BT Financial Group’s (BTFG) insurance arm was a bright spot on the otherwise flat interim results for Westpac’s wealth management division.
In announcing its results for the first half of 2016, BTFG said insurance cash earnings were up three per cent to $162 million and the business saw growth in life insurance in-force premiums and higher premiums in Lenders Mortgage Insurance (LMI).
Loss rates across the business were broadly unchanged.
Chief executive Brad Cooper said BTFG had paid $275 million in life insurance claims last year.
“Life insurance remains a topic of interest and I am incredibly proud of our genuine ‘customer first’ culture which has allowed us to stand out in the market,” he said.
“We were the first retail insurer to extend the life expectancy time provision for terminal illness conditions, from 12 months to 24 months, and last year we were the only company awarded the top ‘A*’ rating from The Risk Store, reflecting our excellence in claims processes and customer service.”
The wider BTFG group saw little growth in its cash earnings for the first half of 2016, with growth offset by lower markets and the partial sale of BT Investment Management (BTIM) in the second half of 2015.
Its cash earnings hits $452 million, down slightly on the $453 million cash earnings for the same corresponding period last year.
Commenting on the results, Mr Cooper said the result was affected by market volatility and increased regulatory change and compliance.
“The industry is operating in a challenging environment and will continue to do so for the foreseeable future,” he said.
The funds management business delivered cash earnings of $262 million, down $21 million, or seven per cent. The first half 2016 results reflect the full period of impact following the partial sale of BTIM in June 2015 and the move to equity accounting of $8 million.
Advice income was down $22 million as investors continue to maintain a cautious approach, the banks said in its interim financial results statement.