Higher claims in Australia have led the Asia-Pacific division at Reinsurance Group of America (RGA) to report a $US16.5 million ($16 million) pre-tax loss in the three months to September 30.

The loss, following a $US25.6 million ($24.8 million) profit in the previous corresponding period, was driven by more claims in individual and group life business and a $US27.9 million ($27 million) increase in group scheme liabilities.

Net premiums in the Asia-Pacific division grew slightly in the quarter, to $US330.4 million ($320.6 million) from $US328.3 million ($318.6 million).

The division was also adversely affected by currency fluctuations, which hit premiums by $US5.4 million ($5.2 million) and pre-tax operating income by $US1.3 million ($1.2 million).

CEO Greig Woodring says high claims in Australia and the US hit operating earnings.

“In Australia, adverse individual mortality and liability claims contributed to a poor quarter,” he said. “We continue to monitor that business closely.

“We have performed a detailed review of our Australian group reinsurance business and, as a result of the emerging experience, have strengthened group business claim liabilities.”

Mr Woodring says the US individual mortality and group reinsurance business also suffered higher than expected claims.

US pre-tax net income was $US70.6 million ($68.5 million) in the quarter, down from $US85.2 million ($82.6 million) in the previous corresponding period.

“Our US group reinsurance business also experienced higher than expected claims in disability, medical and life coverage,” Mr Woodring said. “We expect the volatility in recent quarters to level out over longer horizons.”

RGA’s total net premium in the third quarter was $1.9 billion ($1.8 billion), up from $1.7 billion (1.6 billion) in the previous corresponding period. Net income was $US144.4 million ($140 million), up from $US134.6 million ($130.6 million).