Disclosures from the Hayne royal commission have raised caused more damage to life insurance than it has for the general insurance sector, S&P Global Ratings says.

It says poor claims-handling in 2016 damaged the industry’s reputation, and the royal commission has added fuel to the fire.

The ratings agency says in a new report that while revelations stemming from the royal commission have been embarrassing for both property & casualty and life insurance, “overall the life insurance sector has experienced greater adverse publicity.”

Evidence included “misleading the corporate regulator, premiums being charged for deceased individuals and advice not provided, inappropriate direct selling techniques, poor claims management practices and using outdated medical definitions”.

The past few years have been “forgettable” for life insurers, the ratings agency says, and they will continue to struggle as the royal commission adds fresh woes to an already under-pressure industry.

“The underperformance of the individual income protection line of business continues to hinder the industry’s profitability, and there are prospects of legislative changes affecting group business that threaten to further erode margins,” Credit Analyst Mark Legge said.

“There is also uncertainty surrounding the extent and impact of the royal commission recommendations due early [next year].

“All these challenges reinforce the negative trend we see for the sector.”