Commonwealth Bank’s (CBA) income from insurance operations increased 12% to $960 million in the year to June 30, despite higher claims from its general and life insurance businesses.

The group says inforce premiums grew 10% to $2.27 billion but an improved claims experience in life insurance and reduced lapse rates in New Zealand were partly offset by higher general and life insurance claims in Australia.

CBA Wealth Management, which runs the group’s Australian insurance operations, suffered an 11% drop in net profit to $569 million.

“The result reflects continued weakness in global investment markets, which was partly offset by a solid insurance performance,” the bank said.

Insurance operations were a bright spot for the division, with inforce premiums growing 20% to $1.97 billion as CBA gained new business and improved sales from bank branches.

CBA says inforce premiums grew strongly across all lines at CommInsure.

CommInsure’s income rose 11% to $691 million but after-tax profit fell 3% to $246 million, which CBA blamed on the run-off of closed investment portfolios.

The retail life business saw premium growth of 10% to $815 million, supported by solid sales from bank channels.

“However, in the current economic environment, the industry continued to see deterioration in claims experience as well as an increase in lapses,” the bank said.

Retail life increased new sales by 21% to $216 million but lapses rose 29% to $144 million.

Premium growth of 41% in wholesale life insurance, to $651 million, was due mostly to acquisitions and internal growth.

General insurance saw premium growth of 16% to $505 million, as new business grew and lapses reduced.

Insurance income from New Zealand and Asia rose 16% to $269 million.