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.