Motoring assistance group and insurer RACQ has reported a net surplus drop last financial year following weaker investment returns and increased claims, while benefitting from a jump in gross written premium (GWP).

The net surplus for the mutual, which also includes banking, fell to $12.94 million for the year ended June 30 from $33.47 million a year earlier.

Insurance premium revenue increased to $968.7 million from $890.1 million while insurance claim expenses rose to $863.6 million from $847.7 million.

Several smaller but significant weather events, particularly Rockhampton and Sunshine Coast hailstorms, contributed to the claims total and a record retained loss of $129 million in natural hazard claims not covered by reinsurance, RACQ President Bronwyn Morris said.

The cashflow statement also shows GWP received reached $1 billion for the first time, rising from $982.8 million in the previous year.

Group Executive Insurance Tracy Green says the business benefitted from market share gains across its key lines, while claims inflation contributed to average rate increases overall of about 3-4%, depending on product.

“The insurance result was robust, it is sustainable and we are growing strongly,” Ms Green told insuranceNEWS.com.au. “We are putting out product that members are wanting to buy, and are seeing value, and in that respect we are able to price appropriately and deliver returns.”