The Victorian Managed Insurance Authority has turned around three years of losses to report a $118 million operating surplus for 2024-25.

The state government insurer’s annual report says higher than expected net earned premium and investment income lifted the result.  

These tailwinds were partially offset by higher than expected claims across most portfolios. Lower interest rates increased the net claims liability.

VMIA earned gross premium of $827 million, up 21%, and incurred gross claims of $1 billion, up 13%.

Net premium rose 25% to $727 million and net claims gained 6% to $993 million.

The report says claim costs face pressure across all portfolios due to factors including higher general damages allowances and special damages in compensation payouts.

As more claimants hire lawyers, VMIA’s legal bill is rising.

Claims continued to rise for domestic building insurance – cover for homeowners for incomplete or defective construction work – but this portfolio moved to the new Building and Plumbing Commission in July.