Life insurance premiums were up almost $1 billion in the 12 months ending March 31, according to the latest figures from the Australian Prudential Regulation Authority.

Premiums for the year to March 31 were $16.4 billion, compared with $15.6 billion in the corresponding 2015 period.

Death and disability claims rose modestly during the year to $7.7 billion. This compared to $7.2 billion in the previous corresponding period.

Maturing policies saw a slight decline to $460 million compared to $476 million previously.

There was also a decline in surrenders and terminations dropping from $499 million in 2015 to $452 million for the year ending March 31.

Upfront commissions dropped while trails remained flat during the reporting period.

Life insurers paid $1.5 billion of upfront commissions in the 12 months, compared to $1.53 billion in the corresponding period last year. Trails were flat at $2.4 billion.

But the profitability of the life industry was hit by poor investment returns on insurers’ portfolios.

Investment income was flat at $12 billion, with insurers taking a significant hit on their returns.

Their investment portfolios recorded a total loss of $15.6 billion for the year. This compared to a $25.2 billion gain during the previous reporting period.

And although the industry slashed expenses down from $49 billion in 2015 to $12.8 billion in this year’s reporting period, pre-tax profits fell.

The industry reported a pre-tax profit of $2.5 billion compared to $6.1 billion in the corresponding 2015 period.

Broken down individual lump sum gross policy revenue was up from $7.9 billion in 2015 to $8.6 billion in the latest reporting period.

Gross policy expenses for lump sum business saw a slight rise from $3.3 billion in 2015 to $3.4 billion.

With negative investment income, the lump sum business made a pre-tax profit of $1.5 billion in the March 2016 year-end compared to $1.8 billion in the previous corresponding reporting period.

Income protection delivered a stronger performance despite making a $9 million pre-tax loss for the year ending March 31. This compared to a loss of $862 million in the corresponding 2015 reporting period. Gross policy revenue was up from $2.9 billion in 2015 to $3.1 billion.

Total expenses saw a dramatic decline from $3.9 billion in 2015 to $2.5 billion in this year’s reporting period.

The work on making group life more profitable is succeeding, with life insurers reporting a pre-tax profit of $542 million at March 31. This compared to $284 million pre-tax profit in 2015.

Gross policy revenue rose slight from $6.1 billion in 2015 to $6.5 billion. But this was offset by a rise in gross policy expenses, up from $3.9 billion in 2015 to $4.2 billion.