APRA releases quarterly life insurance statistics for June 2020
The Australian Prudential Regulation Authority (APRA) today released its Quarterly Life Insurance Performance Statistics publication for the June 2020 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 June:
| Year to June 2019 ($bn) | Year to June 2020 ($bn) | Yearly change |
Net policy revenue | 16.4 | 14.9 | -9.2% |
Investment revenue | 15.4 | -0.9 |
|
Total revenue | 35.6 | 15.9 | -55.3% |
Net policy expenses | 10.5 | 10.2 | -2.3% |
Operating expenses | 9.5 | 8.0 | -15.2% |
Effective movement in net policy liabilities | 13.7 | 0.5 | -96.4% |
Total expenses | 34.3 | 18.9 | -44.8% |
Net profit after tax | 0.4 | -1.6 |
|
Total assets | 200.5 | 129.8 | -35.3% |
Key performance statistics for the life insurance industry in the quarter ended 30 June:
| March 2020 Quarter ($bn) | June 2020 Quarter ($bn) | Quarterly change |
Net policy revenue | 3.6 | 3.4 | -6.2% |
Investment revenue | -10.4 | 4.0 |
|
Total revenue | -6.3 | 7.8 |
|
Net policy expenses | 2.5 | 2.4 | -5.5% |
Operating expenses | 2.0 | 1.8 | -8.8% |
Effective movement in net policy liabilities | -8.5 | 2.9 |
|
Total expenses | -3.8 | 7.0 |
|
Net profit after tax | -1.0 | 0.4 |
|
Total assets | 185.3 | 129.8 | -29.9% |
The life insurance industry’s performance continues to be challenged. Net loss after tax was $1.6 billion for the year to June 2020, a significant reduction from a $438 million profit in the previous year. This deterioration was caused by poor results in both the December and March quarters. Total assets fell significantly this year due to AMP Life transferring a substantial amount of investment-linked business from its life company to other managed investment schemes.
For the 12 months to June 2020, risk products reported a combined after-tax loss of $1.4 billion. Performance of all risk products deteriorated over the year apart from the Individual Lump Sum product. In particular, Individual Disability Income Insurance (also known as Income Protection Insurance) reported a substantial loss, primarily driven by loss recognition as adverse claims experience persists.
Risk product net profit after tax for the life insurance industry in the year ended 30 June:
Risk product | Year to June 2019 ($m) | Year to June 2020 ($m) | June 2020 quarter only ($m) |
Individual lump sum | 746.1 | 422.5 | 239.1 |
Individual disability income insurance | -1,106.4 | -1,228.0 | -179.1 |
Group lump sum | 62.2 | -352.9 | 0.5 |
Group disability income insurance | -93.6 | -249.1 | -28.5 |
Total | -391.7 | -1,407.5 | 32.1 |
Key ratios for the life insurance industry in the year ended 30 June:
| Year to June 2019 | Year to June 2020 | Yearly Change | March 2020 Quarter | June 2020 Quarter | Quarterly change |
Return on net assets | 1.8% | -6.4% | -8.1 percentage points | -15.3% | 6.6% | 21.9 percentage points |
Prescribed capital amount coverage ratio | 1.76x | 1.78x | 0.02x | 1.76x | 1.78x | 0.02x |
The June 2020 Quarterly Life Insurance Performance Statistics publication is available on APRA’s website at: Quarterly life insurance performance statistics.
For more information
Email dataanalytics@apra.gov.au or mail to
Manager, External Data Reporting
Australian Prudential Regulation Authority
GPO Box 9836, Sydney NSW 2001Looking for discontinued publications?
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