Crisis-hit CCI reports net loss
Catholic Church Insurance (CCI) recorded a net loss of $274.2 million last financial year as it entered run-off.
The loss for what was Australia’s oldest continuously operating general insurer compares with a profit of $866,000 the previous year, which in turn followed losses of more than $200 million in fiscal 2020.
Last May 29, CCI said it would stop issuing renewals or new policies because of financial pressures resulting from an increase in historical abuse claims, referred to as professional standards claims. The Federal Court and policyholders later approved a scheme of arrangement for the “orderly” payment of claims should the insurer risk becoming insolvent.
The annual report shows the prescribed capital ratio, which reflects capital held relative to the minimum required by the Australian Prudential Regulation Authority, deteriorated to 0.14 at the end of the year to June 30, from 1.61 in the previous period.
The company has targeted a prescribed capital ratio operating range of at least 2.4 times.
“As we face forward now into our new operating structure in 2024, our purpose and mission remain – to serve by managing claims and the run-off operation to the best of our ability and in the best interests of all policyholders,” Chairman Joan Fitzpatrick and CEO Roberto Scenna said in the report.
Premium revenue last year grew 7.7% to $357.3 million, while gross claims incurred increased to $682 million from $459.1 million. The underwriting result deteriorated to a loss of $278.5 million.
The statement of financial position shows an outstanding gross claims liability of $1.25 billion. This includes a current claims liability of $598.65 million and a non-current liability of $654 million.
The report says there is significant uncertainty around future professional standards claims, given publicity surrounding the Royal Commission into Institutional Responses to Child Sexual Abuse and the National Redress Scheme.
The report is available here.