TAL’s net profit after tax fell 57% to $29 million in its first half as disability, income protection and trauma cover claims increased.

CEO Jim Minto says negative claims experience has hit the entire life insurance industry, and an adjustment period is likely while the sector acts to improve the outlook.

“The reporting season has revealed a higher level of claims and lapses than insurers had expected,” he said.

“While TAL has also seen larger effects from claims, we have, partly as a result of price adjustments, been able to continue to grow.”

TAL has become Australia’s second-largest life insurer by inforce premium, he says.

Premium and other revenue grew to $1.1 billion in the six months to September 30, up 15% on the corresponding period last year, according to results released by parent Dai-ichi Life.

New business grew 33% to $261 million and total inforce premium increased 16% to $1.76 billion.

Mr Minto says TAL is continuing its efforts to reduce policy lapses, which are running at higher-than-planned levels across the industry as consumers cut costs.

“The concern is that people do not maintain adequate cover and it is only at claim time that customers realise the major consequences of that decision to cut back or lapse.”

Dai-ichi Life forecasts net income for the group of ¥57 billion ($613 million) for the year to next March, up from ¥32.4 billion ($348 million).