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APRA releases general insurance statistics for December 2020

Thursday 4 March 2021

The Australian Prudential Regulation Authority (APRA) today released its Quarterly General Insurance Performance Statistics and Quarterly General Insurance Institution-level Statistics publications for the December 2020 quarter.

The Quarterly General Insurance Performance Statistics publication provides industry aggregate summaries of financial performance, financial position, capital adequacy and key ratios. The publication also includes detailed statistics at a class-of-business level, a breakdown of operating income and expenses, and more granular solvency information.

Industry reported a net profit after tax of $35 million and return on net assets of 0.1 per cent during the year ended 31 December 2020. The result was driven by natural catastrophe claims costs, provisions for business interruption (BI) claims, and falls in investment income.

The industry reported a loss of $649m for the December quarter (predominantly due to increased provisions for COVID related BI claims, alongside storm events and long tail reserve strengthening), following profits of $836 million in the September quarter and $860 million in the June quarter (aided by underwriting profits in domestic motor), and a March quarter loss of $1.0 billion (impacted by natural catastrophe events and investment losses).

The industry PCA coverage ratio decreased during the December quarter to 1.70x predominantly due to falls in capital levels from the increased BI provisions. These falls were partly offset by capital raisings/injections by the insurers impacted by BI provisions.

Key performance statistics for the general insurance industry in the year ended 31 December:

 

December 2019

December 2020

Change (annual)

Gross claims expense

$38.1bn

$47.2bn

+23.7%

Underwriting result

$2.3bn

-$78m

 

Investment income

$3.4bn

$1.7bn

-48.8%

Net profit after tax

$3.1bn

$35m

-98.9%

Key performance statistics for the general insurance industry in the quarter ended 31 December:

 

September 2020

December 2020

Change (quarterly)

Gross claims expense

$9.0bn

$14.4bn

+59.7%

Underwriting result

$1.1bn

-$1.1bn

 

Investment income

$626m

$507m

-19.0%

Net profit after tax

$836m

-$649m

 

Key ratios for the general insurance industry:

 

December 2019

December 2020

Change

(annual)

Change

(quarterly)

Net loss ratio

69%

75%

+6 percentage points

+24 percentage points

Return on net assets

11.4%

0.1%

-11.3 percentage points

-20.9 percentage points

Prescribed capital amount coverage ratio

1.68x

1.70x

+0.02x

-0.04x

The Quarterly General Insurance Institution-level Statistics publication contains individual insurer information about financial performance, financial position, capital adequacy and key ratios. The quarterly performance statistics of insurers may be impacted by factors outside of their control, such as natural catastrophe events, as well as those driven by their internal processes, such as the timing of actuarial valuations. Users should take these factors into account when interpreting the statistics.

Copies of the 31 December 2020 quarterly publications are available on APRA’s website at: Quarterly general insurance statistics.

Statistics

For more information

Email dataanalytics@apra.gov.au or mail to

Manager, External Data Reporting – Data Analytics and Insights
Australian Prudential Regulation Authority
GPO Box 9836, Sydney NSW 2001

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