Life Insurance Risk Profitability: March Qtr 2017 | KPMG | AU

Life Insurance Risk Profitability Update: March Quarter 2017

Life Insurance Risk Profitability: March Qtr 2017

In May 2017, APRA released the March 2017 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 March 2017 quarter.

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Key insights

The life insurance industry reported profits of $394m for risk products in the March 2017 quarter, after a loss of $153m in the previous quarter. The profits were driven by retail lump sum returning back to profitability while retail disability income reported significantly lower losses. Group life shows signs of improving profitability while Group disability income profits continue to be volatile.

  • Retail lump sum risk profits increased to $255m, compared to $12m loss reported in the December 2016 quarter.
  • Retail disability income reported a loss of $20m, which is a lower loss compared to the December quarter ($200m loss), making it the fifth consecutive loss making quarter.
  • Group life profitability appears to have improved, but continues to be at historically lower levels.
  • Group disability income produced slightly higher profits, consistent with a reinsurance/retrocession agreement that impacted profits.

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