The Victorian Transport Accident Commission (TAC) suffered a $1.02 billion loss in 2011/12, down from a $279.4 million profit in the previous year, amid collapsing investment returns and falling interest rates.

However, it made a $351 million profit on its insurance operations, compared with $187 million a year earlier, and paid the Victorian Government a $140 million “dividend” on profits made the previous year.

Chairman Paul Barker says the loss resulted from a negative investment performance of $1.82 billion, driven by a “significant reduction in bond yields over the period and lower investment returns of 4.2%, compared with 10.9% for the previous year”.

Investment returns were a positive $204 million in 2010/11.

Victorian Treasurer Kim Wells says the loss is due to a “significant fall in Australian bond yields, which [are] used to value claims liability”.