Australian Life Insurance

Submitted by Craig Strzelecki on 18 April, 2007 - 17:53

Sharemarket analyst UBS has provided an update for the Australian Life Insurance sector. They observe that there has been a strong equities boost asset growth in Q4 2006 for the Australian Life Insurance sector. Life office assets were up 4.4%: APRA's Q406 'Life insurance trends' shows life office assets up 4.4% to $239.7bn in Q4. This balance is 8.9% higher than the pcp, and compares with a ten year CAGR of 6.0%. Super assets up 4.7% in the quarter: Growth was centred in the superannuation divisions. In turn, strong net earnings accounted for the bulk of the increase, reflecting solid asset returns, particularly for equities. Net premium outflows continued. Ordinary business rises 1.7%: The slower growth in ordinary businesses is in line with recent trends. In contrast to the super businesses, asset growth was almost entirely driven by net premium inflows. The analyst remains neutral towards the Australian life insurers. Within the life sector, the sharemarket analyst has a slight preference for AXA (Neutral 2, PT $7.85) over AMP (Neutral 2, PT$10.70).