Higher insurance claims related to bushfires have contributed to a 4% decline in annual operating income at major bank CBA.

Insurance income fell 5% to 139 million in the year to June 30, the bank revealed last week.

CBA’s full-year net profit from all operations rose 12% to $9.6 billion on windfalls from the sale of businesses, including its Life operations.

Underlying earnings dropped 11% to $7.3 billion, hit by the coronavirus economic downturn.

“The next few months will be critical and some sectors will take longer to recover than others; however, we remain positive about Australia’s long-term prospects,” CEO Matt Comyn said.

Insurance premiums received dropped to $1.14 billion, from $2.41 billion a year earlier, though that fall was offset by lower claims payments and commission expenses, which fell to $2.09 billion from $3.06 billion a year earlier.,

Investment income fell to $198 million from $340 million a year ago.

In April CBA received further payment of about $865 million from AIA as part of a $2.375 billion sale agreement for its life insurance business CommInsure. In June CBA had received a total of $1.608 billion from AIA, including “partnership milestone” payments of $100 million.

The divestment of CommInsure Life will be completed through either a share sale, or a statutory asset transfer to complete in the first half of 2021.

In June, CBA also completed the sale of its 80% interest in its Indonesian life insurance business, PT Commonwealth Life. The $426 million deal included a 15-year life insurance distribution partnership with the buyer, Hong Kong-based FWD.

The sale of its 37.5% equity interest in BoCommLife to MS&AD, the parent company of Mitsui Sumitomo Insurance, is subject to Chinese regulatory approvals and expected to complete by December.

CBA has similarly offloaded stakes held in other life businesses such as Sovereign in New Zealand and CommInsure Life to AIA.

CBA acknowledged a class action was brought against it in the Federal Court on June 10 relating to consumer credit insurance sold for eight years until March 2018. It must file its response by September 21.