Insurance

Individual disability income rises to $1.1 billion – Life insurance – Insurance News

Individual disability income rises to $1.1 billion

August 29, 2022

Individual Disability Insurance (DII) made more than $1 billion in net profits for the year to June 30, bolstering hopes the troubled line is on the mend after the Australian Prudential Regulation Authority ( APRA) has taken action, including capital action, to force suppliers to improve pricing and product design.

The latest data from APRA shows that the individual DII recorded a net profit of $1.14 billion in the 2021/22 financial year, recovering from a loss of $345.3 million in the previous 12 month period.

The profit recovery is also a significant improvement from the $723.2 million profit recorded in the year to March.

“The improvement in the DII’s individual result can be attributed to the continued releases of reserves throughout the year in light of improved loss assumptions,” APRA said. “This reflects actions taken by insurers to address sustainability concerns and improve long-term outcomes for customers.”

According to APRA, DII’s individual results helped venture products post a combined net profit of $1.2 billion for the year, after a previous loss of $18 million.

The group lump sum is the only product of the four risk offerings in the red, widening its net loss to $121.5 million from $70.5 million.

DII Group made a net profit of $76 million after losing $5.6 million the previous year and individual lump sum earned $89.5 million, down sharply from $403.3 million of dollars.

The life industry’s overall net profit fell 51.6% to about $500 million, hit by an investment loss of $6.3 billion, according to APRA. The investment deficit results from unrealized losses on interest-bearing assets.

Industry-wide net policy income increased 0.8% to $14.7 billion and net policy expense fell 1.7% to $9.2 billion of dollars.