In this newsletter we review APRA's quarterly statistics for the March quarter on the profitability of the superannuation insurance sector at an aggregate and a product level, as well as explore the mental illness.
Superannuation Group Lump Sum profits increased during the quarter, but remained below 2015 levels. This reflects that profits increased from $16m in the December 2016 quarter to $57m in the March 2017 quarter, compared with 2015 average of $72m.
Superannuation Group Disability Income profits remain volatile. The March quarter profit of $108m was the highest reported profit for the past 10 quarters. The improvement appears to be due to the impact of an insurer/reinsurer entering into a reinsurance/retrocession agreement that impacted the reported profit.
Life and general insurers are experiencing significant challenges with disability insurance, particular from mental health claims. KPMG presented a paper on "Balancing the Challenges of Mental Health Claims" which:
The newsletter outlines the implications of the paper for Superannuation funds, depending on their strategy/focus.
An overview of the financial performance for life insurance risk products in the March 2017 quarter.
An overview of the financial performance for life insurers and bank subsidiaries in the May 2017 reporting season.