General insurance underwriting earnings grew last year as increased premium revenue more than offset claims, according to the Australian Prudential Regulation Authority.

Total net earned premium grew 6.5% to $30.7 billion, including $1.3 billion written by reinsurers, the regulator says in its latest quarterly report.

Underwriting profits increased to $4.1 billion, from $3 billion in 2012.

Industry net profit after tax fell 13.6% to $4.7 billion, while investment income dropped 34.3% to $3.4 billion, mainly due to changed market valuations as government bond yields increased.

Short-tail classes of business such as householder and domestic motor vehicle cover mainly drove the rise in net earned premium.

Gross incurred claims increased 10.1% to $26.2 billion, while net incurred claims gained 3.3% to $18.6 billion.

The overall net loss ratio improved to 61% from 63%, while for reinsurers it blew out to 43% from 34%.

The industry underwriting expense ratio moved to 26% from 27%, while total underwriting expenses increased 2.6% to $8 billion.