Westpac reported today a sharp earnings decline in its general and life insurance arms, with the bank confirming it no longer sees a future in the businesses following the completion of a strategic review and is committed to divesting the assets at the right time.

The bank’s Specialist Businesses unit, which includes general insurance, life insurance and lenders’ mortgage insurance, made a cash earnings loss of $506 million in the last financial year to September 30.

Combined net wealth management and insurance income fell 27% to $751 million from a year earlier, dragged down by lower life revenues and elevated natural disaster claims.

General insurance income declined $105 million, with total claims from last summer’s catastrophic bushfire season surpassing $37 million.

At the group level, the bank posted a 62% decline in overall cash earnings to $2.6 billion and 66% fall in statutory net profit to $2.29 billion.

Group CEO Peter King says Westpac has “made progress” in its review of the non-core banking arms that are grouped under Specialist Businesses.

“We are moving back to core banking with a sharper focus on Australia and New Zealand,” he said. “We have enhanced our operating model to align our businesses to our major customer offerings, such as mortgages, everyday banking and business lending.”

The bank says in its annual report the strategic review of non-core businesses that was announced in May has been completed.

“The outcome is that Westpac does not view itself as the long-term holder of these businesses and will seek to exit them over time as market conditions permit,” the annual report says.