Insurance industry suffers underwriting loss of $1.5 billion
Australia’s general insurance industry operations suffered an underwriting loss of more than $1.5 billion during the 2008-09 financial year, according to a KPMG insurance survey.
The underwriting surplus for the domestic operations of the Australian general insurance industry, worth $938 million in 2008, was reduced to a loss of $609 million by the end of the 2008 financial year, due to a rise in insurance claims as a result of severe weather events. Insurance profits fell by 12.5 per cent to $2.16 billion during the same period.
Severe weather events are estimated to have cost the industry $1.7 billion during the year.
While gross written premiums rose by 6.4 per cent to $22 billion, total global profits for Australia’s insurance companies dipped to $3.19 billion, down from the 2007-08 financial year profit of $3.2 billion. The total underwriting surplus for Australia’s global insurance companies fell 76 per cent to $463 million as insurers experienced high claim costs from severe natural events and a fall in interest rates.
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
