Limited re-investment opportunities, persistent low interest rates and the rise in operating expenses have all combined to negatively affect the earnings and profitability of the life insurance industry.
Hence, the return on investment fell to around 5.5 percent in June 2012 from over 6 percent in the previous year, and the return on equity slowed to 12 percent from almost 14.5 percent over the same period. At the end of June 2012, the Statutory Fund for the consolidated life insurance sector was in surplus.