As the ANZ continues the process of seeking to sell its life insurance business, the latest data from the Australian Prudential Regulation Authority (APRA) has revealed a life insurance industry which is struggling to return to its better years of profitability.
The APRA quarterly Life Insurance Performance Statistics for the September quarter have revealed both revenue and profitability to be down, relative to previous periods.
It showed that life insurers’ total revenue was $7.5 billion in the September quarter, compared with the June quarter revenue of $7.9 billion – an outcome which APRA said was driven by a decline in investment revenue from $2.9 billion in the June quarter to $2.3 billion in the September quarter, and was partially offset by an increase in net policy revenue, which rose $246 million to $4.6 billion in the September quarter.
The data show that for the 12 months to 30 September 2017, total revenue was $31.4 billion, which was 12.8 per cent lower than in the previous 12 months with total revenue for the 12 months to September 2017 mainly comprising net policy revenue of $16 billion and investment revenue of $12.3 billion.
In the face of this, the APRA data indicated a life insurance industry seeking to contain costs, with the total expenses for the 12 months to 30 September down to $28 billion, compared to $31.6 billion in the previous corresponding period.
The APRA data reveal that total entity net profit after tax was $489 million in the September quarter of 2017, compared with $632 million in the June quarter and that in the 12 months to 30 September 2017, net profit after tax was $2.2 billion, with non-investment-linked businesses contributing $1.7 billion and investment-linked businesses contributing $412 million.
