The Australian life insurance and private health insurance (PHI) industries remained stable during the year ended March 31, 2022 (FY22), despite the persistence of the COVID-19 pandemic, regulatory changes, geopolitical issues, and other factors contributing to hard market conditions.
In its latest report, the Australian Prudential Regulation Authority (APRA) stated that the Australian life insurance industry had total revenue of $16.7 billion during FY22, a significant 25.0% drop from $22.2 billion in the year ended March 31, 2021 (FY21). However, its net profit after tax totalled $1.05 billion during the same period, up by 2.6% from $1.02 billion in FY21, driven by a stable result in premium revenue.
Risk products' results made a comeback in FY22, recording a profit of $930.2 million (compared to a loss of $145.5 million in the prior year), mainly driven by individual disability income insurance's (DII) profit of $723.2 million (a $1.1 billion increase from the previous year). Meanwhile, individual lump sum returned a profit of $393.2 million, a slight increase from $370.5 million in the previous year. Group products returned mixed results compared to the previous year, with continued losses in group lump sum (-$214.3 million) and group DII returning to profitability ($28.1 million).
APRA decided that the Australian life insurance industry remained stable in FY22, despite a significant drop in total revenue.
Focusing on PHI, APRA reported that the industry's premium revenue totalled $26.6 billion for FY22, up by 5.6% from $25.2 billion in FY21. Meanwhile, its net profit after tax was $2.0 billion, up by a whopping 107.8% from $0.95 billion in FY21, due to higher insurance profits partially offset by a fall in investment income.
Additionally, hospital treatment membership increased by 2.0% (or 224,858 persons during FY22), the longer-term ageing trend in hospital membership continued in the year with membership in the 50+ age group increasing by 2.5% (or 114,384 persons), while membership among the younger population (insured persons aged 20 to 49) increased by 1.6% (or 64,634 persons).
The life and PHI publications coincide with the release of APRA's general insurance industry statistics covering FY22 and the three months ending March 31, 2022 (Q1 FY22).
