Insurance premium growth in Australia slowed to 0.5% last year from 1.3% in 2014, and the outlook for this year remains tough, according to Swiss Re.

“Non-life insurers still face pricing pressures, and premium growth in Oceania is expected to remain low [this year],” the reinsurer’s Sigma report on the global market says.

“In addition, an expansive range of regulatory changes present major challenges.”

The report says Australian liability lines were “sluggish” last year and property premiums declined. Major personal lines recorded moderate improvement.

The overall loss ratio increased to 69.2% from 63.2% after events including Cyclone Marcia, heavy storms in NSW and southeast Queensland and bushfires in SA.

“Alongside higher losses from natural catastrophes and weaker investment results, Australia’s non-life insurers reported a 43% drop in after-tax net profits,” Swiss Re says.

Primary insurers’ solvency ratio “declined slightly [last year], but was still strong”.

In New Zealand, general insurance premiums declined 1.2% amid a weak economic backdrop, after edging up 0.2% in 2014. Property premiums contracted due to fierce price competition, motor was steady and liability lines were mixed.

The loss ratio improved on benign natural catastrophe losses and lower liabilities claims.

The weakness in Australia and New Zealand came as global non-life premium growth improved to 3.6% last year from 2.4%.

“The advanced markets were the main drivers, with all regions other than Oceania experiencing higher growth rates,” Swiss Re says in the report.

Globally, advanced-market non-life premiums increased 2.6% last year and emerging markets gained 7.8%.

Advanced Asia grew 4.1%, while North America posted a 3.2% increase.

But Swiss Re warns weak economic growth and soft pricing will likely drag on premiums in advanced regions.

“Non-life insurers’ profitability is expected to continue to be under pressure as investment returns remain depressed and soft market conditions continue.”