The Australian Prudential Regulation Authority (APRA) today released the Half Yearly General Insurance Bulletin for the year ended 31 December 2006. The Bulletin is compiled from data lodged by each APRA-regulated general insurance company in its audited annual return as at its 2006 balance date.
Over the year, gross premium revenue for APRA-regulated general insurers was $28.9 billion, up $500 million on the previous year. Direct insurers reported gross premium revenue of $27.4 billion, making up 95.1 per cent of the total, while reinsurers accounted for the remaining 4.9 per cent or $1.4 billion.
Gross incurred claims were $18.4 billion, with $17.9 billion (97.2 per cent) made up by claims on direct insurers. As a result, the total reported net loss ratio for the industry was 57 per cent, down from 61 per cent for its 2005 year.
Total assets reported for the industry were $83.6 billion and total liabilities were $58.8 billion, so that the industry aggregate net assets were $24.8 billion. The corresponding capital for APRA’s prudential purposes was $23.1 billion, which is almost identical to the 2005 figure of $23.2 billion.
APRA Member Mr John Trowbridge said that the solvency coverage had fallen from 2.44 in 2005 to 2.08 in 2006, but this occurred largely because APRA increased its minimum capital requirements for lenders mortgage insurance in 2006.
“Although lenders mortgage insurers’ total capital increased by 11.5 per cent as a result of this change, their solvency coverage reduced from 2.75 in 2005 to 1.19 in 2006. For the remainder of the industry the solvency coverage was 2.31 compared with 2.41 in 2005,” he said.
“It is notable that, while the aggregate capital position of the industry was the same in 2005 and 2006, and the solvency coverage suffered a modest reduction in 2006, industry capital has increased by more than 60 per cent over the past five years and, at $23.1 billion, remains strong overall.”
Copies of the Bulletin are available on APRA’s website at www.apra.gov.au/Statistics/General-Insurers-Statistics.cfm.
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 $2.5 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.
Media and industry inquiries only:
Andrew McCutcheon, Public Affairs Manager
Australian Prudential Regulation Authority
Telephone: 02 9210 3143
Mobile: 0417 528 660
All other inquiries:
APRA Contact Centre 1300 131 060
