Tough quarter for bank insurers

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20 February 2012

Both Westpac and ANZ have reported difficult conditions for their insurance businesses during the three months ending December 31.

In a trading update for investors, Westpac reported strong sales for insurance without revealing any figures.

But the profitability of the business was hit by rising claims and higher reinsurance costs.

Earnings were also hit by higher expenses from more advisers being employed during the quarter while changing accounting treatment for projects and technology upgrades.

Westpac reported an after-tax net profit for the quarter in the region of $1.4 billion.

ANZ has also reported its insurance business had a tough December quarter with increased claims.

The bank’s trading update did not revealing any financial information of how its OnePath business performed during the quarter.

But ANZ did announce an after-tax profit of $1.7 billion for the quarter, with CEO Mike Smith saying it is adapting to changing market conditions in Australia.

“Although our business in Australia is tracking reasonably at present, we have to continue adapting our business model to changes in the domestic and international environment, particularly in retail and wealth,” he said.  

Meanwhile, Macquarie Group has revealed in an investor briefing that Macquarie Life now has $118 million of inforce premiums and $390 million of insurance premium funding.