Australian life insurers have seen both revenue and profits fall during the 2010/11 financial year, according to the latest figures from the Australian Prudential Regulation Authority.

Total revenue for the year ending June 30 was $31.4 billion, compared to $33.8 billion in the previous financial year.

This drop in revenue has also hit the bottom line for insurers with net profits in the year ending June 30, falling 13.9% to $2.76 billion. The 2009/10 financial year net profit was $3.2 billion.

Net life insurance premiums for the 12 months ending June 30 were $43.4 billion compared to $40 billion in the 2009/10 financial year.

But the industry still has its underwriting on the positive side, with net policy payments for 2010/11 at $41 billion compared to $37.6 billion last year.

Death and disability claims for the 2010/11 financial year were $4.6 billion, up on the 2009/10 figures of $4 billion.

The industry also saw a rise in the termination and surrender of life insurance policies with the 2010/11 total of $623 million, slightly up on the 2009/10 figure of $603 million.

Having survived attempts by the Federal Government to ban commissions on life insurance sold through superannuation, advisers received $1.4 billion in payments, up from $1.3 billion in 2009/10.

The life insurers also suffered, like most investors, from falling global investment markets.

In 2010/11, their investment income inflows were $18.7 billion, well down on the 2009/10 returns of $22 billion on their portfolios.

The life insurers had $116 billion invested in equities, $71.4 billion in debt securities, $17.6 billion in property and $681 million in other investments at June 30 this year.

Despite poor investment performance, life insurers’ total assets were $235 billion on June 30 this year compared to $227.6 billion 12 months earlier. 

The prudential capital coverage for life insurers was 1.84 at June 30 this year, compared to 1.80 at June 30 last year.