The Australian Reinsurance Pool Corporation (ARPC) has forecast weaker commercial property premiums, as the recent growth trend nears an end.

“While commercial property premiums are currently still increasing, the expectation for the near future is for a moderate softening,” it says in its annual report.

ARPC operating earnings fell 13.2% to $72.45 million last financial year, amid lower investment returns and costs associated with government dividend payments.

Gross written premium gained 5.9% to $132.09 million as commercial property insurance rates gained.

“In the coming year we anticipate a reversal of this trend [because] competition among insurers is set to increase markedly,” former CEO David Matcham says in the report.

Other softening factors include lower-than-anticipated catastrophe claims and declining reinsurance costs, because providers have excess capital.

Mr Matcham left the corporation on October 4, concluding a three-year contract.

The ARPC began paying the Federal Government dividends in the year, and is scheduled to release $700 million from its claims reserves over the next five years.

“While the impact on claims reserves held by the ARPC is significant, their impact on the size of the scheme, which is currently in excess of $13 billion, is not material,” Mr Matcham says.

Investment income fell 12.2% to $35.91 million on falling interest rates, a low risk investment profile and dividend payment requirements.