The insurance industry has returned to underwriting profitability with annual underwriting profit of $3.8 billion, reversing a previous loss of $1.1 billion.

The latest quarterly general insurance figures from the Australian Prudential Regulation Authority reveal net premium revenue of $25.3 billion for the year ended December 31, up 8% from $23.3 billion the previous year.

Net incurred claims reflected a relatively benign year, falling 19% to $14.8 billion, while industry net profit climbed 74% to $4 billion.

Insurers achieved a return on net assets of 14%, against 8% previously.

For the December quarter, insurers lifted net premium 9% to $6.17 billion, while underwriting profit improved to $1.08 billion from a loss of $1.15 billion a year earlier.

Net profit for the quarter increased to $1.24 billion from $492 million previously.

Despite the good results elsewhere, industry assets fell $700 million during the year to $94.2 billion.