The industry’s householders segment made an insurance service profit of $534 million in the June quarter and general insurers combined for an overall insurance service profit of $2.22 billion, prudential data released today shows.

The figures represent a substantial improvement for the industry, particularly in the householders line, which has been loss-making for at least three years, analysts say.

Householders cover made losses of $194 million in the March quarter and $681 million in the December quarter, reflecting the toll on the industry of the 2022 record floods and other natural catastrophes. Insurers have raised home rates since those floods to cover higher claims costs, inflation, reinsurance expenses and economy-wide cost pressures.

“One quarter doesn’t mean that it has totally turned, but it’s a positive sign,” KPMG insurance partner Scott Guse told insuranceNEWS.com.au.

On the industry’s overall results for the June quarter, he said: “An extremely positive quarter ... historically, it has not been, because we are coming off the tail end of the natural catastrophe weather [period] ... however, there was an absence of those sorts of events and therefore the results have come through very positively.”

The industry’s insurance service profit of $2.22 billion is up from $1.43 billion in the March quarter, while net profit after tax rose to $1.57 billion from $1.41 billion.

In the Australian Prudential Regulation Authority’s enhanced data publications, insurance service result is a key metric of underwriting performance.

Short-tail classes including householders made an insurance service profit of $1.08 billion; long-tail classes made $592 million; mortgage business $154 million; and other direct classes $161 million.

The industry’s overall insurance revenue increased to $18.57 billion from $18.22 billion in the March quarter. Reinsurance premium allocation was $4.14 billion and recoveries from reinsurers totalled $2.06 billion.

Mr Guse said: “Australian companies are paying a lot for reinsurance and not collecting much, which is positive in one respect. We’re not having the claims to make recoveries on, but if you look at the results, reinsurers made about $2.1 billion profit ... in the last quarter alone.

“Obviously, the more profitable reinsurers [are], the more likelihood we are going to have stability ... in pricing going forward.”