Insurers are still losing money in the householders line but industry net earnings increased in the March quarter, according to an Australian Prudential Regulation Authority update.

The industry booked a $1.41 billion profit in the period, compared with $938 million in the December quarter; its “insurance service result” was a $1.43 billion profit, up from $861 million; and incurred claims fell to $10.1 billion from $11.52 billion.

In the short-tail segment, householders cover made an insurance service loss of $194 million in the March quarter, improving from a $681 million loss previously.

Householders incurred claims decreased to $2.45 billion from $3.18 billion and gross written premium fell to $3.66 billion from $3.82 billion. 

These are APRA’s first “enhanced” quarterly statistics since it suspended publication last year to consult on new accounting standards. The adoption of Australian Accounting Standards Board 17 Insurance Contracts led to changes in the reporting framework for insurers.

In the enhanced publications, insurance service result is a key metric of underwriting performance.

KPMG insurance partner Scott Guse says the statistics show overall market profitability has improved.

He says the householders insurance service loss in the December quarter mainly reflected the Christmas storms that hit parts of Queensland and NSW.

“The result in homeowners is not surprising ... we have seen sizeable increase in premiums and they are starting to flow through now ... so I would expect the next quarter, the June quarter, to be profitable,” he told insuranceNEWS.com.au.

Other key figures from the APRA statistics show the industry booked insurance revenue of $18.22 billion and investment returns of $1.36 billion.

Short-tail property classes made an overall insurance service profit of $192 million following a $605 million loss in the December quarter.

In other short-tail property lines, domestic motor made a profit of $275 million ($117 million profit in December quarter); commercial motor logged $61 million profit ($25 million loss); and fire and industrial special risk made a $51 million profit ($16 million loss).

See the statistics here.

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