Australian Prudential Regulation Authority (APRA) Member, Mr Steve Somogyi, said that the first edition of the regulator’s Quarterly General Insurance Performance publication released today shows an industry that has recovered strongly from its lows of several years ago. The industry is providing strong capital backing for policyholders, attractive returns to investors and making a positive contribution to the Australian economy.

“Although the industry is likely to remain somewhat cyclical, APRA is confident that stronger management, capitalisation and pro-active prudential supervision will reduce the potential for the significant downturns experienced in the past,” he said.

Based on September 2004 results, APRA’s new publication shows that total assets for the general insurance industry as at 30 September 2004 were $80.6 billion, an increase of $4.7 billion or 6.2 per cent on the previous year.

Net assets of the industry have increased by $3.1 billion to $23.3 billion, up 15.3 per cent from the previous year, and have increased by 37.2 per cent over the two years from September 2002 to September 2004.

Total industry net profit after tax for the year ended 30 September 2004 was at $5.0 billion, an increase of over 50 per cent on the previous year, which corresponds to a return on equity of 23.2 per cent.

Net loss ratios have fluctuated between 50 per cent and 70 per cent over the past year or two and are near the top of that range in the September 2004 quarter.

The new publication replaces and significantly improves on APRA’s previous publication, General Insurance Trends, by providing industry aggregate summaries of financial performance, financial position and key ratios. It is the result of public consultation and the introduction of a new prudential reporting framework for insurance.

Mr Somogyi added: “We expect the new publication will become an essential tool for those with an interest in the Australian general insurance industry.”

Copies of the Quarterly General Insurance Performance publication are available on APRA’s website at: http://www.apra.gov.au/Statistics/Quarterly-General-Insurance-Statistics.cfm

For more information about the publication, please e-mail statistics@apra.gov.au

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry.APRA is funded largely by the industries that it supervises. It was established on 1 July 1998.APRA currently supervises institutions holding approximately $2.0 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.