Suncorp Life’s profit slumped from $251 million to $60 million in the year to June 30 as higher discount rates, lower interest income and higher lapse rates took their toll.

But Group CEO Patrick Snowball says industry change is coming and the division remains one of the company’s key growth levers.

The group’s annual result, released last week, “does not necessarily reflect the potential of the bank or the life insurance business”.

Mr Snowball says other major life companies have joined Suncorp in highlighting the industry’s cyclical and structural problems, which will increase the impetus for change.

Suncorp Life incurred an accounting loss of $60 million from the rise in discount rates.

Underlying profit after tax was $120 million, down 18% “due to negative experience against lapse and claims assumptions”. The division is targeting significant improvement by 2016.

Individual life new business grew 14% to $121 million, and New Zealand operations performed strongly.

Life individual inforce premium increased 9% to $785 million, while group premium was up 13% to $60 million.

Suncorp says it is responding to industry challenges by building a direct business, reviving the adviser channel, simplifying its operating model and being more selective about writing group risk.