Suncorp Life says half-year net profit after tax fell 38.4% to $53 million, following $5 million of negative market adjustments.

In an analyst presentation on the December half, Suncorp CFO Steve Johnston says a “reduction in long-dated risk-free rates has resulted in a negative market adjustment”.

Life insurance inforce annual premium grew 5.2% in the half to $1 billion.

The biggest surprise is modest growth in business through advisers (up 3% to $642 million) and greater gains through direct channels linked to Suncorp’s general insurance arm (increasing 60% to $60 million).

Suncorp Life’s new business fell 27.5% to $50 million for the half-year.

“Adviser new business was below historical levels as a result of pricing changes put in place to improve product profitability,” Mr Johnston said. “However, lower industry-wide churn means inforce premiums benefit from lower-than-expected lapse rates.

“Direct life remains a core strategic priority, and to that end we are focused on designing new products and improving access to those products through our multiple distribution channels.”

The impact of claims on Suncorp’s Life profits described as a positive $3 million, although the claims amount has not been not revealed. Lapses were a positive $5 million.