Tower Australia has reported a 24% increase in underlying profit to $92.3 million for the year ending September 30.

This compares to $74.5 million underlying profit in the previous financial year.

Inforce premiums rose by 41% to $1.1 billion for the 2010 financial year compared to $783.8 million in the previous 12 months.

Tower Australia MD Jim Minto says the results reflect the strong growth in all life insurance markets, with particularly good results in the group and direct distribution channels.

The direct market now has eight alliance partners, while Tower’s group insurance is the life insurer for 10 industry superannuation funds, 650 corporate plans and 10 master trusts.

“The direct business through InsuranceLine continues to be a market leader in a competitive environment,” he said.

“Our initial investment and subsequent move to 100% ownership of InsuranceLine continues to deliver strong results for Tower.”

Mr Minto says the company is looking to consolidate its market share in group insurance with service improvements and continued development of its technology platform.

Net claims for the life business continue to grow as Tower increases its sales. The claims loss ratio has risen to 39% for this financial year compared to 34% during the 2009 financial year.

Claims this year cost Tower $250 million compared to $175 million last year.

During the year Tower merged four claims systems into one while increasing staff in the division by more than 20.

Mr Minto says the company is moving towards claims simplification and automation as well as using management history to feed into product design.

The outlook for the next financial year is positive, he said, with life insurance sales continuing to grow.

“We continue to see significant levels of underinsurance across Australia and addressing this remains a key focus,” Mr Minto said.

“Life insurance has been the fastest-growing financial services sector, and the outlook for the life industry remains very positive with independent researchers predicting continued market growth.”

He says life insurance revenue growth during the next five years is tipped to be 11% compared to general insurance growth in that period of 2.4%.