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APRA releases life insurance statistics for September 2019

Thursday 28 November 2019

The Australian Prudential Regulation Authority (APRA) today released its Quarterly Life Insurance Performance Statistics publication for the September 2019 quarter.

The Quarterly Life Insurance Performance Statistics publication provides industry aggregate summaries of financial performance, financial position, capital adequacy and key ratios.

Key performance statistics for the life insurance industry in the year ended 30 September:

  September 2018 September 2019 Change
Net policy revenue 17.9 16.1 -9.6%
Investment revenue 17.5 15.7 -10.0%
Total revenue 39.6 34.9 -12.1%
Net policy expenses 10.0 10.6 6.7%
Operating expenses 9.7 9.0 -7.4%
Effective movement in net policy liabilities 16.3 13.7 -16.1%
Total expenses 36.2 33.8 -6.6%
Net profit after tax 1.8 0.2 -87.8%
Total assets 232.7 202.9 -12.8%

The life insurance industry’s performance continues to decline. 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. This persistent decline is primarily caused by poor performance of risk business (see below).

Risk product net profit after tax for the life insurance industry in the year ended 30 September:

Risk product September 18 September 19 Sep 2019 quarter only
Individual lump sum 751.7 million 866.8 million 238.0 million
Individual disability income insurance -276.7 million -1,119.1 million -231.3 million
Group lump sum 106.4 million 8.1 million -45.5 million
Group disability income insurance 72.9 million -173.1 million -66.6 million

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. Individual Lump Sum remained largely the same pre-tax while all other risk products deteriorated, particularly Individual Disability Income Insurance (also known as Income Protection) primarily driven by loss recognition as adverse claims experience persists.

Key ratios for the life insurance industry in the year ended 30 September:

  September 2018 September 2019 Change
Return on net assets 7.1% 0.9% -6.25 percentage points
Prescribed capital amount coverage ratio 1.77x 1.73x -0.04x

Please refer to the ‘highlights’ section in the Quarterly Life Insurance Performance Statistics publication for an analysis of material movements in the key performance statistics.

The September 2019 Quarterly Life Insurance Performance Statistics publication is available on the APRA website at: Quarterly life insurance performance statistics.

Media enquiries

Contact Ben McLean, APRA Media Unit, on +61 2 9210 3024

All other enquiries

For more information contact APRA on 1300 558 849.