Reinsurance Group of America (RGA) has reported a net loss of $US49.6 million ($53.5 million) for the quarter to June 30, down from a $US141 million ($152 million) profit in the corresponding period last year.

The slide was driven by the group’s Australian life operations, which recorded a second-quarter pre-tax loss of $US299.7 million ($323.6 million).

The Australian deficit is largely down to the group life business, according to RGA President and CEO Greig Woodring.

“We have just completed a comprehensive claims analysis within the past week and that analysis indicates a more dramatic deterioration than we previously anticipated,” he said.

“The largest increase in liabilities relates to the total and permanent disability (TPD) coverage and, to a lesser extent, disability income benefits.”

RGA has indefinitely suspended all quoting activity in the local group TPD market.

“We will continue to be extremely selective in other aspects of that group market until it stabilises and the products become more sustainable,” Mr Woodring said.

RGA’s global operations recorded net premium of $US2 billion ($2.1 billion), up from $US1.95 billion ($2.1 billion) on the corresponding period last year.

Outside Australia, operating performance was strong in asset-intensive business lines, while mixed claims experience was generally in line with expectations, Mr Woodring says.

The Asia-Pacific second-quarter result was also hit by the Australian losses. It has reported a pre-tax operating income loss of $US285.7 million ($308 million), down from a positive income flow of $US22.7 million ($24.5 million).

“Outside of Australia, all the markets in this segment performed better than expected, particularly Hong Kong and southeast Asia,” Mr Woodring said. “Asia-Pacific net premiums increased 3% to $US340.5 million ($367.5 million) from $US331.9 million ($358.3 million).”