Fingers crossed, and barring any Cyclone Yasi-like disasters, insurers in Australia have a decent chance of closing out the year on a relatively high note.

As things stand, it has been a mild season for natural catastrophes, and that has enabled the industry to keep claims losses at manageable levels.

The year’s biggest catastrophe, the east coast storms last month, cost insurers about $377 million – well below the $949.62 million bill borne by the industry following last year’s east coast low.

Mother Nature is, of course, unpredictable, but the loss scorecard gives the industry hope it can see out the year unscathed.

“A higher frequency of higher natural catastrophe losses is always a threat to Australian insurers and their performances,” Fitch Ratings Director Insurance and International Public Finance John Birch told insuranceNEWS.com.au.

“Depending on how benign the loss year is, we could see a good improvement if natural catastrophe losses stay low.

“Compared with last year, the losses are lower in the year to date, but that could all change. If this trend continues, you expect to have to have a stronger underwriting result.”

Natural catastrophes have cost insurers almost $539 million so far this year, according to an insuranceNEWS.com.au calculation of figures collected by the Insurance Council of Australia.

Losses totalled about $2.96 billion for all of last year.

Fairer weather is something insurers will gratefully embrace, given the rough conditions they are enduring elsewhere in their businesses.

Investment income, a major source of revenue, remains under strain from near record low interest rates, not just in Australia but globally. Nobody is betting rates will head north soon, and that may encourage insurers to review their investment portfolios.

“We believe insurers may further increase allocation to risky assets to support returns, though the capital/return trade-off limits a large-scale weakening of portfolio compositions,” Fitch Ratings says in a report.

Analyst Ibisworld predicts general insurers will record about $60 billion of revenue and $7.6 billion profit for the year to June 30.

It predicts revenue will grow at an annualised 2.1% over the five years to 2020/21, reaching $66.5 billion, but emphasises that all bets are off if natural catastrophes occur.

“As weather conditions are difficult to predict, the uncertainty surrounding the regularity and severity of future natural disasters makes actuarial estimates difficult,” Ibisworld says.

“If one or more large-scale disasters occur within a short time period, the industry’s dynamics will change significantly and industry forecasts will need to be reassessed.”

The havoc natural disasters can wreak on insurers cannot be underestimated.

The last time the industry’s combined operating ratio blew out above 100% was in 2011, the year Cyclone Yasi left a trail of damage estimated at $1.41 billion.

It was a torrid year, with $4.49 billion in losses from a spate of disasters that included the $1.36 billion Brisbane floods that January.

As for how this year will close out, it’s all in the hands of Mother Nature. Fingers crossed.