New stats from APRA have unveiled how much direct insurers earned in the past 12 months and the startling multi-billion figure is a sign of the power and appeal of the direct channel.
APRA’s The General Insurance Supplementary Statistical Tables (GISST) includes state level premium and claims expenses for direct insurers and found for the 12 months to June 2012, direct insurers earned $33 billion of gross premium inside Australia.
Of this premium, $14.3 billion (43%) related to risks in NSW/ACT. This region accounts for the highest percentage of gross earned premium in all classes other than employers’ liability.
The total claims incurred for direct insurers were $26 billion and of these claims, $10.8 billion (41%) were related to risks in NSW/ACT.
The total claims incurred from houseowners/householders, domestic motor vehicle and fire and ISR classes of business accounted for 52 per cent ($13.6 billion) of the total claims incurred in all classes. These incurred losses were impacted by catastrophic events that occurred in various states in 2011.
In Victoria, the gross loss ratio for domestic motor vehicle class of business was 118%. This high loss ratios was due, in part, to the Melbourne Christmas hailstorms that occurred in December
2011. The gross loss ratio for employers' liability class of business was 322%. This high loss ratio was due to the increase in gross incurred claims which was impacted by the significant falls in government bond yields over the year.
In Queensland, the gross loss ratio for houseowners/householders and fire and ISR classes of business were above 90% (up to 144% for fire and ISR class of business). These high loss ratios were due, in part, to the Queensland floods that occurred in early 2011 (the impact of which was included in the annual returns for direct insurers with September and December 2011 balance dates).