APRA releases life insurance statistics for June 2021
The Australian Prudential Regulation Authority (APRA) today released its Quarterly Life Insurance Performance Statistics publication for the June 2021 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 June:
| Year ended Jun-20 ($bn) | Year ended Jun-21 ($bn) | Yearly Change |
|---|---|---|---|
Net policy revenue | 14.9 | 14.6 | -2.1% |
Investment revenue | -0.9 | 6.3 | |
Total revenue | 15.9 | 21.7 | 36.2% |
Net policy expenses | 10.2 | 9.4 | -8.2% |
Operating expenses | 8.0 | 7.0 | -13.5% |
Effective movement in net policy liabilities | 0.6 | 3.3 | 481.8% |
Total expenses | 19.0 | 19.9 | 4.5% |
Net profit after tax | -1.7 | 1.0 | |
Total assets | 129.1 | 132.7 | 2.8% |
Key performance statistics for the life insurance industry for the quarter ended 30 June:
| Mar 2021 Quarter ($bn) | Jun 2021 Quarter ($bn) | Quarterly change |
Net policy revenue | 3.4 | 3.9 | 15.9% |
Investment revenue | -1.0 | 3.1 |
|
Total revenue | 2.6 | 7.3 | 176.9% |
Net policy expenses | 2.2 | 2.2 | 0.2% |
Operating expenses | 1.6 | 1.9 | 17.8% |
Effective movement in net policy liabilities | -1.4 | 2.3 |
|
Total expenses | 2.4 | 6.5 | 164.9% |
Net profit after tax | 0.2 | 0.4 | 156.1% |
Total assets | 129.5 | 132.7 | 2.5% |
The overall performance of the life insurance industry is improving. The net profit after tax for the industry was $1.0 billion for the year ended June 2021, a significant improvement from the previous year primarily owing to the improved investment market performance.
Although performance has improved for the 12 months ended June 2021, risk products still reported a combined net loss after tax of $18.8 million. In particular, Individual Disability Income Insurance (also known as Income Protection Insurance) reported a loss of $345.5 million during the year, which is a $0.9 billion improvement in comparison to the previous year’s result. Results for Group Lump Sum and Group Disability Income Insurance remain negative but have also improved this year.
Net profit after tax by product for the life insurance industry for the year ended 30 June:
Risk product | Year ended Jun 2020 ($m) | Year ended Jun 2021 ($m) | Jun 2021 quarter only ($m) |
|---|---|---|---|
Individual lump sum | 429.1 | 403.1 | 278.0 |
Individual disability income insurance | -1,288.2 | -345.5 | -161.0 |
Group lump sum | -352.9 | -70.6 | 24.7 |
Group disability income insurance | -249.1 | -5.9 | 27.0 |
Total | -1,461.0 | -18.8 | 168.7 |
Key ratios for the life insurance industry for the year ended 30 June:
| Year ended Jun 2020 | Year ended Jun 2021 | Mar 2021 Quarter | Jun 2021 Quarter |
Return on net assets | -6.6% | 3.8% | 2.4% | 6.2% |
Prescribed capital amount coverage ratio | 1.78x | 1.94x | 1.85x | 1.94x |
The June 2021 Quarterly Life Insurance Performance Statistics publication is available on APRA’s website at: Quarterly life insurance performance statistics.
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The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, mutuals, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding around $9 trillion in assets for Australian depositors, policyholders and superannuation fund members.