The Australian Prudential Regulation Authority (APRA) today released its Half Yearly General Insurance Bulletin which is compiled from audited annual returns from APRA-regulated general insurance companies for their financial years ending in the period 1 January 2007 to 31 December 2007.

Of most note is the industry’s continued strong performance and position despite combined pressure from global financial markets and natural events.

Insurers reported gross premium revenue of $30.2 billion, an increase of $1.3 billion on the previous year. Gross incurred claims were $22.4 billion. This is an increase of $4.0 billion on the previous year and is largely due to a number of severe storms in the 2006 and 2007 calendar years.

The industry reported an underwriting profit of $3.3 billion, down 5.7 per cent on the previous twelve months but 13.8 per cent higher than the twelve months to 31 December 2005.

APRA Member John Trowbridge said that industry underwriting profits and capital position have remained substantially the same as the previous year.

'Recent economic and environmental events could have placed the industry under financial stress but its reported results show that the industry has ridden both 'storms' well,' he said.

'The worldwide turmoil in financial markets had little impact on the industry in 2007 due to its conservative approach to investment. Only 7.8 per cent of investments were in equities and there were no material exposures to sub-prime mortgages or other impaired asset classes. The impact of severe weather has also been mitigated by the use of reinsurance.'

'Despite a combination of adverse events, the general insurance industry maintained a strong solvency position at 2.04 times the minimum capital required by APRA, which compares to a figure of 2.08 a year earlier. To have faced this combination of stresses and come through relatively unscathed to this point is a good indication of the overall strength of the industry,' Mr Trowbridge said.

Copies of the Bulletin are available on APRA’s website at www.apra.gov.au/Statistics/GI-Half-Yearly-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 $3 trillion in assets for 21 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.