Losses continue for Australian life insurers

Risk products posted a combined net loss of $379m in December 2020.

Australia’s life insurers continue their slump as losses piled on even with an improvement in net loss after tax, according to a report by the Australian Prudential Regulation Authority.

Net loss after tax was $77m (A$100m) for December 2020, an improvement from the $281m (A$300m) loss in the previous year, mainly driven by a significant release of reserves to offset the investment losses and claims payments made throughout the year.

For the 12 months to December 2020, risk products reported a combined net loss after tax of $379m (A$492.3m), lower than the losses recorded in 2019. In particular, individual disability income insurance reported a substantial loss as adverse claims experience persists.

Individual lump sum insurance, whilst still profitable, showed profit deterioration over the year.