TAL (formerly Tower Australia) has reported a $21 million underlying profit for the three months ending June 30.

This is an 8% decline on the corresponding period in 2010 where the underlying profit was $22 million.

The Australian life insurer reported a 19% increase in annual net premiums from inforce policies to $1.2 billion compared to $1 billion in the three months ending June 30 last year.

Claims for the June quarter were $274 million.

Dai-ichi Life Managing Executive Officer Hideo Teramoto revealed TAL’s figures in a presentation on its first-quarter results.

“The premiums increased due the addition of a major group insurance client in December and satisfactory sales of individual death protection and income protection products,” he said.

“Premium income for the June quarter increased by 40% compared to the same period a year ago.”

Mr Teramoto says policy lapses and claims on income protection products are at a slightly higher level due to the slow recovery of the Australian economy.

Dai-ichi has put ¥65.9 billion ($834 million) of goodwill on its books from the TAL acquisition and this will be amortised during the next 20 years.

The deal has proved to be beneficial for Dai-ichi as it has reported a ¥23.1 billion ($292 million) gain on its previous minority holding (29%) in TAL.

Reporting its results, the Japanese insurers says the earthquake and tsunami has cost the company ¥23.8 billion ($301 million).

Despite the catastrophe loss, Dai-ichi reported an ordinary profit of ¥47.3 billion ($599 million), only a 7% decline on ¥50.8 billion ($643 million) in the corresponding 2010 quarter.

Revenue for the three months ending June was ¥1.13 trillion ($14 billion), dropping 4% on the corresponding 2010 period figure of ¥1.18 trillion ($14.9 billion).

Mr Teramoto says lapse rates for the quarter increased 4.2% compared to the 2010 corresponding period. Lapsed polices cost the insurer ¥1.8 trillion ($22 billion).

Dai-ichi is predicting ordinary revenue of ¥4.3 trillion ($54 billion) for the year ending March 2012 with a profit estimated to be in the region of ¥270 billion ($3.42 billion), in line with the 2011 financial year result of ¥275 billion ($3.48 billion).