Life insurers ended 2017 on a positive note, reporting solid investment revenue performance and an improvement in profitability.
APRA's latest statistics in the 12 months to December 2017 show the life insurance industry recorded total revenue of $36.2 billion - comprising net policy revenue ($15.7 billion) and investment revenue ($17.6 billion) - 11.3% higher than the previous corresponding period.
In terms of assets, non-investment-linked assets were $97.1 billion at the end of 2017. Breaking this down to asset classes, 55% was invested in debt securities ($14.2bn); 14.7% in equities ($5.2bn); and 5.3% in property ($9.6bn).
For risk products, individual lump sum risk contributed $1.1 billion to net profit after tax; group lump sum risk products meanwhile earned $273 million; group disability income insurance contributed $216 million (this was partially offset by net loss after tax of $60 million from the individual disability income insurance product group.)
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The industry reported after-tax profit of $2.4 billion, up 5.6% year-on-year.
Total life insurance assets inched 3.2% to $232.5 billion?year-on-year. Return on net assets was flat at 9.3%.
In December 2017, the Financial Services Council finalised the standard for life insurance approved product lists.
From 1 July 2018, Australian financial service licensees who are members of the FSC will be required to include three or more life insurers on their APL.
On top of this, unless the APL is "open" - that is to say, it includes all APRA-regulated life insurers - AFSLs will also be required to implement an approval process for life insurance products not included on the list.
"This means where advisers wish to use insurance offerings not part of an AFSL member's life insurance APL that they are not unnecessarily restricted from doing so and the AFSL member will make a decision for the off APL request within seven business days," the standard explains.