The 34.7 per cent drop in net profit is partly due to rising lapse rates and increased claims within the sector.
Looking at the March 2014 quarter, net profit was $627 million, down from $723 million in the prior corresponding period.
The drop in profit was coupled with an accompanying rise in total expenses over the 12 months.
Total expenses in the year to 31 March 2014 were $38.8 billion, up from $34.9 billion in the previous year.
Total expenses comprised net policy expenses, operating expenses, effective movement in net policy liabilities, change in policy owner retained profits and other expenses, according to APRA.
Net policy expenses were $7.3 billion in the year to 31 March (up from $6.6 billion in the previous year), operating expenses were $7.9 billion (up from $7.4 billion, effective movement in net policy liabilities was $23.3 billion (up from $20.6 billion), change in policy owner retained profits was $202 million (up from $144 million) and ‘other expenses’ were $83 million (up from $103 million).
Total revenue within the life insurance sector for the 12 months to March 2014 was $42.5 billion, compared with the previous year’s revenue of $40.3 billion.
However, total revenue for the March 2014 quarter was $6.8 billion – down from $13 billion in the first quarter of 2013.
The industry held total assets of $276.8 billion as at 31 March 2014, compared with $252.9 billion as at 31 March 2013.
