Australia’s life insurance industry has maintained profits despite a huge drop in revenue during the 2012 financial year.

Net profit for the year to June 30 was $2.7 billion, down slightly on last year’s profit of $2.8 billion, according to Australian Prudential Regulation Authority figures.

Revenue fell to $20.7 billion from $31.5 billion the previous financial year.

Net profit on individual life products was $386 million for the 2012 financial year, while group life generated $52 million in profits.

Net premiums were $42.3 billion, compared with $43.5 billion in the 2011 financial year.

This was offset by net policy payments of $41.6 billion, compared with $41 billion in the previous year.  

Death and liability claims were $5.1 billion, compared with $4.6 billion in the 2011 financial year, and $570 million of policies were closed, down from $624 million.

Commissions on new business were $1.48 billon, compared with $1.42 billion in the previous financial year, while trails on policies were $2 billion, up from $1.9 billion.

The life industry’s total capital adequacy at June 30 this year was $229 billion, up slightly on $226 billion at the same time last year.

Capital adequacy reserve coverage for the industry was 1.4, compared with 1.48 previously.