The positive outlook for Australian insurers has been reinforced by a report by the Reserve Bank of Australia (RBA). In its first review of the industry’s financial stability, it attributes the move to a more profitable base on “growing premium income, stronger underwriting standards, comparatively mild claims expenses and cost efficiencies”.

The financial stability review is the first of a series of new reports that provides the RBA with an assessment of the macroeconomic environment, the strength of the financial system and improvements to enhance the regulatory infrastructure. The review will be published twice yearly in March and September.

An exception to the positive local scene was AMP, which recorded a loss of $5.5 billion for 2003. But the RBA says the majority of the loss can be blamed on the group’s UK operations.