Life Insurance Financial Results – November 2016

Life Insurance Financial Results – November 2016

KPMG’s Life Insurance Financial Results Update provides an overview of operating earnings and actual/planned margins, annual premium in force (API) and commentary on individual life insurers as reported in their financial reports.

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In the November reporting season growth in operating earnings amongst the listed life risk insurers and bancassurers was varied, with many life insurers reporting lower operating earnings.

Key insights

  • The results show that some listed life insurers and bancassurers are facing profitability pressures. A number of companies have cited higher claims losses or adverse claims experience impacting on profitability.
  • Planned profit margins for the most recent reporting period remain broadly stable or slightly lower than the last few reporting periods. Planned margins are around 10 percent for most insurers, and remain below historical highs.
  • API growth has been varied with companies citing mixed experience with regard to new business volumes and lapses impacting on API growth. Some insurers continue to cite balancing value of business against volume of business achieved.
  • We are observing a growing trend of M&A and reinsurance transactions emerging amongst listed life insurers and bancassurers. This appears to be driven by the relatively high capital requirements of operating a life business and recent profitability concerns, coupled with increased regulatory scrutiny.

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