Australia life insurance full-year 2022 net profit falls 59.3%

Investment loss was the main driver of the decreased performance for the year.

Life insurance net profit after tax for the full-year 2022 fell by 59.3%, driven by poor performance in investments, according to recently released statistics from the Australian Prudential Regulation Authority (APRA).

Investment loss reached $4.45b (A$6.6b) due to realised and unrealised losses on interest-bearing investments.

Risk products returned a net profit after tax of $740m, an increase compared to a $502.78m net profit recorded in the prior year. The result was predominantly driven by the $740m profit recorded by Individual Disability Income Insurance (IDII) businesses. The increase in IDII performance can be attributed to movements in bond yields, repricing activities and releases of COVID-19 reserves throughout the year. 

Individual lump sum businesses reported a loss of $221.99m which can be attributed to an increase in net policy expenses. Group Lump Sum and Group Disability Income Insurance (Group DII) business reported profits of $22.73m and $237.37m respectively, an increase from the prior year’s result for both Group products.

The industry-prescribed capital coverage ratio increased from 1.99x to 2.04x over the year ended 31 December 2022.