The life insurance business of BT Financial Group (BTFG) has posted a small negative return due to increased claims but has reduced its lapse rate over the past 12 months.
Overall, BTFG contributed $876 million in cash earnings to the Westpac Group result with the group’s life insurance business contributing $156 million in cash earnings, for the year ending 30 September 2016.
Results released by the bank state that while life insurance in-force premiums were up by 9%, to $973 million, this increase was offset by a rise in the number of benefits paid to customers, which in turn, increased the claims ratio to 36% and lapse rate to 22%.
BTFG said the rise in the number of benefits was due to more customer claims in Death and Total Permanent Disability (TPD) insurances, along with growth of the portfolio.
While the claims ratio was on par with last year’s figures and the lapse rate was lower than the 28% recorded in 2015, overall cash earnings for the life insurance business were still down 7% to $156 million compared with $167 million this time last year.
BTFG Chief Executive, Brad Cooper said group was operating in a challenging environment but had achieved significant strategic milestones across the business.
“The wealth management industry is being adversely impacted by a number of headwinds, however, our key performance measures are positive overall,” Cooper said, adding that BTFG was progressing in broadening its general insurance capability continued to receive recognition for the strength and professionalism of its life business.
