Australian insurers investment approach reduces loss

The financial turmoil being experienced worldwide has had little impact on the Australian general insurance industry according to a report issued today by the Australian Prudential Regulation Authority (APRA)

The 'Half Yearly General Insurance Bulletin' issued today is compiled from the 2007 annual returns of APRA regulated general insurance companies

Key points found in the report are:

An increase of $1.3 billion in premium revenue.
An increase of $4.0 billion in gross incurred claims.(Believed to be the result of events such as the Newcastle floods) 
Underwriting profit of $3.3 billion

APRA Member John Trowbridge said 'Recent economic and environmental events could have placed the industry under financial stress but its reported results show that the industry has ridden both 'storms' well,'

'The worldwide turmoil in financial markets had little impact on the industry in 2007 due to its conservative approach to investment. Only 7.8 per cent of investments were in equities and there were no material exposures to sub-prime mortgages or other impaired asset classes. The impact of severe weather has also been mitigated by the use of reinsurance.'

The entire report can be viewed at www.apra.gov.au