Life Insurance Risk Profitability: December Qtr 2016 | KPMG | AU

Life Insurance Risk Profitability Update: December Quarter 2016

Life Insurance Risk Profitability: December Qtr 2016

In February 2017, APRA released the December 2016 quarter life industry aggregate summaries of financial performance, financial position, as well as details of the performance of individual product groups. KPMG’s Life Insurance Risk Profitability Update provides an overview of the financial performance for life insurance risk products in the December 2016 quarter.

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Key insights

The life insurance industry reported losses of $136m for Risk Products in the December 2016 quarter, after 11 consecutive quarters of profits. This was driven by significantly lower profits in Retail Lump Sum and large losses in Retail Disability Income. Group risk profits remain subdued.

  • Retail Lump Sum Risk profits reduced to $29m, compared to $300m+ profit reported for the first two quarters of 2016.
  • Retail Disability Income reported a loss of $209m, making it the fourth consecutive loss making quarter, largely due to investment losses.
  • Group Life indicates a continuation of weakened profits due to strengthening of reserves.
  • Group Disability Income produced a profit after three consecutive loss making quarters, partly due to a reduction in reserves. 

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