The National Claims and Policies Database (NCPD) provides insurers, the community and government detailed comparative data to promote a better understanding of professional indemnity and public and product liability insurance. These Explanatory Notes outline the information that is in the NCPD reports, including:
- the coverage and data limitations of the NCPD; and
- a guide to interpreting the contents of the NCPD reports.
A glossary of key terms is also included.
About the NCPD
The NCPD is a comprehensive database of policy and claim information on professional indemnity (PI) and public and product liability (PL) insurance. It contains data on every open, reopened or finalised claim and policy underwritten on PI/PL since 2003 by Australian APRA regulated general insurers, although data for 2003 is excluded from the current publication due.
The NCPD was created by APRA at the request of the Federal Government and was launched in January 2005.
The NCPD provides insurers, the community and governments with better information on PI and PL insurance than previously available. It provides insurers with detailed information to assess risks and price premiums, and to develop or enhance PI and PL products for policyholders. It also assists insurers, the community, and governments to monitor the number and cost of PI and PL claims.
All Australian APRA-regulated general insurers that provide PI and PL insurance must contribute claims and policies data to the NCPD. Separate reports for Lloyd’s have been released.
Contents of the NCPD
The NCPD includes claims and policies data for: Professional Indemnity (PI) insurance policies providing cover for:
- legal actions taken against a person for advice or services supplied as part of their professional practice, including related legal expenses;
- Directors’ and Officers’ Liability insurance and legal expense insurance; and
- Medical Indemnity insurance.
Public and Product Liability (PL) insurance policies providing cover for:
- legal liability to the public for injury or property damage from the operation of the insured’s business
- compensation for loss and/or injury caused by, or as a result of, the use of goods; and
- environmental clean-up costs caused by pollution spills if not covered by Fire and Industrial Special Risk policies.
Data collection
Data for the NCPD must be provided to APRA twice a year, within four months of the end of the reporting period. The reporting periods cover six calendar months, ending on 30 June and 31 December every year.
The data required to be submitted relate to policies written or renewed after 1 January 2003 and all claims that were either unsettled on 1 January 2003 or reported or reopened after that date.
The first data collection occurred in early 2005 and included claims and policies data for the 24 months from 1 January 2003 to 31 December 2004.
Data confidentiality and Privacy
APRA determined through public consultation that the NCPD publications are not confidential.
NCPD publications do however include privacy masking, with unmasked data available only on request and subject to APRA approval and acceptance of privacy terms and conditions.
Data limitations, corrections and interpretation guidance
- A duplicate claims return identified in the 2019 reporting year has been corrected in this publication, resulting in a material reduction in reported claim counts and values for that period.
- APRA identified inconsistencies between Level 1 and Level 2 outputs affecting the 2018 to 2022 reporting periods. These have been addressed in the refreshed publication.
- An issue affecting the allocation of ANZSIC codes has been corrected. In some cases, leading zeros were not retained when deriving two-digit codes (for example, “012x” being grouped as “12” rather than “01” in a number of instances).
- Improvements to policy–claim linkage have reduced the number of records with ‘Unknown’ values compared to previous NCPD publications.
- APRA has identified a data issue affecting the 2017 to 2019 reporting periods. Mismatches in policy identifiers across submissions have resulted in overstated gross written premium (GWP) and new risk counts. This issue cannot be fully resolved using data available to APRA.
- Data for these periods should be interpreted with caution, as policy counts and premium include duplicate records relating to earlier underwriting years. This is most evident where users analyse results by reporting year and underwriting year, particularly where the current reporting year is paired with prior underwriting years, which may show inflated risk counts and GWP. As a result, these data may not reflect underlying trends.
- The NCPD includes data reported by APRA‑regulated Australian general insurers only. Professional indemnity (PI) and public liability (PL) insurance are long‑tail classes, with many claims reported several years after the policy period.
