APRA releases life insurance statistics for September 2022

The Australian Prudential Regulation Authority (APRA) has released its Quarterly Life Insurance Performance Statistics publication for the September 2022 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 for the year ended 30 September:

Year ended Sep-21 ($bn)

Year ended Sep-22 ($bn)

Yearly Change

Net policy revenue

14.6

14.8

1.5%

Investment revenue

5.4

-7.5

Total revenue

20.9

8.3

-60.1%

Net policy expenses

9.2

9.2

0.2%

Operating expenses

7.0

6.5

-6.4%

Effective movement in net policy liabilities

2.2

-7.2

Total expenses

18.6

8.7

-53.2%

Net profit after tax

1.4

0.2

-87.0%

Total assets

134.2

122.4

-8.8%

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

Jun 2022 Quarter ($bn)

Sep 2022 Quarter ($bn)

Quarterly change

Net policy revenue

3.7

3.9

4.9%

Investment revenue

-3.9

-0.5

Total revenue

0.05

3.7

Net policy expenses

2.4

2.3

-2.2%

Operating expenses

1.5

1.7

15.8%

Effective movement in net policy liabilities

-3.3

-0.3

Total expenses

0.5

3.8

669.8%

Net profit after tax

-157m

65m

Total assets

121.4

122.4

0.8%

For the year ended 30 September 2022, the industry reported a net profit after tax of $0.2 billion and a return on net assets of 0.7 per cent, a decrease in comparison to the results from the prior year. The driver behind the decrease in performance was an investment loss of $7.5 billion due to unrealised losses on interest bearing investments.

Collectively, risk products returned an improved result for the year ended 30 September 2022, recording a profit of $977 million compared to prior year’s profit of $435.7 million. This was predominantly driven by a $1.1 billion profit recorded by Individual Disability Income Insurance. The increase in Individual Disability Income Insurance can be attributed to repricing activities as well as reserve releases as a result of increases in bond yields over the past 12 months. Individual Lump Sum reported a loss of $207.0 million, a decline in performance compared to the prior year. Group products both returned improved results with Group Lump Sum recording a profit of $7.6 million and Group Disability Income Insurance recording a profit of $96.8 million.

Net profit after tax by product for the life insurance industry for the year ended 30 September:

Risk product

Year ended Sep 2021 ($m)

Year ended Sep 2022 ($m)

Sep 2022 quarter only ($m)

Individual lump sum

430.1

-207.0

-105.4

Individual disability income insurance

117.6

1079.6

69.5

Group lump sum

-97.5

7.6

6.2

Group disability income insurance

-14.4

96.8

47.2

Total

435.7

977.0

17.5

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

Year ended Sep 2021

Year ended Sep 2022

Jun 2022 Quarter

Sep 2022 Quarter

Return on net assets

5.2%

0.7%

-2.4%

1.0%

Prescribed capital amount coverage ratio

1.95x

2.06x

2.03x

2.06x

The September 2022 Quarterly Life Insurance Performance Statistics publication is available on APRA’s website at: Quarterly life insurance performance statistics.

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