industry going forward, as high-profile examples of these attacks will generate increased demand in cyber insurance products in the country.”