BT Financial Group’s life insurance business has reported an increase in cash earnings, despite the group recording an overall decrease in earnings for the half year to March.
Cash earnings for BT’s life insurance business were up 15 per cent for the half year to 31 March, with lapse rates remaining industry leading, according to a BT statement this morning.
BT chief executive Brad Cooper said BTFG was operating in a challenging environment but it had achieved significant strategic milestones across the business.
“Over the period, our life business was once again awarded as a standout, awarded Life Company of the Year for the second consecutive year and recognised by IRESS as having the highest quality life cover.
“We are exceptionally proud of our life business, its high-quality product, its intense focus on our customer gives us better retention and materially lower lapse rates than our competitors.”
Despite a positive result in its life business, BT reported cash earnings of $397 million - a decrease of 11 per cent from first half 2016 and down five per cent since the second half 2016.
The result was affected by margin compression from accrued default amounts (ADA) superannuation migrations, competition for flows and significant general insurance claims increase from Cyclone Debbie and the Sydney hail storms, the statement said.
“This half, we delivered a step change in managing clients’ superannuation, SMSFs and investments with the integration of superannuation and insurance on BT Panorama,” Mr Cooper said.
Westpac reported overall cash earnings of $4.02 billion for the half, up 3 per cent from the corresponding period.
“This is a solid result given the current complex operating environment,” Westpac group chief executive Brian Hartzer said in a statement to the ASX.
“We have been disciplined in balancing growth and returns, with cash earnings up 3 per cent over both the previous half and the same period last year. At 14 per cent, our return on equity is at the upper end of the range we are seeing to achieve, and we held costs flat over the last six months,” Mr Hartzer said.
This article has been amended to clarify Westpac reported overall cash earnings of $4.2 billion, not million
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