- Data for 2003 has been excluded from the refreshed publication, as submissions for that year did not include identifiers required to determine the latest version of each return. As a result, some data items for the 2004 reporting year cannot be calculated, as indicated in the publication.
- The NCPD is not designed to assess insurer profitability, as it does not capture all relevant costs. For example, expenses associated with underwriting and claims management—such as commissions, reinsurance, claims administration, advertising and policy administration—are not collected.
- Claims incurred but not reported (IBNR) and claims incurred but not enough reported (IBNER) are not included in the NCPD. In addition, some policy information may not be available to insurers at the time data is submitted.
Guide to interpreting NCPD publications
It is important to understand how information has been presented when using data in the NCPD reports.
Not all claims are attributed to a particular state in the data provided to the NCPD. The jurisdiction of a claim is an optional field when the claim is not yet finalised. When a claim is finalised a jurisdiction is assigned to the claim and prior periods are revised accordingly.
Policy reports are prepared on the basis of individual risks, not individual policies. A policy may have more than one associated risk; for example, a head office in Sydney and a branch in Adelaide.
The refreshed NCPD publication presents aggregated statistics across defined cross-sections, with measures reported for each cross-dimensional bucket.
Policy measures
Number of risks written
Shows the number of risks (not policies) written in an underwriting year within each cross-dimensional bucket. Risks may be combined or split from one year to the next and different risk recording approaches are used by individual insurers. As a result, this measure does not represent the total number of policies written in Australia.
Risks in force (weighted)
Shows the pro-rated number of risks in force during the reporting period within each cross-dimensional bucket.
Gross written premium
Shows the total amount of premium written by insurers in a particular underwriting year, aggregated within each cross-dimensional bucket. Premium written through endorsements on a policy is included in the original underwriting year of the policy.
Gross earned premium
Represents the total premium earned by the insurer, aggregated across all policies in each cross-dimensional bucket.
Claims measures
Number of claims reported
Shows the total number of new claims within each cross-dimensional bucket.
Number of claims finalised
Shows the number of claims that have been finalised within each cross-dimensional bucket.
Gross claims incurred
Shows the total cost to insurers of active claims within each cross-dimensional bucket. This includes both claim payments and changes in estimates of outstanding liabilities (case estimates).
Gross claim payments
Shows the total payments made to claimants within each cross-dimensional bucket.
NCPD glossary
Accident year
For a ‘loss incurred policy’, this is the calendar year in which the event giving rise to a claim occurred, regardless of when this was reported to the insurer. For a ‘claims made policy’ the date of loss is sometimes recorded as the date that the claim is notified to the insurer, and in those cases the accident year is the year of notification.
Attachment point
See Excess/deductible.
Bordereau
A detailed report used to list multiple policies, premiums, or claims, allowing insurers or intermediaries to share transaction data.
Reporting year
The period between 1 January and 31 December of the same year.
Case estimate
A case estimate relates to a particular claim. In data submitted to the NCPD a case estimate is the amount that the insurer believes remains to be paid on that particular claim.
Claim cost
The claim cost is the total of payments made on the claim and any specific internal costs of the insurer which relate to the claim. This term is used to refer to claims which have been finalised, as the total cost for these claims is known.
Claim frequency
The claim frequency is the number of claims reported as a proportion of the number of risks written and does not include IBNR claims.
Claims made policy
Policies where a claim is made against the policy that is currently in force. Usually the event giving rise to the loss must have occurred during the policy coverage period. However, retrospective cover may be offered, particularly where there has been continuous policy renewal.
Claims occurring policy
Policies where a claim is made against the policy that was in force at the time of the event giving rise to the claim, regardless of when the claim is reported and whether the policy has lapsed. Also referred to as loss incurred policy.
Development year
This is the amount of time taken for the claim to develop from its reference year. The reference year depends on the specific report and metric – either accident year or underwriting year.
Excess/deductible
The excess or deductible is the amount that the insured must bear in the event of a claim before the insurer becomes liable. For policy records, where different deductibles apply depending on the cause of the claim, either the most commonly applied excess or the minimum excess is reported. On claim records, the excess or deductible that was actually applied is reported. For excess liability policies, the attachment point (the point at which the excess liability protection comes into effect) is reported.
Facility
Facility business is closed by ‘bordereau’ and the insurer does not always receive individual policy and/ or claims information for this business. Facilities may include underwriting pools, joint ventures, and arrangements with brokers and insurers.
Finalised claim
A claim is finalised when a settlement is reached with the claimant and all payments have been made.
Gross claims incurred
This is a measure of the total cost to the insurer of a particular claim over the period. For each claim it is the sum of any payments made on the claim, and any change in the estimate of remaining payments to be made for that claim. For example, if an insurer is notified of a new claim which it initially estimates will cost $50,000 to settle, the insurer will report an incurred claims cost of $50,000 even though it has yet to make a claim payment. In data submitted to the NCPD, gross claims incurred does not include any allowance for IBNR or IBNER claims costs.
Gross claim payments
The amount of claim payments made during the reference period.
Gross earned premium
This is the amount of premium earned during the reporting year period. While policies are written at a single point, the insurer ‘earns’ this premium as the risk expires over the life of the policy.
Gross written premium
Written premium is the amount of premium received by the insurer when a policy is taken out. The written premium is applicable to a particular underwriting year.
IBNR
Claims incurred but not reported (IBNR claims) are claims arising from incidents occurring during the reporting period but which were not notified or reported to the insurer until a later time.
IBNER
Claims ‘incurred but not enough reported’ (IBNER claims) is the difference between the ultimate costs of claims at the time of settlement and the estimate made by the insurer at the end of the reporting period. Generally, the estimates are below the ultimate costs.
Jurisdiction
This is the state where the claim has been decided by a court judgement. If the claim was settled out of court, the jurisdiction is recorded as the state where the claim was settled.
Limit of indemnity
This is the insurer’s maximum liability on a policy for any one event, or series of events, during the policy term.
Loss incurred policy
Policies where a claim is made against the policy that was in force at the time of the event giving rise to the claim, regardless of when the claim is reported and whether the policy has lapsed. A loss incurred policy is also referred to as claims occurring policy.
Nature of insured organisation
This records information on the industry of the insured risk. Standard ANZSIC industry codes are provided for PL business, and for PI business covering directors’ and officers’ or employment practices risks.
Occupation code
This records information on the nature of occupation of the insured risk. Occupation codes are recorded for PI business except directors’ and officers’ and employment practices risks.
Private Insurer
APRA defines Private Insurers as Australian APRA regulated insurers.
Product Type
Each of the PI and PL classes of business are split into more specific product types. The product type categories in the NCPD may still contain a number of different types of insurance products.
Professional Indemnity (PI)
All policies that provide cover for a professional for actions taken against that person in tort and/or statute law for advice or services provided as part of their professional practice, including related legal expenses. This includes directors’ and officers’ liability and legal expense insurance, and medical indemnity insurance.
Public and Product Liability (PL)
Public liability covers legal liability to the public for bodily injury or property damage arising out of the operation of the insured’s business. Product liability includes policies that provide for compensation for loss and or injury caused by, or as a result of, the use of goods.
Public Insurer
APRA defines Public Insurers as Australian state and territory general insurers.
Reference year
The reference year may be the accident year or the underwriting year.
Runoff indicator
An insurer is in runoff when it ceases writing new policies. It may still contain claims that continue to be paid.
State In relation to policy information, the state is the location of the risk being insured. For some multi-state covers, this is the state where the majority of the work is done, or where the head office of the insured is located.
Underwriting year
This applies to both policy and claim reports. For policies, the underwriting year of a policy is defined as the calendar year in which the policy commences (begins covering the insured risk). For claims, this is the underwriting year of the policy that the claim is being made against. This may be the policy that was in force at the time of the event (loss incurred policy) or the policy in force when the claim is reported to the insurer (claims made policy).