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APRA release confirms general insurers' profits hit by bad weatherThe Quarterly General Insurance Performance Statistics publication just released by APRA disclose the underwriting result of all general insurers was down a very considerable 85.7% from the previous year to a surplus of $0.5 billion. The previous year’s surplus was $3.4 billion. An increase in weather-related claims costs were noted as a major reason for the decrease. The statistics reflect performance for the year ended September 2008. Net premium revenue for the industry in the year was $23.1 billion, up 3.9% from the previous year. Of this, direct insurers wrote $21.8 billion (94.5 per cent), while the remaining $1.3 billion was written by reinsurers. Net incurred claims for the industry in the same period were $16.3 billion, up 29.2% from the previous year, primarily due to weather-related claims in December 2007, and January 2008. Net loss ratio for the industry in the year ended 30 September 2008 was 70.6%, against 56.7% in the previous year. Reinsurers saw their net loss ration increase in the same period from 28.5% to 64.3%, due also to higher claims costs from weather-related events. The industry underwriting expense ratio reduced slightly from 27.8% to 27.3%, although underwriting expenses increased by 2.2% to $6.3 billion. Investment income fell from $4.2 billion to $4.0 billion and return on total investments was 6.8%, down from 7.4% in the previous year. Total industry net profit after tax was $2.6 billion, down from $5.2 billion in the previous year. Return on net assets was 9.9 per cent, down from 20.4 per cent in the previous year. Direct insurers accounted for $2.2 billion (84.6%) of the industry profit. |
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