TAL has recorded a 35% drop in net income to $27 million for the three months to June 30.

Higher interest rates in Australia hit the accounting profit despite stronger business performance, according to Seiji Inagaki, Corporate Planning Department Managing Executive Officer with parent company Dai-ichi Life.

Premium income grew 4% to $690 million in the three months, while claims were flat at $445 million.

TAL’s investment income fell 88% to $7 million.

At June 30 inforce premium was $2.2 billion, up from $2.1 billion a year earlier.

Retail life inforce premium was flat at $1.2 billion in the June quarter, while group life inforce premium grew to $953 million from $861 million.

Retail life new business premium totalled $37 million, partly offset by $22 million of policy terminations in the three months.

There was no new business premium in group life, but $43 million was lost due to repricing.

“Group insurance premium significantly decreased year on year due to one-time impact on a change in inforce, which resulted in a decrease in overall new business,” Mr Inagaki said.

“This was because TAL downwardly repriced premium rates for a certain group policy during the first quarter, in light of favourable claims experiences.”