The Australian Prudential Regulation Authority (APRA) today released its Quarterly Life Insurance Performance Statistics publication for the December 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 31 December:
Year ended Dec-20 ($bn) | Year ended Dec-21 ($bn) | Yearly Change | |
Net policy revenue | 14.4 | 14.8 | 2.8% |
Investment revenue | -2.3 | 3.8 | Significant |
Total revenue | 13.3 | 19.5 | 46.4% |
Net policy expenses | 9.7 | 9.1 | -5.9% |
Operating expenses | 7.4 | 7.1 | -2.8% |
Effective movement in net policy liabilities | -3.1 | 1.1 | Significant |
Total expenses | 14.1 | 17.7 | 25.5% |
Net profit after tax | -0.1 | 1.2 | Significant |
Total assets | 130.2 | 132.0 | 1.3% |
Key performance statistics for the life insurance industry for the quarter ended 31 December:
Sep 2021 Quarter ($bn) | Dec 2021 Quarter ($bn) | Quarterly change | |
Net policy revenue | 3.8 | 3.7 | -4.5% |
Investment revenue | 0.7 | 0.8 | 13.3% |
Total revenue | 4.8 | 4.8 | -1.0% |
Net policy expenses | 2.3 | 2.3 | 0.6% |
Operating expenses | 1.8 | 1.9 | 4.5% |
Effective movement in net policy liabilities | 0.2 | -0.03 | Significant |
Total expenses | 4.4 | 4.3 | -1.1% |
Net profit after tax | 371.8m | 212.0m | -43.0% |
Total assets | 134.2 | 132.0 | -1.6% |
The overall performance of the life insurance industry is improving. The net profit after tax for the industry was $1.2 billion for the year ended December 2021, a significant improvement from the previous year primarily owing to improved market performance and to a lesser extent, growth in premium revenue.
Collectively, risk products returned an improved result for the year ended December 2021, recording a profit of $752.9m. This result was predominantly driven by Individual Disability Income Insurance which recorded a profit of $546.4m, a $1.3bn increase from the previous year. Individual Lump Sum returned a profit of $375.3m, a result lower than the previous period. Furthermore, Group Lump Sum and Group Disability Income Insurance reported improved results in comparison to the prior year, however, both products continued to return losses of $165.2m and $3.6m respectively.
Net profit after tax by product for the life insurance industry for the year ended 31 December:
Risk product | Year ended Dec 2020 ($m) | Year ended Dec 2021 ($m) | Dec 2021 quarter only ($m) |
Individual lump sum | 548.3 | 375.3 | 22.2 |
Individual disability income insurance | -740.4 | 546.4 | 329.5 |
Group lump sum | -183.7 | -165.2 | -85.6 |
Group disability income insurance | -136.1 | -3.6 | -110.7 |
Total | -511.9 | 752.9 | 155.3 |
Key ratios for the life insurance industry for the year ended 31 December:
Year ended Dec 2020 | Year ended Dec 2021 | Sep 2021 Quarter | Dec 2021 Quarter | |
Return on net assets | -0.4% | 4.4% | 5.7% | 3.2% |
Prescribed capital amount coverage ratio | 1.79x | 2.00x | 1.95x | 2.00x |
The December 2021 Quarterly Life Insurance Performance Statistics publication is available on APRA’s website at:
