The general insurance industry returned to profitability in the March quarter, achieving a $19 million net profit after a $622 million loss in the preceding three months to December, according to the prudential regulator.

For the 12 months to March 31, the industry recorded a 28.3% fall in net profit to $1.1 billion from the corresponding period last year, the Australian Prudential Regulation Authority (APRA) said last week in a regular update.

Provisions for business interruption claims and natural catastrophe losses marred the industry’s results in the 12-month period, as did impacts from the COVID-19 operating environment and lower investment income.

APRA says the industry reported “large” gross incurred claims from the Halloween hailstorms and severe flooding in NSW and Queensland, which were declared a catastrophe by the Insurance Council of Australia.

“Significant” provisions for BI claims made in the December quarter also pushed up gross incurred claims.

But the fallout from these increases were offset partially by declines in domestic and commercial motor claims costs, the result of lower levels of vehicle usage during parts of last year when COVID restrictions were in place.

As a result, total gross incurred claims for the year declined 1.9% to $41.5 billion.

Gross earned premium rose 4.1% to $53.1 billion, supported by rate increases in householders, domestic motor, fire & industrial special risk and professional indemnity classes of business.

APRA says the increase in premiums was in response to rising claims costs in these classes.

Underwriting earnings grew 6% to $1.6 billion and investment income dropped 20.8% to $1.6 billion

For the March quarter, gross earned premium remained flat at $13.6 billion while gross incurred claims fell 36% to $9.4 billion.

The industry made an underwriting profit of $657 million, erasing the previous quarter’s $1.1 billion loss.

In a separate report, the prudential regulator provided individual insurers’ earnings for the March quarter.

Following are the results of key primary insurers (in alphabetical order):

• AIG Australia recorded gross earned premium of $257 million, gross incurred claims of $161 million and neither a loss or profit
• Allianz Australia had $1.24 billion in gross earned premium, gross incurred claims of $989 million and a $16 million net loss
• Hollard Holdings Australia posted $385 million in gross earned premium, $252 million in gross incurred claims and a $1 million net loss
• IAG booked $2.14 billion in gross earned premium, $1.55 billion in gross incurred claims and a $17 million net loss
• QBE Insurance Australia had $1.34 billion in gross earned premium, $873 million in gross incurred claims and a $2 million net loss
• Suncorp-owned AAI recorded gross earned premium of $2.12 billion, gross incurred claims of $1.62 billion and net profit of $22 million.

Here are the results of selected reinsurers:

• Munich Re had gross earned premium of $421 million, gross incurred claims of $254 million and net loss of $26 million
• Swiss Re made gross earned premium of $87 million, gross incurred claims of $22 million and $20 million net profit.

Click here to access the reports.