Group life insurance losses blew out to $553 million last financial year, according to data from the Australian Prudential Regulation Authority (APRA).

The figure compares with a pre-tax loss of $159 million the previous year, and confirms APRA’s fears for the group life sector’s sustainability.

Total group life revenues grew to $3.7 billion in the year to June 30, up from $3 billion the previous year. But total expenses blew out to $4.2 billion from $3.2 billion, driven by a huge rise in net policy liabilities, up to $1.3 billion from $569 million.

The life industry also has a problem with income protection, which recorded a pre-tax loss of $403 million last financial year, compared with a pre-tax profit of $204 million in 2012/13.

Again, net policy liabilities have helped drive the decline, rising to $900 million from $85 million.

Total expenses in the income protection segment grew to $2.8 billion from $1.8 billion, while total revenue was $2.4 billion, up from $1.9 billion in 2012/13.

The life industry’s only profitable sector was individual lump sum, recording a pre-tax profit of $1.2 billion, up from $892 million the previous year. Total revenue was $6.3 billion, up from $5.7 billion, while total expenses grew to $5.1 billion from $4.8 billion.

Overall, the life industry’s profit fell 11.8% to $2.3 billion last financial year.