Generation Development leads profit growth among Australian life insurers

Generation Development Group Ltd. reported the highest percentage growth in net profit after tax among leading Australian life and health insurance companies in the first half of fiscal 2025.

The life insurer's net profit after tax rose 152% year over year to A$12.4 million.

Generation Development Group's underlying business demonstrated a four-year compound annual growth rate of 28%, CEO Grant Hackett said during an earnings call. Growth could have been even higher at 39% if not for the transition to a standard corporate tax-paying entity from a full development fund license. The shift meant that the company now faces a higher corporate tax rate, impacting the net profit after tax figures.

CFO Terence Wong noted strong operating leverage in the company's financial results, with revenue growth significantly outpacing expense growth.

Mixed results for wider group

Medibank Pvt. Ltd. posted the largest underlying net profit after tax figure among leading Australian companies in the life and health sector for the fiscal first half at A$298.7 million, up 13.8% year over year. During an earnings call, CEO David Koczkar highlighted substantial growth in the resident and nonresident health insurance segments, which contributed to the strong result.

Meanwhile, ClearView Wealth Ltd. and Nib Holdings Ltd. reported declines in their underlying profits.

ClearView posted the biggest year-over-year drop, with its underlying net profit after tax plummeting 42% to A$10.5 million. The company's results were adversely affected by weaker life insurance profits, which were impacted by a A$6.2 million claims loss in the fiscal first quarter, according to an investor presentation.

Meanwhile, Nib's underlying operating profit dropped 26.7% to A$105.8 million. The profit exceeded market expectations, but reflected the anticipated normalization of margins in the Australian residents' health insurance sector and the adverse effects of high claims inflation in New Zealand, CEO Edward Close said during an earnings call.

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Investment income

Net investment income was strong across the group, with the three largest companies reporting double-digit percentage growth.

Medibank led the pack with net investment income of A$114.5 million, reflecting a 37% increase from the prior-year period. Medibank CFO Mark Rogers attributed the gains to strong performances across both growth and defensive portfolios, particularly in international equities, which benefited from a weakening Australian dollar. The increase in defensive portfolio returns was bolstered by higher asset balances and a favorable cash rate environment.

Nib reported a 23.4% increase in net investment income to A$41.1 million, driven by the positive performance of global financial markets.

NobleOak Life Ltd.'s net investment income grew 20% to A$3.2 million.