General insurers and reinsurers made a combined net profit of $2.6 billion for the year to June 30, down from $5 billion the previous year.

The latest industry statistics from the Australian Prudential Regulation Authority show gross incurred claims increased more than 25% to $32.5 billion, driven by natural catastrophes in NSW and Queensland.

Gross written premium (GWP) gained 1.3% to $42.19 billion. Of this, $2.24 billion was earned by reinsurers, down 10% on the previous year.

Home cover GWP was up almost 2% to $7.6 billion, while domestic motor increased 1.8% to $8.04 billion.

Commercial motor GWP fell slightly to $2.08 billion, with fire and industrial special risks dropping 3.6% to $3.74 billion.

The industry’s underwriting result was a $1.6 billion profit, compared with a $4.1 billion profit the previous year.

The net loss ratio was 69%, up from 61%, and investment income dropped 12.1% to $3.3 billion.

At June 30, 115 insurers were licensed to conduct general insurance business in Australia, including 11 reinsurers.