The industry more than tripled its underwriting profit to $6.1 billion for the 12 months to September from a year earlier, managing to push through premium increases in key lines as floods and other extreme weather events increase claims.
However, underwriting results were offset by significant investment losses of $3 billion, causing the industry’s after-tax net profit to fall 0.8% to $960 million, according to data from Australian Prudential Regulation Authority (APRA) published today.
Net earned premiums increased 10.3% to $43.3 billion, while net incurred claims decreased 3.4% to $26.9 billion, reflecting higher reinsurance recoveries for industry.
According to APRA, the rise in underwriting profits – from $1.9 billion a year earlier – was driven by higher net premiums earned, reflecting the impacts of higher rate adjustments across most classes of insurance. ‘activities.
“Premium increases were greatest in the home, domestic auto, fire and industrial special risks, professional liability and reinsurance lines of business,” the regulator said.
Gross premiums earned increased 11.3% to $61.9 billion and gross incurred claims also increased, but at a slower pace of 8.1% to $46.3 billion.
The NSW/Queensland floods in February and March – the costliest insured flood disaster with losses of at least $5.57 billion – notably led to an increase in gross claims incurred, according to APRA.
“The increase in gross incurred loss costs was reflected in short-term property categories such as homes, home and commercial auto, and reinsurance,” says APRA.
According to APRA, the investment loss of $3 billion – compared to a profit of $1.2 billion a year earlier – was due to rising bond yields over the past 12 months, leading to losses unrealized on interest-bearing investments.
However, insurers’ investment portfolios performed better in the September quarter, rebounding with a profit of $100 million after losing $1.2 billion in the previous three months.
According to APRA, despite the turnaround, investment income remained modest compared to historical levels.
Underwriting profit fell 29.3% to $1.6 billion from the prior June quarter, the result of a 19.5% increase in net incurred claims costs to $7.1 billion.
Net income for the quarter was $937 million, down from $300 million.