Australia’s largest life insurer TAL has finished the financial year with a bang, maintaining its profit levels despite record claims pay-outs.
Financial results just released by TAL’s Japanese parent Dai-ichi Life show net profit after tax was down only 1% to $90 million for the 12 months to 31 March 2014. The year before TAL delivered net profits of $91 million.
There was also an increase in underlying profit by 6% to $131 million, while premium and other revenue rose 24% to $2.3 billion.
These results are surprising because total claims for the period rose 38% to $885 million.
CEO Jim Minto said that in each of the three years of full ownership by Dai-ichi Life, TAL has grown its underlying profit successfully despite the market going through significant change.
“Our specialisation in life insurance with a team focused on our core business including operational risks management and strong business partnerships are behind our good results again this year,” he said.
Minto also said TAL was pleased to have delivered record claims payments, and delighted it had grown to become the largest life insurer by market share over the past year.
“We are paying more claims than ever delivering tremendous social purpose for the people of Australia,” he said. “We have maintained our profit levels through effective risk management and long term planning as we look to the decades ahead.”
Long-term sustainability is critical for the life insurance industry and TAL will continue to ensure the benefits it offers are affordable, he said.
New business for the year grew 128% to $728 million, while TAL’s embedded value grew by $195 million to a whopping $1.957 billion over the same period.