Rising disability claims and lapse rates have reduced NAB Wealth’s retained profits and capital in its life insurance business.

In a first-quarter trading update for the 2013 financial year, the bank says stronger earnings from NAB Wealth’s investment business offset the losses.

Unaudited cash earnings were stronger at approximately $1.45 billion, about 4% above the quarterly average of the September 2012 half-year.

NAB CEO Cameron Clyne says the stronger result for the quarter reflects the underlying strength of the bank’s core Australian business.

“This is a pleasing result, especially given operating conditions remain challenging both in

Australia and the UK, notwithstanding recent improvements in financial markets,” he said.