The Australian life insurance industry is continuing to grow. Despite a drop in premium activity over the last quarter, policy payments for the 12 months to September 30 last year were up 8.9% to $38.9 billion.

The latest Australian Prudential Regulation Authority (APRA) statistics show the industry’s net investment assets increased 11% over the year to stand at $165.2 billion on September 30. These funds represent 71.9% of the total assets in life office statutory funds backing potential policyholder liabilities.

Statutory fund assets that are not investment-linked increased a fraction to end the year at $64.5 billion. APRA says these funds incorporate many products that are closed to new business and diminishing rapidly – thanks to an increase in the rate of maturities and surrenders.

Most of the industry’s assets are still held in equities and units in trust. The proportion of capital in these investments rose from 59.2% to 60.5% over the year to September 30. Life insurers also held $50.8 billion (25.8% – down from 26.3%) in interest-bearing securities. Holdings of cash, deposits, loans and placements decreased slightly to stand at $10.2 billion (5.2%).

As expected, the superannuation and life insurance industries remain closely linked. Superannuation business accounted for 90.6% of policy payments made throughout the 12-month period.