Aussie life insurers post $774m net profit

Only ILS reported a profit amongst risk products for the year ended March 2021.

Australian life insurers have recorded an improvement in their net profit after tax to $774m (A$1b) for the year ended March 2021, according to the Australian Prudential Regulation Authority (APRA).

The increase was attributed to better market performance, with investment revenue jumping by $4.1b (A$5.3b) to $5.5b (A$7.1b). 

Within risk products, individual lump sum (ILS) is the only category reporting a profit at $245m (A$316.5m), much lower than the profit recorded by the year ended March 2020. Individual disability income insurance (IDII) recorded a loss of $232m (A$0.3b) during the year, which is a $852m (A$1.1b) improvement in comparison to the previous year’s result. 

Results for group LS and group DII have also improved this year, but both products continued to record losses of $71.1m (A$91.8m) and $45.2m (A$58.3m) respectively.

The industry prescribed capital amount (PCA) coverage ratio increased from 1.76x to 1.85x over the year , mainly driven by capital injections in response to the IDII capital charge that came into effect on 1 October 2020 and the fall in the insurance risk charge as a result of higher bond yields.