Personal lines insurer RACQ Insurance (RACQI) has evaded weather event claims and raised premiums to return to profit last year.

While RACQI dodged the kind of natural event claims absorbed by their competitors in Perth and Melbourne to post a profit of $55 million for the year to December 31, the insurer warns proposed changes to compulsory third party (CTP) insurance could backfire.

The Queensland Government is considering a takeover of the CTP scheme, which it considers overpriced. Insurers say profit margins in CTP are razor thin and question any takeover, pointing to the precarious state of the state-run workers’ compensation scheme.

Chairman Richard Pietsch told the Courier Mail the Government’s push to underwrite the scheme would “endanger the stability” of CTP in Queensland.

The RACQI balance sheet is now firmly back in the black after losses of $36 million in 2008, including shareholder investment losses of $27.6 million. CTP posted a $16.2 million profit, up from an $11.4 million loss the previous year.

RACQ, which owns a 50% stake in the insurer, posted an overall profit of $63.3 million last year.