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 2021 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 $1.7 billion and return on net assets of 5.6 per cent during the year ended 31 December 2021 driven by stronger underwriting results. Lower claims costs were reported in the Householders class, reflecting the lower incidence of catastrophe events. For the Fire and Industrial Special Risks (ISR) class, gross claims costs were comparatively lower due to the prior year one-off impact of large claims provisions raised by insurers for Business Interruption insurance claims. Investment income fell during the year due to unrealised losses on interest bearing investments, which resulted from increases in bond yields.
The industry PCA coverage ratio increased slightly in the year ended 31 December 2021 to 1.72x, up from the ratio of 1.70x reported for the same period last year.
Key performance statistics for the general insurance industry in the year ended 31 December:
December 2020 | December 2021 | Change (annual) | |
|---|---|---|---|
Gross claims expense | $47.4bn | $38.9bn | -18.0% |
Underwriting result | $-0.08bn | $4.0bn | significant |
Investment income | $1.7bn | $0.4bn | -76.3% |
Net profit after tax | $0.06bn | $1.7bn | significant |
Key ratios for the general insurance industry:
December 2020 | December 2021 | Change (annual) | |
|---|---|---|---|
Net loss ratio | 75% | 66% | -9 percentage points |
Return on net assets | 0.2% | 5.6% | +5.4 percentage points |
Prescribed capital amount coverage ratio | 1.70x | 1.72x | +0.02x |
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 2021 quarterly publications are available on APRA’s website at:
