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APRA releases quarterly general insurance statistics for June 2020

Thursday 27 August 2020

The Australian Prudential Regulation Authority (APRA) today released its Quarterly General Insurance Performance Statistics and Quarterly General Insurance Institution Level Statistics publications for the June 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 net profit after tax of $1.0 billion and return on net assets of 3.7 per cent were significantly lower during the year ended June 2020.  This was due to lower underwriting results from the catastrophic bushfire and storm events in late December / early 2020, and large falls in investment income mainly from the negative impact of the COVID-19 pandemic on investments markets in the March quarter. Gross incurred claims costs were significantly higher due to a large strengthening of long tail claims reserves. This was mainly due to falls in bond yields which were particularly pronounced in the March quarter with the impact of COVID-19 on investment markets.

Industry performance since the onset of COVID-19 has been an industry profit of $1.0 billion in the June quarter following a March quarter loss of $1.0 billion. The June quarter profit was largely driven by a domestic motor underwriting profits totalling $0.7 billion, and a minor rebound in investment income following the large investment loss in the March quarter.

The industry PCA coverage ratio increased slightly during the June quarter to 1.69x.

Key performance statistics for the general insurance industry in the year ended 30 June:

 

June 2019

June 2020

Change (annual)

Gross claims expense

$37.9 billion

$42.8 billion

+13.0%

Underwriting result

$2.3 billion

$1.4 billion

-38.5%

Investment income

$3.6 billion

$1.4 billion

-60.3%

Net profit after tax

$3.5 billion

$1.0 billion

-70.5%

Key performance statistics for the general insurance industry in the quarter ended 30 June:

 

March 2020

June 2020

Change (quarterly)

Gross claims expense

$15.3 billion

$8.3 billion

-45.6%

Underwriting result

-$1.0 billion

$1.1 billion

 

Investment income

-$81 million

$683 million

 

Net profit after tax

-$1.0 billion

$1.0 billion

+195.6%

Key ratios for the general insurance industry:

 

June 2019

June 2020

Change (annual)

Change (quarterly)

Net loss ratio

69%

71%

+2 percentage points

-23 percentage points

Return on net assets

12.4%

3.7%

-8.7 percentage points

+29.0 percentage points

Prescribed capital amount coverage ratio

1.79x

1.69x

-0.10x

+0.03x

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 30 June 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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