The life market is starting to react to poor profitability and may be at the bottom of the cycle, Suncorp Group CEO Patrick Snowball believes.

“The industry has realised it has a problem and is looking to resolve it,” he said when announcing Suncorp Group’s profit last week. “We don’t know how quickly the resolution will take to work through and what the impact will be.”

Suncorp Life’s after-tax profit more than halved to $22 million in the six months to December 31, from $51 million in the corresponding period of 2012, as lapses, claims and higher discount rates took their toll.

The Suncorp Group made a profit of $548 million, down 5%, with general insurance profit falling 17% to $470 million.

Mr Snowball says Suncorp Life’s focus this year will be on direct distribution and super, managing lapse and claims challenges and driving industry reform.

Suncorp has made a “significant commitment” to the adviser market, but the life business must be sustainable for all parties. It has introduced alternative premium and commission structures to limit upfront acquisition costs.

More new business is being written on level premium, hybrid commission terms and being submitted via apps.