Profits for insurers and reinsurers fell by half to $2.36 billion as a string of weather-linked disasters including storms in NSW drove up claims, annual industry data shows.

Gross incurred claims for the year to September 30 increased 26.9% to $33.5 billion and net earned premium grew 1.1% to $31.3 billion, the Australian Prudential Regulation Authority (APRA) says in its latest quarterly update released last week.

Gross written premium (GWP) improved to $42.84 billion from $41.76 billion the previous year, but the net loss ratio worsened to 70% from 62%.

“The higher gross incurred claims were largely driven by catastrophe events, including storms in NSW and southeast Queensland… and hailstorms in Sydney… and in Brisbane,” the report says. 

The APRA report covers 112 licensed groups ­– 102 insurers and 10 reinsurers.

Overall investment income was $3.36 billion, down from $3.38 billion.

GWP for the 102 insurers increased to $40.35 billion from $39.27 billion, and gross incurred claims grew to $31.79 billion from $24.95 billion.

Among household policies, GWP grew to $7.69 billion from $7.49 billion, gross incurred claims increased to $5.37 billion from $3.21 billion, the net loss ratio blew out to 70% from 51% and the combined operating ratio deteriorated to 99% from 79%.

In fire and industrial special risk, GWP fell to $3.7 billion from $3.86 billion, gross incurred claims increased to $3.68 billion from $1.49 billion, the net loss ratio moved to 89% from 49% and the combined operating ratio hit 133% from 89%.

For domestic motor, GWP improved to $8.12 billion from $7.94 billion, gross incurred claims grew to $6.06 billion from $5.35 billion, the net loss ratio deteriorated to 76% from 72% and the combined operating ratio moved to 98% from 92%.

Compulsory third party motor GWP increased to $3.6 billion from $3.51 billion. Gross incurred claims fell to $2.82 billion from $2.99 billion, the net loss ratio strengthened to 75% from 86% and the combined operating ratio improved to 87% from 98%.

For the 10 APRA-licensed reinsurers, GWP was flat at $2.49 billion. Gross incurred claims grew to $1.72 billion from $1.46 billion, the net loss ratio weakened to 73% from 55% and the combined operating ratio deteriorated to 106% from 85%.