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Summer catastrophes sink industry earnings

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The industry’s underwriting profit fell by more than half to $1.9 billion in the year to September as costs from the Sydney hailstorm and Townsville flood last summer severely dented earnings.

A strengthening of claims reserves in long-tail business classes also marred the results, according to the latest Australian Prudential Regulation Authority (APRA) data.

Net profit after-tax declined 13.2% to $3.4 billion and the net loss ratio worsened to 70% from 63% a year earlier.

Gross incurred claims increased 25% to $38.8 billion, outpacing the 6.5% rise in gross earned premium to $49.4 billion.

The APRA data is based on inputs from 97 insurers.

In a separate report, APRA provided individual insurers’ earnings covering various financial years across the 12 months to June 30.

Following are the results of key primary insurers (in alphabetical order):

  • AIG Australia recorded $806 million in gross earned premium, $802 million in gross incurred claims and $4 million in net profit
  • Allianz Australia had $4.9 billion in gross earned premium, $3.8 billion in gross incurred claims and $489 million in net profit
  • Hollard Holdings Australia logged $1.1 billion in gross earned premium, $767 million in gross incurred claims and $13 million in net profit
  • IAG returned $11.9 billion in gross earned premium, $8.5 billion in gross incurred claims and $951 million in net profit
  • QBE Insurance Australia posted $18.2 billion in gross earned premium, $12 billion in gross incurred claims and $743 million in net profit
  • Suncorp Insurance had $9.7 billion in gross earned premiums, $7.8 billion in gross incurred claims and $751 million in net profit.

The results of selected reinsurers:

  • Munich Re had $1.47 billion in gross earned premium, $910 million in gross incurred claims and $359 million in net profit
  • Swiss Re made nearly $1.1 billion in gross earned premium, $443 million in gross incurred claims and $46 million in net profit.