Australia’s life insurance industry’s performance continues to decline, according to the Australian Prudential Regulation Authority’s latest Quarterly Life Insurance Performance Statistics publication for the September 2019 quarter.
Industry net profit after tax (NPAT) was $0.2 billion for the year to September 2019, a significant reduction from $1.8 billion for the year to September 2018.
The report stated the persistent decline is primarily caused by poor performance of risk business with figures showing risk products recorded a combined loss of $105 million for the September 2019 quarter.
For the 12 months to September 2019, risk products reported a combined after-tax loss of $417 million, a significant reduction from the $654 million profit for the previous 12 months.
The report stated that apart from Individual Lump Sum which remained largely the same pre-tax, all other risk products deteriorated, particularly Individual Disability Income Insurance, primarily driven by a significant reduction in discount rates and a recognition of persistent adverse claims experience.
Results by product included:
- Individual Lump Sum $238 million profit
- Group Lump Sum $45 million loss
- Group Disability Income Insurance (DII) $67 million loss
- Individual DII $231 million loss
Click here to view the September 2019 Quarterly Life Insurance Performance Statistics publication.