Life Insurance Financial Results Update – May 2017 - KPMG Australia
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Life Insurance Financial Results: May 2017 reporting season

Life Insurance Financial Results Update – May 2017

The recent reporting season shows that listed life insurers and bank subsidiaries continue to face profitability pressures with few exceptions. Insurers have generally reported lower or negative operating earnings largely driven by poor profitability on their Income Protection (IP) portfolios. KPMG’s Life Insurance Financial Results Update provides an overview of operating earnings, actual/planned margins, annual premium in force (API) and commentary on individual life insurers as reported in their financial reports.


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Key insights

  • Operating earnings and actual margins have generally been lower compared to recent reporting periods with insurers citing poor claims experience.
  • Profitability on income protection (IP) portfolios appear to be of particular concern with insurers citing worsening termination experience. This has resulted in significant capitalised losses for some insurers where the product is no longer profitable.
  • Planned profit margins have generally trended downwards over recent reporting periods reflecting adverse assumption changes. Margins are increasingly varied amongst insurers with AMP, ANZ and CBA having reported lower planned margins from the previous half year.
  • API growth remains varied amongst insurers, however, overall premium growth has been fairly low. BT and Clearview remain exceptions citing strong new business growth relative to others.

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