Revenue across the life insurance sector plummeted almost 70 per cent in 2020, driven by COVID investment losses and continuing poor claims experience in income protection, according to the latest data from APRA.
The prudential regulator's life insurance statistics for December 2020 revealed that total revenue had declined 68.9 per cent year-on-year across the sector, from $42.7 billion in 2019 to $13.3 billion in 2020.
Net policy revenue had also declined 9.3 per cent year-on-year to $14.4 billion in 2020, while investment revenue had descended from $24.6 billion in 2019 to -$2.3 billion in 2020 as a result of COVID-related volatility.
APRA noted that losses across the life industry had improved from $0.3 billion in 2019 to $0.1 billion in 2020, but said this was due to reserves being released to cover losses and claims payments.
The data revealed that losses across risk products were improving but still substantial, with individual disability income insurance products recording a loss of $739.9 million for 2020, compared with a $1.47 billion loss in 2019.
Losses persisted across the group insurance category with group lump sum and group disability income reporting losses of $173.5 and $122.5 million, respectively. Individual lump sum was still profitable as a product category, reporting a profit of $543.7 million.
The prudential regulator said the industry's performance "continues to be challenged".
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