Jim Minto

Australia’s largest life insurer TAL continues to pay out record benefits and claims while maintaining its strong performance, financial results for the six months to 30 September 2014 show.

Results released by TAL’s ultimate parent, Dai-ichi Life, show TAL’s underlying profit for the six months to 30 September 2014 was $78 million, up from $46 million in the previous comparative period. This result was 69% higher than the weaker first half last year.

Net profit after tax was $71 million, compared to $29 million previously, while ordinary revenues rose 16% to $1.585 billion and claims paid were up $37 million to $491 million over the period. Net profit was affected by one-offs such as interest rate changes, although TAL prefers the underlying profit measure.

TAL’s embedded value grew by $221 million to $2.179 billion.

TAL Group CEO and Managing Director Jim Minto said he was pleased with the result in what have been difficult market conditions.

“TAL has been focusing on the long term sustainability of the business. We have been delivering for customers for 145 years and want to ensure we continue to do so sustainably for many decades to come.

“Significant challenges remain across the industry in terms of claims experience, regulatory change and an increasing focus on the quality of advice and product sustainability.”

“TAL continues to enhance its claims management with a focus on ‘return to health and work’ initiatives and we are focussed on generating greater business efficiency.”

“This is all part of our over-arching strategy of delivering sustainable products and services to our customers and partners. Central to this strategy is a multi-channel approach to provide freedom of choice to customers so they can obtain financial protection in ways and means of their choosing.”

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Jim Minto

Australia’s largest life insurer TAL has finished the financial year maintaining profit levels amid record claims payouts.

Financial results released by TAL’s Japanese parent, Dai-ichi Life, show net profit after tax (NPAT) was down 1% to $90 million for the 12 months to 31 March 2014, compared to an NPAT of $91 million the year before.

There was an increase in underlying profit by 6% to $131 million while premium and other revenue rose 24% to $2.3 billion.

Total claims for the period paid rose 38% to $885 million.

TAL Group CEO Jim Minto said: “In each year of the three years of full ownership by Dai-ichi Life, TAL has grown its underlying profit in what has been a very successful growth period for the company in a market that is going through significant change.

“Our specialisation in life insurance with a team focussed on our core business including operational risk management and strong business partnerships are behind our good results again this year.”

Mr Minto said TAL was proud to have delivered record claims payments to help families and individuals in times of need as well as providing peace of mind in protecting what people have created in life and what they dream of for the future.

As a company with a 150-year history providing financial protection, TAL has grown to become Australia’s largest life insurer by market share over this past year

Mr Minto said: “We are paying more claims than ever delivering tremendous social purpose for the people of Australia. 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 that is why we work closely with our business partners to help ensure benefits are affordable and sustainable for our customers well into the future so we are there for them when they need us.”

New business for the year grew 128% to $728 million while TAL’s embedded value grew by $195 million to $1.957 billion in the period.

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Jim Minto

Australia’s leading specialist life insurer, TAL, has increased its premium and other revenue by 15% to $1.1 billion in the six months ending 30 September 2013, compared to the prior comparative period.

Results released by TAL’s ultimate Japanese parent, Dai-ichi Life, show new business growing 33% compared to prior comparative period to $261 million while total in-force premium grew 16% to $1.76 billion.

TAL’s embedded value grew by $132 million to $1.894 billion in the period.

The business’s annual net profit after tax result was $29 million. This figure was down from $68 million in the previous period, due largely to changes in discount rates and deterioration of claims experience.

TAL’s underlying profit for the six months to end September was $46 million, down from $70 million in the previous corresponding period, after removing the effect of non-cash items such as amortisation and changes in discount rates. This fall is due to negative claims experience this year against favourable claims experience in the prior year.

TAL Group CEO and Managing Director Jim Minto said that negative claims experience had affected the entire life insurance industry, and he expected a period of adjustment while the industry worked through a series of steps to improve the outlook.

“The reporting season has revealed a higher level of claims and lapses than insurers had expected. While TAL has also seen larger effects from claims, we have, partly as a result of price adjustments, been able to continue to grow TAL to become Australia’s second largest life insurer as measured by in-force premiums.”

The company experienced a higher level of claims on living insurance products – disability, income protection and trauma cover – and as a result has had to make higher provisions for claims which also reduce earnings.

“The really good news is people are accessing and getting major benefit from their life insurance in this period of higher claims,” Mr Minto said.

“While there has been publicity about price increases for life insurance within superannuation, the availability of life cover in super has resulted in many people getting access to cover they might not otherwise have obtained. We believe major schemes will adjust cover design and benefit amounts to improve affordability and sustainability of these covers. This will help to maintain the enormous benefits Australians receive from having this life insurance in superannuation.”

Mr Minto said efforts were continuing to help reduce lapses which are running at higher than planned levels across the industry. A key element was to better inform and educate customers about the high value of life insurance which can forestall a financial crisis when an income suddenly stops, permanently or for an extended period.

“Family budget pressures and price shopping behaviour have also had a big impact due to the ongoing economic uncertainty as Australians continue to reduce costs and save more. The concern is that people do not maintain adequate cover and it is only at claim time that customers realise the major consequences of that decision to cut back or lapse.”

^{Million of $AUD}

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