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Premium earnings up but profit down

The Australian general insurance industry earned net profit after tax of $4.1 billion last year, down 12.8% on the 2013 figure.

However, net earned premium was up 3.2% to $31.7 billion, according to the latest statistics from the Australian Prudential Regulation Authority.

Of this sum, primary insurers wrote $30.1 billion and reinsurers $1.6 billion.

Gross incurred claims increased 3.6% to $29.8 billion, while net incurred claims were up 11.8% to $20.8 billion. Gross incurred claims for domestic motor grew 6.1% to $5.7 billion due to higher claims from catastrophes, including last November’s Brisbane hailstorm.

Increased claims led to reduced underwriting profit of $2.7 billion, down from $4.1 billion in 2013.

Short-tail classes such as householder and domestic motor powered the overall premium rise, while investment income for the industry grew 24% to $4.2 billion.

The net loss ratio was 66%, up from 61%, and the underwriting expense ratio was unchanged at 26%.

Total industry underwriting expenses increased 2.1% to $8.1 billion.

At December 31 there were 103 insurers and 12 reinsurers licensed to conduct general insurance business in Australia.

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