Life insurance industry hit hard by $6.6 billion investment losses

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

APRA notes that the losses were caused by both realised and unrealised losses on interest-bearing assets, impacting investment returns during the year. By comparison, the industry reported investment revenue of about $3.8 billion in the previous year.

Despite this setback, risk products, including individual disability income insurance (DII), performed strongly during the same period. APRA reports that net profit from risk products increased to $1.14 billion from $745.6 million in the previous year, with the improved profit largely driven by the $1.1 billion profit recorded by individual DII.

The regulator attributes this increase to movements in bond yields, repricing activities, and the release of Covid-19 reserves throughout the year.

Group lump sum and group DII business also reported profits of $33.7 million and $352 million, respectively, in contrast to a $165.9 million loss and $6.6 million profit the previous year. APRA explains that the improved results were due to lower net policy expenses for group lump sum business and reserve releases for group DII.

However, individual lump sum was the only risk product in the red, reporting a $329.2 million loss, primarily due to an increase in net policy expenses, according to APRA.

While the life industry's investment losses have stung the sector significantly, the strength of its risk products provides some optimism for the future. Industry players will need to remain vigilant and strategic in their investments to navigate the unpredictable financial landscape ahead.

Published:Friday, 10th Mar 2023
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

NSW Strata Commission Ban: A Catalyst for Industry Reform

07 Feb 2026: Paige Estritori

The New South Wales (NSW) government's proposal to ban commissions on strata insurance has ignited a contentious debate between consumer advocacy groups and industry leaders. This reform aims to eliminate potential conflicts of interest and enhance transparency within the strata management sector. - read more

Queensland Strata Owners Advised to Leverage New Premium Reduction Programs

07 Feb 2026: Paige Estritori

Strata property owners in North and Central Queensland are being encouraged to take advantage of newly introduced federal and state initiatives designed to reduce insurance premiums and enhance cyclone resilience. These programs offer financial incentives for property upgrades that can lead to significant savings on insurance costs. - read more

Australian Insurers Struggle to Keep Pace with Emerging Risks

07 Feb 2026: Paige Estritori

Recent findings from the PwC Insurance Banana Skins Survey reveal that Australian insurers are trailing their global counterparts in risk preparedness. The survey, which gathered insights from 698 insurance executives across 42 territories, indicates that Australian insurers scored 6.6% lower on the Preparedness Index compared to the global average. This gap is particularly concerning as the industry faces escalating challenges from cyber threats and the rapid advancement of artificial intelligence (AI). - read more

Significant Increases in Australian Home Insurance Premiums

07 Feb 2026: Paige Estritori

Australian homeowners are experiencing substantial increases in home insurance premiums, with the average premium rising by 16% over the past year. Consumer advocacy group Choice reports that some insurers, including Kogan, RAC, and Honey, have raised their rates by more than 30%. These hikes are attributed to various factors, including high supply chain inflation, increased claims costs, and higher reinsurance expenses due to severe weather events. - read more

The Vital Role of Reinsurance in Australia's Insurance Industry

07 Feb 2026: Paige Estritori

Reinsurance serves as a critical component in the Australian insurance landscape, offering capital relief and stabilising returns for insurers amidst escalating natural disaster claims. A recent report by the Actuaries Institute underscores the indispensable role of reinsurance in maintaining the industry's financial health. - read more

Click for more Insurance News