The Australian Prudential Regulation Authority (APRA) has released its 2020 financial year general insurance claims data.

APRA says the professional indemnity (PI) product line saw reserve strengthening across all recent accident years, with the trend aligning with an increase in class action activity.

Premium increases were offset by increases in future expected future claims, APRA says.

The estimated ultimate loss ratio for PI in the 2020 accident year is 67%, with about $2.58 billion in gross earned premium. In the 2019 accident year, the estimated loss ratio was 65.2% with $2.11 billion in gross earned premium.

PI gross claim payments in the 2020 accident year reached $114 million, compared with $104 million in the 2019 accident year.

For the compulsory third party (CTP) motor vehicle line, significant reserve releases occurred consistently across all prior accident years in the 2020 financial year.

APRA says these reserve strengthening were mainly concentrated in the accident years up to five years prior.

The estimated ultimate loss ratio for the 2020 accident year is 84.1%, compared with 83.2% in the 2019 accident year.

The CTP line recorded about $3.37 billion in gross earned premium in the 2020 accident year versus $3.58 billion in the 2019 accident year.

Gross claim payments in the 2020 accident year reached $102 million, compared with $95 million in the prior accident year.

Public and product liability saw some reserve strengthening across recent accident years, according to the APRA data.

The estimated ultimate loss ratio for the 2020 accident year is 55.9%, compared with 53.7% in the 2019 accident year.

Gross claim payments in the 2020 accident year amounted to $99 million, little changed from the $100 million recorded in the previous accident year.

Houseowners/householders reported an estimated ultimate loss ratio of 81% for the 2020 accident year, higher than the 10-year average of 59%, due mostly to the negative impact of natural catastrophe events on insurers’ claims costs, APRA says.

Gross claim payments in the 2020 accident year reached $4.79 billion, compared with $3.42 billion in the 2019 accident year.

Gross earned premium in the 2020 accident year totalled $9.71 billion, versus $9.21 billion in the prior year.

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