Insurance industry sees profit bump

Insurance industry sees profit bump

Insurance industry sees profit bump Net earned premiums and gross incurred claims fell for the Australian insurance industry over the previous quarter - but the industry saw higher profits, the latest figures released by APRA show.

In its Quarterly General Insurance Performance Statistics, APRA noted that the industry had a solid quarter while insurers upped their levels of reinsurance.

“Total industry net profit after tax in the year ended September 30, 2016, was $3.1 billion, up from $2.4 billion from the previous year,” the report states.

Meanwhile, net earned premium for the industry stood at $30.6 billion, down 3.4% from the previous year ($31.6 billion) while outwards reinsurance expense was $13.5 billion, an increase of 25.3% on the previous year ($10.8 billion).

On the claims side, net incurred claims fell by 9.9% to $20 billion, compared with $22.2 billion the previous year. This decrease was driven by a drop in gross incurred claims, down 7.1% and “mainly due to decreases in gross incurred claims for the short-tail property classes of business, particularly for houseowners/householders, and fire and ISR,” according to the report.

On the back of a reduction in net incurred claims, the underwriting result for the industry hit $2.6 billion, compared with $1.1 billion the previous year.

The net loss ratio for the industry came in at 66%, down from 70% the previous year.


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