Australia's life insurance sector continues to grow steadily, with gross policy revenue increasing by 6.6% to A$24.7bn ($18.1bn) in the 12 months to 31 March 2018, says KPMG's Life Insurance Insights Report 2018. This equates to 1.4% of Australia's GDP.
Based on premium volumes, the life insurance industry is now of comparable size to health insurance and about half the size of the general insurance sector.
The report points out that A$14.8bn of benefit payments were paid out to policyholders and super fund members. By contrast, just A$2.2bn went in profits to shareholders.
Risk product profitability, a key indicator of the industry’s health, bounced back to a more normalised level in 2018, earning A$1,307m, up more than double on a disappointing performance last year.
KPMG’s study confirms the growing role played by reinsurers in this market, with the level of reinsurance increasing from 23% to 30% over the past five years.