Net profit for the life insurance industry plummeted to only $800 million in the year to March, according to Australian Prudential Regulation Authority figures.

The $1.4 billion drop came as industry expenses grew 17.5% to $34.8 billion. Investment revenue increased to $15.4 billion from $12.3 billion. Operating expenses increased by $700 million to $9.5 billion and net policy expenses by $400 million to $10.2 billion.

Individual risk products suffered the worst profit slumps, with lump sum falling to $654.3 million from $1.09 billion.

Disability income fell further into the red, with a $636.2 million drop to a $782 million deficit.

Group disability income dropped to a $66.2 million loss from a $120.3 million profit, and group lump sum fell by more than $147 million to a $100 million profit.

Net premium fell to $39.27 billion from $43.05 billion.