APRA reveals what happened to life insurance industry in 2021

The Australian Prudential Regulation Authority (APRA) has released its annual life insurance statistics for the 12 months ending December 31, 2021 (FY21), covering the industry's sources of profit, assets backing policy liabilities, and policy liabilities.

APRA's Life Insurance Supplementary Statistics Tables (LISST) for FY21 used annual accounts corresponding to insurers' financial years. Moreover, the data in the publication was based on a mix of annual returns from different periods.

For FY21, the Australian life insurance industry's total experience profit was $436 million through superannuation and $137 million through ordinary class of business. Meanwhile, the total Life Insurance Act operating profit after income tax was $778 million in superannuation and $884 million in ordinary class of business.

Regarding assets backing policy liabilities, focusing on total statutory funds, APRA reported a total of $5,283 million cash and $81,328 million in investments, of which:

• $55,080 million accounted for debt securities;
• $20,701 million for equities;
• $5,158 million for property; and
• $389 million for other investments.

For other assets, APRA found a total of $15,506 million. Overall, the assets attributable to products were a whopping $102,118 million.

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For assets backing policy liabilities focusing on superannuation, APRA reported a total of $3,693 million cash and $45,590 million in investments, of which:

• $30,188 million accounted for debt securities;
• $11,026 million for equities;
• $4,222 million for property; and
• $153 million for other investments.

Meanwhile, APRA reported a total of $9,459 million for other assets. Overall, the assets attributable to products were $58,741 million.

Lastly, for assets backing policy liabilities on ordinary business, APRA revealed a total of $1,590 million cash and $35,739 million in investments, of which:

• $24,892 accounted for debt securities;
• $9,675 million for equities;
• $936 million for property; and
• $236 million for other investments.

APRA also found a total of $6,048 million for other assets, while the total assets attributable to products were $43,377 million.

Finally, focusing on policy liabilities, APRA revealed a total of $7,219,514 million gross insurance amount and $3,411,540 million reinsured insurance amount. Meanwhile, its total gross best estimate liability – considering the gross value of future policy benefits, expenses, and premiums, along with a gross reduction in respect of unrecouped acquisition expense – was $48,668 million.