'Substantial' DII turnaround lifts risk products: APRA data

‘Substantial’ DII turnaround lifts risk products: APRA data

30 May 2022

Individual disability income insurance (DII) posted improved results in the 12 months to March, making a net profit of $723.2 million following a $359.9 million loss in the year-earlier corresponding period, according to latest data from the Australian Prudential Regulation Authority (APRA).

APRA says the “substantial” improvement in individual DII – primarily due to further reserve releases in light of improved claims assumptions – led to risk products collectively returning to profitability for the year to March.

Individual DII and the other three risk products – individual lump sum, group lump sum and group DII – achieved $930.2 million in net profit, compared with a $145.5 million loss a year earlier.

Individual lump sum increased its net profit to $393.2 million from $370.5 million a year earlier and group DII made $28.1 million after losing $61.3 million.

Group lump sum is the only loss-making product, widening its net loss to $214.3 million from $94.7 million.

For the March quarter the four risk products combined for a net profit of $380.4 million, as individual DII’s $418.2 million contribution and group DII’s $74.7 million cushioned losses in individual lump sum ($82.4 million) and group lump sum ($30.1 million)

The APRA data shows the life industry achieved $1.05 billion in net profit for the year to March, up slightly from $1.02 billion from a year earlier.

The earnings reflected stable result in premium revenue, APRA says. Net policy revenue improved 5.4% to $14.9 billion for the period.

However, in the March quarter, the life industry suffered a 78.7% fall in net profit to $47.2 million from the preceding December quarter.

APRA says a drop in investment revenue – $3.9 billion deficit from a $800 million surplus in the December quarter – dragged the life industry down during the March quarter.