The raft of reforms being planned for the industry could have earnings implications for general insurance providers, actuaries Taylor Fry say in a report.

Personal lines insurers in particular are already feeling the heat, months after the Hayne royal commission released its final report in February after last year’s hearings into financial sector misconduct.

“There has been increased regulatory focus on consumer outcomes for purchasers of personal lines products in the aftermath of the royal commission,” Taylor Fry’s Radar report says.

“This may prompt insurers to review their pricing strategies, particularly regarding new versus renewing customers.

“Some insurers are already including comparative pricing information in anticipation of it being a requirement in the upcoming General Insurance Code of Practice.

“This may have a negative impact on renewal rates, with consumers more likely to shop around once they have greater visibility over premium changes.”

A key outcome from the royal commission findings is how insurers are already altering the way they approach doing business.

Principal Kevin Gomes says the “ongoing impacts from the royal commission have made insurers increasingly conscious of the need to balance shareholder and policyholder considerations”.

The proposed move to apply unfair contract terms provisions to insurance contracts could see flood exclusions coming under challenge from consumers.

This may result in insurers taking out the opt-out clause presently available to consumers and attaching large premium increases for flood covers in high-risk areas, the report says.

The report also looks at how the various lines have performed based on the last financial year’s statistics from the Australian Prudential Regulation Authority.

Profitability for commercial lines remains under pressure despite hardening rates, the report says, citing the fallout from catastrophic weather events.

Rising litigation and class actions continue to hurt professional indemnity.

In compulsory third party, the combined ratios for all jurisdictions have risen over the past three years, but remain below 100%.

In domestic motor, the high cost of repairing cars installed with advanced driver-assistance systems is pushing up claims cost. But the profit outlook is stable as premium rises are in line with claims inflation.