Disability insurance still problematic
Disability insurance is continuing to prove problematic for Australia's major insurance companies, according to the latest data released by the Australian Prudential Regulation Authority (APRA).
APRA's June quarter Life Insurance Performance statistics have pointed to a life insurance sector which had mostly recovered from the challenges of 2013/14, but which was still struggling to deal with disability products.
The APRA data revealed that net profit after tax for risk products was $300 million in the June quarter, with individual lump sum risk contributing $333 million and group lump sum risk contributing $164 million.
But notably, the data showed that individual disability income insurance contributed minus $167 million, while group disability income insurance contributed minus $31 million.
In the year ending June 2016, net profit after tax was $1.4 billion, with individual lump sum risk contributing $1.3 billion, individual disability income insurance contributing minus $381 million, group lump sum risk contributing $468 million and group disability income insurance contributing minus $24 million.
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
