Commonwealth Bank (CBA) says insurance income, as measured on a cash basis, increased 3% to $145 million for the year to June 30, aided by lower claims experience from fewer weather-related events.

But second-half insurance income fell to $54 million from $91 million in the preceding six months to December 30.

CBA says the decline was due to higher home and motor claims experience from increased activities following the easing of COVID-19 restrictions.

The bank says the insurance results are treated as continuing operations ahead of its sale to Hollard and included in the account lines of its Retail Banking Services performance.

The reason it was not classified as a “discontinued operation” is because the business is not a “major line” for the lender, CBA says.

CBA is preparing to offload the general insurance business to Hollard under an agreement announced in June, subject to prudential regulatory approval. The deal is expected to close in the middle of next year.

Under the terms of the agreement, CBA expects to receive $625 million in proceeds from the sale of CommInsure General Insurance and enter into a 15-year exclusive distribution alliance with Hollard.

The bank has shed several non-banking assets - including its general and life arms - in the last few years as part of efforts to return to its core lending business.