The Australian life insurance industry’s performance is in a downward spiral, regulator APRA’S latest data show. A $19bn increase in overall CY19 revenue on CY18, mainly driven by a favourable investment market, was offset by a $17.8bn rise in total expenses and $1.8bn increase in tax expense.

Total industry revenue was up 80.2% to $42.7bn but net policy revenue declined by 10.5% to $15.8bn. APRA said a significant increase in expenses was mainly driven by reserve strengthening as insurers recognised losses from a persistent adverse claims experience. Industry net loss after tax was $0.2bn, down from $0.6bn profit.

APRA said the continuing decline was mainly caused by poor risk business performance. Risk products reported a combined after-tax loss of $1.3bn – down from $34m profit.

All risk products deteriorated with the only exception being the individual lump sum product. In particular, individual disability income insurance or income protection insurance reported a substantial loss, driven mainly by loss recognition as persistent adverse claims experience.