Suncorp Life is starting to see the benefits of a “massive clean-up” in recent years, group CEO Patrick Snowball says. But he also believes the life insurance market remains challenging because of low economic growth and weak consumer confidence.

The insurer’s after-tax profit grew 68% to $251 million in the year to June 30, or by 11.5% to $146 million once accounting adjustments for investment market volatility were removed and divested businesses excluded.

Mr Snowball said in last week’s announcement of the group’s annual results that the program of exiting businesses, leadership changes and significant operational and capital efficiency improvements is beginning to deliver results.

“Suncorp Life will continue to target the group’s customer base by driving growth in low capital-intensive direct products, in combination with a continued focus on growth through IFA [independent financial advisers] and New Zealand,” he said.

Suncorp says low bond rates will affect underlying performance next year.

Individual inforce premiums rose by 8% to $722 million. Individual life risk new business rose 15% to $105 million, with the IFA channel delivering growth of $62 million, up 10.7%, helped by the program to refresh and rebrand Asteron Life.

Direct sales grew 30% to $30 million, with 80% of sales through the direct channel made to existing customers of AAMI, APIA, GIO and Suncorp Bank.

New Zealand life insurance sales, made through AA Life, increased new life business by 17% to $14 million.

Suncorp says the group risk division is only pursuing business that delivers an acceptable rate of return. This hit growth in the segment but protected margins.

It blames weak investment markets for a 12% fall in superannuation new business and says funds under administration fell 7.6% to $7.1 billion.