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RACV Insurance profit slumps

Deteriorating investment returns and increased severe weather claims have impacted RACV’s insurance returns in the last financial year.

The dominant Victorian personal lines insurer – which owns Insurance Manufacturing Australia in a joint venture with NRMA Insurance – experienced a $29.7 million drop in dividends to $57.3 million. That’s 34% less than the previous year.

Insurance commission for the year was up 2.4% to $54.7 million from the previous year.

RACV Insurance CEO Colin Jordan says the figures reflect an increase in insurance storm costs and lower returns on investment activity.

He says a number of severe weather events in Victoria over the past year have raised claims, with one storm in December resulting in more than 3000 building and contents claims.

“A severe windstorm a few months later brought another 5500 claims for damage caused by falling trees and for refrigerated food lost as a result of electricity supply interruptions,” Mr Jordan said.

He says despite this, RACV Insurance is still a leader among the highly competitive motor and home insurance market, with an increase of 20,000 policies over the year and a 19% growth in commercial policies.