Surge in claims dents life insurer TAL's half-year profit Jim Minto from TAL. TAL, Australia's second-biggest life insurer, has posted a slide in half-year profit but expects price rises to contribute to a better performance this half. Managing director Jim Minto said the September-half results were dragged down by higher-than-expected claims, including claims dating back a decade and shepherded by lawyers, rather than people giving up their policies. "The trends are quite remarkable," Mr Minto said, pointing to larger numbers of mental health claims over the past few years as the economy has weakened. People are saying they won't be able to go work again, which is a dramatic judgment. TAL's Japanese parent, Dai-ichi Life, tipped an improvement in TAL's net income this half but expects its 2014 result to be lower than the previous year's. "We expect claims experience in the second half of the year to benefit from management initiatives, and therefore forecast TAL to record $70 million net income in the current fiscal year, while it recognised $29 million net income in the first half of the year," it said. The $70 million net income forecast for the year to March 2014 compares with $91 million recorded in 2013. Dai-ichi Life bought TAL, formerly known as Tower Australia, two years ago for $1.2 billion. TAL sells policies direct to customers, via financial planners, and through group and workplace superannuation schemes. Its customers include AustralianSuper and First State Super. The results follow profit warnings from Australia's biggest life insurer, AMP, as a slowing economy prompts some people to opt out of life insurance products such as death and disability cover. Life insurers have been hit by a surge in disability and stress-related claims, and by delays in people returning to work. Furthermore, while life insurance policies are designed to stay in force for some years, people are changing their policies more frequently as they cut costs and consolidate their super. TAL's underlying profit - stripping out elements such as interest rate changes and one-off expenses - fell 34 per cent to $46 million in the six months to September. Ordinary profit almost halved to $49 million, and net income slumped 57 per cent to $29 million. Ordinary revenue rose 15 per cent to $1.37 billion.