The Territory Insurance Office has reported the worst result in its 30-year history with a loss of $58.6 million.

The NT Government-owned insurer attributed most of the damage to the global downturn, with its motor accidents compensation (MAC) division particularly vulnerable to low interest rates and poor investment returns.

Its MAC fund contributed a loss of $41.1 million, while TIO Insurance & Banking lost $11.8 million.

An insurance underwriting loss of $6 million followed a profit of $8.5 million last year. Investments lost $3.5 million compared to a previous loss of $3.6 million.

The overall result compares poorly with last year’s net profit of $10 million and the $71 million profit recorded in the 2006/07 financial year.

CEO Richard Harding told insuranceNEWS.com.au TIO’s gross written premium growth of 15% was evidence that underlying performance remains sound.

“We’ve done some work to revise what was a growth-orientated investment portfolio and for the first quarter of this year we are looking at a $25 million profit overall,” he said.

Mr Harding claims TIO’s major competitors in the Territory have engaged in “irrational pricing” within the NT workers’ compensation market. Its competitors in that market are Allianz, CGU, GIO and QBE.

“Some of those rates are 20-40% away from where we’d like them to be,” he told insuranceNEWS.com.au. He says TIO will not write unsustainable business.

Earlier this year TIO announced a restructure in response to the tough economic conditions, closing two branches near Darwin and laying off 20 staff.

Chairman John Flynn says TIO maintains “a sound capital position and continues to be a market leader in the provision of insurance and banking service to Territorians”.