Home / Life Insurance / Life industry’s profit profile still in freefall
2 December 2019
The life industry’s net profit declined to a mere $200 million to September this year, diving steeply from $1.8 billion in the previous year, according to the Australian Prudential Regulation Authority’s (APRA) life insurance statistics.
The industry has been hit hard by a devastating decline in individual disability income insurance, which is now $1.12 billion in the red. It made a $276.7 million loss at the same time last year. Adverse claims experience is responsible for the result, APRA says.
Group disability income insurance has plunged from a $72.9 million profit to a $173.1 million loss. Group lump sum has posted a profit of just $8.1 million, down from $106.4 million at the same time last year.
Only individual lump sum increased its profits, from $751.7 million to $866.8 million.
Risk products reported a combined loss of $417 million in the 12 months to September, a sharp reversal from the $654 million profit in the previous 12 months.
Net policy revenue for the industry fell from $17.9 billion to $16.1 billion, and investment revenue declined as well from $17.5 billion to $15.7 billion. Net policy expenses rose slightly to $10.6 billion from $10 billion, but total expenses fell from $36.2 billion to $33.8 billion. Operating expenses fell 7.4% to $9 billion.