TAL has increased its underlying profit after tax by 14 per cent to $123 million despite suffering a decline in income due to falling interest rates.
The insurer’s Japanese parent, Dai-ichi Life, released its annual results showing that TAL’s annual net profit after tax fell slightly to $91 million from $93 million, due to lower interest rates.
TAL also reported that it wrote less group life policies, but had continued to have double-digit growth in new individual life policies placed with the insurer.
As a result of this growth, TAL’s embedded value rose to $1.76 billion, up 10 per cent, while its in-force premiums increased 13.4 per cent to $1.57 billion.
TAL Group chief executive and managing director Jim Minto said TAL had continued to grow despite the wider market reporting lower profits.
However Minto said TAL had also seen higher claims levels, particularly in disability insurance, where total claims paid and provided for were $1,098 million, up 25 per cent on the previous year.
Minto said that despite the results there were still issues around the affordability of insurance, with many insured people choosing to cut back spending, including insurance coverage.
He said insurers would need to reduce the level of consumers reducing or cancelling their risk cover at a time when claims continue to climb.
In releasing its results, TAL stated that recent independent claims analysis showed total life claims paid in Australia for 2012 broke the $4 billion figure for the first time, an increase of 10.7 per cent over the previous year.
