The Australian insurance industry has proved “resilient” to a challenging economic and natural environment, according to the latest industry snapshot by KPMG.

In a year beset by severe weather events and jittery investment markets, insurer net profit remained steady at $3.197 billion, against $3.21 billion in the 2008 financial year.

The Victorian bushfires and Queensland floods contributed to an estimated $1.7 billion cost of severe weather events. Insurers’ Australian operations returned an underwriting loss of $609 million, after a $938 million profit last year.

Overall underwriting surplus fell 76% to $463 million, although gross written premium grew 4.3% to $35.2 billion.

“The foundation of general insurance remains strong,” KPMG said in the report released this morning.

KPMG has forecast premiums to increase further in response to rising claims costs and lower investment returns.

See insuranceNEWS.com.au on Monday for a full report.