The Australain Prudential Regulation Authority (APRA) has released the first edition of its General Insurance Bulletin, which shows a pronounced turnaround in profitability for the industry over the past five years.

Over the five-year period to June 30 last year, total assets reported by the industry rose from $59.9 billion to $77.8 billion, while net premium revenue rose from $14.3 billion to $20.5 billion. Net incurred claims were steady over this period.

Over the same five-year period, the net loss ratio for the industry fell from 92% to 62%, and the return on equity rose from -7.1% to 21.1%.

APRA Executive Member Steve Somogyi – who handles the regulator’s general insurance side – says solid underwriting results coincided with well-performing investment markets to deliver improved profitability.

“A number of factors contributed to the solid performance for the year ended June 2005 including premium inflows, low claims intensity and low frequency of claims in most lines of business.”

The bulletin is the first of its kind since the introduction of the new prudential regime for general insurers and new reporting requirements in 2002. These requirements have enabled the collection of additional and more relevant information.

The unveiling of this publication should not be confused with APRA’s Quarterly General Insurance Performance Statistics.

The new APRA bulletin, which will be published every six months, is based on information from 133 private sector insurers – 112 direct insurers and 21 reinsurers.

Between July 2004 and June 2005, private insurers reported 98% of gross premium revenue being accepted inside Australia.