RACQ is “committed” to its general insurance business, the Queensland motoring club said, after the loss-making division returned to profitability in the last financial year. 

In its FY2022/23 annual report, RACQ Chair Leona Murphy said the board “continues to review RACQ Insurance, focused on the exploration of optimal capital structures with the aim of improving the utilisation of members funds in delivering insurance products and services”. 

A spokesperson declined to say if the review includes a potential sale of RACQ Insurance. Last year a number of unsourced media reports said the club was looking to sell the business, and at one stage, was close to a $500 million deal with a major insurer. 

The spokesperson says RACQ’s “goal is to provide our members with accessible and affordable insurance solutions”. 

“And in line with the increased volatility facing all insurers and the capital demands to support this, RACQ continues to take active steps to strengthen its balance sheet, including long-term partnerships in reinsurance,” the spokesperson said. 

“At the same time, we have been and will continue to look for ways to drive greater efficiencies and improvements across our business. The Club has been offering insurance for the past 50 years and we remain committed to continue doing this for our members and to grow our market share.” 

RACQ Insurance is ranked 8th and 10th in Australia by gross premium written (GWP) for motor vehicle and home insurance respectively. 

It reported an after-tax net profit of $31.9 million in FY23, after a $236 million loss in the prior year. The $236 million comprised of a $149 million provision and $87 million trading loss, and took into account things like the pricing promises review, flooding disaster and cost challenges. 

RACQ Group CEO David Carter said the improved results were driven by strong GWP, lower natural hazards costs, improved underlying claims cost performance, and a more normal year of returns on investments. 

He said in the annual report the business has finalised 96.5% of the more than 16,000 claims received from last year’s floods. 

“We now expect the final cost of this disaster to be below our initial estimate of $350-380 million.” 

He said supply chain management continues to be a critical area of focus in both home and motor, with pressures notably easing in home in the latter part of the financial year as a result of greater capacity in trades and more reliable supplies of materials. 

Mr Carter said distribution partner, insurtech Honey Insurance, has not been immune to the challenging operating environment. The insurtech is budgeted to contribute a small profit in FY24 as the portfolio continues to grow, after a loss in the prior year.