The general insurance industry’s earnings fell steeply in the March quarter while the householders line narrowed its losses, according to Australian Prudential Regulation Authority data.

Insurers’ combined profit from continuing operations after income tax slumped to $634 million, nearly half the $1.1 billion recorded a year earlier.

A huge slide in investment returns, to $530 million from $1.18 billion, affected the industry’s performance.

The industry also suffered unrealised losses of about $613 million in the March quarter, following a $668 million loss in the October-December period.

KPMG insurance partner Scott Guse says the unrealised losses were “sizeable”.

But he adds the industry has performed well given the March quarter has “historically been quite volatile”, being at the “back end of the weather season”.

Narelle was the biggest storm during the cyclone season that ended on April 30, and the summer bushfire season was generally benign, with the Victorian blazes in January the sole declared insurance catastrophe.

The industry made an underwriting profit of $1.24 billion in the March quarter, down from $1.32 billion a year earlier. The figure was up sharply from the preceding quarter’s $284 million.

 

 

In the householders line, underwriting losses narrowed sharply to $10 million from $191 million a year earlier and $1.08 billion in the preceding quarter.

While it remains loss-making, the line is on the “right trajectory … albeit there will be fluctuations from period to period”, Mr Guse says.