APRA releases life insurance statistics for March 2022
The Australian Prudential Regulation Authority (APRA) today released its Quarterly Life Insurance Performance Statistics publication for the March 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 31 March:
| Year ended Mar - 21 ($bn) | Year ended Mar - 22 ($bn) | Yearly Change |
|---|---|---|---|
Net policy revenue | 14.1 | 14.9 | 5.4% |
Investment revenue | 7.1 | 0.8 | -88.6% |
Total revenue | 22.2 | 16.7 | -25.0% |
Net policy expenses | 9.5 | 9.1 | -4.1% |
Operating expenses | 6.9 | 7.0 | 1.8% |
Effective movement in net policy liabilities | 4.0 | -1.1 | Significant |
Total expenses | 20.4 | 15.3 | -25.0% |
Net profit after tax | 1.02 | 1.05 | 2.6% |
Total assets | 129.5 | 126.6 | -2.2% |
Key performance statistics for the life insurance industry for the quarter ended 31 March:
| Dec 2021 Quarter ($bn) | Mar 2022 Quarter ($bn) | Quarterly change |
|---|---|---|---|
Net policy revenue | 3.7 | 3.4 | -8.0% |
Investment revenue | 0.8 | -3.9 | Significant |
Total revenue | 4.8 | -0.2 | Significant |
Net policy expenses | 2.4 | 2.1 | -9.6% |
Operating expenses | 1.9 | 1.4 | -25.1% |
Effective movement in net policy liabilities | -0.1 | -3.5 | Significant |
Total expenses | 4.4 | 0.02 | -99.5% |
Net profit after tax | 221.3m | 47.2m | -78.7% |
Total assets | 132.0 | 126.6 | -4.1% |
The overall performance of the life insurance industry is stable. The net profit after tax for the industry was $1.0 billion for the year ended March 2022, driven by a stable result in premium revenue, with falls in investment revenue offset by a 25% decrease in total expenses.
Collectively, risk products returned a significantly improved result for the year ended March 2022, recording a profit of $930.2m compared to a loss of $145.5m in the prior year. This result was predominantly driven by Individual Disability Income Insurance which recorded a profit of $723.2m, a $1.1bn increase from the previous year. Individual Lump Sum returned a profit of $393.2m, a slight increase from the prior year’s result of $370.5m. Group products returned mixed results in comparison to the prior year, with continued losses in Group Lump Sum (-$214.3m) and Group DII returning to profitability ($28.1m).
Net profit after tax by product for the life insurance industry for the year ended 31 March:
Risk product | Year ended Mar 2021 ($m) | Year ended Mar 2022 ($m) | Mar 2022 quarter only ($m) |
|---|---|---|---|
Individual lump sum | 370.5 | 393.2 | -82.4 |
Individual disability income insurance | -359.9 | 723.2 | 418.2 |
Group lump sum | -94.7 | -214.3 | -30.1 |
Group disability income insurance | -61.3 | 28.1 | 74.7 |
Total | -145.5 | 930.2 | 380.4 |
Key ratios for the life insurance industry for the year ended 31 March:
| Year ended Mar 2021 | Year ended Mar 2022 | Dec 2021 Quarter | Mar 2022 Quarter |
|---|---|---|---|---|
Return on net assets | 4.0% | 4.0% | 3.4% | 0.7% |
Prescribed capital amount coverage ratio | 1.84x | 1.99x | 1.99x | 1.99x |
The March 2022 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.