The life industry made an after-tax net loss of $1 billion in the March quarter, as the pandemic dealt a fresh blow to the struggling sector, according to a regular Australian Prudential Regulation Authority (APRA) update.

The March losses followed a $1.1 billion deficit in the previous December quarter.

Investment returns, a major source of income from non-risk products for the industry, suffered from the virus-triggered market volatilities, losing $10.4 billion during the period,  APRA said. In the December quarter, the industry had made $1.5 billion in investment revenue.

“There was a reduction in investment revenue during the March quarter as a result of COVID-19 related volatility in investment markets,” APRA says. “This has had a particular impact on a number of other non-risk products, which recorded substantial losses for the quarter.

“The performance of these products has contributed significantly to the overall weak quarterly results for the sector.”

Three of the four main risk products made losses during the period, except for individual lump sum, which recorded a $39.7 million profit.

Individual disability income insurance (DII) made the biggest loss of $141.4 million, followed by group lump sum on $69.7 million and group DII on $19.9 million.

Overall the four risk products lost $191.3 million in the March quarter. On a year to March basis, the losses blew out to $1.64 billion from $94.9 million a year earlier.

Individual lump sum and group lump sum made a profit of $653.3 million and $100 million respectively during the year, while individual DII lost $782 million and group DII $66.2 million.

For the year to March, the industry sank into a $1.8 billion loss, after recording a $759 million profit a year earlier.

“This deterioration was caused by poor results in both the December and March quarters, driven by the poor performance of risk business and a substantial collapse in investment revenue owing to the COVID-19 related volatility in investment markets,” APRA says.