… but APRA says insurers are solid
The financial strain of Cyclone Larry has yet to be felt by insurers, with industry profits up and claims stable in the latest snapshot by the Australian Prudential Regulation Authority (APRA).
The effect of Larry, which incurred more than $540 million in insurance losses, seems to be have been absorbed by the industry’s reserves. Gross incurred claims – paid, about to be paid and possible in the future – were unchanged at $18.4 billion for the year ending December 2006 compared with the previous year.
APRA’s half-year bulletin shows gross premium revenue rose $500 million from the year before, to $28.9 billion, and net profit was up nearly $300 million to $5.36 billion.
Residential claims in Queensland showed the effect of Cyclone Larry, with gross claims from homeowners up 55.7%, or more than $200 million. This contributed to an overall increase in nationwide gross homeowner claims of more than 10%, to $2.1 billion.
Problems in the homeowner market are also reflected in the APRA update, showing a three-fold increase in mortgage lender claims in 2006. Insurance costs from default mortgages rose from $49 million to $210 million.
“The higher level of claims is consistent with housing stress reported in some areas of western Sydney and elsewhere in Australia,” the APRA report said.
Fire and industrial special risk claims jumped 50%. Professional indemnity, employers’ liability, and public and product liability recorded large falls in gross claims, down 23%, 31% and 32% respectively.
At 21.7%, the domestic motor vehicle market accounted for the largest percentage of total direct gross premium revenue.
Premium income for Lloyd’s of London in Australia was $1.6 billion over three years from 2004, compared with the $1.5 billion accrued from 2003 to 2005.
The effect of Larry, which incurred more than $540 million in insurance losses, seems to be have been absorbed by the industry’s reserves. Gross incurred claims – paid, about to be paid and possible in the future – were unchanged at $18.4 billion for the year ending December 2006 compared with the previous year.
APRA’s half-year bulletin shows gross premium revenue rose $500 million from the year before, to $28.9 billion, and net profit was up nearly $300 million to $5.36 billion.
Residential claims in Queensland showed the effect of Cyclone Larry, with gross claims from homeowners up 55.7%, or more than $200 million. This contributed to an overall increase in nationwide gross homeowner claims of more than 10%, to $2.1 billion.
Problems in the homeowner market are also reflected in the APRA update, showing a three-fold increase in mortgage lender claims in 2006. Insurance costs from default mortgages rose from $49 million to $210 million.
“The higher level of claims is consistent with housing stress reported in some areas of western Sydney and elsewhere in Australia,” the APRA report said.
Fire and industrial special risk claims jumped 50%. Professional indemnity, employers’ liability, and public and product liability recorded large falls in gross claims, down 23%, 31% and 32% respectively.
At 21.7%, the domestic motor vehicle market accounted for the largest percentage of total direct gross premium revenue.
Premium income for Lloyd’s of London in Australia was $1.6 billion over three years from 2004, compared with the $1.5 billion accrued from 2003 to 2005.