Group lump sum still suffering losses

Group lump sum is the only risk product to experience losses in the September 2021 quarter at a loss of $122.6 million.

However, the quarter saw risk products report an overall profit of $235.6 million, according to Australian Prudential Regulation Authority (APRA) data.

The net profit after tax for the life insurance industry was at $1.4 billion over the year to September 2021, while group lump sum was still in the negative at a loss of $97.5 million.

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Despite substantial losses over prior periods, individual disability income insurance (IDII) reported a profit of $144.9 million during the quarter, and a profit of $124 million over the year to September 2021. This followed substantial losses of $1.4 billion during the year prior.

“Group lump sum and group disability income Insurance returned losses for the 12 months ended September 2021, however, the losses were at a significantly lower level in comparison to the previous year,” APRA said.

During the September 2021 quarter, individual lump sum made a profit of $186.7 million, group disability income insurance also experienced a profit of $26.7 million.

Over the year to September 2021, all risk products combined had a profit of $439.1 million with individual lump sum contributing $427 million.

“Risk products demonstrated significant improvements for the 12 months ended September 2021 as they returned a combined profit of $439.1 million, a $2 billion improvement in comparison to the prior year,” APRA said.

“The overall performance of the life insurance industry is improving. The net profit after tax for the industry was $1.4 billion for the year ended September 2021, a significant improvement from the previous year primarily owing to improved investment market performance.”

Source: APRA

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Why wouldn’t they make a profit The new products have barely gotten off the ground and both AMP and AIA have “hiked” the in force premiums yet again.
I expect the rest to quickly follow
Some clients have received 40-50% increase ! Yes that correct don’t let them tell you otherwise
Let’s play a game ! Which standard holds us to a fee that we charge and states must be reasonable and promote good value to the client ???? Apparently that does not apply to the insurers
I think we all knew this would happen in an effort to price out the clients holding the “value” contracts ( prior to October 2021) and force them into these inferior ones
It’s all one way traffic as far as ASIC the FSC and APRA are concerned. Stuff the clients and let the advisers explain our outrageous actions

The insurers also forget that once a client cancels after reducing cover to remain affordable that hey lose trust in all insurers and when the premiums start to fall the client has already allocated that cash elsewhere to their own budget. It is then near on impossible for the few advisers left doing risk to be able to re-convince the client that insurance is a worthwhile spend.

So individual IP is back to profitability, which is what APRA wanted, so then did we actually need to release the similarly priced new (watered down) IP products? The gov't has shafted the public on this I think.

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