The industry suffered a 44.7% drop in underwriting profit to $2.3 billion in the year to June 30, as claims from the Sydney hailstorm and Townsville flood negated gains from rising premium rates, latest regulatory figures show.

A strengthening of claims reserves in most long-tail classes of businesses also impacted earnings, according to the Australian Prudential Regulation Authority (APRA).

After-tax net profit decreased 8.6% to $3.5 billion.

The net loss ratio worsened seven percentage points to 69%, with short-tail property deteriorating to 70% from 68% and long-tail classes to 73% from 59%.

Gross incurred claims went up 25.4% to $37.9 billion, and the gross loss ratio weakened 12 percentage points to 72%.

The APRA data is based on regulatory filings from 96 general insurers comprising 86 direct providers and 10 reinsurers.

Gross earned premium improved 6.7% to $48.7 billion, and gross written premium rose to $48.4 billion from $45.7 billion.

Investment income surged 53.3% to $3.6 billion.

Direct insurers made a combined net profit of $3.02 billion, down from $3.6 billion a year earlier and underwriting earnings declined to $2.4 billion from $3.9 billion.

While reinsurers’ net profit grew to $479 million from $249 million, they made an underwriting loss of $85 million compared with a year-earlier profit of $264 million.