Life insurance industry gradually improves
The life insurance industry has made a significant improvement over the year to March, 2021, as the industry made a net profit after tax of $1 billion and a return on net assets of 4%, according to Australian Prudential Regulation Authority (APRA) statistics.
APRA’s latest quarterly life insurance statistics found the industry was gradually recovering from the economic impacts associated with the COVID-19 pandemic, and its $1 billion profit was a significant improvement from the previous year.
However, for the 12 months to March, 2021, risk products reported a combined net loss after tax of $165.7 million.
Individual disability income insurance (IDII) continued to post losses, with a loss of $331.2 million during the year. But this was a $1.1 billion improvement from the previous year’s result.
Group lump sum posted a loss of $91.8 million and group disability income insurance (group DII) posts a loss of $58.3 million. Individual lump sum was the only product to post a profit of $316.5 million.
“For the March quarter, the industry made a modest profit of $159.1 million, which was primarily driven by the favourable performance of the individual and group DII business,” APRA said.
“These were partially offset by the fall in investment revenue as the equity/bond market did not perform as strongly as during the December quarter.”
Recommended for you
The Federal Court has dismissed a conflicted remuneration case brought by ASIC against the director of life insurance distributor Freedom Group, where Bali holidays and Vespa purchases were among sales incentives.
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.
